Sitting of 18 March 1993

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH RAILWAYS BILL
  Lords amendments agreed to.
  BRITISH WATERWAYS BILL [Lords] (By Order)
    CROSSRAIL BILL (By Order)
      EAST COAST MAIN LINE (SAFETY) BILL (By Order)
        GREATER MANCHESTER (LIGHT RAPID TRANSIT SYSTEM) BILL [Lords] (By Order)

  RIVER HUMBER (UPPER BURCOM COOLING WORKS) BILL [Lords] (By Order)
  Orders for Second Reading read.
  To be read a Second time on Thursday 25 March.

  BRITISH RAILWAYS (No. 4) BILL (By Order)
  Order read for resuming adjourned debate on Question [8 February], That the Bill be now read a Second time.
  Debate to be resumed on Thursday 25 March.

Oral Answers to Questions
  NORTHERN IRELAND

    Liquidations (Departmental Debts)
    Mr. Beggs: To ask the Secretary of State for Northern Ireland how many companies in Northern Ireland have gone into liquidation or bankruptcy while a demand was outstanding for payment of debt owed to a Department of Government, in each of the last three years.
    The Minister of State, Northern Ireland Office (Mr. Robert Atkins): During the year ending 31 March 1993 the number of High Court generated insolvencies, and companies starting creditors' voluntary winding up, will number approximately 655. This compares with 463 in 1991–92 and 457 in 1990–91. It is estimated that debts owed to Government Departments would be found in at least 90 per cent. of these insolvencies.
    Mr. Beggs: I thank the Minister for the information that he has delivered to the House. He highlights how serious the problem is. Will he confirm that it is estimated to cost £9,000 per annum in benefits and lost revenue to keep someone unemployed? Will he give me an assurance today that there will be better departmental consultation to ensure that no arm of government acts on its own to force a liquidation, bearing in mind that 50 per cent. of wind-ups in 1992 in Northern Ireland and 20 per cent. of bankruptcies in that year were as a result of intervention on VAT? I hope that he can give that assurance.
    Mr. Atkins: The hon. Gentleman raises a technical point. I should like to give some consideration to it. Clearly, it is not always possible to delay an insolvency or the crash of a company for the time that the hon. Gentleman suggests that it takes to look into it. However, it is not the wish of the Government to put more people out of work than can be avoided in cases such as those of which the hon. Gentleman gives evidence today. If he would drop me a line or perhaps talk to me later about how we can progress, or if there is a particular instance or company about which he is worried, I should be more than happy to take it up.
    Dr. Hendron: Will the Secretary of State and the Minister with responsibility for economic development pledge their support for the new survival plan that has been worked out between the Industrial Development Board and Stoy Hayward for the Clarence Clothing company in west Belfast? That company is in an area which is probably one of the blackest unemployment spots in these islands.
    Mr. Atkins: I am familiar with the case. The hon. Gentleman will find me particularly sympathetic, although as yet I have not made a final decision.

    Republic (Constitutional Changes)
    Mr. Fabricant: To ask the Secretary of State for Northern Ireland what assessment he has made of the effects of the proposed constitutional changes in the Republic of Ireland and of the consequent effect on the whole of Ireland.
    The Secretary of State for Northern Ireland (Sir Patrick Mayhew): The Irish Government have expressed their willingness to initiate and incorporate constitutional change in the context of an overall political settlement. I welcome this. I believe that it provides an encouraging context for fresh political talks.
    Mr. Fabricant: In that connection, does my right hon. and learned Friend agree with me that the comments by Dick Spring on 5 March at the Dublin Mansion House were particularly helpful? Does he further agree that the comments by the United States foreign relations committee recently about a possible investigation into human rights in Northern Ireland were particularly unhelpful?
    Sir Patrick Mayhew: I was much encouraged by the content and tone of the Tanaiste's speech. It was a most substantial speech which plainly had been carefully weighed.
    As for the second part of my hon. Friend's question, I had perhaps better wait to see what may be proposed, but I might properly say that human rights are, indeed, abused in Northern Ireland. They are abused on purpose and with authority. They are thus abused by terrorists pursuing their evil and fruitless campaigns at the behest of their leaders. I sometimes think that if a national of a foreign country were to become their victim—which I would wish on nobody—and were murdered, for example, like woman police constable Colette McMurray at Newry in March last year, or merely deprived of his legs at the hips, like constable Paul Slaine, who was sitting in the car beside her, we would hear rather more about the matter from overseas commentators and rather less unspecific calumny of the brave men and women in the police and Army, who strive to prevent that by every means in their power within the law.
    Mr. A. Cecil Walker: When will the British Government challenge the Irish Government's claim over Northern Ireland in an international court, on the basis of article 29 item 3 of the Irish constitution?
    Sir Patrick Mayhew: The more promising way to overcome what is without doubt a serious difficulty is to heed what the Tanaiste, Mr. Spring, said recently—that the Irish Government are prepared to put articles 2 and 3 to the Irish people—with a referendum in mind—as part of an overall settlement or accommodation reached during discussions.
    Rev. Ian Paisley: Is the Secretary of State of the same mind as his predecessor—that articles 2 and 3 are illegal? Is it not a fact that nowhere from the south of Ireland, including Mr. Spring's recent statement, is there any declaration that that is looked upon as an illegal claim and that anyone is prepared to do away with it?
    Sir Patrick Mayhew: I have just given my understanding of Mr. Spring's speech in that context and I welcome it very much. Naturally, a claim—which has been described by the Supreme Court of the Irish Republic as a constitutional imperative—to bring the six counties that form part of the United Kingdom, known as Northern Ireland, within the jurisdiction of the Republic, is extremely unhelpful. As matters have been developing in a
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    hopeful way, at this stage of our discussions I do not think that the exchange of epithets is very constructive. I prefer to proceed in the way that I suggested.
    Mr. McNamara: Can the Secretary of State explain the statements in his speech to the area council of the Conservative party in Northern Ireland last weekend? Given the integrationist tenor of the statements, does he repudiate the neutral stance that the Government have been taking over affairs in Northern Ireland?
    Sir Patrick Mayhew: I really do not know what the hon. Gentleman has in mind. I said that the United Kingdom is already—
    Mr. McNamara: I have the speech here.
    Sir Patrick Mayhew: I have it here, too, and I am glad that the hon. Gentleman has studied it. If his party committed those who support it in Northern Ireland—there must be a few—to organise as the Conservative party has done, he would have an opportunity to test his policies for a united Ireland on the electorate, but those supporters are not allowed to do so. In my speech, I said that Northern Ireland is already an integral part of the United Kingdom and that I thought that the time had come to move the debate on, away from ill-defined notions such as integration and devolution, and towards considering how Northern Ireland can best be governed, while it remains part of the United Kingdom pursuant to the wish of the majority.
    Mr. Peter Bottomley: Most of us would agree with that statement. Could my right hon. and learned Friend pass a message to the Senate foreign relations committee and its sub-committees that the constitutional position is well spelt out in the Anglo-Irish Agreement and that they would be welcome to come here, to Belfast or to Dublin to speak to constitutionally elected politicians and to meet groups such as New Consensus, which are trying to get rid of the killing and to let people live together?
    Sir Patrick Mayhew: I agree with my hon. Friend. The Anglo-Irish Agreement makes a substantial advance towards a mutual expression of the current status of Northern Ireland. My hon. Friend will have noted, however, that both Governments have said that they would support a new and more broadly based agreement or structure, provided that it secured wide acceptance. As we have made clear, we would wish part of such an agreement to be a shared and unambiguous expression and understanding of Northern Ireland's current status.

    Housing Benefit
    Mr. Clifford Forsythe: To ask the Secretary of State for Northern Ireland how many Housing Executive tenants are receiving housing benefit.
    Mr. Atkins: On 5 March 1993, 110,367 Housing Executive tenants were receiving housing benefit.
    Mr. Forsythe: Under what legislation is confidential benefit information shared between the Department of Health and Social Security and the Housing Executive, leading on the one hand to many housing benefit claimants losing benefit, and on the other allowing hundreds of giro drops to continue in Northern Ireland?
    Mr. Atkins: As the hon. Gentleman will be aware, my noble Friend the Under-Secretary of State has particular responsibility for this matter. I know that he has been in conversation and correspondence with the hon. Gentleman. I will ensure that the hon. Gentleman's concerns are related to my noble Friend. I suspect that the detail for which the hon. Gentleman is looking requires a detailed letter in response, and that I will try to provide.

    Adrian Carroll
    Mr. Trimble: To ask the Secretary of State for Northern Ireland what steps have been taken to review the original police inquiry into the murder of Adrian Carroll in Armagh in 1983 following the judgment of the Court of Appeal in July 1992.
    Sir Patrick Mayhew: I have received a range of representations about the case of Mr. Latimer, mostly seeking a further reference—
    Mr. Trimble: This is the answer to a different question.
    Madam Speaker: Is the right hon. and learned Gentleman replying to question 4?
    Sir Patrick Mayhew: That is exactly what I am doing—at least I am attempting to, Madam Speaker.
    I have received a range of representations about the case of Mr. Latimer—which bears upon the murder of Adrian Carroll, referred to in question 4—mostly seeking a further reference to the Court of Appeal. I have found that none contains material to justify making a reference; nor has any been found to justify commissioning any review of the original police inquiry into the murder of Mr. Carroll.
    Mr. Trimble: Thank you. I fear that questions 4 and 9 may have been too closely linked by the Secretary of State because my question relates to the original police inquiry into the murder of Adrian Carroll in 1983. Does the Secretary of State intend to follow the precedent set in England with regard to the May inquiry and appoint, when the time is appropriate, a judicial inquiry into the conduct of that original investigation so that the whole truth can come out? Does he also agree, in vim of the disappointing decision of the Northern Ireland Court of Appeal last summer, that it would not be fair to ask a Northern Ireland judge to head such an inquiry?
    Sir Patrick Mayhew: I completely repudiate the implication in the hon. Gentleman's last remark. I never make comments on judicial decisions: I think that that is a good principle to be followed by anybody in the House. Nothing has been represented to me that justifies an inquiry into the police investigation.
    Mr. Peter Robinson: Will the Secretary of State take it from me that the overwhelming majority of the people of Northern Ireland find it an outrage and a scandal that Neil Latimer is still in prison? Those who have bothered to acquaint themselves with the facts and details of this case recognise that the Crown prosecution witness who gave forensic evidence in the case corrupted the whole of the case for all four of the men who were convicted and not just three of them. Latimer is left as a figleaf behind which the establishment may hide the awful fact that there are policemen who are not perfect and judges who can make mistakes.
    Sir Patrick Mayhew: It is not for me to express a view as to what the majority—overwhelming—or otherwise—of the people in Northern Ireland may consider in this context. I have, in response to many letters I have received about the judgment of the Court of Appeal in July last year, read very carefully again the judgment delivered by the Lord Chief Justice. It is perfectly clear to me that this is a matter which has been gone into with the very greatest care—as the sheer volume of the judgment shows. If I thought that the criteria, which have been long established for making a further reference to the Court of Appeal, had been satisfied in this case, I would have no hesitation in making such a reference. I am perfectly certain, for the reasons I have set out in letters to hon. Members, that those criteria are not satisfied.
    Mr. Canavan: Is the Secretary of State aware of the concern on both sides of the House and throughout the
    country about the possible miscarriage of justice in this case because of the unreliable evidence of witness A and the disgraceful behaviour of the RUC in the whole affair? Has he had the opportunity to study the evidence produced by Mr. Andrew Morton, who conducted an investigation on behalf of the BBC's "Newsnight" programme, and who came to the conclusion that there was no way in which Neil Latimer could have been the author of the statement described in court as his confession? Will the right hon. and learned Gentleman therefore refer the case of Neil Latimer back to the Court of Appeal for further consideration?
    Sir Patrick Mayhew: The short answer is no. I am aware of the programme to which the hon. Gentleman refers. If it will not take too long, I should like to cite a few lines from the judgment delivered by the Lord Chief Justice—the House will find it of interest:
    "We are satisfied that the ESDA findings in relation to the interview notes of Latimer do not create a doubt as to the correctness of his convictions, because on his own evidence at the trial as to what happened in the interviews and as to what he said in the interviews, it is clear that on the night of 2–3 December 1983 he confessed to murdering Mr. Carroll. We are further satisfied that those confessions were true and were the confessions of a guilty man and not of an innocent man who, by improper police conduct, was pressed into confessing to a murder which he had not committeed.
    No one reading the full transcript of the evidence of Latimer at the trial, and reading that transcript in an impartial way and with commonsense can doubt that he was a guilty man".
    If any further evidence were put to me that would constitute material of a substantial kind that had not previously been raised before the courts and which gave rise to a possibility that this was an unsafe conviction, I would refer the conviction again to the Court of Appeal—but none has been.
    Mr. McNamara: Is the Secretary of State aware that after most terrorist-related offences in Northern Ireland have gone through the Court of Appeal, there is no appeal thereafter and communities generally accept that justice has been done? In this particular case, however, there is a general sense of unease throughout the whole community about the legitimacy of this man remaining in prison. That is why I am concerned: in most cases no one challenges the convictions.
    Sir Patrick Mayhew: I do not doubt that that is correct. I have had about 70 letters from hon. Gentlemen—
    Ms Short: And hon. Ladies.
    Sir Patrick Mayhew: Quite so. We have also received about 550 other letters, most of them in a standard form. I quite understand why there has been concern, because in this case four people were originally convicted, of whom three had their convictions overturned by the Court of Appeal. The fourth did not, even though improprieties concerning the police notes in connection with the fourth case were present, just as they had been with the other three.
    The purpose and point of the Lord Chief Justice's judgment, however, explaining why Latimer's conviction was not considered unsafe is as follows. Leaving aside the question of the notes prepared by the police, other evidence, including evidence emanating from Latimer himself and confirmed at the trial, made it quite clear, in the opinion of the Court of Appeal, that this was a safe conviction.

    Voluntary and Selective Schools
    Mr. Anthony Coombs: To ask the Secretary of State for Northern Ireland what proportion of children in Northern Ireland are educated in voluntary or selective schools.
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Jeremy Hanley): Of the total school population—that is primary and secondary—54 per cent. attend voluntary schools and 39 per cent. of secondary pupils attend selective schools, about 75 per cent. of which are voluntary.
    Mr. Coombs: Does my hon. Friend agree that it is extremely significant that a high proportion of children in Northern Ireland attend schools after having been selected either by ability or aptitude? That is accompanied by the fact that in terms of GCSE results, A-level results and staying on rates, results in Northern Ireland are significantly better than those in the rest of the United Kingdom. Does not that have implications for the way in which we organise our education system in the rest of the United Kingdom?
    Mr. Hanley: My hon. Friend is right about the excellence of schools in Northern Ireland. Some statistics might bear that out. The House will be interested to know that 32 per cent. of Northern Ireland school leavers achieve at least one A-level compared with 26 per cent. in England; 75 per cent. leaving grammar school achieve at least one A-level; 45 per cent. of all school leavers achieve five or more GCSE grades A to C compared with 40 per cent. in England; over 55 per cent. continue in further or higher education compared with 34 per cent. in England. However, in Northern Ireland more pupils leave school with no GCSE qualifications than in England. I believe that to be a corollary. it is 13 per cent. in Northern Ireland compared to 7 per cent. in England, but the position has greatly improved from 27 per cent. 10 years ago. We must concentrate just as much on that end of the spectrum as on the excellence that is achieved in Northern Ireland education.
    Mr. John D. Taylor: Following the recent decision to give 100 per cent. funding for new Roman Catholic voluntary schools, will the Minister assure the people of Northern Ireland that there will be no discrimination and
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    that similar 100 per cent. grants will be available to the Protestant churches, such as the Church of Ireland and the Presbyterian Church, if they decide to build their own schools?
    Mr. Hanley: The right hon. Gentleman is right that Catholic schools have recently been able to apply for 100 per cent. grants, the same as most other schools. That removes discrimination and gives equality of opportunity to the majority of children in Northern Ireland. With that comes a change in the constitution of the schools' boards. As long as schools comply with those constitutional changes they will receive the same grant.
    Sir Giles Shaw: Will my hon. Friend take a little further the answer that he gave to the right hon. Member for Strangford (Mr. Taylor)? What proportional grant is given to the relatively few schools that are seeking to be integrated into the education system on a Roman Catholic and a Protestant basis? Is my hon. Friend encouraging the development of such schools?
    Mr. Hanley: Yes, indeed, I am helping to encourage the numbers of pupils who attend integrated schools in Northern Ireland. The schools receive the same level of grant. At the moment, they educate about 1 p
    er cent. of all children in Northern Ireland. I believe that they give an excellent education and I hope that their future will be encouraged.
    Mr. Stott: The Minister will surely be aware of the deep unease that is felt about curriculum assessment and testing by the teaching profession throughout all the schools in the sector which he has mentioned. Is the hon. Gentleman aware that the largest teachers' union in Northern Ireland recently held a ballot in which 95 per cent. of teachers voted in favour of boycotting testing and assessment? When the Minister spoke in the appropriation orders debate a couple of weeks ago he said that he was a listening Minister. Will he listen to the voices of the teachers, as expressed in the ballot on whether testing should take place?
    Mr. Hanley: I am in regular contact with the teaching unions. I am extremely pleased that many teachers are trying to use the opportunities that are provided by a pilot year of assessment. They will, therefore, be able to practise the new assessment techniques and provide feedback to the Department for Education so that we can get assessment absolutely right. There will be no benefit to children or teachers in boycotting the assessment procedures. I am glad that the National Union of Teachers, for instance, is being constructive in this regard.

    Security
    Mr. Molyneaux: To ask the Secretary of State for Northern Ireland if he will make a statement on the security situation in Northern Ireland.
    The Minister of State, Northern Ireland Office (Mr. Michael Mates): Since I answered a similar question on 18 February, six people have been killed as a result of the security situation in Northern Ireland, including three civilians, two Royal Ulster Constabulary Officers and one soldier.
    The Government, through the work of the police and armed forces, and with the support of the public, will

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    defeat terrorism from whichever side of the community it comes. There is no lack of will or determination on the Government's part or on the part of the security forces. An example of the level of police success is that so far this year 63 people have been charged with serious terrorist crimes, including 14 with murder or attempted murder.
    Mr. Molyneaux: In expressing deep sympathy with the families of those who have been murdered, including the young soldier who was shot yesterday by an American bullet from an. American rifle, probably fired from the territory of the Irish Republic, may I ask Her Majesty's Government to seek the wholehearted co-operation of the American and Irish Governments in totally suppressing those who carry out such murderous activities?
    Mr. Mates: I understand and share the sentiments that the right hon. Gentleman has expressed. We do have the wholehearted co-operation of the Government of the Irish Republic in our attempts to defeat the terrorists. That has been one of the concrete results of the Anglo-Irish Agreement. Co-operation is much better than it has ever been, as has been shown by the joint successes of the Garda and the Royal Ulster Constabulary. We shall continue to try to get the message across in the United States of the importance of neither directly nor indirectly supporting the root cause of the terrorism, but inevitably some arms and money will slip through the net.
    Mr. Cyril D. Townsend: Nobody knows better than my hon. Friend the dedication of the British Army to eradicating terrorism in Northern Ireland, but, in view of the considerable overstretch that the British Army is facing, what proposals is his Department putting forward to reduce the burden on the British Army in the years ahead?
    Mr. Mates: The overstretch of the British Army is a matter for my colleagues at the Ministry of Defence. We shall ask for and hope to get a sufficient level of Army personnel to support the police as and when the police need that support. If we can reduce terrorism and obtain some political development, we can achieve what we all hope to achieve: more primacy of the police, more areas in which the police can operate without the support of the Army, and thus a reduction in the Army presence in Northern Ireland.
    Mr. Mallon: The Minister will be aware that the six deaths to which he referred took place in my constituency and I express my anger and resentment about them, not least the killing of the young soldier yesterday when everyone else was celebrating the memory of St. Patrick. However, that anger and resentment should not be allowed to cloud the fact that certain statements made recently by senior members of Sinn Fein may show a change of policy and tactics. If that is the case, would it not be wise to encourage those people away from violence? Our real strength is not in our determination but in our ability to capitalise on the potential for peace rather than dismissing it out of hand. Will the Minister and the Secretary of State keep an open mind and use every opportunity to explore that potential for peace?
    Mr. Mates: I agree that anger should direct us in nothing that we do. If members of Sinn Fein or the IRA see the pointlessness of what they do, and if they show by their actions that they are prepared to repudiate violence,
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    they will see a response from the British Government. But the initiative lies with them and with the many in the community who know about their activities and could persuade them of the futility of the killing. We all want to see the violence end and it is up to us to try to achieve it.
    Lady Olga Maitland: In view of the appalling number of killings which have taken place, does my hon. Friend agree that it was vital that we renewed the Prevention of Terrorism (Temporary Provisions) Act 1989 and despicable that the Opposition obstructed it?
    Mr. Mates: The Prevention of Terrorism (Temporary Provisions) Act is a most important tool which the Government need and which the House was asked to support. I am happy that the House did so.

    Further Education
    Ms Short: To ask the Secretary of State for Northern Ireland what representations he has received from the further education review group regarding current funding for further education in Northern Ireland; and if he will make a statement.
    Mr. Hanley: The report of the review group on further education made a total of 48 recommendations about future arrangements for the planning and funding of further education in Northern Ireland, a number of which called for additional resources to be made available. In my response to the report, I indicated that I could maintain spending at its current level, which in recent years has received increased funding, but that there were many competing claims for additional expenditure. However, I gave an assurance at the time that obtaining even more resources for further education would remain one of my top priorities.
    Ms Short: Is it not the truth that the report recommended a strengthening of further education provision in Northern Ireland, but also recommended some mergers and closures? The Minister has accepted the mergers and the closures but found no new money. He is using the report as an excuse for cuts rather than for a strengthening of the service.
    Mr. Hanley: I am sorry to disagree with the hon. Lady in one respect. The mergers and closures are not to seek cuts in the number of students who go to these colleges or in the number of teachers, who provide an excellent and ever-growing service in Northern Ireland. The purpose is to allow even more teachers to be hired to teach even more students, to benefit the situation in Northern Ireland with the money that is available. It is therefore not in any way a financial cut.
    Mr. Sykes: Has my hon. Friend any intention of centralising the administration of further education in Northern Ireland, as has been done in England?
    Mr. Hanley: My hon. Friend is perhaps referring to one of the recommendations of the Stewart committee. At this moment a review of the administration of education in Northern Ireland is out for consultation. Whether the further education colleges are brought together under one funding body with one regional control is part of the whole consultation exercise. Therefore, I can tell my hon. Friend that we are looking at that at this very moment.
    Mr. William Ross: As this country faces a deficit of £35 billion this year and £50 billion next year is it not amazing that we are still spending some £10 million educating students from the Irish Republic without any reciprocal arrangement on that side of the frontier? Is that not a scandalous situation, and will the Minister try to do something about it regardless of the European Community?
    Mr. Hanley: I am proud that the United Kingdom adheres to its responsibilities within the European Community.

    Pupil-teacher Ratios
    Mr. Harry Greenway: To ask the Secretary of State for Northern Ireland what is the current pupil-teacher ratio in (a) primary and (b) secondary schools; what the figures were in 1979; and if he will make a statement.
    Mr. Hanley: The latest available pupil-to-teacher ratio, at January 1992, was 22·6 in primary schools and 15·3 in secondary schools. The figures in 1979, for which my hon. Friend also asked, were 23·8 and 15·6 respectively
    Mr. Greenway: I welcome that improvement in the pupil-teacher ratio since 1979. Will my hon. Friend confirm that the pupil-teacher ratio in Northern Ireland is better than that in England? Will he also say what he thinks that the pupil-teacher ratio should be, and against what kind of criteria it should be decided? Who decides what the best pupil-teacher ratio is?
    Mr. Hanley: My hon. Friend is extremely knowledgeable in these matters and I believe that he takes a regular interest in pupil-teacher ratios, but I am afraid that I shall have to put him straight on one aspect. In secondary schools in Northern Ireland the PTR is lower than in England, 15·3 compared with 15·8, but in primary schools the PTR is 22·6, which is above the 22·2 for England. So we cannot look at the figures and say that Northern Ireland is better all round. The second part of my hon. Friend's question related to the optimum PTR. The pupil-teacher ratio under local management of schools is increasingly a matter for each individual school; the school must decide what its staffing levels should he within its own delegated budget and it must, therefore, decide the priorities for teachers. It is not down to the Government to dictate the PTR, and it is certainly not for us to say what an optimum PTR might be.
    Rev. Martin Smyth: Does the Minister accept that the lack of universal nursery education is penalising many young people in Northern Ireland, particularly those from deprived backgrounds where they do not get the stimulus required to equip them for primary and secondary education? Does he agree that if we had better nursery provision many of the difficulties that arise later would be removed?
    Mr. Hanley: I am a great believer in the benefits of nursery education, but I believe that Governments should adhere first to their statutory responsibilities while trying to find additional revenue for their non-statutory responsibilities. I agree that nursery education can benefit children for the future.
    Mr. Barnes: What is the pupil-teacher ratio in integrated education, which is the best form of education
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    in Northern Ireland? A good pupil-teacher ratio in those schools would encourage the further development of integrated education. Has the Minister seen the recent issue of Fortnight which contains articles with extracts from essays written by students at Lagan college? One 15-year-old student pointed out that there are borders in the mind, borders in prisons, borders in education and even borders in entertainment. The removal of those borders would improve the situation in Northern Ireland, and integrated education will help to achieve that.
    Mr. Hanley: I am grateful to the hon. Gentleman for his support for integrated education. The figures that I gave relate either to primary schools or secondary schools and are not sub-divided into those for integrated schools, but I will certainly provide that information to the hon. Gentleman.

    Neil Latimer
    Mr. Hunter: To ask the Secretary of State for Northern Ireland what representations he has received about the imprisonment of Neil Latimer of the UDR Four, since July 1992.
    Sir Patrick Mayhew: My hon. Friend will recall, because I mentioned it a few moments ago, that I have received a range of representations about the case of Mr. Latimer, mostly seeking a further reference to the Court of Appeal. I have found that none contained material to justify making a reference.
    Mr. Hunter: I ask my right hon. and learned Friend to take to heart that on this particular subject many people fear that he is making a dreadful mistake and that any conviction based on the testimony of witness A is unsustainable. They are therefore deeply disquieted by the continued imprisonment of Mr. Latimer. I beg my right hon. and learned Friend to reconsider.
    Sir Patrick Mayhew: I know the strength of my hon. Friend's feelings. I hope that he will pay careful regard to the letter I sent him yesterday containing citations from the Lord Chief Justice's judgment, which I have already mentioned in the House this afternoon. I repeat that the basis for that judgment was by no means limited to the evidence of witness A; it was founded also on the evidence given in the trial by Mr. Latimer himself. I shall not repeat what I said earlier, but I must assure my hon. Friend that I have given great attention to the matter and I do not find any grounds on which I can properly refer the matter once again to the Court of Appeal.
    Mr. Maginnis: While three of the UDR Four have been freed on the basis that police notes used in evidence were tampered with, is it not a total injustice that Neil Latimer remains in prison solely on the alleged identification by witness A, a person who has been medically diagnosed as having a psychopathic personality, subject to delusions and misinterpretations?
    Sir Patrick Mayhew: As I have already tried to make clear this afternoon, it is not the case that the judgment of the Court of Appeal said that Mr. Latimer's conviction depended solely on the evidence of witness A. I do not wish to repeat what I said this afternoon, but I am happy to write to the hon. Gentleman about it. I know that he has already signed the early-day motion on this matter.
    Rev. Ian Paisley: Has the Secretary of State no concern for the case that we are discussing? Is he aware that 13 people were arrested, six of them were charged, one charge was not proceeded with, five came to court and the judge threw out the charge saying that the police had put undue pressure on the prisoner to make a confession? But is it not a fact that all the prisoners made confessions? Is it not a fact that four were condemned, that the cases went to appeal and that they were still condemned, yet when the Secretary of State's predecessor passed the cases back for review, three were discharged and one was kept in? Now the Secretary of State is saying that that one is kept in on his own confession when in fact they all made confessions.
    Mr. Mayhew: The facts of the case are a matter of public record and may be discovered within the extensive judgment delivered by the Lord Chief Justice in the Court of Appeal. I have to exercise the discretion that Parliament has given me by reference to consistent principles. I have already today described those principles. It is essential that I continue to apply them and that I do not yield to campaigns, however sincere or however loudly delivered, because it is not by reference to decibels that justice is done in this country.

  PRIME MINISTER

    Engagements
    Ql. Mr. Anthony Coombs: To ask the Prime Minister if he will list his official engagements for Thursday 18 March.
    The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Coombs: Does my right hon. Friend recall the agreement and the declaration on the environment reached in Rio last year, which achieved the support of all parties in the House and elsewhere? Does he not think it somewhat two-faced of those who support a cleaner environment in principle to reject any measures to achieve it in practice?
    The Prime Minister: I cannot imagine who my hon. Friend may have in mind, but he is right. I seem to remember that after Rio we were attacked by more than one Opposition party for not going far enough on environmental matters. We made our commitment and we have now take action towards meeting it.
    Mr. John Smith: Will the Prime Minister confirm that, as a result of his betrayal of his election promise not to increase taxes, a typical family will have to pay £8·50 per week in extra tax from next April and £12·50 per week in extra tax the following year?
    The Prime Minister: The right hon. and learned Gentleman is the wrong person to remind people about ditching election promises. As I reminded him on Tuesday, he said recently:
    "We would be a very foolish party if we went into an election, say '95 or '96, with the same policies as '92."
    [HON. MEMBERS: "Answer the question."] On his specific question, unlike the Labour party, we do not like raising taxes and we do it only when necessary. I said last year that
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    we had no plans to raise taxes—nor did we—but we have an overriding commitment to return the deficit to balance and to take the action necessary to do that. In the Budget my right hon. Friend the Chancellor acted to meet that overriding commitment and in the interests of everyone in the country he was surely right to do so.
    Mr. Smith: The country will have noted carefully that the Prime Minister did not deny that there will be an extra £8·50 per week of tax for a typical family next year and £12·50 per week the year after. Will the Prime Minister tell us whether people who qualify for income support, including millions of pensioners, will receive increases in benefit to cover in full the tax increases on their fuel bills?
    The Prime Minister: I shall deal directly with the point, but the right hon. and learned Gentleman may care to reflect also upon this: does he or does he not agree with one of his Front-Bench spokesmen in another House—[Interruption.]
    Madam Speaker: Order. Hon. Members must contain themselves. These interruptions only waste time.
    The Prime Minister: Perhaps the right hon. and learned Gentleman will reflect on whether he agrees with his noble Friend in another House who called for all zero-rated items to be subject to the full rate of value added tax. Does the right hon. and learned Gentleman agree with his noble Friend, or does he not?
    As for the right hon. and learned Gentleman's question about the fuel increase, he should have read carefully what my right hon. Friend the Chancellor of the Exchequer said in his Budget speech. My right hon. Friend made it absolutely clear that there will be extra help for less well off pensioners and other people on low incomes. They will get that help from next April, before the higher fuel bills come in. That help will be additional to the future increase in pensions and other benefits which will take place automatically. Cold weather payments will also be adjusted to reflect increases in fuel costs. The right hon. and learned Gentleman has also neglected to welcome the fact that fuel prices have dropped since privatisation and that further reductions were announced this very morning.
    Mr. Smith: The country will have noticed that the Prime Minister can never give a straight answer to a straight question. The country will also find it shameful that he cannot give a clear commitment to meet in full the increase in taxes for the most vulnerable members of our society. He has no conscience at all about short changing the poor as well as betraying his election commitments?
    The Prime Minister: What the country may have noticed today, of all days, is that on this occasion the right hon. and learned Gentleman made no mention of and gave no welcome to the fall in unemployment. Neither has he mentioned the substantial real incomes increase in pensions; neither has he mentioned the uprating next April, or the fact that we have not taken back the money put in the base line for the community charge which pensioners will no longer have to pay. None of these and other matters have apparently occurred to the right hon. and learned Gentleman.

    North-west Kent
    Mr. Dunn: To ask the Prime Minister what plans he has to visit north-west Kent.
    The Prime Minister: I am making plans for a series of visits and hope to include Kent among them.
    Mr. Dunn: Is the Prime Minister aware that the people of north-west Kent have always been strong supporters of home ownership and, as such, welcome the changes in stamp duty which will encourage the housing market? They also welcome the new, exciting, radical right-to-buy campaign announced today.
    The Prime Minister: I am grateful to my hon. Friend. I think he will find that that welcome will extend across not just north-west Kent but the whole country. In a recent survey, 89 per cent. of people under 30 said that they wished to own their own homes. We shall again give more of them the opportunity to do so. Raising the stamp duty threshold will halve the number of houses on which stamp duty has to be paid. That, with low interest rates and the lowest mortgage rates for nearly 30 years, will dramatically increase the possibility for millions to become home owners.

    Engagements
    Mr. Gordon Prentice: To ask the Prime Minister if he will list his official engagements for Thursday 18 March.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Prentice: Does the Prime Minister of manufacturing recall that this time last week he did not know the names of the two major competitors of Rolls-Royce and that his ignorance shocked my constituents? Will he join me in condemning the 24 per cent. and 35 per cent. pay increases for the chief executive and chairman of Rolls-Royce at a time when the company is sacking 5,000 skilled workers, including 170 in my constituency?
    The Prime Minister: I have spoken before of my admiration for Pratt and Witney and General Electric. As for the wage increases to which the hon. Gentleman referred, if he were here more often he would know how often I have set out my views on that subject.
    Mr. Sykes: To ask the Prime Minister if he will list his official engagements for Thursday 18 March.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Sykes: I know that, unlike the Jeremiahs in the Labour party, the Prime Minister will welcome the news on the unemployment figures that has been announced today. Will he also welcome the freezing of the uniform business rate that was announced on Tuesday, which will further help job prospects?
    The Prime Minister: I am certainly happy to do that. The Budget was a Budget for business, as my right hon. Friend the Chancellor said. The freeze on business rates will help about 800,000 businesses. Nor was that the Budget's only boost for business. The chorus of welcome for the Budget from business speaks for itself.
    Mr. Ashdown: How does the Prime Minister justify to the nation a Budget which, over the next three years, will require the poorest tenth of people to pay proportionately twice what the richest tenth will have to pay to bail the country out of his Government's financial failure?
    The Prime Minister: The right hon. Gentleman has clearly failed to notice the substantial increase in the proportion of the burden that we are asking people on higher incomes to bear. He has neglected that. I hope that he will join his hon. Friend sitting beside him who earlier this week said:
    "I am in favour of taxes on things that pollute."
    Mr. Ancram: To ask the Prime Minister if he will list his official engagements for Thursday 18 March.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Ancram: Is my right hon. Friend aware that many Conservative Members take grave exception to the heavy-handed behaviour of Chinese Government towards the Governor of the Hong Kong? Will he take up with the Chinese Government their threat to set up an alternative government for Hong Kong, and will he remind them that the whole international community expects agreements to be honoured?
    The Prime Minister: My hon. Friend is entirely right. The British Government stand four square behind the Governor and Government of Hong Kong. The Governor has acted sensitively, resolutely and correctly, and we shall continue to make that clear to the Chinese Government. In doing so, we shall underline three points: the Governor has acted entirely within the terms of the documents that we have agreed with China and we expect the Chinese Government to do likewise; the Governor's proposals for greater democracy are widely supported in Hong Kong, in the United Kingdom and in the international community, and I believe that they have wide support across this House; we and the Governor have gone the extra mile in our efforts to consult China. We remain ready for talks without pre-conditions, but no one should doubt that the Governor has our total support.
    Mr. Turner: To ask the Prime Minister if he will list his official engagements for Thursday 18 March.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Turner: Does the Prime Minister accept that Budget day will be remembered for many years as Black Tuesday? It was the day of taxes on heating, taxes on beer, taxes on petrol and taxes on cars. Will the Prime Minister tell the House and the Country how many more taxes we shall have to endure before, mercifully, we get to the next general election?
    The Prime Minister: It will certainly be a tax on Labour's ability to win that election when it comes, for my right hon. Friend the Chancellor has put in place the right structure to make sure that we get back the growth, the jobs and the prosperity that we seek. If the hon. Gentleman had been a little more gracious he might, unlike anyone else on the Opposition side, have welcomed not only the drop in unemployment but also the new £100 million manufacturing centre for car components at Wednesbury near Wolverhampton.
    Mr. Bowden: Will my right hon. Friend convey the congratulations of all Conservative Members to his right hon. Friend the Secretary of State for Social Security on his speedy clarification of the help that will be given to those on income support and low-pay pensioners? Will he also please look very closely at the position of the nearly 1 million pensioners who do not claim the income support to which they are entitled, as well as those whose income is very slightly above income support level? If my right hon. Friend could find some way of helping those people to pay the extra VAT on fuel, that would be a major step forward.
    The Prime Minister: I know that my hon. Friend will agree with our right hon. Friend the Secretary of State that it is right to concentrate extra help especially on the poorest households. He will also know that other benefits will automatically increase with prices through the normal uprating mechanism, and my hon. Friend at least—if not the Opposition—will join us in welcoming the fact that fuel prices have fallen in recent years.
    Mr. Pike: To ask the Prime Minister if he will list his official engagements for Thursday 18 March.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Pike: In view of the tax changes announced on Tuesday in relation to mortgage tax relief, will the Prime Minister state whether the Government intend, during the lifetime of this Parliament, to phase out tax relief on mortgages?
    The Prime Minister: No. We made it clear earlier that we would retain the system, and my right hon. Friend the Chancellor set out our immediate proposals.
    Mrs. Ann Winterton: To ask the Prime Minister if he will list his official engagements for Thursday 18 March.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mrs. Winterton: My right hon. Friend will be encouraged by the welcome given by the Manufacturing and Construction Industries Alliance, to which he recently sent a message of support, to the boost to British exporters from the £1·3 billion of extra export credit announced in the Budget, but will he acknowledge the growing concern about the erosion of our manufacturing base? Will he seek to have published the report on these matters prepared by the Department of Trade and Industry which has recently been the subject of much press speculation?
    The Prime Minister: We have not only, of course, extended ECGD but my right hon. Friend the Chancellor has cut premiums over the past few months by as much as 27 per cent. in order to help exporters. We have over recent weeks announced a wide range of policies specifically geared to improve the prospects for manufacturing, both the efficiency of existing manufacturing and the widening of the manufacturing base. I made it clear earlier this week that the paper to which my hon. Friend refers was private advice to Ministers and will not be published.

Business of the House
3.31 pm
Mrs. Margaret Beckett: Will the Leader of the House state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): Yes, Madam. The business for next week will be as follows:
MONDAY 22 MARCH—Conclusion of the debate on the Budget statement.
TUESDAY 23 MARCH—Second Reading of the Agriculture Bill [Lords.]
Motion relating to the Funds for Trade Union Ballots (Revocation) Regulations.
At Ten o'clock, the question will be put on all outstanding excess Votes, supplementary estimates and defence Votes A.
WEDNESDAY 24 MARCH—European Communities (Amendment) Bill: progress in Committee, 17th day.
THURSDAY 25 MARCH—European Communities (Amendment) Bill: progress in Committee, 18th day.
FRIDAY 26 MARCH—Private Members' Bills.
MONDAY 29 MARCH—European Communities (Amendment) Bill: progress in Committee, 19th day.
The House will also wish to know that European Standing Committees will meet on Wednesday 24 March at 10.30 am to consider European Community documents as follows: Standing Committee A—Document No. 4307/93, relating to sheep and goat farming; Standing Committee B—Document No. 4436/93, relating to establishing a cohesion fund.
[Wednesday 24 March:
European Standing Committee A:
Relevant European Community document—4307/93, sheep-meat: ewe premium.
Relevant reports of the European Legislation Committee—HC 79-xviii(1992–93), HC 79-xxiii (1992–93)
European Standing Committee B:
Relevant European Community document—4436/93, cohesion fund.
Relevant report of the European Legislation Committee—HC 79-xxii (1992–93).]
Mrs. Beckett: When does the Leader of the House think that he will be able to announce how the Government propose to handle, let alone schedule, debates on the defence estimates and on the Government's detailed public expenditure programme? I remind him that neither the defence estimates debate nor the scrutiny of the Government's public expenditure programme in full have taken place for two consecutive years. If he cannot give us a date, in particular for the public expenditure debate, will he give a commitment that there will be such a debate and, preferably, a debate on the defence estimates, well before the summer recess?
I draw the right hon. Gentleman's attention to early-day motion 1631.
[That this House views with considerable concern the rumours emanating from senior government sources that the review of the existing European parliamentary constituencies necessitated by the creation of six additional seats will be conducted by the Home Office with help from outside consultants; notes that such a decision will be a major departure from parliamentary convention that all boundary reviews are conducted by the independent and impartial
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boundary commissions for England, Wales, Scotland and Northern Ireland; and calls on the Government not to prejudice the high international regard of the British parliamentary system and lay itself open to accusations of gerrymandering parliamentary boundaries for narrow political advantages.]
I hope that he will take heed of it and find time for a debate on the matter. It calls for an early boundary review for European seats, in view of the fact that there will be six new European constituencies. Is the right hon. Gentleman aware that, as expressed in that early-day motion, there is great concern in the House at the increasing signs that, instead of putting the programme to the Boundary Commission, which has said that it is quite able to handle it before the deadline, the Home Office proposes to make its own decisions about what the boundaries should be, possibly with the advice of a few, no doubt carefully chosen, individuals? That would not be acceptable to the House, and it is important that we are reassured as soon as possible.
Mr. Newton: Taking the right hon. Lady's latter point first, I understand that there is no truth in the rumours—to which I believe the early-day motion refers—that the review of European parliamentary constituencies will be conducted by the Home Office. The Government are simply formulating proposals for the best way of accommodating the six extra seats. When we have done so, we shall consult the Opposition parties in the usual way.
The right hon. Lady also asked about debates on the defence estimates—in fairness to her, I acknowledge that she has referred to that subject once before in recent weeks—and on the public expenditure programme. I cannot immediately give her the commitments for which she asked. Of course, we had a full debate on public expenditure in the wake of the autumn statement, although I accept that the right hon. Lady was making a somewhat different point. I should like to find time for a debate on the defence estimates, but I cannot undertake to do so before Easter.
Dame Peggy Fenner: May I ask my right hon. Friend whether we can have an early debate on the recommendations of the Jopling Committee? I understand that the process of negotiation is now being held up by intransigence on the part of the Opposition. I find that extraordinary, given that many women outside the House look towards some reform of the hours worked here. I am astonished that the right hon. Member for Derby, South (Mrs. Beckett) is not helping in the matter.
Mr. Newton: I cannot promise a debate before Easter, but discussions have been taking place through the usual channels, and are continuing. I have no doubt that the right hon. Member for Derby, South will seek to respond as soon as possible. I, at any rate, accept that such matters need to be considered with care, but I hope that we shall be able to make progress. I certainly recognise the strength of my hon. Friend's views, and the fact that she probably speaks not only for lady Members but for many Opposition Members.
Mr. Archy Kirkwood: Will the Leader of the House advise us when he expects the Government to be able to make a statement about the White Paper resulting from the President of the Board of Trade's consideration of the pit closures? There is now

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some suggestion that there will be an unconscionable delay, which will have the knock-on effect of delaying the Government's conclusions to the consultation process set in train on redrawing the assisted areas map. Those are important matters for regions throughout the United Kingdom, and the sooner we get on with them the better.
Mr. Newton: I note what the hon. Gentleman says about the assisted areas map, but he will understand that that in itself is a difficult and complex matter on which representations have come from all parts of the country. Our aim remains to publish the coal review White Paper as soon as we can. As the hon. Gentleman will know, intensive contract negotiations are taking place, and as the President of the Board of Trade told the House yesterday, it is important that the base contracts should be in place so that the House can have a comprehensive view of the position.
Mr. Patrick Cormack: Will my right hon. Friend arrange for the Foreign Secretary to make a statement next week on the situation in Bosnia—on the increasing number of atrocities there, on the evidence that they are committed by Serbians from Serbia, and on the fact that United Nations soldiers, including British soldiers, are having to stand by while women and children are killed in front of them?
Mr. Newton: I shall certainly bring that request to the attention of my right hon. Friend the Foreign Secretary.
Mr. Derek Enright: Will the Leader of the House please consider carefully the workings of European Standing Committees A and B? It is often a very long time before the recommendations of the Select Committee on European Legislation come to those Committees, so that the scrutiny that they undertake is not as effective in influencing the outcome as it might be.
Mr. Newton: The hon. Gentleman has put his point constructively, and I undertake to consider what he said. I have also received representations from a number of other hon. Members who are members of one or other of the Standing Committees about matters such as the balance of work between the two, and I shall consider that as well.
Mr. Nicholas Winterton: My right hon. Friend will have heard my hon. Friend the Member for Congleton (Mrs. Winterton) refer to the warm message of support sent by the Prime Minister for the launch of the Manufacturing and Construction Industries Alliance in the House only a fortnight ago. My right hon. Friend will also be aware of the Prime Minister's warm endorsement of the important role of manufacturing industry in this country in an interview that he gave to The Independent.
Bearing in mind the fact that this sector of our economy can play a major role in our economic recovery, will my right hon. Friend find time for a full day's debate on manufacturing industry in Government time, outside the debate on the Budget? Will he please not refer to the Supply day debate that was initiated recently by the Opposition?
Mr. Newton: My hon. Friend has sought to second-guess my answer. Given that the House has recently had a full day on manufacturing industry and that it is currently in the middle of a four-day debate on the Budget, which contains a wide range of very welcome
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measures to assist manufacturing and other industries, my hon. Friend may understand why, although I agree with him about the importance of manufacturing industry, I find it difficult to promise a separate debate.
Mr. Dennis Skinner: Would it be a good idea for the Leader of the House to organise a debate on the Government's fiddling of statistics? We could start with the fiddling of the dole queue figures today and the fact that the Government have fiddled those statistics 21 times before. The cost of living figures are fiddled, and now the Government are fiddling the figures for the price reductions in electricity, bearing in mind the fact that they imposed 10 per cent. increases in gas and electricity charges, above the rate of inflation, a few years ago.
We could then explain how the price of coal has gone down by 6 per cent. in the course of the past eight years as a result of the 155 per cent. increase in productivity. That is something straight, to which the Prime Minister never refers, because he would not recognise the truth if it was sprayed on his eyeballs.
Mr. Newton: I should prefer, although I am afraid that I cannot promise this either, to have a debate on the quality of forecasting by Opposition Front-Bench spokesmen. The hon. Member for Dunfermline, East (Mr. Brown) said yesterday that he would make one Budget forecast—that,
"after the Budget, unemployment will rise this month, next month and for months afterwards."—[Official Report, 17 March 1993; Vol. 221, c. 289.]
Mr. Toby Jessel: May we have a statement next week on the decision to cut in half the number of British Army bands, whose high standard of excellence is the envy of the world and which, as a part of British tradition, have brought to this country visitors from abroad, whose spending generates income, employment and a tax yield to the Government?
Mr. Newton: My hon. Friend is obviously referring to the announcement earlier this week by my right hon. Friend the Minister of State for the Armed Forces. I emphasise that new arrangements will be provided for music in support of the Army, based on bigger bands providing a high standard of music.
Mr. Harry Cohen: Will the Leader of the House consider a debate on the nuclear non-proliferation treaty? Such a debate is urgent, because North Korea proposes to withdraw from the treaty, which sets a dangerous precedent and has increased tension in the region. Some of us are not happy with the Government's record on the treaty, either. A debate would be relevant.
Mr. Newton: I can do no more than note the hon. Gentleman's request; I cannot promise an early debate on the matter.
Mr. Richard Tracey: Can my right hon. Friend hold out the prospect of Report and Third Reading for the National Lottery etc. Bill before Easter? Such news would be much welcomed by many good causes outside the House, as I am sure my right hon. Friend agrees.
Mr. Newton: I am not sure whether my hon. Friend is a member of the Committee. Perhaps I should know. If he is, he can give me an up-to-date report on progress.

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Obviously we shall seek to advance the Bill as soon as possible, but I cannot give an undertaking that we shall do so before Easter.
Mrs. Bridget Prentice: I am sure that the Leader of the House is aware that yesterday the Fire Brigades Union met the Home Secretary to discuss its pay claim. Is the right hon. Gentleman prepared to ask his right hon. and learned Friend to make a statement in the House about why he is prepared to ditch the national pay formula which has kept industrial peace in the Fire Brigades Union and in the cities and towns of Britain for the past 15 years?
Mr. Newton: I regularly speak to my right hon. and learned Friend the Home Secretary and, indeed, have done so on various matters this morning and yesterday. I understand that he met representatives of the Fire Brigades Union to explain the background to the current public sector pay policy and made it clear, as would be widely accepted, that its members cannot expect special treatment. But he also made it clear that no decision had been taken to abolish the 1977 pay agreement.
Mr. Nigel Forman: Is my right hon. Friend aware that several Conservative as well as Opposition Members would appreciate an early debate on the nuclear non-proliferation treaty? It is arguably one of the most important international treaties, and we must ensure the maximum possible compliance with it.
Mr. Newton: I cannot say much more than I told the hon. Member for Leyton (Mr. Cohen), but I shall note the request even more now that it has come from both sides of the House.
Mr. John Denham: Will the Leader of the House take an early opportunity to ask the Secretary of State for Employment whether she would be prepared to make a statement to the House on employment practices in the ports industry? Is the right hon. Gentleman aware that, when the dock labour scheme was abolished, Ministers pledged that abolition would not lead to the return of casual labour to British ports? Is he aware that Southampton container terminal proposes to introduce casual labour on a large scale, with all the job insecurity and dangerous working practices that that involves? Does he agree that the matter should be examined in the House, in view of the pledges that were previously made?
Mr. Newton: If I may answer the direct question that I was initially asked, the hon. Gentleman will probably have observed that, as he was completing his question, I did indeed have a word with my right hon. Friend the Secretary of State for Employment.
Mr. Harry Greenway: Will my right hon. Friend arrange a debate next week on the important effect on the education of children in Britain of the decision of some teachers to boycott standard assessment tests this year? Should not the House examine the important principle that all teaching and learning should be evaluated to judge what progress has been made in children's learning in order to improve their education, where it can be improved?
Mr. Newton: Many hon. Members on both sides of the House, and certainly on this side, will share my hon. Friend's views. I can only reiterate that our view is that we need the national curriculum and testing to help pupils and raise standards. We would all deplore any action that would disrupt those important tests.
Mr. David Winnick: Before the Budget debate begins on Monday, will it be possible for the Secretary of State for Social Security to make a detailed statement about the Government's plans for assisting, if they are going to assist, people on low incomes, and especially pensioners, once VAT is applied to heating bills? In any such statement, will it not be necessary for the Secretary of State to explain how pensioners who are just above the level of income support can be assisted, because such people, and, of course, the poorest, suffer nightmares even now as a result of their inability to pay to heat their homes adequately? A statement from the Secretary of State is needed before the vote takes place on Monday.
Mr. Newton: I hear what the hon. Gentleman says, but I cannot and shall not attempt to add to the clear statements that my right hon. Friend the Prime Minister made in the Chamber less than an hour ago.
Mr. Jacques Arnold: Could we have a statement early next week on the high-speed rail link as it passes through Kent? There are many environmental apprehensions in Kent which must be dealt with. Likewise, economic opportunities could arise, so could we also have a statement—a glut of statements next week—on the east Thames corridor and the opportunities for regeneration in north-west Kent?
Mr. Newton: I cannot at this stage promise a statement on the latter aspect in the time scale that my hon. Friend seeks. However, I expect my right hon. Friend the Secretary of State for Transport to make a statement early next week on the channel tunnel link following what my right hon. Friend the Chancellor said in his Budget statement.
Mr. Harry Barnes: The Leader of the House will he aware that, if someone uses their redundancy money to pay off their mortgage, in order to secure their future, they are liable to lose income support, or a section of it. He may not be aware that the only records kept centrally are on coal miners using redundancy. Records on five such in the Chesterfield area have just started. Should we not debate that matter to find out why there is this peculiarity?
Mr. Newton: I take it, in the best possible spirit, that the hon. Gentleman seeks to raise a matter that is of some importance to him rather than seeking a full debate on it.
Mr. Barnes: Either.
Mr. Newton: Well, I certainly cannot promise a full debate. From my experience of social security, I know that I would be rash to attempt a further reply off the cuff, but I shall draw the matter to the attention of my right hon. Friend the Secretary of State for Social Security.
Mr. Simon Burns: I hope that my right hon. Friend will not take it as a criticism of his arrangement of the business next week but, bearing in mind the answer that he gave to the hon. Member for Bolsover (Mr. Skinner), will he reconsider it? Will he

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consider the subject forecasting, as it would seem that a debate is urgently needed to set the record straight and improve accuracy? Some right hon. and hon. Members seem totally at sea on forecasting, and determined to talk down the prospects for this country, as shown in column 289 of yesterday's Hansard—
Madam Speaker: Order. What is the hon. Member's point?
Mr. Burns: The point is, Madam Speaker, that we need a debate next week on forecasting, given that the hon. Members for Dunfermline, East (Mr. Brown) and for Holborn and St. Pancras (Mr. Dobson) are totally at sea. For the past 24 hours, they have both claimed that unemployment would rise substantially today, when it fell.
Mr. Newton: I do not take my hon. Friend's remarks as a criticism in any sense. I am grateful to him for drawing attention once again to the almost instant inaccuracy of one of the main arguments of an Opposition Front-Bench spokesman yesterday—as I myself sought to do a few moments ago. I guess that the Budget debate may easily provide an opportunity for precisely the sort of debate that my hon. Friend wants.
Mr. David Alton: Would the Leader of the House arrange for a statement or response next week to early-day motion 1439, on the causes of violence in society?
[That this House notes with grave disquiet the growth in vicious and unprovoked attacks on the most vulnerable in society, particularly on women and children; believes these developments stem from a decline in standards of personal responsibility and respect for others, aggravated by the easy availability of violent pornography, including snuff videos, and particularly the promotion of violence on television, which opposes the belief that 'thou shalt not kill' and gives people the liberty to watch murder, mayhem and child-abuse presented as entertainment; and therefore calls on Her Majesty's Government to establish a Royal Commission to investigate the causes of violence in society.]
It calls for the establishment of a royal commission to look into the reasons why there has been such a proliferation of violence. Bearing in mind that the Chief Rabbi, Jonathan Sacks, and the Cardinal Archbishop of Westminster, Basil Hume, also called last week for such a commission, does he agree that the Prime Minister should give the matter urgent attention?
Mr. Newton: The hon. Gentleman, whose concern about such matters is well known and widely respected, will know that many of my hon. and right hon. Friends, including the Prime Minister, have expressed concern in recent weeks. I am sure that they will take note of what he has said. If I cannot promise a debate in the way that the hon. Gentleman seeks, it is in part because it is a relatively short time since we had an opportunity to debate crime and its causes.
Dr. Liam Fox: Will my right hon. Friend consider an early debate on the regulation of air transport? While many hon. Members on both sides of the House are pleased with the deal between British Airways and United States Air this week, which will be good for both the airlines and their passengers, we are concerned about the
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apparent threat by the European Commission, which has said that it wants to negotiate bilateral deals through the Commission and not through member Governments.
Mr. Newton: I cannot promise a debate, but I note my hon. Friend's concern and will bring the question to the attention of my right hon. Friends who deal with such matters.
Mr. John Gunnell: Can the Leader of the House tell me the future of the King's Cross Railways (No. 2) Bill, which is passing through Parliament? Could he arrange for a statement from the Secretary of State for Transport and an opportunity to debate the issue so that those of us who are worried about links between the channel tunnel and the north of England can be assured that any changes in plans ensure that we keep through routes, which will give us a direct service to the tunnel?
Mr. Newton: Having recently adverted to deficiencies in other people's forecasts, I shall not respond in quite the way that the hon. Gentleman sought, with crystal-ball gazing on the earlier part of his question. I do not need to engage in further crystal-ball gazing to know that he will have an opportunity to ask those questions, subject to you, Madam Speaker, when the Secretary of State for Transport makes a statement early next week.
Mr. Ray Powell: Can the Leader of the House say when it will be possible for the Accommodation and Works Committee to know whether the Jubilee line extension will go ahead or not? The right hon. Gentleman will be aware that we have waited for five years for a decison, and that phase 2 of the new parliamentary building development would have been completed, and Members of the House accommodated in it, had it not been for the Jubilee line proposals. Is not it time that the Government made up their mind about whether the Jubilee line extension is going ahead, so that the Accommodation and Works Committee can plan accordingly?
Mr. Newton: Given the size of the project, I am not sure that I accept the hon. Gentleman's point about the speed with which it would have been possible to accommodate people in that major new building. I cannot add to what has been said on numerous occasions about the extension to the Jubilee line.
Mr. John McAllion: On Tuesday, the Secretary of State for Employment washed her hands of the seven-week long Timex dispute and simply noted that the Advisory, Conciliation and Arbitration Service, ACAS, had not yet become involved. As ACAS has not become involved because the management of Timex will not agree to its involvement, can we have a statement from the Secretary of State for Employment next week that outlines what the Government intend to do about an employer who imposes cuts in wages and working conditions, sacks an entire work force for exercising their legal right and then refuses to accept arbitration?
Do the Government simply intend to look the other way while rogue employers wage war on the working conditions of British workers? If that is what they intend to do, they should be warned that, like the Timex workers in Dundee, workers across Britain will fight back. Far

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from being a recipe for a society at ease with itself, it will be a recipe for a society riven by class and industrial conflict, and that will be the fault of the Government.
Mr. Newton: Without in any way endorsing what I will call the political thrust of the hon. Gentleman's rather tendentious question, I merely note that my right hon. Friend the Secretary of State for Employment has heard his observations direct.
Mr. Tony Banks: Is there any chance of a debate next week on the public funding of political parties, which would give us an opportunity to discuss the way in which our major parties are financed?
As the Leader of the House is aware, the Labour party publishes its accounts in full; the Conservative party does not. During the debate, we could find out the source of the £17 million-worth of donations that went to the Conservative party immediately before the general election. The Prime Minister will not allow the accounts to be published, and I put it to the Leader of the House that that is because the right hon. Gentleman is ashamed to know that much of that money came from British crooks and foreign fascists.
Mr. Newton: I think that I will respond in much the same way as I did to the question from the hon. Member for Dundee, East (Mr. McAllion) rather than seek to raise the temperature by responding in similar terms. I do not have any plans for an early debate on that subject.
Mr. Jeremy Corbyn: When will there be a debate on London in Government time so that Members for London constituencies can raise their legitimate concerns about the lack of an overall elected authority for London that can undertake planning? That debate could also consider the chaos in housing, the current cuts in the number of hospitals and the disastrous proposal to deregulate the London bus service. That proposal has led to strong action by bus workers throughout London to protect the idea of an integrated public transport system in this capital city, for which they have massive support from the people of London.
Mr. Newton: I note the various points that the hon. Gentleman has made. I am unable, however, to promise a debate in Government time in the immediate future on that matter. I am aware that hon. Members on both sides of the House have an interest in the various issues in and around London, so I will bear that subject in mind for when an opportunity may arise.

Orders of the Day
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [16 March]
  WAYS AND MEANS

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

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

    (b) for refunding any amount of tax;

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

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

    Question again proposed.

  Budget Resolutions and Economic Situation
  [Relevant documents: European Community Document No. 4683/93, the Commission's Annual Economic Report for 1993, and the draft Decision adopting the Report.]
  3.58 pm
  The Secretary of State for Employment (Mrs. Gillian Shepherd): I greatly welcome the Chancellor's statement. He produced a Budget for recovery and for jobs. It will bring help and hope for individuals and for industry. Above all, it restores confidence, which is the key to recovery.
  I shall return to the Budget later—
  Madam Speaker: Order. It was remiss of me, but I should have pointed out that many hon. Members wish to speak in the debate today, and I shall have to limit speeches between 6 and 8 pm to 10 minutes.
  Mr. Dennis Skinner: Where are they all?
  Mrs. Shephard: As the hon. Gentleman says, they are not immediately apparent; no doubt they will drift in later.
  When I return to my right hon. Friend's Budget later, I shall provide more details, but I can say now that the new measures announced in the Budget will help unemployed people back into work.
  This has been a good week for Britain. On Monday, we had improved manufacturing output figures; on Tuesday, we had a first class Budget for recovery; on Wednesday, we had improved retail sales figures; and only this morning I was able to announce that seasonally adjusted unemployment had fallen. These figures are welcome because they offer hope for what people want: real and lasting jobs.
  I should like to set out the background to economic recovery. On Tuesday, my right hon. Friend announced his Budget, which is a Budget for recovery because the necessary economic framework for that recovery is already in place. In Britain, we have the lowest interest rates in the European Community. We have a competitive exchange rate. We have the lowest inflation for 25 years. We have the lowest corporation tax in the developed world. Our unit

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  wage costs in manufacturing are rising more slowly than those of Japan or Germany. Our labour costs are 61 per cent. of those in Germany, and we have record productivity. We have low burdens on industry, and fewer strikes than at any time in our history.
  We also have the people. We have the most flexible work force in Europe—a work force so productive that Britain now exports cars to Japan. We have a better educated work force, a society in which more than 90 per cent. of 16-year-olds are in education or training. Our work force are willing to go it alone. Nearly 3 million people work for themselves, creating new businesses and new enterprises, which in turn will create new jobs for others. This is the right framework to enable Britain to compete.
  We should not forget the good news. Exports of manufactured goods are at record levels, up by 11 per cent. outside the EC in the year to January. Consumer credit is up; consumer expenditure is up; investment is up; export volumes are up, and at record levels; business confidence is up; car sales are up; retail sales are up 0·2 per cent. in February to their highest volumes ever; and, as announced on Monday, manufacturing output was up by 0·8 per cent. in January.
  Mr. Tony Banks: It is good to hear all this good news, because we all want this country to succeed, but I suspect that the Secretary of State is using sophistry. She is giving us a litany of things that are up without telling us what they are up from. If she would give us a base year, we might get a more accurate picture of whether investment is truly up. It may be up compared with last year, but it is most certainly not up compared with 1979.
  Mrs. Shephard: I would have put money on something else being up—the hon. Gentleman in this debate. He might like to know that manufacturing investment has been up for three successive quarters. As the Chancellor said on Tuesday, all independent forecasters—the Confederation of British Industry, the Institute of Directors, the Organisation for Economic Co-operation and Development, and the European Commission—predict a resumption of growth this year. Indeed, the Commission expects growth in the United Kingdom to exceed that of any of our European partners, as Monday's output figures confirm.
  Now to the best news of all. Today I announced that seasonally adjusted unemployment fell by 22,000. That is good news for unemployed people, and for us all. A fall in unemployment, especially so early in the recovery cycle, will of itself help to boost confidence.
  As I have said before, however, and as I shall certainly say again, we must be careful not to place more weight on one month's figures than they will bear. In that, the hon. Member for Holborn and St. Pancras (Mr. Dobson) and I are, for once, at one. None the less, the latest figures provide some reason for optimism.
  The number of unemployed people placed into new jobs by the Employment Service is up on last year. The number of people becoming newly unemployed and joining the register is down. I am talking about one month's figures, but they provide news that I welcome, as I am sure does the whole House.
  That is the background against which my right hon. Friend the Chancellor of the Exchequer produced his
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  Budget. It is a Budget for recovery and jobs. It will ensure a lasting recovery. It is a Budget for business. It will reduce tax and regulatory burdens on small firms, reform advance corporation tax, improve export credit insurance and permit entrepreneurs to reinvest their capital gains. Small wonder that it was widely welcomed by all the business organisations that my right hon. Friend the Chief Secretary to the Treasury quoted yesterday. All these reforms will create jobs as businesses expand.
  Mr. Skinner: The Secretary of State could make a great difference to the unemployment figures if she and the rest of the Government did a couple of things during the next month. For example, the Government are in control of 100,000 jobs in the pits and in coal-related industries. There are 30,000 jobs in the pits and 70,000 in manufacturing and service industries.
  If the Government decided to save the 31 pits over which there is a question mark, there is just half a chance that the unemployment figures would be announced during the next six months. If the Government saved jobs in local government and in hospitals during the course of the year, they would be on the verge of saving 300,000 jobs. It is no use blaming private entrepreneurs all the time. It is no good the right hon. Lady claiming credit for unemployment falling when the figures have been fiddled. The truth is that the Government never take the blame for all the misery they cause.
  Mrs. Shephard: As the hon. Gentleman knows, we await the outcome of the pit closure review. I am sure that he is awaiting the outcome as anxiously as we all are.
  The hon. Gentleman will know also that local authorities have had a real increase in funding of 3·1 per cent. That increase enables them to retain their work forces or to expand them, as Conservative-controlled Hampshire county council is doing, to the tune of 800 extra jobs with effect from April.
  I also draw to the hon. Gentleman's attention the rather good example set by Sheffield city council, Sheffield being quite close to his constituency. It has made good management decisions to retain its work force in a cost-effective and efficient way. I can see that that does not commend itself to the hon. Gentleman, but that is no surprise.
  The hon. Gentleman talks of what the Government can do. Jobs will be created directly by the construction of the Heathrow Express line, an investment of £300 million. The line is due to open in 1997. It will create 2,000 jobs during construction. Jobs will also be created by the construction of the channel tunnel rail link, which involves investment of £2.5 billion. As the House heard earlier, details of these projects will be announced by my right hon. and learned Friend the Secretary of State for Transport next week.
  The reaction of Opposition Members, as ever, is predictable. They want extra resources here and extra expenditure there, but they always oppose every proposal for raising the necessary additional revenue. Fortunately, no one takes any notice of them. That is at least partly because they are all preaching different messages.
  The hon. Member for Holborn and St. Pancras continues to want to impose a tax on jobs. The hon. Member for Dunfermline, East (Mr. Brown) claims to be the friend of the small business man. The right hon. and

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  learned Member for Monklands, East (Mr. Smith), the Leader of the Opposition, has not yet felt able, alas, to welcome the fall in unemployment announced today.
  The Budget will help to create what unemployed people want—real and lasting jobs. It will encourage inward investment such as that by Toyota in Derbyshire, the biggest single Japanese investment in Europe, which will create 3,000 jobs, and by Kimberly-Clark in Humberside, the largest United States investment ever in the region, which will create well over 700 jobs.
  Last week, we had an interesting little debate about Opposition Members' attitudes to inward investment. I was delighted to have the position clarified once and for all by the hon. Member for Livingston (Mr. Cook), who had the courage to follow the example of Mr. Gavin Laird, of the Amalgamated Engineering and Electrical Union, who condemned the TUC's description of inward investment as "negative and racist", and he was right to do so. I am delighted that the hon. Member for Livingston was finally smoked out, although not his hon. Friends, in condemning that particular description.
  Mr. Eric Illsley: Does the Secretary of State realise that, since October, when the President of the Board of Trade announced the programme of colliery closures, my constituency alone has lost 1,000 jobs? Over the next few months, we are likely to lose a further 6,000. How does that compare with a couple of hundred jobs at Toyota or Kimberly-Clark?
  Mrs. Shephard: The hon. Gentleman is an expert in coal mining matters, and I know, because he is a sensible man, that he understands that, as in every other industry and with every other business, if the coal industry cannot sell its product, there has to be change. I also know that the hon. Gentleman is awaiting the outcome of the pit closure review, and that he will welcome the investment by the training and enterprise council and the Employment Service in his area, which are helping to create jobs, regenerate the economy and help those who are currently out of work.
  The Budget will provide direct help for unemployed people. My job and that of my Department is to give that help, to renew people's confidence, and, above all, to give people the help they need to get back to work. That is my top priority.
  It is sad that some Opposition Members like to give the impression that a person who has lost his job will be out of work for ever. They have tried over recent days to perpetuate the myth that there is only one job for every 27 unemployed people. That ignores two things. First, for every job notified to jobcentres, many others are not notified—jobs which are filled by other means such as advertisements or private agencies.
  Secondly, that calculation is based on the number of vacancies that remain unfilled. It ignores the much larger number of vacancies that jobcentres have filled—filled with unemployed people. Last year, the Employment Service placed 1·5 million people into jobs.
  I shall tell the House how, with our help, unemployed people are getting back into work. Every month, hundreds of thousands of jobs become vacant. Only this morning, I
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  published the figures for February. In that month alone, 160,000 vacancies were notified to jobcentres—only a third of those actually becoming vacant.
  People are taking up those vacancies. In February alone, again as I announced this morning, almost 400,000 people left unemployment—one in eight of the total. That happens every single month.
  Most people leave unemployment very quickly—one quarter within a month, more than a half within three months, and two thirds within six months. That is the message that we should get across to people who have lost their jobs. It is a clear message that there are jobs out there—real jobs—and that TECs and jobcentres are there to help people to get back to work.
  The range of help already available to unemployed people is considerable. The Employment Service has a staff of nearly 50,000 and a budget of over £1 billion. Day in, day out, the Employment Service helps people find new jobs. Last year, it found new jobs for 6,000 people each and every working day.
  It is a pity that the hon. Member for Holborn and St. Pancras hates employers. He has made that clear; he never misses an opportunity to run them down. But I live in hope that one day I shall persuade him that there is a connection between employers and jobs.
  Perhaps the hon. Gentleman would like to look at what employers are doing through training and enterprise councils and local enterprise companies. They now comprise 104 different sets of employers, business people, working in their own local areas to help unemployed people. The hon. Gentleman might disapprove of what TECs are doing, but the unemployed people they help approve, as do local Members of Parliament—on his own side as well as on this—and those trade unionists who sit on TEC boards.
  I will give a few examples of what TECs are doing. Durham TEC is providing 100 engineering apprenticeships for young people. Northumberland TEC is sponsoring 160 students from firms in the region to undertake Open university management courses. Surrey TEC is working closely with the health authority to help 10 adults with Down's syndrome; all have been found work placements, and three are likely to be offered permanent jobs. I could give scores more examples. With the Employment Service and TECs, the framework is there, and so are the opportunities.
  Our plans in the autumn statement already provided for 1·5 million opportunities—more than have ever been provided before. Those opportunities are targeted on those who need them most: the longer-term unemployed, the people most in need of help; people who have difficulty getting employers to give them an interview and who can now benefit from the job interview guarantee scheme, which has placed over 100,000 people in jobs; the disabled, who can get a three-week work trial with an employer; and job clubs, which improve by 50 per cent. people's chances of getting new jobs. Those programmes help unemployed people to get back to work, and they will help more people get jobs as the economy recovers.
  In the new measures that we announced on Tuesday, we have responded to what unemployed people tell us about the help they want. They tell us that they want opportunities which are good for them and which represent a lasting investment in the economy and in their local community. The Budget will provide the framework

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  for recovery, for growth and for new jobs. To make sure that unemployed people get those new jobs, we have listened to what they tell us and have responded.
  That is why we announced on Tuesday an additional 100,000 opportunities, costing £230 million. That should be welcomed in all parts of the House. Above all, it will be welcomed by the individuals who want those opportunities and have asked for them.
  The new package will provide 30,000 opportunities through learning for work, to finance unemployed people to pursue full-time courses of education—perhaps to learn a language, which would be a useful additional skill in a nation of exporters, or to acquire skills in business administration, catering or engineering. All these are skills which will improve people's job prospects.
  The new measures will provide 60,000 opportunities under community action to enable people to do part-time voluntary work while continuing active job search—work such as restoring heritage buildings and inner-city sites, and work with elderly people, the infirm, the young, or the mentally handicapped, and to improve the environment.
  There will also be 10,000 extra places on the business start-up scheme to provide financial support, training and advice to enable unemployed people to start their own businesses: businesses such as Elliot's in Leicester, where a family business has been created by unemployed people; or Thomas Ferguson Print Finishing in Accrington, which now employs 25 people; businesses which employ 83 additional people for every 100 self-employed individuals.
  The package also contains TEC challenge, a fund to which TECs will bid competitively to develop new, innovative ways to help unemployed people into work and to create new jobs; and it contains workshop pilots—four in different parts of the country—to test how effective it is in encouraging the recruitment of long-term unemployed people by paying a temporary subsidy to employers.
  This package, building on those opportunities already available, will help unemployed people to take advantage of the recovery and of the many thousands of jobs that become available each and every day.
  Mr. David Nicholson: My right hon. Friend will be aware that nobody on this side of the House believes that it is possible to absorb the vast numbers of unemployed people simply by throwing money around, which is what the Opposition appear to think. If that were possible, it would have been done before, under Governments of either party. Is my right hon. Friend aware that some people have suggested that these measures are cautious and have limited scope? Could she say why the measures do not go further than pilots, when we have had so much experience of employment and training schemes over the past 10 years?
  Mrs. Shephard: The measures should be seen in the context of the 1·5 million opportunities—a record number—that we have already provided and that will come on stream in April. Perhaps I could remind my hon. Friend of what I said when introducing the measures—that they will enable an investment in the people, in the economy and in local communities.
  In addition, the workstart pilots are intended to test other approaches, so that we can see what might be of particular help to unemployed people and so that we can take the lessons and build on what we learn from those pilots. That is the essence of a pilot scheme.
  Ms Angela Eagle: Is the Minister aware that Professor Snower, the originator of the idea, apparently believes that a subsidy of £150 a week is the only way to create new jobs? Why are the Government offering only £60?
  Mrs. Shephard: I note that Professor Snower, whose work I greatly respect, has claimed ownership of the idea. The hon. Member for Birkenhead (Mr. Field), who is sitting next to the hon. Lady, might also claim that he had some interest in the idea, which has been discussed for quite some time by all those people interested in helping the long-term unemployed. I note Professor Snower's comment. We feel that the basis of the workstart pilot is correct, and that the subsidy given to employers is real and will be helpful, but we shall continue to see how the schemes develop, because, as I told my hon. Friend the Member for Taunton (Mr. Nicholson), they are in the nature of pilots, and we wish to learn from them.
  Mr. Frank Field: As the Minister has commented about people who have also submitted ideas to her on the workstart proposals, will one of the four pilot schemes be testing the idea that I put to her?
  Mrs. Shephard: I have not quite finished the design of the individual pilots, and the hon. Gentleman will understand why. On Tuesday, I shall be meeting heads of TECs and the Employment Service to discuss a whole range of measures, including the design and location of the individual pilots, so perhaps the hon. Gentleman will be able to accept that the final design is not yet ready.
  Mr. Field: If the TECs say that people should be able to keep the whole of their benefit for a year, provided that employers meet a certain wage level, will the Minister be prepared for all four pilot schemes to take that form if the TECs say that it would be the most marketable scheme?
  Mrs. Shephard: No, I cannot reassure the hon. Gentleman in that way: we are basing the schemes on a flat rate payment, because that is simple to administer and enables us to achieve a standardised arrangement which we can test. However, as I have already said, these are pilots and we shall have to see how they go. I shall keep a watching brief, and no doubt the hon. Gentleman will do exactly the same.
  What is most damaging to confidence is when Britain is talked down by Front-Bench members of the official Opposition. We are trying to bring hope and confidence. It was extremely sad last week to have to listen to the speeches of the hon. Members for Livingston and for Holborn and St. Pancras in the Supply day debate. Joined by several of their hon. Friends, they sought to deny the achievements of manufacturing industry. Sadly, speaker after speaker rose from the Opposition Front Bench to deny the facts.
  They denied that exports are at record levels. There was not a word from them about the chemical industry, a net exporter; not a word about pharmaceuticals, also a net exporter, with exports growing 17 per cent. in 1992; not a word about the fact that car exports have doubled since 1986; not a word about the fact that Britain is a net exporter of television sets; not a word about the record export performance of British industry; not a word about the fact that, in the year to January, British exports outside the EC were up 11 per cent.

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  There was not a word about those achievements. There was not a word of encouragement to the men and women in industry who produce our manufactured goods and our services. There was not a word about those who sell them in tough export markets. There was not a word about the success of British industry brought about by policies aimed at encouraging enterprise, providing incentives, sweeping away unnecessary regulation and reducing burdens on business—policies which were greatly furthered by my right hon. Friend's Budget. There was not a word about the trade union reforms which have made industrial relations in this country the best in Europe.
  In last week's debate, we heard speeches deploring the decline of Britain from the hon. Members for Livingston and for Birmingham, Yardley (Ms Morris), and from the right hon. Member for Halton (Mr. Oakes). Today, unemployment fell in all those areas. That is good news.
  It is a shame that the official Opposition spokesman on employment, the hon. Member for Holborn and St. Pancras, cannot contain his hatred of employers. Indeed, last week he added to them bankers and financiers, accusing them of being incompetent financial institutions, on the make and exhibiting short-sighted stupidity. That is quite something for an hon. Member who represents a constituency in the heart of the world's major financial capital.
  Last year, we heard much about Opposition Front-Bench spokesmen scurrying round the City, downing prawn cocktails in ever-increasing quantities, in an attempt to show that they and their party believed in capitalism. How many more prawns will have to be sacrificed to put right the words of the hon. Member for Holborn and St. Pancras? Instead of encouraging enterprise and business, instead of helping employers, Labour would introduce job destruction policies.
  Mr. Frank Dobson: Does the Secretary of State say that Barclays bank has been well managed since Nigel Lawson joined it? If so, why is it running at a loss?
  Mrs. Shephard: That is a cheap comment, even from a prawn.
  The Opposition would introduce a national minimum wage; how many jobs would that destroy? At a time of high unemployment, they would sign up to the social chapter which the Prime Minister rejected at Maastricht; how many jobs would that destroy? As an incentive to training, they would put a training levy on employment; how many jobs would that destroy? Their latest idea is to subsidise jobs by taxing the utilities. That is not a positive message to business. Every time success was made of an enterprise, it would be taxed. How many jobs would that destroy?
  Those policies are in complete contrast to the policies of the Government. The Labour party has never learnt that Governments do not create jobs, despite the fact that business, employers and industry tell it so all the time. Only businesses can create jobs, through producing goods and services that people want, on time and at a competitive price.
  In this House we have, sadly, had to get used to Opposition Members running Britain down. They were
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  running Britain down in last week's Supply day debate. They ran Britain down in Tuesday's debate on the Budget. No doubt they are longing to run Britain down today.
  In commending this Budget to the House, I agree with the Opposition that some things in Britain are down. Inflation is down; interest rates are down; unemployment is down; and the Labour party is down—and out. But confidence is up; output is up; retail sales are up. Above all, Britain is on the up.
  4.30 pm
  Mr. Frank Dobson: I welcome, without reservation, the reduction in the jobless total that has been announced today. Like all Opposition Members, I am delighted if there are fewer people officially out of work. It is undoubtedly the only bit of good news on unemployment in the last three years, and it is welcome news. We hope that it will continue in future months and years, but we fear that it is a freak. If I have read the right hon. Lady's press statement correctly, she fears that it is a freak, too, because she says that we should not attach too much importance to it.
  There are many, not just among the Opposition, but around the country, who will also fear that, besides being a freak, the reduction may be another of the Department of Employment's statistical fiddles. I plead in justification of that remark the fact that the Department of Employment has already done 27 fiddles, all of which have reduced the unemployment total. It may be that there is no fiddle this time, but if this is the start of a trend it had better be an accelerating trend because, if the total is to fall by 22,000 a month, it will take 11 years before all those out of work are back in work.
  The Department of Employment also published today its labour force survey, headed "Key Results for Autumn 1992". One of the items, highlighted even by the Department, reads:
  "66,000 more people were unemployed on the ILO definition than the average monthly number of claimants of unemployment-related benefits in Great Britain during the period September to November 1992."
  In other words, by that international definition, 66,000 more people were out of work than the Government were acknowledging.
  That is not all, of course. As you, Madam Deputy Speaker, know and as I, the Secretary of State and, I am sure, her statisticians know, there are, using the old definition, 4 million people out of work. Nevertheless, we welcome the reduction and hope that it is the start of a trend.
  Harold Wilson said that a week is a long time in politics. Certainly 48 hours appears to be a long time when it comes to Budget debates. Things move rather quickly. The Guardian carried a headline after Tuesday's Budget which read:
  "Lamont's stock riding high with Tory MPs."
  By today, however, Tory MPs, according to The Guardian, are in revolt about the imposition of VAT on fuel for pensioners. Sadly, it is nothing new these days for The Guardian to be outflanked in concern by Tory MPs. Not long ago, the spineless leader writers on The Guardian welcomed the Prime Minister's workfare proposition, only to see it, to their embarrassment, dropped by the Government—at least for the time being.
  This week The Guardian, in its response to the Budget, mocked my right hon. and learned Friend the Leader of

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  the Opposition for objecting to the blatant Tory betrayal of election promises and the imposition of VAT on fuel, which will impoverish millions of badly off pensioners and families. Perhaps The Guardian will no longer run such moving articles about people dying from hypothermia.
  Mr. Skinner: I do not think the paper's man is in the Press Gallery. He has probably gone to Cheltenham.
  Mr. Dobson: That could well be. On the other hand, my hon. Friend is probably being unfair. I believe that the paper is represented.—[Interruption.] Surely The Guardian is not sold by newsagents. Newsagents sell the tabloids.
  According to most commentators, the Tories won the general election of 1992 by managing to turn it into an election about tax. The commentators said:
  "Labour lost because Labour said that tax would have to go up"—
  that is, Labour told the truth—
  "and the Tories won because the Tories said that tax would not have to go up."
  In other words, the Tories told lies. It may seem harsh to accuse the Tory party of telling lies.
  Mr. Nigel Evans rose—
  Mr. Dobson: I shall give way in due course, but I want to make some progress.
  There are two possible explanations of what various leading lights in the Tory party said in the run-up to the general election. Either they were lying or they were ignorant and incompetent. All the time, Ministers had access to Treasury figures. They had all the official information at their disposal. The Prime Minister told the House that the Tories had costed their programme. Treasury officials had been used in the exercise. He said that they has also costed our programme. Well, the costing was rather strange. Having costed our programme, the officials said that it could be paid for only by tax increases. When the self-same officials costed the Tory programme, they said that it could be paid for without tax increases. There seems to be something wrong, either with the officials or with those who draw on their work.
  Nevertheless, the Prime Minister told us that he had no plans and no need to extend the scope of VAT. He said:
  "I have no plans to raise…the level of national insurance contributions."—[Official Report, 28 January 1992; Vol. 202, c. 808.]
  For good measure, the Chancellor of the Exchequer said:
  "We will not have to increase taxes. I cannot see any circumstances in which that will be necessary."
  The Prime Minister said:
  "We have no need and no plans to extend the scope of VAT."
  If that was not lying—and, under the rules of the House, it cannot be lying—it must have been an admission of incompetence on a monumental scale. If leading Conservatives were called to any court to answer the charge that they had lied to the electorate, they could plead incompetence. In doing so, they could call upon a considerable body of evidence that they are, and always have been, incompetent. They could probably call character witnesses to demonstrate long-term incompetence in handling economic affairs. They could reasonably claim that everything they said before the election was consistent with their usual behaviour. They could, indeed, ask that other offences over 14 years be taken into account.
  Mr. Nigel Evans: Does the hon. Gentleman accept that one of the major reasons for the Conservative party's victory in the general election of 9 April 1992 was that the electorate listened to what the Labour party had to offer and heard what it and its leader had to say, did not like what it heard and went to the polls to vote Conservative?
  Mr. Dobson: In reply to that, I can only say, "It wasn't what you said at the time, sunshine."
  For the past 14 years, the Tories have been running the British economy into the ground. When they came to power, there was a trade surplus in manufactured goods. Now, despite the benefits of North sea oil, we have had trade deficits averaging £16 billion for the last seven years in succession. Now, despite the benefits of North sea oil, under this collection of clowns we have a trade deficit even in the fuel trade. When they came to power, just over 1 million people were out of work. Now, for the fifth time in 14 years, there are 3 million people out of work officially and 4 million people out of work in reality. That is despite the 27 downward adjustments carried out by statisticians at the Department of Employment in response to pressure from Ministers.
  When the Government came to power, 7,300,000 people were working in manufacturing industry, making things for people here and abroad to buy. Now, there are scarcely 4 million people working in manufacturing industry, and it is clear that soon there will be more people out of work than working in manufacturing industry. After 14 years in power, putting their economic theories into practice, the Tories have got us to the top of the European unemployment league. We have the most people out of work—we are the only country with more than 3 million unemployed—and we have the fastest rising rate of unemployment.
  Despite all that, the Chief Secretary had the gall to tell the House yesterday that the Tory party is the party of economic competence. He also spent a considerable amount of time talking about the public sector borrowing requirement, so let us consider the sacred PSBR under this Government. I refer specifically to this year's borrowing requirement.
  The Tories, the self-proclaimed paragons of economic competence, have made six successive estimates of the PSBR. I remind the House that the latest estimate is £35 billion. The first estimate was that we would not have a PSBR but a surplus of £3 billion. That estimate was made by Chancellor Lawson. The second estimate, by the then Chancellor Major, was, again, that there would be no PSBR although, to be fair, he did not say that there would be a surplus. He had obviously turned himself into the Polonius of 11 Downing street:
  "Neither a borrower, nor a lender be"
  He said that there would be a balance, and hon. Members might recall—
  Mr. Barry Legg rose—
  Mr. Dobson: No, wait until I have read out the quotation.
  Mr. Legg rose—
  Madam Deputy Speaker (Dame Janet Fookes): Order. The hon. Gentleman should know well enough by now that if the hon. Member who has the Floor does not give way, he must resume his seat.
  Mr. Dobson: In his one and only Budget statement, the right hon. Member for Huntingdon (Mr. Major), who is now the Prime Minister, said:
  "For decades, successive Governments had spent more than they were prepared to raise honestly from taxation and they made up the shortfall by borrowing."—[Official Report 20 March 1993; Vol. 169, c. 1014.]
  At that point, the PSBR for this year was estimated to be nil; under his premiership it has shifted to £35 billion. It has reached that point by way of a third estimate of £12 billion, a fourth estimate of £28 billion, a fifth estimate in the autumn statement of £37 billion, and the latest estimate of £35 billion. We have moved from a surplus of £3 billion to a PSBR of £35 billion under a Government who claim to be economically competent.
  To cut back on the deficits which have accumulated, apparently by accident and against the Government's intentions, we are faced with massive tax increases and massive cuts in public services, not to invest in the future, not to put right the structural faults in the British economy and not to re-skill our people; the cuts will repay the debts piled up by a Government who, to use the Prime Minister's words, were not honest enough to raise the money by taxation earlier. That is what has happened under this incompetent Government.
  Mr. Peter Ainsworth: It is abundantly clear that the Opposition do not like the Budget, but it is less clear what measures they recommend to enhance the recovery which is already under way. The debate has already lasted for more than two days, but we have not heard a single positive suggestion from the Opposition about what they would do. Are we to hear one from the hon. Member for Holborn and St. Pancras (Mr. Dobson) this afternoon, or are we to continue to wait in vain?
  Hon. Members: Who was that?
  Mr. Dobson: If anybody had asked me at the door whether the hon. Gentleman was a Member, I should not have recognised him. He clearly adorns our debates extremely infrequently. He will have to learn that, like Conservative Members, we make speeches that we want to make and do not take orders from those across the Floor.
  Conservative Members should listen to this. The worst charge of incompetence against the Government is that they have squandered the benefits of North sea oil. Over the past 14 years, the Government have been blessed with the one-off bonus of North sea oil which could have helped the balance of trade, which it did, and could have helped to fund investment but it has not been used for that. It gave a massive lift to Government revenues. One hundred and thirteen billion pounds has been raised from the North sea and every penny has been frittered away. The rest of Europe cannot believe what the Government have done with that one-off bonus. Every penny of revenue from North sea oil has gone either to pay for the costs of unemployment and in tax cuts for the rich in the 1988 Budget or to ease the pain of the poll tax.
  Mr. Jacques Arnold: Will the hon. Gentleman give way?
  Mr. Dobson: No, I shall not.
  There is not a penny left for investment in plant and machinery or research and development, and there is not a penny left for investment in education and training.
  Mr. Arnold rose—
  Mr. Dobson: No, I shall not give way.
  What I have outlined is incompetence on a grand scale. If the Tories are accused of lying, we can see why they would find it easy to counter the charge with a plea of incompetence, but we cannot allow them to get away with it. At the previous election, the Tories cruelly misled the British people and never stopped trying to do so. However, it is getting more difficult for them, and their excuses are getting more threadbare.
  It is now almost exactly three years to the day since the present Prime Minister presented his Budget as Chancellor of the Exchequer. Since that Budget, unemployment has risen in every single month save this one, rather like the trade deficit most months and the PSBR, as far as I can see, every month. It is no good the Prime Minister telling The Independent that he blames his predecessors for what he inherited. During his Budget speech, when he was Chancellor, he said of his predecessor, Nigel Lawson:
  "He has left the public finances stronger than at any time in living memory".—[Official Report, 20 March 1990; Vol. 169, c. 1010.]
  That is what he said and he meant it. He went on to describe that as an enduring record. With this lot in office, it is likely to endure as a record for a very long time.
  Since the Prime Minister became Chancellor, manufacturing jobs have been lost at a rate of 255,000 a year. Since he became Prime Minister, manufacturing jobs have gone at a rate of 312,000 a year. Since he became Prime Minister, the number of people in work has fallen by one million three hundred and sixty odd thousand. Since the Prime Minister's one and only Budget, unemployment has risen by 87 per cent., more than 1,200,000 people have been thrown out of work and 9,500,000 of his fellow citizens have experienced the pain and shock of being out of work.
  What has the Prime Minister done to help? Scarcely anything at all. Let us consider the Government's spending on training. When the Prime Minister took over, it was £2·4 billion. It fell to £2·1 billion, it stayed at £2·1 billion, it is planned to stay at £2·1 billion next year and is set to fall after that. In other words, as unemployment has gone up by 87 per cent., measures to help the unemployed have fallen away. This year, spending is down £300 million on 1990–91.
  When the Prime Minister became Chancellor, there were 430,000 trainees on employment training. This year, there are 210,000. Spending on ET is down from £1·2 billion to £883 million—and that includes employment action. Even the Secretary of State must realise that employment action and employment training are not working, because she is wrapping them up and amalgamating them into one outfit called training for work. One can reasonably say that only the names have been changed to protect the guilty. The coming year's budget for the new combined training for work arrangement will be less than the budget for this year. There will be 210,000 trainees and a budget of £874 million.
  When employment training was originally announced by the right hon. Member for Sutton Coldfield (Sir. N. Fowler), who is now the chairman of the Tory party, he promised with a great fanfare of trumpets—it was a Tory promise, so we could tell what would happen to it—600,000 places on employment training and a budget of £1·5 billion. What we got was one third of the number of trainees that he had promised, and half the budget. In

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  other words, there is a massive difference between what was promised. and what was delivered. The unemployed were betrayed by the breaking of that promise.
  Another Tory promise was the youth training guarantee. Apparently every young person of 16 or 17 who was not in work or education would get a YT place. The numbers have fallen from 347,000 for 1990–91 to 233,000 for the months of this year for which the places have been counted. But the Unemployment Unit, which generally speaking is more reliable than the Department of Employment, estimates that there are 111,000 16 and 17-year-olds who are not in education, not in work and not in training. Another promise has not been kept, and our young people have been betrayed by the Government and by the Department of Employment.
  We need to look at that history of broken promises when we examine what the Chancellor promised on Tuesday, and what the Secretary of State said at her press conference, at which she admitted that the additional money resulting from the Budget would be only £125 million at most—less than £1 per week for every person who is out of work. I should describe that as not a lot, but the Secretary of State refused to accept that it was "a piddling sum". It all depends on how one judges a piddling sum—certainly it would not make much of a splash. Set against the needs of the 3 million unemployed it is a piddling sum. Set against the £27 billion cost to the taxpayer of keeping all those people out of work, the 780 million working days lost because of mass unemployment, and the £50 billion worth of lost production of goods and services, it is a piddling sum. That seems to me a perfect description.
  The Government claim—let us accept their claim for a moment—that 100,000 people will benefit from what was announced in the Budget. In view of the long history of Government announcements followed by failure to deliver, it is reasonable to assume that what will happen will be less favourable than what was announced. But even if we accept their estimate that 100,000 people will be helped, that means that out of every 30 people out of work, 29 will get not one shred of help from the budget announced by the Secretary of State.
  I should like the right hon. Lady to clear up one point now. Is the £125 million really an increase? Is it additional money from the Treasury or money shifted from within her existing budget?
  Mrs. Gillian Shephard: There is £230 million in extra money that my Department would not otherwise have had.
  Mr. Dobson: The Secretary of State said in her press release on Tuesday that, after the estimated benefit savings, the net cost would be £125 million. She cannot claim that the benefits that people will receive are part of her spending—that is absurd. The figure is £125 million. She acknowledged that on Tuesday, and she cannot change her mind today.
  There are other questions for the Secretary of State to answer. What about all those leaks about the brilliant new schemes that she would introduce? There were all sorts of stories being circulated. The 21-hour rule for education and the availability for work rule were both to be relaxed. Massive new programmes were to be introduced to match the scale of the unemployment problem. What went wrong? Why has the right hon. Lady not delivered?
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  The next question is, as one of the Secretary of State's hon. Friends asked her, why did the unemployed have to wait all that time for what she has now announced? Could not the schemes have been implemented as soon as they were worked out? Why have people had to wait until the Budget? The right hon. Lady has been telling people for months—since July and August last year—that the Department is working on those schemes. Why have people had to wait for the Budget? Was it because that was the only bit of good news that we would get in the Budget? We do not think that provisions for the worst off of the unemployed should be used simply as a propaganda exercise for a Tory Chancellor in trouble.
  There are 1 million long-term unemployed people, and many of them would like to do further education courses, but many are prevented by the availability for work rule and the 21-hour rule. The Secretary of State has not changed those rules. All that she has said is that 30,000 of the 1 million long-term unemployed will be able to have places on her new scheme—one place for every 33 people suffering from long-term unemployment.
  The Secretary of State has also held forth at great length about how wonderful the business start-up scheme is. Sometimes it is; it does some good work. The right hon. Lady intends to provide 10,000 extra places, but she did not mention that when she has done so there will still be 30,000 fewer places than there were on business start-up schemes in 1989, when fewer than 2 million people were out of work.
  The Secretary of State talks about the TEC challenge. That is brilliant—£25 million. Even by the Secretary of State's definition that must be a piddling sum. All the TECs are supposed to compete for the £25 million, and we can safely bet that most of it will be eaten up by TEC and Department of Employment bureaucracies, as bids are submitted, assessed and argued about, and awards are finally made. Furthermore, we know that in the end awards will be made not on the basis of the merit of the application but according to where the Department thinks that it would be best for the Secretary of State to turn up for a photo opportunity—for the county council elections, say.
  Then there is workstart. That may be a good idea. Perhaps some of the ideas suggested by my hon. Friend the Member for Birkenhead (Mr. Field) would be a good thing. But the best that we can say about workstart at the moment is that it has not started and that nobody is sure whether it will work. Of the four pilot schemes, two will be run by the TECs, which were originally to be trusted with everything, and two will be run by the Department of Employment, which apparently no longer trusts the TECs with everything.
  As my hon. Friend the Member for Birkenhead has always realised, but as Ministers do not seem to realise, the great danger of workstart is job substitution. That is what happens when somebody moving into a job with a big subsidy is cheaper for a firm than keeping on somebody who already works there, so that person gets pushed out to make way for a new cheaper, subsidised worker. That problem must be tackled and the Secretary of State has not yet done so.
  The proposal for community action—voluntary work, part time—is certainly not up to scratch compared with the old community programme. It is to he carried out part time and on the cheap.

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  We recognise that the situation is so desperate that anything seems better than nothing, even when what the Government propose is next to nothing. Nothing is being done to help to create real jobs; the schemes are geared more to knocking people off the unemployment figures than to getting them back to work. That is a betrayal of the people who are out of work.
  The jobless have been betrayed, their families have been betrayed, the country has been betrayed and Tory promises have been betrayed. In 1979, the Tories promised to get Britain back to work. Since then, they have failed to get the unemployment total down to the level that they inherited. At the general election, they promised that there would be no tax increases and no cuts in services—now they are to increase taxes and cut services, and they have virtually ignored all those who are out of work.
  Labour Members recognise how painful, harmful and hurtful it is to be out of work and that is why we welcome even today's small decrease in the unemployment total. A person who is out of work loses a sense of purpose because, for many people, what they do is what they are. If one asks a child "What are you going to be when you grow up?", the answer is some sort of job. When people lose their jobs, they feel that they are nothing and have lost their place in society. [Laughter.] If the witless loons on the Tory Benches do not understand my point, I shall make it again. It may be that such a question is not asked in the middle-class homes of Conservative Members, but Labour Members are all familiar with the aunt, uncle or neighbour who asks a child, "What are you going to be when you grow up?" The answer given is some sort of job. Children want to be teachers, miners, engine drivers or nurses, because that is how people perceive themselves in our society—by how and where and when they work, and by the status that goes with that work. People who lose their jobs lose their status and that sense of belonging and contribution. They also lose money because when they lose their jobs, they lose their pay, and benefits do not make up for that.
  The Government have also been harmful for many of our people. Before the present unemployment crisis began, those policies saddled tens of millions of people with personal debt with which they now find it difficult to cope. When this collection of people who claim to be economically competent took power in 1979, the total personal debt was £74 billion, or 52 per cent. of individuals' disposable income. The latest figures show that people in this country now owe £487 billion, or 109 per cent. of disposable income. It is against that level of debt that people are losing their jobs, so to lose a job now is more hurtful and harmful than it was in the past.
  Unemployment is bad for health and even increases the rate of cancer. It increases the rate of suicide, and the likelihood of violent death. A middle-aged man who loses his job has double the chance of dying within the next 10 years. I apologise to anyone who may ask why I do not know the figure for women. Such a figure is not available. However, there is no doubt that unemployment increases illness and premature death, and the country has a Chancellor of the Exchequer who states that unemployment is a "price well worth paying".
  Unemployment breaks up family relationships and leads to homelessness, to vandalism, to theft and to
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  violence. It impoverishes whole neighbourhoods and it is the greatest enemy to our democracy. It impoverishes the country as a whole. The Secretary of State has admitted that it costs £9,000 to keep somebody out of work for a year—£27 billion for the country as a whole. In terms of lost production, 780 million working days a year are lost with the present level of unemployment. Unemployment is ruining the lives of 3 million people and their families. It is shackling the economy. Of all the Tory betrayals, the worst is throwing 3 million or 4 million people out of work and then doing nothing to help them.
  The whole country is paying the price of mass unemployment, but that is not how the Government see it. To them, it remains a price well worth paying, as the Chancellor said. It is not; it is far too high a price. People want the chance of a job and when they get that job, they want to be paid enough to be able to bring up their families without depending on benefits or handouts from anybody. People do not want a Britain on benefits; they hope for a Britain at work. The Budget betrayed their hopes.
  Madam Deputy Speaker: Before I call the next speaker, I remind hon. Members that, although the odd sedentary intervention may be acceptable, repeated sedentary interventions are not. I shall count them as if they were a speech.
  5.4 pm
  Sir Rhodes Boyson: All hon. Members know that unemployment is disastrous for the individual and for society. What surprised me about the speech of the hon. Member for Holborn and St. Pancras (Mr. Dobson) was that he did not propose one policy about how to solve the problem. We do not disagree with the last five or six pages of the hon. Gentleman's speech; we all know that. I grew up in Lancashire in the 1930s, in a town where unemployment was higher than it was in Jarrow. Unemployment destroys people. The hon. Member for Holborn and St. Pancras made no suggestions, apart from the growth rate, for doing anything.
  There is also no doubt that the deficit, which concerns us all, is linked to unemployment. It costs £9,000 for each person who is unemployed. Getting people back into work is the main concern of everyone in the House. We want the policy that will achieve that in the long term by providing continuing arrangements. The hon. Member for Holborn and St. Pancras said nothing about that.
  I welcome the fall today in the level of unemployment. The hon. Member for Holborn and St. Pancras was gracious enough to say that as well. We trust that this is a sign of better times to come in the employment ratio. We shall have to wait for two or three months, but at least the sign of better times to come is there. One swallow may not make a summer, but it is better than having a swan.[Laughter.] I made that up as I went along, and it was not very good. As is usual in my case, I did not know at the beginning where I would finish up, but at least I got to the end of the sentence.
  I especially welcome the commitment to the channel tunnel train link coming into London. That will provide employment and will give better services in London and elsewhere. Similarly, I welcome the Heathrow fast link and the fact that, within 15 minutes, it will bring people into London. That will encourage tourism and travel, and will increase employment. I wonder why we are not taking more such decisions. It is almost like the 1930s, although

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  this work needs doing in any case. Perhaps we should make it a proviso that the people taken on should come off the unemployment registers. If we bring people in from outside, we shall do nothing to reduce unemployment.
  I wish that there had been a bigger commitment for the crossrail line and for the extension of the Jubilee line, because we need far better public services in London. If we are to have such services, the time to work on them is at a time of unemployment, when we are back to public works. We are all turning into semi-Keynesians who remember the 1930s and the Tennessee Valley Authority. There is nothing wrong with that. Most Conservative Members are very intelligent; if we see that a policy is not working, we change it. I offer such a policy to the Opposition.
  In our debates on the Budget, several hon. Members have mentioned people who have been unemployed for two years. The critical time is six months. If people are on the register for more than six months, the day on which they do not get up at their usual time but instead stay in bed is the day from which it will then be difficult to get them properly back to work. We should concentrate on that six-months figure, although I know that there are difficulties.
  My next point is not over-cheerful. To enable us to pull out of the recessions of 1929–31, of 1974–75 and of 1980–81, the real interest rate had to be negative or very low indeed. Interest rates in Britain are still too high. That causes us great difficulty in pulling out of the recession. I realise why they are kept at their present level, and the difficulty of reducing them. Let us examine the three previous recessions. Between 1929 and 1931, there were also times when public sector pay increases were negative. We must watch the interest rate if we are to pull out of the recession.
  I want now to refer to London. I am a Lancastrian who has lived in London for 30-odd years—an adoptive Londoner. Many people in Britain are not aware how serious the position is in London compared with that in other areas, and I wish to draw the attention of the House to it. Certain parts of London may soon need assisted area status if they are to get through the present recession.
  It is my reckoning—the figures are agreed by the London Boroughs Association—that the council tax takes about £200 million out of London and £175 million out of the rest of the south-east. London is treated as a milch cow which makes money for the rest of the country and which can remain for ever a milch cow.
  Let us examine the unemployment figures. In my constituency in December 1991, unemployment was 9·7 per cent. In December 1992, it was 12·9 per cent. Unemployment among males aged 20 to 24 is 26·2 per cent., or more than one in four. Brent as a whole had a rate of unemployment of 16·8 per cent. at the end of last year.
  If we compare those figures with the figures for the rest of the country, we realise the position that London is in. The comparable figures for unemployment are: Scotland 9·9 per cent., Wales 10·3 per cent., Northern Ireland 14·6 per cent., and the north 12·2 per cent. Yet we are switching money from London to the rest of the country.
  Let us take one example. East Kilbride development corporation is advertising in London to persuade employers to move from London to East Kilbride. Unemployment in East Kilbride is 8·7 per cent., while in London it is 11·6 per cent. There is something ridiculous about using Government money to persuade people to
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  transfer their businesses from London, where there is high unemployment, to East Kilbride, which has lower unemployment. I ask my right hon. Friend the Secretary of State for Employment to examine that policy.
  Sometimes policies become historic policies which continue until someone puts up a red signal and says, "Hang on, do we know what we are doing and where we are at the present time?" I fear that the pick-up in London may not be as fast as in the rest of the country, because London's industries, especially the financial services industry, will never employ the number of people that they employed in the past. The prosperity of London and certainly of my constituency, which lies within 20 to 25 minutes travelling distance of the City, was built on such industries. For that reason, I should like the extension of the Jubilee line and the crossrail link to be built to bring help to London.
  I should like to make a suggestion. I do not know whether it is possible, but one of the privileges of being a Back-Bencher is to suggest things and then blame other people if they do not do them. We must have some privileges from time to time. I wonder whether we could make docklands into a freeport area. To my mind, docklands is the best construction in London since the second world war. If it took off and we got it right, it could almost pull the rest of the country with it.
  One must have a sense of confidence when things are built. That confidence can permeate society. We could make docklands the Hong Kong of Europe. I do not refer to the present events in Hong Kong, and I do not suggest that Mr. Patten should be its governor, but we could make docklands a special area. I am worried about the future of docklands. It will be a depressing area of London if we do not get it going faster than at present.
  Mr. Tony Banks: I come from the east end, and I am not altogether sure that I would want docklands turned into Hong Kong. I certainly would not want Chris Patten coming back to run it. Could the right hon. Gentleman put some pressure on his colleagues? He and I agree on this point. There is a good case to be made for assisted area status in London. He makes that case, too. He should put pressure on his Front-Bench colleagues. I understand that there are some differences between the Secretary of State for Employment and the President of the Board of Trade. Is the right hon. Gentleman prepared to join all the rest of us in London in making our case to the Government so that we can achieve the assisted area status which he and I support?
  Sir Rhodes Boyson: There is no doubt in my mind that the Secretary of State and the Paymaster General are listening carefully. What is the point of asking for a delegation if one is putting one's case on the Floor of the House, where these things should be said? I welcome the fact that the hon. Member for Newham, North-West (Mr. Banks) agrees with me on this point. I always pray for his salvation. We are both Londoners. I spent my first headship in the east end and lived there for a time.
  Mr. David Nicholson: On assisted area status, does my right hon. Friend agree that one of the achievements of the recent economic difficulties has been effectively to abolish the north-south divide, and that therefore the massive regional subsidies, which sadly were necessary when the recession hit the north so badly, are no longer necessary?

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  Will he also reflect on the knock-on effect on neighbouring areas of designating certain areas for assisted area status? Such areas may lose investment and jobs as a result.
  Sir Rhodes Boyson: My hon. Friend makes shrewd remarks. The risk of all Government intervention is that it will improve one area and make the rest worse. However, at present other areas have assisted area status and London does not, and, to reply in an east end fashion, we want some of the gravy. Otherwise, we shall lose employment. I do not want my businesses to go to East Kilbride. I am sure that it is one of the nicest places in the world—the fact that I have a Scottish wife shows my belief in Scottish blood—but my businesses should not be tempted away to the north
  Mr. Geoffrey Clifton-Brown: I can illustrate the point about assisted area status graphically to my right hon. Friend. A firm in my constituency has recently made 350 people redundant, because it has been tempted by assisted area status money amounting to £1 million to move to Wigan. What is the point of putting that number of people out of work in one area merely to put people to work in another?
  Sir Rhodes Boyson: My hon. Friend makes a similar case to mine. I am sure that my right hon. Friend the Secretary of State and others are listening carefully, and that, later tonight or tomorrow, they will have meetings about the matter. So we are having a good debate, as we always do in the Chamber.
  I do not like big government—that is why I am a member of the Conservative party. When people use their own money, they are much more likely to get it right than a Government committee which goes home and sleeps content because there is no penalty clause if its decisions are wrong.
  The percentage of gross national product which goes to the Government has increased from about 39 per cent. to 45 per cent., depending which calculations one uses. I wonder whether we should set a target of reducing Government spending by 1 per cent. every two years to bring it back to its previous level. I am a great believer in targets which can be achieved. It is no good saying that we could do it in a year. But before Government spending runs away with itself, we should set a target of bringing it back in future years to 40 per cent. or 39 per cent.
  My next point is a personal one. I do not like the exchange rate mechanism. It was a glorious day when we left the ERM on 16 September. I know that it is the desire of the Government to keep me happy. Obviously, I vote with them more when I am happy. One of the happiest days of my life will be when I hear a commitment that we shall never re-enter the ERM. I am quite prepared to buy a drink for every member of the Cabinet to achieve that. As that might be considered bribery, perhaps I had better take it back. As a Lancastrian from near the Yorkshire border, I would not want to be tempted too far. If that pledge is given in the reply, a great cheer will go up in the English land and unemployment will undoubtedly go down by 1·5 per cent. tomorrow.
  Many people have expressed opinions on the application of value added tax to fuel. The Government have to raise money, as they are in a difficult position. I accept that there is VAT on fuel in other countries, and
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  those people who receive social relief of one sort or another will be covered when that is upgraded. Those of us who can pay our bills easily will not be bitter about the increase, but I am concerned about the people in between. I shall describe them in Webbian terms, so that even the Labour party cannot object: they were known as the frugal poor in the 19th century. I am concerned about the people who want to pay their bills—the 1 million people who do not claim, and who were mentioned at Prime Minister's Question Time today.
  One cannot meet everyone's needs, but the retirement pension should be upgraded to deal with the increase, as pensioners are at home for most of the time and need the warmth. Many pensioners will pay the full council tax and all their bills, but they have to do so out of a narrow income. I am concerned about the peope who have about £4,000 or £5,000 in the bank, and who hold the old working class belief that one should be able to afford to pay for one's own funeral and to have a decent funeral.
  The pension should be upgraded next April and in the statements sent out in October. Many pensioners are in the Conservative heartlands and therefore on political grounds—because I like the Conservative party, including myself, to win elections—and for equity, an increase in the pension should be considered. Upon that matter, I shall retire for today.
  5.21 pm
  Mr. Jim Cunningham: First, I must pull up the Secretary of State for Employment on several matters. In answer to an intervention by my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), who asked about additional moneys for her Department, she mentioned £200 million. She did not completely answer the question, however, because no one from the Government Front Bench has told us where that £200 million will come from. It sounds to me rather like borrowing from Peter to pay Paul; if that is the Government's intention, they will find themselves in trouble with the Budget straight away when they start to deal with some of the underlying problems in this country. The Secretary of State should clarify that when she replies.
  Any dip in unemployment must be welcome but—I hope that the Secretary of State will take note of this "but"—whether the figures increase or decrease depends to a large extent on the success of the Budget and on the decision about the closure of 31 pits. As some of my hon. Friends have said, 30,000 miners' jobs are at stake as well as about 70,000 jobs in industries servicing coal mining, which means that 100,000 jobs are at risk and we must therefore offer a word of caution.
  I would never be reluctant to welcome any assistance to the business community, whether to large or small businesses, if it helped to create jobs. Opposition Members have a cautious welcome for measures to help businesses because we want something to happen to unemployment.
  Questions should be asked about some of the slogans coming from the Government Benches. Conservative Members keep firing back the question, "What would you do?" This is not a general election; it is the policies and programme that the Government fought the election on that are at issue. Part of their programme was that there would be no increases in taxes or extension of value added tax—so two of those promises have already been broken.

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  The question of talking Britain down must be dealt with. We are not talking Britain down, but questioning the Government and calling them to account. That is the right of Parliament. We are questioning the Government's handling of their stewardship of the British economy. That is the issue that must be nailed in this debate.
  The Budget must be judged against a background of 14 years of ups and downs and "stop-go" policies which were supposed to be coming to an end in 1979 when Lady Thatcher became Prime Minister. In 1979, the Tory party started this country down the road and it has never recovered. Where have those 14 years got Britain? We have just under 3 million unemployed, and as the basis for the figures has changed we do not know the real figure.
  Since 1979, the Government have found every excuse under the sun when they have run into trouble. During the 1979 election campaign there was no world recession, but after the Conservatives had won the election they suddenly discovered one. World recession is once again their reason for breaking their promises to the electorate. We know that there is a recession. No one would deny that, but we disagree with the way in which the Government are handling it and about the measures necessary to get us out of it. That is how the Budget will be judged.
  The money lenders, who finance the Government, are asking whether it is about time that the Government started to pay some money back before they are given any new borrowings. That is why the Budget will produce about £17·5 billion in taxes during the next two years to start to pay the debt off.
  I have listed some of the issues that must be dealt with and for which the Government must be held to account. Despite the late conversion of the Prime Minister to the cause of manufacturing industry, between 1979 and the present we switched investment from manufacturing to the service industries, which were good for a quick return on investment; if one invests in a company such as Rolls-Royce it sometimes takes many years to get a return on the investment. As a result, we lost considerable numbers of jobs in manufacturing industry as we moved into service industries.
  Mr. Oliver Heald: Last Friday, Labour Members tabled a motion suggesting a cut of £7·5 billion in defence spending. How would that affect Rolls-Royce workers and workers in my constituency who rely on the defence industry? Is that investment in British industry?
  Mr. Cunningham: Opposition Members were suggesting that some of the money for defence could be used for diversification into new technological industries. I am sure that if the hon. Gentleman talks to his colleagues and to the President of the Board of Trade and the Minister for Industry he will find that trade unions have made many representations to the Government on the subject of diversification now that the Russian threat seems to be in abeyance, so I shall not fall for that one.
  To return to some of the major issues for manufacturing industry, the west midlands, which was the powerhouse of the British economy, has between 11 and 12 per cent. unemployment and some of the old industries have vanished during the past 14 years, especially the "metal-bashing" industries—as we would describe them
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  on the shop floor—such as those which produce motor cars or steel. The Government have been reluctant to do anything to assist Rolls-Royce and Leyland DAF.
  Although the Budget contains some measures to assist development and help with development costs, it contains nothing major to assist our manufacturers to develop either new projects or projects that they already are working on. Anybody who knows anything about manufacturing industry knows that a good percentage of costs, outside of wages, are incurred by development projects.
  Coventry, the west midlands and the rest of the country are suffering from the "accumulative factor"—the problems that come with high unemployment. I have already said that the unemployment rate in the west midlands is about 11 per cent. Coventry has been saddled with high unemployment—in a city to which, 30 years ago, people came from all parts of the country and the world for employment and it was able to absorb them. Today the population has dropped from 350,000 to 300,000, which reveals the flow of people from the city because of lost job opportunities.
  Coventry has lost 50 per cent. of its manufacturing industry. Household names in the motor industry, such as Standard Triumph, Rolls-Royce and GTP, are running down their operations and have made systematic redundancies. The Government have done nothing to help them.
  Our assisted area status is under threat. We shall not know its fate until the outcome of the President of the Board of Trade's review of the mining industry is known. Again, the Government are taking money from Peter to pay Paul. That is an issue of great concern to the local people.
  The Budget does nothing to address the plight of the homeless and old age pensioners, who need approximately £200 a week to live on. The right hon. Member for Brent, North (Sir R. Boyson) mentioned the 1 million frugal poor, to use the Webbian expression. Those people and old age pensioners in their twilight years deserve a certain level of income to survive and should not be subjected to means tests by the Department of Social Security. There are problems with disablement benefit for those pensioners who are disabled. These people need assistance with their fuel bills.
  One-parent families and those in employment whose income does not entitle them to receive extra assistance are the people who will be affected by the extension of VAT, and they will struggle.
  It is interesting to note that the Budget signals the extension of the imposition of VAT. There is no doubt about that. In the next few years, pay-as-you-earn will be phased out and VAT phased in by the Government. We have had another signal—although the Prime Minister denied it today—that assistance with mortgages is to be phased out. People should have no illusions about that.
  As a result of the Budget, the urban aid programme will be cut, which will lead to the loss of 30,000 jobs throughout the country and 200 jobs in Coventry. That programme trains people and it helps community relations by helping the ethnic minorities either to start their own businesses or to apply for jobs. Such help will be hit badly in inner cities as a result of the Budget. The safer cities initiative will also be abandoned. That suggests to me that areas such as my constituency—with high unemployment among young and middle-aged people and many

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  one-parent families—will be abandoned. They will have fewer employment prospects and the opportunity to improve their quality of life will diminish. One-parent families in inner city areas will suffer most because they will be deprived more.
  I have considered the economy and how it will affect our manufacturing base. We know that the Government will be remembered for the Budget. It has nailed the lie that they are the party of low taxation and low unemployment. In reality, they represent the extension of taxation, high taxation, new taxation and high unemployment. They are the party who claim to support industry but, when it comes to demonstrating it in the Budget, they give it very little support, as witnessed recently by the great industries of Coventry and the west midlands which are being run down because they have been denied Government assistance.
  5.35 pm
  Sir Michael Grylls: The speech by the hon. Member for Coventry, South-East (Mr. Cunningham)—bearing in mind his constituency—understandably, and rightly, centred to some extent on manufacturing industry. There would be no difference between hon. Members on both sides of the House that that is a vital part of our economy. The criticism and implications, however, about a massive retraction in manufacturing industry almost suggest that people are living in an isolated state, locked up in a box and cut off from the rest of the world.
  If one is honest about our own country, we have seen our manufacturing base get narrower over the past 100 years. That started to happen almost immediately after the industrial revolution, and it was quite natural, because other nations wanted to build things for themselves. We could not for ever be the workshop of the world.
  That process of retraction has occurred in other countries. In the United States, service industries account for nearly 70 per cent. of the economy, in Germany and France they account for more than 50 per cent. and 40 per cent. respectively. In Britain, those industries account for 60 per cent. of our economy. That trend has affected the older workshops of industrialised countries, because other countries want to make their own things.
  Such changes present us with massive challenges. This debate rightly has focused to a large extent on jobs. The big worry shared across the House—it should not be a party issue, but, as my right hon. Friend the Member for Brent, East (Sir R. Boyson) said in his excellent speech, it should be bipartisan—is, how do we create the jobs? How do we help the private sector to create jobs? The challenge is that there are very few things we make in this country—or, for that matter, in any of the G7 countries—that cannot be just as well made in India, China and Vietnam, where the average wage is about $50 a month.
  The challenge is how we compete with such economies, unless we are prepared to live in a box and see ourselves living in a lovely country while doing no trade. That would not be practical. How do we maintain employment? The transformation in manufacturing industry—this applies to the other G7 leading industrial countries—has meant that each country has focused on what it does best.
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  I am sure that the hon. Member for Coventry, South-East will agree that our car industry has expanded recently. It was run down in the 1970s, and it is now having a renaissance. We are now building 300,000 more vehicles a year than we were five years ago, but the companies are employing 100,000 fewer people. In the United States, Motorola has doubled its business but halved its work force. There is nothing essentially British about this problem. It is worrying, but the challenge—which is better than worrying about it—is how we deal with it. We can only deal with the challenge by being the best in a smaller number of industries than we had 130 years ago. We are the best in pharmaceuticals; we are a leading country in chemicals and in aerospace. We now have massive motor car production that we did not have a few years ago. The balance of trade in television sets is now in our favour—we are exporting a great many of them. We are good at all sorts of other high-technology industries.
  I can remember when, in the mid-1970s, British Steel, then a nationalised company, came before a Committee of the House to announce that it was losing £500 million a year. It was a disaster. Then it was privatised and turned around. Until the economy started turning down two years ago, British Steel was making nearly £500 million a year profit and paying about £200 million a year into the Exchequer in corporation tax—to pay for important things such as social services.
  We have a great many success stories but—we must face the truth and deal with it—on a much narrower front than ever before. Now we must build on that.
  This is not actually a debate about manufacturing industry; it is a debate about the Budget, so I shall return to that. I have been struck by the fact that some people rejoice in picking out negative elements. They are the sort of people who refer to traffic lights as stop lights. I refer to them as go lights. Perhaps hon. Members think that I have flipped my lid by using that expression, but it is certainly more positive. Let us concentrate, therefore, on what has been positive in this Budget.
  First, the Chancellor has rightly and determinedly set about dealing with the deficit. That cannot be done without considerable pain. Certainly, some people will not like the additional payments that they will have to make over the next few years to help to get the Budget into balance again—but there is no gain without pain. Let us face that fact and try to be positive about it.
  My right hon. Friend the Chancellor has been more unfairly criticised than any Chancellor I can remember. I would only remind him that we never put up statues to critics. Walking around London, we observe that the statues are put up to the doers and the achievers. I believe that our Chancellor has achieved a great deal. He has set in train tough policies to resolve the temporary problem of the deficit.
  It is childish to debate whether someone said that we had no plans to increase indirect taxation or VAT. That is so idiotic as to bring politics into disrepute. Governments are in place to deal with challenges, not to worry about trivial debating points which have no bearing on anything.
  Mr. Jim Cunningham: There is nothing childish about it. The British people are being taxed to the tune of £17 billion to claw back the money that must be borrowed. Why were the British people not told that before the election? Does the hon. Gentleman agree that the Government obviously knew it then?
  Sir Michael Grylls: The hon. Gentleman is clearly more perspicacious than any Government, and can see around every corner. After Governments are elected, events happen. What are they to do then—sit on their hands and claim that they did not say in the election that they might have to put up VAT? Should they disclaim responsibility for the problem?
  Mrs. Anne Campbell: During the election campaign, the Chancellor said on "Channel 4 News':
  "We will not have to increase taxes. I cannot see any circumstances in which that will be necessary."
  Does the hon. Gentleman agree that that was a very firm statement?
  Sir Michael Grylls: I do not want to be discourteous to the hon. Lady, who has made a fair point according to her lights, but she is being a little nit-picking. No one—certainly no one in the Labour party, and no economic pundit—knew how long the recession would last. What was the alternative? Would she have liked the Chancellor to tell the House that, because he had said two years ago that he had no plans to increase VAT, he would not do anything now—that he would let the deficit rise, the currency fall and inflation start again? I believe that the Chancellor did the honourable and right thing for the country: that is what he is there for—
  Mr. Illsley: He should resign.
  Sir Michael Grylls: That is ridiculous. He is there to serve the country and to do what is best for it. He is there to solve problems, not to throw up his hands and ignore them.
  Mr. Clifton-Brown: Does my hon. Friend recognise that even the Clinton Administration, so revered by Opposition Members, have had to revise their taxation and spending plans in the light of the current and worsening economic situation in which they find themselves?
  Sir Michael Grylls: That is certainly true, but I fear that you, Madam Deputy Speaker, would quickly admonish me if I started discussing the Clinton Administration.
  The strategic point that our party has always made is that we believe in indirect taxation, not direct personal taxation. That is what the Chancellor has done. Although he has had to put up some indirect taxes, for reasons that I have tried to outline, he has also managed to reduce direct personal taxation for 1 million people who really need help, and I honour him for so doing.
  Mr. Heald: Does my hon. Friend agree that one circumstance that has changed since the election is the Government's commitment at the Rio conference to spend considerable amounts on improving the environment? That was not known at the time of the election, but it has to be paid for. Is it correct that, today, the hon. Members for Islington, South and Finsbury (Mr. Smith) and for Peckham (Ms Harman) both refused to say that they would remove the extended VAT? Those remarks were made in the course of media interviews.
  Sir Michael Grylls: I hear what my hon. Friend says, and it is a good point—but I am being tempted now in all directions. Forced to choose between the United States and Rio, I would prefer to go to Rio, on balance.
  An outstanding feature of the Budget that has not had nearly enough attention was what it did for small independent businesses. This really was a five-star Budget
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  for owner-managed businesses, which are the lifeblood of our country, as 90 per cent. of our firms come under that heading. The Chancellor's substantial changes will be extremely helpful.
  There have also been changes in the Government-backed loan guarantee scheme. When it was introduced in the 1980s, it was not a perfect scheme, but the Chancellor's changes will make it much more effective. He has raised the limit to £250,000 to bring in more medium-sized firms, and he has reduced the premium to 0·5 per cent. The old scheme offered only expensive money, and in addition there was a 2·5 per cent. premium, which will be reduced to 0·5 per cent. Obviously it will be much less expensive for firms to borrow.
  It is important that we give support through such schemes to smaller or medium-sized firms. It should be understood that, as the economy begins to grow, those firms will need extra money to buy stock, to expand, to innovate and to service their customers. If the banks cannot provide the necessary moneys, smaller or medium-sized firms will not be able to respond to growth within the economy.
  It is encouraging that there are positive comments about the Budget. The chief executive of Midland bank, Mr. Pearce, has said that the extra support available through the loan guarantee scheme will further help banks to support economic recovery and create jobs in industry. Midland bank has provided about £150 million to about 7,000 firms since the scheme started. There has been a similarly positive response from Mr. Wanless, the chief executive of NatWest bank. It is encouraging that the banks are reacting positively to the extension and improvement of the scheme. It is one of the most important features of the Budget.
  Similarly important is the removal of capital gains tax for entrepreneurs who want to leave one business and go into another. They are locked into their businesses with 40 per cent. CGT. That meant that, if they sold up, they had only 60 per cent. of the proceeds to put into a new business.
  Many people in Britain, as in America and other developed countries, enjoy building a business but do not enjoy so much the running of it. They like to create a business and build it up, and then let someone else take on the running of it. They then move on and start another business. We must not have a tax system that deters such people from taking that course. After all, they are the creators of wealth and jobs. It is extremely important that my right hon. Friend the Chancellor has removed CGT for those people.
  When more money is available to enable us further to reduce taxes, I hope that, within the lifetime of this Parliament, we shall see the abolition of CGT. Like most capital taxes, it distorts business decisions. In a proper free market enterprise economy there should be no place for such a tax. Let us say thank you for the progress that has been made.
  I know that my right hon. Friend the Secretary of State for Employment will appreciate from her experience as a Minister and as a Back Bencher that, all too often, value added tax enforcement officers adopt an overbearing attitude. That has been a real cause for complaint for millions of self-employed people and for those running small businesses. They have been chased around for trivial sums. They have made small, genuine mistakes; they have not tried to cheat the Exchequer. Those who cheat must be

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  chased, but I am talking about those who make genuine and perhaps simple mistakes while trying to run their businesses. In other words, they have to do everything.
  There is no doubt that the VAT enforcement procedures in the United Kingdom are much tougher than elsewhere. I hope that the review that my right hon. Friend the Chancellor has undertaken will bring us in line with other countries. We do not necessarily want to be as loose as some, but in France, for example, business people are not chased around for trivial sums. I hope that the changes that will be made after the review has been completed will be helpful.
  Another deregulatory measure is the proposal to abolish the statutory audit for small firms. There never was a real argument for it. I know, of course, that some bureaucrats approved of it. Some officials in the Inland Revenue and the Treasury liked it. It has been convenient for them, but that is not the way in which the Government should run things. We must consider what is best for the customer, which in this context means the small firm.
  My right hon. Friend the Paymaster General, who is on the Government Front Bench, was a distinguished Minister with responsibilities for small businesses. He did a wonderful job in that office. I think that he will recognise that the abolition of the statutory audit can do nothing but good. An accountant will often charge about £1,000 for the audit, and that money will be much better spent in obtaining consultancy advice on how a firm can be run more efficiently so that more wealth can be created.
  Important also is the freezing of the uniform business rate. There is no doubt that the UBR has borne heavily on smaller firms during the downturn in the economy. We know that the reform was important, and I believe that it was right. It had to happen. However, when demand dropped, the going became extremely tough, because everything happened at the same time. The freeze will generally be welcomed. I believe that it will help about 800,000 small firms. That is a big feather in the Chancellor's cap.
  This is a five-star Budget for smaller firms. It will give great relief and encouragement. The loan guarantee scheme will prepare the way for firms to prosper and grow as the economy grows, and I view it with great optimism. I hope that others will throw away their negative approach and take account of the positive features of the Budget, which will help the country enormously.
  Several hon. Members rose—
  Madam Deputy Speaker: I remind the House that between 6 pm and 8 pm there will be a limit of 10 minutes on speeches.
  5.56 pm
  Mr. Matthew Taylor: Less than 24 hours after the Chancellor of the Exchequer's Budget statement I had a phone call from Cornwall. I was told that the old, the poor and the sick were calling at a drop-in centre in floods of tears as a result of what they had heard about the rise in fuel bills following the imposition of value added tax. I was told that they did not know how they would meet the extra charges. Those people are among the most vulnerable in our society. They are the people who have
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  been most betrayed by the Budget, which breaks promise after promise that the Conservative party made when it fought the general election only a year ago.
  The hon. Member for Surrey, North-West (Sir M. Grylls) spoke about a five-star Budget for business. I shall present another response to the Government's economic record from someone who ran a small business that had been in the family for many years. It employed many people in my constituency. I received the letter in the second post today and I opened the envelope shortly before I entered the Chamber to participate in the debate. I shall not reveal the name of the person who wrote the letter. However, she said that she wanted her concerns highlighted. Part of the letter reads:
  "It has taken the receiver appointed…just four weeks to finish us. I have to accept the fact that the Company has gone, a lifetime's work and what have they gained? The stock half sold off, the rest going to auction… We had never laid off a single employee, one was retiring due to age, but I prided myself on the fact that I worked hard to keep everyone going… We are looking for a small shop to rent or lease."
  That is for the son, who had 25 years of employment in the company. I understand from the letter that he is at risk of losing his home. That is in addition to the fact that he has lost his profession and the family firm. The letter continues:
  "But of course to stock it"—
  that is, the shop—
  "would cost an awful lot of money and I have literally lost all mine. I realise now that I was silly to put so much into the business but I had so much confidence in the coming year being better and the future being brighter for all… I shall take a back seat now, it's all been too much for me. I am puting my house up for sale".
  That is the reality of the background to the Budget. That is the reality for businesses as well as for individuals who have been hit by tax increases. The letter makes it clear that part of the problem is that only 11 months ago, during the general election campaign, the Conservative party talked of recovery that was in place, not one that was to come. It fooled many people, especially those in business, and, as a result, they took decisions that have led to situations of the sort that are described in the letter that I have quoted.
  That is the background against which we debate the Budget—not the City's reaction, not what the pundits say, but the hard reality for ordinary men, women and families who are being asked to pay for the Government's mistakes. This is a Government who do not blush to say one thing, when they want to win an election, and do quite another when they are back in government.
  It is extraordinary that, today, as in the past couple of days, Conservative Members have repeatedly justified the Chancellor's position by claiming that he did not say what we all know he said during the general election campaign. Had they apologised, the British people might have understood, but they cannot understand a Government who pretend that they did not say what the British well remember being told at the time of the general election.
  There are two great tests of the Budget—how well it faces up to the needs of the British economy and the British people, and how it matches up to the easy promises of the Conservative manifesto. Despite the pledges that Conservative Members have made year after year about reducing taxation, the reality of the Budget is increased taxation—not just the extension of VAT to fuel and power, hitting worst the old, cold and poor, but the increase in national insurance, which is nothing less than

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  an increase in the effective rate of income tax, and hits those on low incomes most and those on high incomes least.
  How does the Budget stand up to the first test? The proposals have done nothing to encourage consumer confidence. They are likely to make many people worse off and to discourage precisely the spending that is needed to get us out of the recession. Many of the plans are not to be implemented for a year, but that will make precious little difference to families who are struggling now. They will simply realise that they are likely to be struggling even more next year.
  Mr. Nigel Evans: As the hon. Gentleman started his speech before 6 o'clock he will have a few more minutes in which to speak than most of us in the Chamber. Will he do something for the House today that the Labour party has signally failed to do, and that is to tell the House something about the policies that his party would have introduced had it been in power?
  Mr. Taylor: I shall be saying something about our policies and it will be the same as we said at the general election. We can say with some pride that we told the truth at the general election, whereas the hon. Gentleman and his colleagues did not. I shall be contrasting those positions.
  Great swathes of the Conservative party manifesto in 1992 were about the priority of low taxation. It proclaimed:
  "A lightly taxed economy generates more economic growth".
  It also said:
  "High taxes kill the goose that lays the golden eggs."
  That goose was pretty well laid out before the high taxes were introduced. Goodness knows what the Conservatives who fought on that manifesto think is the position now that taxes have been increased in the Budget.
  That was in 1992. In 1993, the view seems to have changed. Apparently, economic recovery is achieved through higher taxes. The Chancellor claims that a Budget that increases tax is a Budget for recovery.
  In some parts of the country the position is even worse. Already, in Cornwall, consumers pay electricity bills 8 per cent. above the national average and rising at a faster rate than the national average. That situation will be worsened by plans for regional discrimination in electricity charges, with consumers living further from generating stations paying more. As if that were not enough, there will now be the added blow of VAT, making the price differential even greater.
  Every time that I write to Ministers about regional pricing policy for electricity and gas, they refuse to meet me and local business representatives, saying that it is not their responsibility because the electricity and gas industries have been privatised. But who privatised the industries? It was none other than the Conservative Government and Conservative Members. Who approved the regulations that led to the price increases? It was none other than the Conservative Government and Conservative Members. The Conservatives were happy to promise that privatisation would be in the consumers' interest, but they wash their hands of the matter when it turns out to mean higher bills.
  The Government cannot wash their hands of the VAT plans. They will not be allowed to, certainly not by people in my area, the poorest county in the country, who are
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  backing the Liberal Democrats' Fair Deal campaign which is campaigning for fair water and electricity prices for Cornwall, let alone cuts in the national average.
  It is not as if VAT on fuel and power would do much to help the environment—the great justification that we heard from the Chancellor. He is putting VAT not on pollution, but on all energy. It does not matter whether it is from a coal-fired power station or from one of the wind farms in Cornwall. Nor is the tax imposed on the fuel that an individual consumes; otherwise there would not be the VAT imposition on the standing charge. There is no way that that can be sending a message to cut back on the use of polluting energy sources.
  The west country has also seen huge increases in water charges, way above the national average, so that 3 per cent. of the national population has to pay for one third of the country's coastal clean-up programme. That is nothing other than a tax. It happens to be a selective tax, imposed on some of the poorest people in the country, to clear up a national asset. Without privatisation, that would more clearly have been a tax. It is another way in which the Government's policies are imposing a greater burden on those whom I represent.
  Throughout the general election campaign, I and fellow Liberal Democrats were attacked by Conservatives for our plans to increase petrol prices. Conservative leaflets and Conservative canvassers frightened voters by saying that Liberal Democrats planned huge rises in petrol prices. They did not mention that we planned to phase the increases or that we proposed compensation for people in rural areas and extra investment in public transport. Those were our policies on which we were proud to fight. We told the truth about what they would cost and we explained our reasons and how we would help people with the burdens.
  Meanwhile, Conservatives campaigned against the increases that they are now introducing in their Budget only 11 months later, and they offer no help to rural areas and no investment in public transport in rural areas. It is all take and no give with this Conservative Budget. Most significantly, at no point in the last election did any Conservatives mention that they would increase petrol prices by more than we proposed in our manifesto.
  We also campaigned honestly on mortgage interest tax relief. We said that it needed reform in order to give more help to first-time buyers and people who are renting in the private sector, and less to those who already have a lot and are simply looking to move up the market, buying ever-larger houses with help from the taxpayer in the process.
  Again, Liberal Democrat plans for reform were attacked by the Conservatives at the election. But now, rather than reform the system, they just cut mortgage interest tax relief from 25 to 20 per cent. So much for encouraging growth in the housing market. So much for the Conservative party arguing that Liberal Democrats would hit mortgage payers, when the truth was that only 11 months later it was the Conservative party which would introduce a cut in mortgage interest tax relief.
  One year after the Conservative election victory, we are confronted with the betrayal of their promises on taxes on income, on increases in VAT, on petrol prices and on mortgage interest tax relief. What hypocrisy. What deceit of voters who must be left wondering who they can trust. I am sure that in the county elections in May and in the

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  Newbury by-election it will be clear that the last party that voters are prepared to trust ever again is the Conservative party.
  6.10 pm
  Mr. David Lidington: I am grateful to you, Madam Deputy Speaker, for allowing me to make a short contribution, particularly on a day when we have learnt that unemployment in my constituency of Aylesbury has fallen by nearly 3·5 per cent. That is very welcome news because, although in my constituency the rate of unemployment is below the regional and the national average, it is higher than the rate to which local people have been accustomed in recent years. If I agree with nothing else in the speech of the hon. Member for Holborn and St. Pancras (Mr. Dobson), I agree with his analysis of what to be unemployed means for the individuals and families directly affected.
  I welcome the measures in the Budget because I believe that they provide the right framework for the creation of permanent jobs and sustained economic growth. I particulary welcome the employment package that my right hon. Friend the Secretary of State dwelt on in her speech today. Representing a constituency which relies on small and medium-sized employers, I give as warm a welcome as did my hon. Friend the Member for Surrey, North-West (Sir M. Grylls) to the measures on the value added tax threshold, capital transfer tax relief, the way in which Customs and Excise deal with VAT defaults and the other measures aimed at supporting and assisting small business to get on with generating wealth and creating new jobs.
  I believe, though, that to bring unemployment down to what any hon. Member would regard as anything like an acceptable level will not be an easy task which can be quickly accomplished. That is partly for reasons which my hon. Friend the Member for Surrey, North-West spelt out. We are seeing a shift in the international patterns of industry and trade. Within this country and the rest of the industrialised world, technological advance will mean a demand for different sorts of skills. Large companies, in particular, are approaching their business in a different way, contracting out many of the functions that they once carried out in-house.
  None of these long-term and, I believe, irresistible changes in the international economy can be ignored. I was therefore very glad to see that my right hon. Friend's employment package gave considerable weight to the idea of training and retraining people who have become unemployed. Only if we have a skilled, flexible and adaptable work force shall we be able to help people into more permanent employment.
  I found the vision of the hon. Member for Holborn and St. Pancras so out of date when he talked in that rather moving, grandfatherly fashion about the ambition of a young boy to become an engine driver, or a doctor. In my case it was a zoo keeper initially, and some people might say that I was on the verge of achieving my ambition.
  The truth is surely that in an economy, both global and national, which will be subject to rapid and frequent change we have to say honestly to people that they must expect to have to change not just jobs but career paths at different times in their lives, and that for some people the
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  pattern of the future may be not to have one job from 9 am to 5 pm five days a week, but to have perhaps a portfolio of two or three part-time jobs. We must therefore adjust our social policies and our policies regarding tax and benefits accordingly.
  I support the words of some of my right hon. and hon. Friends earlier in the debate, in particular the remarks of my right hon. Friend the Member for Guildford (Mr. Howell) earlier this week, when he said that we would have to keep the unemployment figures announced this week under review to see whether they should be extended to greater numbers of the unemployed in the future. As I have said, I do not believe that this problem of unemployment is capable of quick or easy solution, and I believe that that is the realistic view of most of the British public, too.
  Referring briefly to a constituency interest, I warmly endorse the remarks made by my right hon. Friend the Member for Brent, North (Sir R. Boyson) about the crossrail project. I, too, feel that I can give two cheers at the Government's announcement, but I wish that a firmer commitment had been given. I believe that Aylesbury's recovery from the recession is under way, although it is fragile, but every analysis carried out by local authorities in the area or by the local business community points to the urgent need for improved transport communications as a condition for getting that recovery fully under way and enabling my constituency to compete with other industrial towns in the south-east, such as Wycombe, Banbury and Reading.
  Crossrail will not benefit my constituents alone; it is an important connection between the channel tunnel link running into Stratford and the rest of the railway network. Now that the Government have decided that private sector money should be involved, I hope that they are prepared to be more ambitious even than under present plans. Let us look at extending the new electrified high speed line beyond Aylesbury to Milton Keynes, and perhaps to Birmingham and further north. That would be a project of which the country and the Government could be proud and which would not only provide many jobs for people who now lack them but contribute in the medium term to the greater prosperity of the country.
  My right hon. Friend the Chancellor had a difficult balancing act to carry out this year. The initial reaction to the Budget that I have been picking up from businesses in my community is that he has struck the right balance and taken the necessary action to correct Government over-borrowing while at the same time, through micro-economic measures, ensuring that the incipient economic recovery is not just allowed to continue but is sustained and encouraged.
  For those reasons, I shall be glad to give the Budget my support in the Lobby.
  6.17 pm
  Mr. Jim Dowd: The two sounds that were heard most clearly on Tuesday when the Chancellor was making his statement were the sound of hon. Members dozing off in all parts of the House and the sound of chickens the size of jumbo jets coming home to roost.
  When I heard the Chancellor, or somebody sounding very much like him, on the "Today" programme yesterday morning saying again—and I am assuming that he was reading—that the Conservative party is the party of sound

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  finance and balanced books, I could barely credit my ears. Towards the end of the interview, when asked whether he was doing the best he could for the British people by being Chancellor of the Exchequer, he said that that was his duty: to serve his country. Then we came here yesterday and heard the Chief Secretary speak at one stage about the duty of responsible government. Obviously, the Government disinformation machine theme for the day was duty. When I reflected upon that, I thought of something that Bernard Shaw once said: when a stupid man is doing something of which he is ashamed, he proclaims it to be his duty.
  We have had for the past 15 years an unabashed, unalloyed spate of irresponsible government. We have had an economic miracle, we are told. I will not go over the ground covered by my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) concerning North sea oil, because it would pain Conservative Members too much, and the truth has a limited effect upon them; they cannot quite see it.
  The waste of over £100 billion in North sea oil revenues pales into insignificance beside their real failure. They really are economic idiots of quite supreme proportions. That is evident from what they have done with the proceeds of privatisation. I am not arguing about the rights and wrongs of privatisation, but I must stress to the imbeciles on the Government Benches that every organisation, large or small, public or private, will inspect its capital portfolio to ensure that it is working to the benefit of the organisation.
  Mr. Lidington: On a point of order, Mr. Deputy Speaker. Is the word the hon. Gentleman used in his last sentence parliamentary?
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): It is not out of order, but I would advise the hon. Gentleman that it would be wise not to use such words in the Chamber.
  Mr. Dowd: I certainly accept your guidance, Mr. Deputy Speaker. I reassure you that it is a word much used in south London, particularly when talking about the Government, but none the less I apologise.
  The Government's most elementary mistake was to use the proceeds of capital sales to fund revenue. Everyone knows that that is the path to bankruptcy. The figures now emerging on Government borrowing show what is happening. Today's papers show that the Chancellor has not even covered his current spending commitments with the tax raising that he announced yesterday. It is the first time in British history that our affairs have been so chronically mismanaged.
  A local authority would be prevented from attempting such a strategy, and a commercial organisation would be prosecuted for attempting to trade while insolvent. That is the strength of the Government's addiction, like junkies, to selling off public assets and using the money to fund revenue.
  Last month's PSBR was the second worst monthly figure in history. It was managed only by the proceeds of privatisation. Again the Government were selling off capital to fund revenue—the economics of idiocy. Now that they have to face the consequences, they are looking for any possible opportunity to sell off their remaining BT shareholding, and even the national picture collection is under threat.
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  What happened to the marvellous vision of the Lawson years when we had PSDR—public sector debt repayment? We had got into a virtuous cycle in which the Government could do no wrong because, as they understand it, they had transformed economic law. However, the way in which they understood was not how the rest of the world understood it. They were deciding how much of the public debt they were going to repay each year, and they thought that they had structured the finances and affairs of the nation so well that it would go on indefinitely.
  I remember some of the financial journalists, who are the alleged experts on these matters, writing articles saying that the Government's choice for the 1990s was how they would dispense all that largesse and what they would do with the phenomenal surplus that had been achieved. But it was all an illusion. The Conservative party did not know the difference between a vision and a mirage, but pursued it nonetheless.
  Let us look at the Government's recent experience. We are now told repeatedly about lower interest rates and the competitive exchange rate. Although the pound goes up and down week by week, the exchange rate is declining. If lower interest rates and a competitive exchange rate are such marvellous attributes of the British economy, why did the Chancellor and Prime Minister spend billions of pounds of public money and a great deal of time and effort attempting to prevent them from happening? They did not have a clue what economic policy they were following then, and the same is true now.
  What is the Prime Minister's response? He says that we are talking Britain down. That ludicrous notion is an example of the Government blaming the messenger because they do not like the message. The Prime Minister must understand that an inane grin and a puerile cliché cut no ice with people who have been hurt by the impact of the recession. Although he and his toadying colleagues on the Back Benches may readily parrot such claptrap, it cuts no ice and although they may have a capacity for self-defence that knows no bounds, it is not shared by the British public, who know exactly who to blame.
  The central theme missing from the Budget is unemployment. I speak on a day when, for the first time, unemployment in my constituency has risen to more than 7,000—and ours is by no means the most deprived part of south London, or of London in general. Some 17·5 per cent. of all the economically active adults in my constituency are unemployed.
  I received a letter from a woman in Catford saying:
  "This letter is about a problem shared by thousands of parents. Our eldest daughter is coming to the end of her three-year degree course in geography. Despite numerous applications, she has no hope yet of any kind of employment."
  My constituent wrote that her daughter applies for jobs but she has no experience, and because she has no experience she cannot get a job, so she cannot break the vicious circle. The only thing that has been recommended to her is a postgraduate course entirely at her parents' expense, but that is totally beyond them, as they have three younger daughters to provide for. The situation is depressing and upsetting the family.
  I wrote back to my constituent, and I wrote to the Secretary of State for Employment, enclosing a copy of the letter and saying:

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  "I would be most interested in your response, and any suggestions you may have to assist Mrs. Scutt's daughter to make the best use of the expensive education which she has acquired."
  I received an answer from Viscount Ullswater. I do not know who the superannuated peers are who do correspondence for Secretaries of State, but I suppose that it keeps them off the streets. However, if I had wanted to write to Viscount Ullswater, I would have written to him and not to the Secretary of State. The reply stated:
  "Viscount Ullswater has asked me to thank you for the letter to Mrs. Shephard enclosing correspondence. As the matters raised fall within the responsibility of the Employment Service, which is an agency, I have passed on your letter to the Chief Executive."
  The Secretary of State had no idea how to respond, and could not care less. The response to my letter represented a total abdication of political responsibility, for which the Government have shown such scant regard recently.
  Unemployment is not simply cutting people off, as my hon. Friend the Member for Holborn and St. Pancras said. It not only undermines people's ideas of their self-worth; it is also the most important part of the engine of wealth distribution in Britain.
  I shall draw my remarks to a conclusion. Although I am sure that Conservative Members would like me to go on all evening, I shall resist the temptation—
  Mr. Deputy Speaker: Order. Mr. Peter Ainsworth.
  6.27 pm
  Mr. Peter Ainsworth: This is an encouraging day for jobs. It is a good Budget for jobs and it is good for the economy as a whole. I fear that it is a bad day for the Opposition, who have yet to produce one positive idea about what they would have done if confronted with the problem that faced my right hon. Friend the Chancellor of the Exchequer as he was preparing his Budget.
  The key problem was clear and substantial—how to recognise the twin imperatives which in economic terms confront Britain's economy at the end of this most difficult recession. Those imperatives are the need to foster recovery and economic growth and the need to address the budget deficit, which in the medium to longer term represents a major threat to economic stability and to confidence in Britain at home and in the international markets.
  I am convinced that my right hon. Friend has reached the right solution. He has, in effect, given precedence to growth. The onus of the tax increases announced by my right hon. Friend will fall substantially in 1994–95 and beyond, at a time when all leading economists, including those in the European Commission, are expecting a more vigorous growth trend to be established. The impact of the tax increases will then be more easily absorbed.
  Some, including my predecessor in Surrey, East, my noble Friend Lord Howe, have argued that more immediate action to reduce the deficit was required, both in terms of increasing taxation and reducing public expenditure. I shared that view, which was put forward earlier in the debate by my hon. Friend the Member for Esher (Mr. Taylor). Having had time to study my right hon. Friend's Budget, however, I have reconsidered the point.
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  The prime objective for this Government, as for any Government, must be economic growth. Economic growth underpins the ability to pay for our public services, such as schools and hospitals; it enables businesses to invest and prosper; it stimulates new jobs and underpins the ability of my right hon. Friend the Secretary of State for Employment to introduce the package of measures which form part of the Budget.
  It is not taxation which does those things. Taxation merely redistributes money which other people earn. It may be argued, however, that the ability to tax is dependent on economic growth, so my right hon. Friend the Chancellor is right to adopt a neutral fiscal stance for the coming year and to build on the series of measures in his autumn statement aimed at fostering the economic recovery which is taking place even now, as recent evidence from industry and the retail sector illustrates.
  Although there is mounting evidence of a more prosperous economic climate, to which my right hon. Friend the Secretary of State for Employment referred in her speech, imposing a significantly heavier tax burden in the coming year could have stifled recovery and been profoundly counter-productive. My hon. Friend the Chancellor has performed a finely poised balancing act and has built in additional flexibility and room for manoeuvre if circumstances turn out, as they have a habit of doing, to be different from those expected.
  On that point, provided that a firm grip is kept on public sector spending, my right hon. Friend and his advisers in the Treasury may be under-estimating the extent of the recovery in the medium term, and may be erring on the side of caution in respect of the public sector borrowing requirement deficit in future years. Let us hope so, for at 5·5 per cent. of gross domestic product in 1995–96 the forecast PSBR burden is still daunting. Indeed, looking over the next four years, the total PSBR is forecast to be £86 billion higher than the total projected last year for the same period. Therefore, let no one underestimate the difficulties that we face.
  As I have said, however, I believe that that forecast may be unduly pessimistic. First, it is conceivable that growth will exceed expectations. For example, the growth forecast for 1992, made by my right hon. Friend as late as his autumn statement, has already proved to be 0·5 per cent. too gloomy. Secondly, we have every reason to be confident that my right hon. Friend the Chief Secretary, in his review of public spending, will not baulk at taking the difficult decisions which circumstances demand. That will be vital to underpin the restoration of a sound and balanced economy.
  On a specific point, I give an especial welcome to my right hon. Friend the Chancellor's proposals to reform advance corporation tax. I detected the fluttering of eyelids as my right hon. Friend moved into that part of his speech on Tuesday; none the less, his proposals represent a significant and welcome reform. The present system, which has caused British-based firms with substantial overseas earnings frequently to end up with an ACT bill on their dividends greater than their entire United Kingdom corporation tax liability, has caused justified resentment for some years. More importantly, it has had the effect of exporting important areas of activity, such as research and development, and with them jobs.
  I know of a number of international companies with head offices in Britain which were seriously, albeit reluctantly, considering relocating elsewhere, especially

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  within the European Community, because of problems with ACT. The measures announced by my right hon. Friend will enable them to stay. That will be as much a relief to them as it will be to all who care about retaining employment in this country and in particular about bolstering London as one of the world's great financial centres.
  The eventual 5 per cent. reduction in the rate of ACT payable on dividends is also welcome. It represents a redistribution of moneys from gross investment funds into corporate management, which will provide a significant cash flow advantage to business of around £1 billion next year. I hope that business managers whose companies will benefit will resist all temptations, as well as pressures, simply to use the extra moneys to top up their dividend payments. United Kingdom dividend yields are already substantially in excess of those in other developed countries, notably Germany and Japan.
  The provisions on ACT, and the extra boost to help export markets, which are welcome and important, will benefit principally large firms. I am glad that my right hon. Friend continues to recognise the vital importance of small firms in generating economic activity and jobs. Small firms have been among the hardest hit during the recession, although there are many more in business than there were only a few years ago, but it will be small firms which will be in the front line of economic recovery. As my hon. Friend the Member for Surrey, North-West (Sir M. Grylls) has said, this is a five-star Budget for small businesses.
  My right hon. Friend's finely judged and thoughtful Budget will help foster recovery in the year ahead and beyond. In the medium term, his tax proposals will blend with economic recovery to deliver a sure underpinning to prosperity. I welcome the Budget.
  6.36 pm
  Mr. John Garrett: I want to spend a few minutes on budgetary reform, an important but arcane subject which does not interest many hon. Members. Anyone who goes on about it tends to be thought a crank, so I shall be brief on the subject.
  I am pleased that this is the last of the March, traditional, taxation-only Budgets and that in future taxation and public spending measures will be presented together in December. The integrated Budget is a reform which I and others have advocated for many years—not that it will be all that it is cracked up to be. The estimates for Government spending will still be presented in March, so we shall not be able to link the spending of individual Departments with the taxation proposals required to fund that spending.
  In addition, while taxation is presented through a Finance Bill, which will be examined for weeks in Committee, changes in social security and other benefits will be introduced through statutory instruments, which are hardly discussed at all and are unalterable. Minor taxation is discussed at length, but the huge sums involved in social security expenditure and the massive changes in entitlement to benefit are often debated for only an hour and a half or less, and nothing can be done about them.
  We also have the problem of a flood of financial and statistical data—one cannot call it information—from Departments and agencies. All that is presented on bases that cannot be compared. There is no indication of the
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  supposed result of spending. So, as I have said before in the House, we are continually told what we are spending, but we are not told what we are buying. In other words, the Government tell us what the inputs are, in terms of funding and programmes, but not what the outputs are, so we can never establish the effectiveness of Government spending. That is a great weakness of our system.
  Spending programmes are not related in any way to targeting improvements in health, environmental protection, crime and all the rest. That is not surprising, because the Government do not expect improvements. All the same, we are entitled to better information. Spending is not considered adequately, even on the Floor of the House. Very few Select Committees examine it; to do so they would need much larger staffs. Much reform is needed in the examination of Government accounts and the results of spending programmes. Although the subject interests very few people, it is of great importance.
  We have heard that this was a Budget for jobs. In the Norwich travel-to-work area, there are 14,700 unemployed. In the area covered by Norwich city council, there are 8,500 unemployed. In my constituency, the unemployment total is up from 3,300 in 1990 to 5,600. That is a record for what was a prosperous area a few years ago. As my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) said, this "Budget for jobs" provides only £125 million in new money that can be used to put people back to work. It amounts to less than £1 a week for each person who is out of work. Only one in 10 of the long-term unemployed and only one in 30 of all unemployed will be helped by the Budget proposals on business start-ups, learning for work and the community action programme.
  That has to be set against the huge cut in vocational training places since the Chancellor of the Exchequer took office. The fact is that there are 80,000 fewer vocational training places than when the Chancellor came to office. There has been a 14 per cent. cut in Government spending on training from 1990–91 to the present financial year, while unemployment has risen by 87 per cent.
  In 1989–90, employment training had 430,000 trainee starts. Last year that number was down to 210,000. It has been more than halved. Spending on employment training and employment action—a scheme which is apparently designed to augment employment training—has fallen
  from £1·2 billion in 1990–91 to £883 million. The new training for work scheme, which is supposed to roll these two programmes together, involves an even lower level of spending. It has gone down by £87 million on last year's £883 million.
  A recession, as we have all learnt since the 1930s and before, is the time to invest in training. We suffer from a massive lack of skills compared with our competitors, a point which is easily verifiable. This is a huge missed opportunity. Look at the difficulty that a mature entrant to, say, a college has in obtaining funding—which is almost invariably discretionary and which, in my case, is from the shire county—for vocational skills training. It is almost impossible to obtain funding for both maintenance and tuition.
  We have heard about recovery from the recession. We know that there is a time lag between recovery from a recession—which I assume is shown by an increase in output for three quarters in succession—and a fall in unemployment. I am a member of the Treasury Select Committee. For the last two years at least, the Chancellor of the Exchequer has come before that Committee and

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  said in public that there were green shoots of recovery, that recovery was round the corner and that the conditions for recovery were in place. But there is little evidence of it. Next year, according to the Red Book, growth in gross domestic product is forecast to be 1·25 per cent., which is so low that a further increase in unemployment is inevitable. Unemployment is forecast to increase by 200,000.
  Investment in either the private or the public sector will barely increase. The forecast for the public sector borrowing requirement, two years on, is £30 billion, even after a £10 billion increase in taxation. In 1992, the trade deficit was £12 billion, and the forecast is that it will be £18·5 billion in 1994. That adds up to a description of an economy that is in a desperate situation. We know from the leaked but now stifled Department of Trade and Industry report on Britain's trading position that we have a long-standing crisis in investment in skills and in research. Even when recovery comes, unemployment will still be over 3 million, even on the cooked figures that we have been given.
  The infrastructure is collapsing. We only have to look around London, eastern England and the south-east to see that. Housing is in a desperate state. I represent a city which was the best housed city in the country. The Chancellor did nothing to ease the housing problem. Norwich has over £30 million locked up in receipts from the sale of council houses which it could put to use tomorrow to build more council houses.
  House building is a classic way in which to begin to get out of a recession. It puts people back to work. The skills are available. There is a very low import content. It works quickly; it gets people earning quickly instead of drawing the dole.
  The Chancellor of the Exchequer appears to be a late convert to the views of Keynes, for he announced some large public works projects, but two out of three of those projects depend on unnamed private participants. Furthermore, all those projects are in the south-east of England, so the impact on the rest of the country will be very slight.
  As for the social impact, the Budget hits the poorest hardest, particularly those just above benefit level. Even if the Government compensate those on benefit, those just above that level will have no prospect of an increase in their income to cover the announced tax and VAT increases. The £6·5 billion tax increase in 1994–95 and the £10·5 billion tax increase in 1995–96 represent the biggest tax increase ever dropped on this country by a party whose constant pledge and whose one claim has been to reduce taxation. The Budget does not meet the needs of the time. It is the product of a fundamentally dishonest Government.
  6.45 pm
  Mr. David Nicholson: This is my first speech on economic policy since I was elected in 1987, so the House will understand if I refer occasionally to some of the tendencies that have led to the present situation. The Budget and our debates upon it show the very great problems and costs—I emphasise costs—which flow from economic stagnation and recession.
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  I welcome the signs that this country may at long last be moving out of recession—before and ahead of European countries which are deep in recession, as I reminded the shadow Chancellor of the Exchequer, the hon. Member for Dunfermline, East (Mr. Brown) yesterday.
  I welcome the fall in unemployment announced today. I welcome the measures announced by my right hon. Friend the Prime Minister today relating to value added tax. I also welcome the measures announced today by my right hon. Friend the Secretary of State for Employment and her explanation to me earlier in the debate of their piloting and explorative scope. They are in addition to the very large measures which have already been taken to increase training.
  I note that no Liberal Democrat Member is in the Chamber at present, but the hon. Member for North Cornwall (Mr. Tyler), who is normally a vigorous critic, is reported in The Western Morning News, which is always accurate, as describing those employment measures as being "quite clever."
  Much use has been made of the Chancellor's remark some time ago about unemployment being a price worth paying. I believe that, on reflection, my right hon. Friend probably regrets having made that remark. I do not believe that it has helped him in coping with the recent slings and arrows of political fortune. However, I believe that the view of the vast number of Conservative supporters and activists in the constituencies and of the vast majority of my hon. Friends—indeed, the common-sense view—is that high unemployment is morally offensive, socially damaging—although it can never excuse crime—and, most relevant for our Budget debates, financially very expensive indeed.
  Having said that, I welcome the skill that my right hon. Friend the Chancellor of the Exchequer has shown in his various Budgets since he became Chancellor and also his autumn statement last year. I welcome the measures which, albeit cautiously, will assist British industry and commerce to move towards recovery—in particular the measures relating to export credits and the uniform business rate. I welcome also the measures—these are particularly relevant to my right hon. Friend the Paymaster General—relating to VAT penalties, and the small firms package which my hon. Friend the Member for Surrey, North-West (Sir M. Grylls) described as a five-star package. I welcome, too, the expansion—again cautious—of the 20 per cent. income tax band.
  There are two lessons to be learnt from the recent management of the economy, both of which need to be considered not just by Ministers but by Treasury mandarins, economic advisers and forecasters and the whole financial establishment.
  First, there was the rapid credit boom of 1987 to 1989, which I criticised in the House and in my constituency and which I believe is now seen as having been a source of grave economic weakness. In view of the consequences of that boom and, indeed, of what my right hon. Friend the Chancellor is doing in relation to mortgage interest relief, I do not think that there is a danger of a return to the sort of property market which distorts investment. The distorting of economic development by diverting investment resources into property has been a feature and a weakness of this country since the early 1970s.
  The second weakness was the continuation—in my view, long beyond the need to cure the previous credit

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  boom—of the policy of high interest and exchange rates. As I pointed out to the hon. Member for Dagenham (Mr. Gould) during a very interesting speech that he was delivering last. Friday, that was not simply a reflection of the exchange rate mechanism—we can argue about the principle of the ERM—but resulted from the level at which we went in to the system and the level that we sustained. British industry has been damaged by high exchange rate policies on at least four occasions this century. It is relevant to point out that those policies were pursued in the past not just as a method of political and economic management but also almost as a religious and moral crusade. That happened under Governments of both parties. It happened in the period 1979–82, under a Conservative Chancellor, as it had happened under Lord Callaghan, a Labour Chancellor in the 1960s. The classic period, of course, was that of the man who was to become our greatest Prime Minister but who, as Chancellor, was very variable indeed. I refer, of course, to Winston Churchill, who was supported by Philip Snowden between 1925 and 1931.
  As my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) pointed out in a powerful speech yesterday, the prospects with regard to Government borrowing are worrying. That ought to underline, above all, the need in present circumstances to maximise growth and to avoid, remove or change policies damaging to industry, enterprise and jobs. This is so whether the policies concern exchange rates or interest rates, to which I have already referred, and which, happily, have now been removed, or whether they concern regulation, be it from Brussels, Whitehall or local government. Such policies have undoubtedly weakened small businesses and cost jobs. These are matters to which we must apply ourselves.
  The Department of Trade and Industry must also take a more active role in enabling industry and enterprise to take advantage of the export and import substitution opportunities created by last September's devaluation of sterling. Situations have been pointed out to me, in my own constituency and elsewhere, in which business depends on imports of semi-manufactured goods because this country does not have the production facilities or the quality to provide certain important materials. That is a weakness in our economy, and it is vitally important that it be tackled. We are running a massive and worrying trade deficit in the middle of a recession, and it is vital that our industry and commerce be enabled to address those weaknesses.
  It is the view of some of my hon. Friends and of The Sun newspaper that the borrowing to which I referred earlier could be reduced by repeated cuts in the budgets of Ministers, as though expenditure on ministerial cars, red boxes and paper clips accounted for the main part of the problem. As a member of the Public Accounts Committee, I can confirm that there are opportunities to remove waste and inefficiency and that there is fraud in the social security field. However, the notion that we could resolve our borrowing and spending problems by being beastly to new age travellers—although that is very desirable—is extremely naive. There is a limit to the amount of fat that can be removed from public spending. One soon gets to the red meat and bone of valuable spending programmes, which are not only used by readers of The Sun but are also used and valued by their children and their grannies.
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  With regard to those expectations, we have to be cautious. I will give an example. In recent months, combating crime has become a very serious issue, not only in the inner cities but also in parts of rural and semi-rural England, such as my constituency and the rest of Somerset. That problem will not be solved on the cheap. We need more police in the inner cities and in rural areas.
  My final point concerns the most controversial issue in the Budget—the proposal to extend VAT. This can be justified as a special environmental measure, although we may debate the details. I welcome what the Prime Minister said at Question Time today. We must also bear down on the charges of the electricity and gas industries, whose current profit levels indicate that that ought to be possible. However, I warn my right hon. Friends not to regard the hoped-for acceptance by the House of this special VAT extension to fuel and power as a bridgehead for extension into other zero-rated areas. I do not perceive acceptance of the idea of multi-rate VAT in Government circles. I might consider the idea of a 5 per cent. VAT rate, but I warn that a further extension would be resisted by me and by other hon. Members.
  6.55 pm
  Mrs. Anne CampbellThe last time inflation was at its current level was in 1967. We had a Labour Government, the economy was growing at a rate of 2·2 per cent., we had a manufacturing trade surplus, and the number of people unemployed was less than 350,000.
  Mr. Dobson: Those were the days.
  Mrs. Campbell: Indeed, those were the days.
  This is a Budget of missed opportunities—a missed opportunity to put Britain back on the road to prosperity and growth; a missed opportunity to put British people back to work; and a missed opportunity to correct some of the unfairness of the last 14 years and give back to those on lower incomes what previous Chancellors took away. In fact, the Chancellor has made life worse for those on low incomes and pensions, and the unfairness will continue and worsen.
  I welcome the dip in the unemployment figures. I sincerely hope that it is a long-term trend and not a short-term spurt of hope. However, my constituency has record unemployment. More than 4,000 people are unemployed for the first time, and male unemployment stands at over 15 per cent. But the Chancellor has not done anything that will help. What he has done for some small businesses amounts to no more than tinkering. These measures will not help capital investment; they will not help to improve skills and technical expertise; and they will certainly not help the transfer of technology from academia to industry which is absolutely vital to the future prosperity of our country.
  In yesterday's Financial Times the director-general of the Engineering Employers' Federation complained of the
  "apparent lack of understanding of the role of capital allowances in stimulating investment."
  Last week, I had the great privilege of going to Germany with the Select Committee on Science and Technology to look at the way in which the German Government help industry there. We saw a whole raft of measures. For instance, the Max Plank institutes are engaged in first-class, high-powered technical innovation and world-class research. We saw the work of Fraumhofer institutes which take the ideas that come from the Max Plank

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  institutes and the universities and turn them into research in technological innovation and engineering skills. We saw also the work of the Steinbeiss foundation, which takes ideas and problems from industry and helps to solve the problems. These institutions do not exist without Government help. In fact, they receive a great deal of Government help—assistance which is totally lacking in the British economy. The Chancellor has tried to cure toothache when the patient is suffering from cancer. I say that in all seriousness because I believe that the problems facing our economy could be terminal.
  In East Anglia, 87,000 people are unemployed. When the Prime Minister loses his job and moves back to Huntingdon, he will have to compete with 28 other people for every job vacancy. If he moves to King's Lynn, he will compete with 322; in Cromer he will compete with 246, and in Great Yarmouth with 149.
  In the face of overwhelming evidence of manufacturing decline, what action does the Chancellor take? Well, he allows people to assess their own tax; he makes minor modifications to the small firms loan guarantee scheme—
  Mr. Heald: I am sorry to interrupt because I know that time is short. As unemployment in Huntingdon has fallen in the past few months, and as the Prime Minister will be in his job for many years to come, does the hon. Lady agree that her calculation might not be correct?
  Mrs. Campbell: I am sure that the Prime Minister would not anticipate a second period of unemployment but, judging by what he said last May, he did not anticipate that the Government would have to increase VAT, so it would be difficult—
  Mr. Garrett: We cannot rely on his judgment.
  Mrs. Campbell: As my hon. Friend says from a sedentary position, we cannot rely on his judgment.
  Are these the measures which will transform the British economy? I think not, because they are a gross underestimation of what our real problems are and what the solutions should be.
  I deal now with broken promises, the increase in the cost of heating fuel, the imposition of value added tax and the way it will affect pensioners in my constituency. I have good reason to believe that the Budget will mean a choice between heating and eating for many pensioners in my constituency. Last March, I was privileged to visit many pensioners in their own homes. I clearly remember one pensioner in particular. He was in his early seventies and lived alone. I stayed in his house for about half an hour and he told me of the difficulties he was experiencing. He said that he was no longer able to run a small car to get around. He had stopped buying meat every day and bought it only twice a week. When I stood up to leave, I realised that I was very cold because his heating had been so low that it was not comfortable to sit there for any length of time. Many pensioners are in that position, and the Budget will make things even worse. Many will die of cold or starvation—what a terrible choice to have to make.
  We have heard some facile comments from Conservative Members who tried to justify the imposition of VAT on domestic fuel by saying it is a green measure which will reduce carbon dioxide emissions into the
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  atmosphere. I do not believe that because people whose heating is determined by cost already have their heating so low that it is not practicable or feasible to turn it down further.
  If we really want to take effective green measures, we need to insulate homes. Why did the Chancellor not move in that direction? Why did he not encourage investment to stimulate the building and construction industries and get people to insulate their homes? Such measures would pay for themselves through genuine reductions in heating costs. My constituents will be extremely dismayed by the lack of such measures. We face the prospect of heating bills increasing steadily in the next two years and people being unable to pay them.
  The rise in petrol duty has also been heralded as a green tax. In my part of the world it will be seen not as a green tax but merely as a revenue-raising tax. I and my family have been fortunate enough to be able to manage without a car for the past five years. We have done so by using bicycles, our feet and public transport, but many people in my part of the world do not have a choice because transport is not available. People need transport to get to work every day and, for many, the only option is to use a car. Therefore, the measure will not be effective in reducing CO2 emissions but it will be effective in raising revenues because people have no choice.
  The Budget is a disaster. It does nothing to deal with the underlying problems of the economy; it will make people on lower incomes even poorer; and it will do nothing to put the unemployed back to work or to improve the economy.
  7.5 pm
  Mr. Iain Duncan-Smith: I am pleased to have the opportunity to follow, at some point, the excellent speech by my right hon. Friend the Secretary of State for Employment. She outlined all the relevant facts, and I shall not repeat them. It is a measure of the importance that the Government place on matters within their brief, such as employment, that the skills and talents of my right hon. Friend and her team have been deployed in this instance.
  The Chancellor spoke of jobs coming from the private sector, which is an aspect on which I shall concentrate. I listened with great care and interest to the hon. Member for Holborn and St. Pancras (Mr. Dobson) and other hon. Members, and I was amazed by their lack of understanding of how employment is created. Before I came to the House, I used to run a company and was involved in manufacturing industry. It is perhaps relevant to describe to some hon. Members how jobs are created.
  Jobs are created as a result of successful enterprise. I know of no business that has been set up solely to create jobs. Businesses are established as the result of an idea or the perception of a gap in the market. People provide goods and services, and jobs flow as a consequence. To listen to Labour Members, one would think that it was the other way round, that the jobs existed and someone looked for something to fill people's time. It is the ideas, drive, perseverance and determination of individuals which create jobs and get the economy going.
  I remind the House that, during the 1980s, about 1 million new jobs were created on the basic principle of enterprise and filling a gap in the market. The Opposition still labour under the old idea, which I thought had died in

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  the 1960s and 1970s, that the Government create jobs, that they can then pick winners from industry and decide who is to succeed at home and abroad. That idea failed, and it is time the Opposition realised it.
  Throughout the 1980s, the Department of Employment focused consistently on training, retraining and re-skilling. It is important that the Budget placed great emphasis on such issues. The Budget was announced against a backdrop of about £2·5 billion spent on training, which is about two and a half times as much as was spent in 1979.
  I was especially pleased by three aspects of the Budget, which I shall highlight. First, I was pleased by the emphasis on training, vocational education and enterprise which will supplement other measures that we have introduced and which should result in about 100,000 more unemployed people being helped.
  Secondly, I was pleased to learn that a community action programme is to be established, which will provide for 60,000 long-term unemployed people to take on voluntary projects. A new project will be set up for 30,000 people, who have been unemployed for six months or more, to be taught new skills. Those two measures are important and should be applauded.
  Thirdly, I welcome the fact that the business start-up scheme is to be expanded.
  VAT is a subject of particular concern, and in Chingford many people with small businesses have come to see me about it. I was interested to note that my right hon. Friend attacked that subject with gusto, and has introduced some crucial reforms. I was especially interested to find that the VAT threshold is to be raised to £37,600, which I applaud, and that the turnover ceiling for VAT cash accounting schemes is to be raised to £350,000—that subject has been raised with me and, I am sure, with other hon. Members on both sides of the House.
  I am pleased, too, that there will be some relief on bad debts. Now they can be reclaimed only when they have been outstanding for a year, but my right hon. Friend has reduced the period to six months, for which he should be applauded. In addition, the misdirection penalty is to be replaced, interest chargeable is to be capped, and VAT penalties for misdirection will no longer be automatic. I wish to highlight all those excellent reforms, which were long overdue.
  Underlying the speech of the hon. Member for Holborn and St. Pancras was a little row that seems to be going on between him and the shadow Chancellor, the hon. Member for Dunfermline, East (Mr. Brown). On 14 February the hon. Member for Holborn and St. Pancras spoke on "The World This Weekend" about several expensive programmes that he would launch into if he were in power. He talked about saving 100,000 jobs here' and 20,000 there, and about stopping various job losses in the public sector. He then refused to cost any of the programmes, saying that that was irrelevant.
  However, his hon. Friend the shadow Chancellor says that the PSBR is already too high, and that Labour would not raise taxes—so clearly, they would not be able to introduce the measures mentioned by the hon. Member for Holborn and St. Pancras. There seems to be a schism between the two hon. Gentlemen. First, they talk about spending, spending, spending, and then they say, "We cannot raise taxes, and we have some responsibilities." It is high time that they got their act together and approached the subject in a logical and reasonable fashion that the public can understand.
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  The simple fact is that Labour has no policies. We have listened to the speeches, and not once have we heard one policy from Labour Front-Bench spokesmen. They have not said what they would do were they in power. That clearly shows that they see their role at this point as solely to attack Government policy, and put nothing in its place—[Interruption.] Opposition Members will have a chance to speak later, so I shall press on.
  Another important factor in the background has been missed—the minimum wage. Opposition Members all signed up to it, and some time ago the hon. Member for Kingston upon Hull, East (Mr. Prescott) said:
  "I knew the consequences were that there would be some shake-out—any silly fool knew that."
  For those hon. Members—especially Opposition Members—who do not know what a shake-out means, I shall tell them: it means job losses. On top of that, the Opposition would pile more job losses, because it is clear that they would not now be able to raise the money to spend on all their programmes. It is the same old deal—they would tax, tax, tax and then spend, spend, spend, and ignore the sort of budget that was needed.
  The Opposition have no policies. They offer nothing and could produce nothing for us when and if—God help us—they were ever in power. I therefore support the Budget that my right hon. Friend presented in such an excellent speech; it is an excellent Budget for jobs.
  7.13 pm
  Mr. Eric Illsley: For the benefit of the hon. Member for Chingford (Mr. Duncan-Smith), I tell the House that we understand perfectly well how jobs are created. The hon. Gentleman does not understand that a Government can assist by providing contracts and projects for enterprise to take on, so as to produce employment. A Government can also produce available markets, as with the coal industry.
  We have been told that the Budget was supposed to nurture the recovery. We have heard about that recovery for the past two years, yet I still see no sign of recovery, and nor do the people at Leyland DAF or Rolls-Royce. Will we see any next week, when we hope that the White Paper on the future of the energy industry, especially the coal mining industry, will be published?
  This was a poor Budget for the unemployed. The Chancellor missed the opportunity to put something back into the economy to encourage recovery and reduce unemployment. As we have already heard, it was not a Budget for jobs. We are told that tax increases now would hinder any sign of recovery, yet in a three-year programme the Chancellor has taxed everything, through 1994–95 and even 1996, to ensure that the Government reduce the public sector borrowing requirement.
  So confident is the Chancellor of that recovery of 1 per cent. or so that he has already put the taxation measures in place, just in case it does not appear, as it has not done over the past two and a half years. Clearly, people will be worried about their job prospects and the extra costs that they will face next year. That will not stimulate demand and, therefore, the recovery for which the Chancellor hopes. We must also bear in mind that there may be more such measures in November. I dare say that we shall see more tax increases and more promises broken when the next Budget arrives later this year.
  The March Budget has been totally regressive. Everything in it affects the poorest tenth of our society,

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  while the richest tenth have fared quite well. Why do the poorer sections of our society have to provide the recovery from a recession started in the late 1980s by Chancellors giving tax cuts to the very well off? We have heard that the Conservatives are the party of indirect taxation—and thereby they are the party of inequality. One of the basic rules of taxation is fairness, yet the Government have turned their back on that.
  One of the most unfair measures was that involving VAT. That regressive measure will impose VAT on heating and power, which will hit the poorest sections of society—people on low pay, pensioners and other people caught in the poverty trap. The Government have again sought to attack pensioners and the poorest groups. We have been told that people who receive income support will get extra help, but so far we have not heard whether they will be fully compensated for the extra VAT that they will have to pay.
  I remember a similar argument being advanced on poll tax. We were told that income support would be increased to help people pay the extra money, but in the end they received an average sum—nowhere near the full amount that they had to pay.
  The hardest hit will not be people on income support but people in the poverty trap—those who earn slightly too much to be able to claim income support or other benefits, yet who cannot be classed as anything like well off. Those people will suffer greatly because of the decision to impose VAT on fuel.
  We heard earlier that fuel bills had decreased. Where is the evidence for that? Coal prices have fallen every year since 1985, and the price to the generators will fall by 20 per cent. this month. But we have never seen a corresponding fall in the prices that the generators charge the consumer. Instead, the generators' profits have increased. Power workers have been offered a 12 per cent. pay rise this week, when everybody else gets either a pay freeze or 1·5 per cent. The generators are awash with money and are offering pay rises of four times the norm. Why do we not tax the generators on their profits with a windfall profits tax, as the Opposition have suggested? The generators must have the money, or they would not be waving 12 per cent. pay rises about.
  The Chancellor is clearly desperate to bring in revenue, and he has decided to raise it in the easiest way—to extend VAT and hit the people who cannot avoid paying it. The "green" argument is that the extension of VAT is a way of reducing CO2 emissions, so the decision arises from the Rio summit. Why has there been no consultation with the energy industry or the energy efficiency organisations? Why has there been no consultation paper on how to reduce carbon dioxide emissions? All of a sudden, we simply have an increase in VAT. It is not a green measure—far from it. There has been no assessment of the impact. The Rio summit did not decide to reduce carbon dioxide levels through increasing hypothermia—nothing of the kind.
  Next week, next month or the month after, we are supposed to receive an energy White Paper. Why did the Chancellor not wait until the White Paper was produced before starting to talk about green taxes on heating and power? Surely the Department of Trade and Industry has some input on this in the White Paper. Let us discuss how
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  we can juggle our generating capacity to try to reduce carbon dioxide. Forget it: it is not a green measure, but simply a revenue-raising measure.
  The idea is that the poorest sectors of our society will have to contribute to the greening of the environment. I quote from yesterday's newspapers:
  "Taxes dressed up as green need also to be justified on distributional grounds or the poor will pay disproportionately for the greenness of the rest of us. For green taxes to be fair they must be accompanied by measures that redistribute resources to those on low incomes."
  That was said by the director of the microsimulation unit of the department of applied economics at the university of Cambridge. That will do for me; it is a fair enough quote. The measure is unfair and it is not green. It is a measure aimed simply at hitting the poor to raise revenue.
  In March 1992, we heard that there were no plans to extend the scope of VAT. The Chief Secretary now says, "We said that when we were not facing a £50 billion public sector borrowing requirement. We are now." Is that not the real reason? Surely the Chief Secretary is saying that it is not a green measure. He is saying that we have a £50 billion PSBR, which is more than we had in 1992, so the Government must impose VAT on fuel and power to meet that revenue requirement. The Chief Secretary said nothing about it being a green measure. He said that it was simply a measure to increase revenue. Either way, the country knows that it is being lied to, and it knows that it can never trust the Government again on any matter relating to taxation.
  We have heard that we should not jeopardise the recovery with tax increases, but the Budget taxes almost everything. Tax increases will be in place until 1996. Tax allowances have been frozen, so more people have been brought into the tax brackets. More people will pay proportionately more tax. National insurance contributions have been increased again. That is a regressive tax which also hits the lower paid. Excise duties have been increased on everything except whisky. Petrol duties have been increased. Surely the increase in petrol duty is a cost to business and a cost to employers. Surely that will come through when they look at their costs at the end of the year. They will see that their transportation costs have increased, and that increase will be passed on to consumers, resulting in job losses. Mortgage interest relief is to be restricted to 20 per cent. All those measures mean that people will pay a lot more tax even before the VAT increases are taken into account.
  What is there for employment? What is there to get us out of the recession? The channel tunnel rail link will come into St. Pancras now and not into King's Cross. The northern part of the country is left out yet again. There is nothing in the Budget for employment. There is nothing for recovery. The Chancellor should think again in November and should come back with a Budget for jobs.
  7.23 pm
  Mr. Oliver Heald: I am glad to have the opportunity to speak in this debate, especially as my last speech, in a debate last Friday, lasted 30 seconds. I do not promise to be as good as that this time, although I hope that hon. Members will be heartened by that news.
  I welcome the news today of a fall in unemployment, in my constituency and in the country generally. That is good news for a constituency that has been hit hard over the past two years, and I hope that the trend will continue.

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  Much of today's debate has centred on the extension of the VAT base, which is not the subject on which I had intended to speak. However, I make the point that it is easy to look at statements made more than a year ago and to ignore what has happened in between. We cannot ignore what happened at the Rio summit, when the Government pledged themselves to a range of environmental measures which have a cost.
  It is wrong for Opposition Members to say that such measures do not have to be paid for. Of course they have to be paid for. We need to hear their proposals before we hear their criticism of extending VAT. At the Rio summit, we were pressed to go further, yet we are now told that, in paying for the measure, we are not following a proper path. That is a false approach to the debate.
  The hon. Member for Truro (Mr. Taylor) talked about the housing market. It was ridiculous for him to compare the position a year ago with the position now, without mentioning that mortgage interest rates have fallen by 4 per cent. Over the pasts two years, the cost for mortgage payers has halved. It was ridiculous for him to ignore that.
  I shall deal with jobs and with the measures in the Budget.
  Mr. Illsley: Will the hon. Gentleman give way?
  Mr. Heald: I will not, because I have only 10 minutes. If the hon. Member for Cambridge (Mrs. Campbell) wants to intervene, however, I shall return the compliment she paid me.
  The hon. Member for Birkenhead (Mr. Field) wrote an article in The Guardian on Monday which contained one or two statements with which I entirely agreed. It is right that politicians on both sides of the House should have full employment as their goal. I do not necessarily agree with the hon. Gentleman about the way in which to set about that, but I agreed with some of his comments.
  He is right to say that getting interest rates down is important, and I hope that he recognises what has been achieved in that direction over the past few months. He is right to say that mortgage interest tax relief should be reduced, as the Chancellor has announced. The hon. Gentleman would go further, but he has made a useful contribution to the debate. He is right to say that it is necessary to widen the VAT base or to increase VAT. Again, I have no argument with that. He is right to say that we should encourage realism in wage bargaining and that the future of this country depends on growth. He is also right to say that that is the province of the private sector and of individual firms.
  When I went through the article, I thought, "Gosh, there will be something here soon with which I shall not agree." I sometimes wish that such sensible and thoughtful contributions to the debate came from Labour Front-Bench spokesmen rather than from Back-Bench Members.
  Mr. Frank Field: Will the hon. Gentleman give way?
  Mr. Heald: No. The hon. Member for Cambridge can be the hon. Member's proxy. I owe her one—[Laughter.]
  Mrs. Anne Campbell: I am grateful to the hon. Gentleman for giving way. Perhaps he will tell us whether he will vote with us at the end of our debate.
  Mr. Heald: I was rather hoping that the hon. Member for Birkenhead would vote with us. One of the problem
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  with the Opposition is that Front-Bench spokesmen come forward with one policy and Back-Bench Members with another. I am reminded of last Friday.
  Mr. Duncan-Smith: What policy?
  Mr. Heald: I am not saying that there is one policy; there are at least three or four. Last Friday, the Labour party proposed to cut defence spending by £7 billion. My constituents rely on defence expenditure for their export industries, so they do not welcome that proposal at all.
  There are three ways in which full employment can be achieved. The first is a range of employment measures, and I welcome the announcements in the Budget. My constituents have written to me and I have a letter here. The letter makes a number of points, including the point that people who are unemployed should be given the opportunity to start up in business. I welcome the extra 10,000 business start-up scheme places which have been made available.
  The second measure suggested by my constituent, who wrote his letter before the Budget, is a scheme under which the unemployed are given vouchers, which they could take to their future employers. I support such a measure for the long-term unemployed. I welcome the workstart pilot scheme, which will achieve just that.
  My constituent went on to say that many socially useful jobs could be done by the unemployed. The community action programme and TEC challenge give people the opportunity to do such tasks. Although I believe that, over a period of years, growth will be the main answer to unemployment, it would be wrong for the Government not to take measures such as they have taken to help people now. Taken together with the meaasures announced in the autumn statement, 600,000 people now have more hope than they had some months ago.
  I agree with what my hon. Friend the Member for Chingford (Mr. Duncan-Smith) said about the role of entrepreneurs in creating growth. It is vital that business men should lead the way in establishing businesses which succeed for Britain. In looking at what has happened in the past 10 or 15 years, we should recognise that businesses have specialised more, and that we have businesses in Britain which can take on the best in the world and succeed. We should not always run Britain down and pretend that that is not the case.
  Such businesses are capable of challenging the three major trends in the world economy which need to be addressed, and, because they have become efficient and productive, they can meet the challenge of the newly industrialised countries. The efficiency of our businesses, the clustering of businesses in western Europe, their good connections in the far east, the type of help that was announced in the Budget under the export credits guarantee scheme and the help of our Foreign Office, which has so many trade missions across the world, will allow our companies to take on the challenge of the newly industrialised countries.
  It is wrong to say that the impact of new technology will be death for jobs and that that is the end of the story. The impact of new technology has made the companies which have introduced it more efficient and productive than before. Some of the businesses which have lost a great deal of labour in the past 10 or 15 years are those which are now capable of exporting products for Britain and taking on the best in the world.

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  I believe that growth will come from that change in technology. The newly industrialised countries may be competitors, but they also provide markets for Britain. If we have the new technologies in place, we will be productive and efficient, and we shall be able to go into the new markets which are opening up around the world. That will create growth and new jobs.
  In Britain, we must face the fact that there is a battle in Europe for inward investment and for the investment of our own companies in our country. The evidence given to the Employment Select Committee in the past few months, when it was investigating the issue, has shown that we must treat competition for investment as European competition. Companies with investment to make look to see whether Britain is at the centre of Europe. I believe that it should be and I hope that the Maastricht treaty will soon be in place so that we can move forward.
  Companies want a willing and capable work force. We have that and good industrial relations and improved training. I wish to make two more points, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order. I call Mr. Geoffrey Hoon.
  7.33 pm
  Mr. Geoffrey Hoon: I am delighted to follow the hon. Member for Hertfordshire, North (Mr. Heald). He has clearly come a long way since our days studying law together. Certainly he was a lot less weighty in those days, had much more hair and was a good deal more radical.
  The Budget must be measured against one crucial test—whether it will encourage or increase confidence. Confidence is crucial in any recovery. People must have confidence in their employment prospects and their ability to maintain their present employment and standard of living. A typical family or household must have confidence in its ability to pay its bills, rent or mortgage.
  People will obviously have welcomed recent cuts in exchange rates after such a long period of sustained high repayment rates. However, as yet there is only patchy evidence that interest rate cuts are leading the country out of recession. Instead of spending on new goods and homes, families and individuals are seeking to restore stability in their finances by repaying debt such as hire purchase commitments, credit card debts, mortgage commitments, and debts built up when the Government encouraged spending before the general elections of 1987 and 1992.
  Moreover, in considering the confidence of a typical family or household, it is necessary to consider the impact of the tax increases announced in the Budget. Disposable income for almost every family in the country will be significantly reduced.
  From April 1994, a married couple with one earner will have to pay more than £7·50 a week more if that earning amounts to more than £14,000 per year. If it amounts to £19,000 per year, they will have to pay £8·50 a week more. If it amounts to £28,000 a year, they will have to pay £13 a week more. That is a significant reduction in people's ability to spend their way out of recession, if that is what the Government are aiming at.
  Above all, the fear of unemployment will remain the key factor which will limit confidence. In December 1992, the Trades Union Congress commissioned an independent
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  poll of working adults. It established that 45 per cent. of people in work thought that it was very or fairly likely that there would be job losses at their workplace in 1993. That is hardly surprising, given the present state of the economy.
  The British economy is in the deepest and longest recession since the war. It has been in recession since the second quarter of 1990. It has had three years of decline. Unemployment has increased in that period from 1·8 million to 3 million. There has been an increase in unemployment in each and every month since the right hon. Member for Huntingdon (Mr. Major) became Prime Minister.
  More than 1,000 jobs have been lost every day over and above the unemployment which existed at the time of the general election. We have a lack of confidence throughout the economy. Investment is down 13·3 per cent. since 1989. It is just 17 per cent. of the gross domestic product. That is 3·5 per cent. below the Organisation for Economic Co-operation and Development average, and 13 points below the rate in Japan. The 1992 rate was 17 per cent. below the rate for 1989 and 6 per cent. lower than in 1979. The result has been unemployment across the range of economic activity.
  In the year to September 1992, 260,000 jobs were lost in manufacturing industry; 320,000 jobs were lost in services; 90,000 jobs were lost in construction. The pit closure programme may add another 80,000 jobs to those totals. An unknown but perhaps comparable number of jobs may be lost in the public sector.
  Recent large-scale redundancies have all too often been in the very areas and industries which we shall need if any recovery is to be permantent and sustained into the next century. There have been high-tech redundancies at Rolls-Royce, GEC and IBM. Like the Government-inspired recession of the early 1980s, this Government-inspired recession is precisely in the areas we desperately need if Britain is to remain competitive into the next century.
  What strategy do the Government reveal in the Budget to deal with the recession? What solution do they propose in the longer term? What overall economic strategy is revealed by analysing the Chancellor's Budget? It seems to me that the Government's policy is still based on a single club. Admittedly, it is a different club: instead of the interest rate policy pursued until black Wednesday in September, our economic policy is apparently based on chronic and persistent devaluation.
  In September, the pound was worth DM2·95. The Chancellor was apparently happy with that level. It is now 20 per cent. below that level, and the Government have not said how far they are willing to allow the pound to fall.
  What has changed since September? Was the Chancellor right before September or is he right now? In effect, the pound is in free fall. Compared to its value in 1980, the purchasing power of the pound is just 45p, according to the calculations made by Barclays bank. Howard Davies, the director general of the Confederation of British Industry, who is not someone I quote regularly, said recently:
  "Half the world thinks we are now hooked on a policy of competitive devaluation, which is dangerous and could be self-fulfilling."
  What are the consequences of that policy? In the short term, British goods are certainly more competitive—no one can argue against that—but how long will they remain

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  so? Inflationary pressures will be increased by continued devaluation and will raise the price of imported goods and services, which account for about 30 per cent. of our national consumption.
  How quickly the increases will feed through into the economy remains a matter for debate. For the moment, the market is so fragile that there is a significant element of discounting, but experience suggests that, as prices become firmer, the full inflationary effects of devaluation will begin. Increases in inflation are likely to offset devaluation in three to five years.
  It seems that the 20 per cent. devaluation since September may take as long as five years to increase inflation by 20 percentage points above what it would otherwise have been. How will the Government fit that in with their medium-term inflation target of between 1 and 4 per cent.? They have no mechanism or strategy for achieving that target, other than a continuation of the present recession, or perhaps a return to their previous policy of raising interest rates.
  Essentially, the Government are staggering from one economic policy to the next, as they stagger from one economic crisis to the next. This country needs stability and confidence, which are crucial to recovery. We need interest rate and currency stability, as they are an important starting point for any economic policy. That would allow families to plan carefully and thoughtfully for their futures, knowing how much they have to spend and what their expenditure is worth.
  Precisely the same considerations apply to businesses, which want stability to plan economic strategy. If they are exporting, they want to know what contracts are worth at the time that they sign them, and that those prices will remain consistent in the longer term.
  The Government must assist in the creation of that stability by encouraging investment in industrial capacity and the skills of our people. They must finance research and development, and help marketing and design.
  Conservative Members have been asking Opposition Members to set out what should be the objective of economic policy. The primary objective was set out by the Government in 1944 in a White Paper entitled "Economic Policy": the maintenance of a high and stable level of employment. That is something that we should be seeking to establish.
  A fundamental change in the Government's attitude is the most important factor in creating a high and stable level of employment. The Government must recognise that they have a crucial role to play in establishing the right conditions to allow that stability. It is a case not of picking winners, as the hon. Member for Chingford (Mr. Duncan-Smith) suggested, but of creating the right conditions.
  The Government are fond of citing illustrations—there have been a number in this debate—of Japanese companies investing in the United Kingdom. Instead, why do they not cite the fact that the Japanese Government are prepared to spend £40 billion on a reflationary programme to ensure that Japan remains competitive? That is the sort of stability, strategy and imagination we need, and there is little evidence of it in the Chancellor's Budget.
  7.43 pm
  Mr. Nigel Evans: I am delighted to follow the hon. Member for Ashfield (Mr. Hoon) who, unfortunately—unlike my hon. Friend the Member for Hertfordshire, North (Mr. Heald)—was hardly radical enough.
  I am conscious of the extremely difficult task facing the Chancellor of the Exchequer and our industrialised partners because of the problems caused by a deep world recession. The Chancellor has the task of introducing a Budget to assist a sustainable recovery without strangling it at birth and he achieved that with admirable skill on Tuesday.
  As well as having a small business I am vice-chairman of the Small Business Bureau. Many small businesses have weathered the current recession with great difficulty, but with resilience. I am conscious of the fresh start-ups, which have been referred to today. Since 1979, there has been a net increase of more than 30,000 new small businesses starting up in the north-west. In 1991, there were 1,500 start-ups.
  There are almost 3 million small businesses in this country and on Tuesday, when the Chancellor referred to them as "leading the growth", he was absolutely right. They employ one third of all private sector employees. Small businesses took on 1 million extra employees during the 1980s, forcing the pace and driving the expansion and profitability of UK plc. In the 1990s, we must look to them to create the jobs necessary to help to expand our gross domestic product and profitability and to reduce social security liability and bring dignity to those seeking work. We must remember that half of the people who become unemployed find work within three months. We must look to them to create jobs to raise the total tax intake to pay for our record amounts of essential spending on education, schools, welfare, health care, law and order and spending in other important areas.
  Since the Budget, Opposition Members with their negative rhetoric have given this country no hope. The most that can be said of the Leader of the Opposition's offering was that his speech was mercifully short. But it was short in all the wrong areas—short in ideas, in vision and in solutions to the economic problems facing the industrial west. His speech was full of pomp and platitudes and empty of content.
  This afternoon I waited three and a half hours to hear policies from Opposition Members, but we have not heard one policy from them. We have as much hope of hearing policies from Opposition Members as we have of hearing a genuine welcome for the reduction of 22,000 in the unemployment figures today. It is not so much a case of holding our breath to listen for that welcome, but of holding our noses because there is a funny lingering smell in the Chamber today. The Opposition, who seem to speak about creating jobs, by their actions and promises would do the opposite. The Opposition would impose a minimum wage, inflict on us the social chapter and saddle us with an employment training tax, all of which would increase unemployment.
  Last Friday in the Chamber I listened to some Opposition Members talking about cutting defence expenditure. British Aerospace is in my constituency and I can tell Opposition Members that I shall fight hard to ensure that we maintain those jobs in my constituency and neighbouring constituencies.

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  The business aspects of the Budget have been welcomed by many leading industrialists, but I do not have time to name them this evening. The hon. Member for Cambridge (Mrs. Campbell), who is not in the Chamber, described the £1 billion kick-start as mere tinkering. I have a list of 10 suggestions from the Chancellor. If I had the time I would talk about all of them, but I will pick some of the juicier suggestions made last Tuesday. First, there is the onslaught on red tape, which strangles many of our small businesses. I am delighted that action has been taken to ensure that that is cut away. It does not matter where the red tape comes from—whether from Brussels, Westminster or local authorities—it needs to be cut.
  On the review of statutory audits, which act as a tax on many small businesses, I am delighted that action is to be taken to consider ways to remove that from many of them. The increase in the value added tax threshold will release many small businesses from registration and allow Customs and Excise officers discretion in the way they deal with many small businesses who have problems filling in some of the extensive forms required for their VAT returns. That measure will also cut to six months the time that many small businesses have to wait before claiming VAT back on some of their bad debts. That is extremely helpful. I hope that the Chancellor will be able to ensure in future Budgets that some larger businesses will pay smaller businesses well within time.
  The freezing of the unified business rate is welcome—800,000 small businesses will be welcomed, to the tune of £320 million. That will ensure that some left-wing councils are not allowed to heap misery on small businesses, because their UBR will be frozen to manageable levels and to levels that they will know.
  The fact that 100 per cent. of the capital gains tax that would be charged on selling a business can now be reinvested in new businesses will create the new jobs that we all want. The increase in the small firms loan guarantee scheme to £250,000 will give small businesses the opportunity to get the money that they need from banks to expand and create extra jobs. I also welcome the other tax changes that will assist small businesses.
  It is excellent that today the unemployment rate has fallen by 4,100 in the north-west.
  Mr. Andrew Mackinlay: It has not fallen in the south-east.
  Mr. Evans: Even so, we must welcome that fall in unemployment. I accept that the unemployment rate may be volatile in the months to come, but today's fall in unemployment shows that we are moving in the right direction.
  One of the new schemes announced in the Budget will allow those who have been unemployed for longer than two years to be employed. The money that would have gone to them in income support will be used by their employers to subsidise their wage. I hope that we shall be able to attract one such pilot scheme to the north-west, because many constituencies—not my own, which has one of the lowest unemployment rates in England—would find such schemes attractive.
  I was delighted to hear from the Government today that they will ensure that those on low incomes will be protected against the imposition of VAT on domestic fuel
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  bills. I hope that we shall also be able to assist those who just fail to be entitled to income support—for example, some of our pensioners on fixed incomes who have been extremely careful throughout their working lives to save money. I hope that they will be given some assistance.
  The extension of the 20p income tax rate from £2,500 to £3,000 is excellent news. An extra 1 million people will now be paying only 20p in the pound on their income. That still represents just one fifth of the working population, however, and I hope that as a result of future Budgets we shall be able to extend that rate to many others. Many people still remember the basic rate of 33p set by a Labour Government, and they will not forget it.
  The conditions are now in place for recovery—a recovery made all the easier by the changes announced in the Budget. Lower interest rates, lower inflation, lower wage inflation and competitive exchange rates will lead industry in the right direction. Confidence is returning and I trust that all hon. Members will do their utmost to avoid jeopardising that recovery.
  7.52 pm
  Mr. Frank Field: I welcome the hon. Member for Surrey, North-West (Sir M. Grylls) back to the Chamber because he gently, but firmly, chided the Opposition for not praising success when we see it. I agree that there is something about the British character that likes to wallow in failure and not prize success. Sassoon, writing during the first world war, said that if the English were promoted from the inferno to paradise they would still gather round and talk about the good old days. Because one despises that side of our national character, however, that does not mean that we should go overboard and declare success when there is little to declare. The sense of unreality surrounding the debate comes from the feeling that I get when I listen to Conservative Members.
  We have a huge tide of unemployment, which is devastating the lives of those who must bear it. Equally, it is catastrophic for our country. The Budget must be judged on how it will help to achieve four objectives.
  First, how will it help those who have suffered worst from unemployment—those who are literally destitute and sleeping on the streets of many major cities? Secondly, how will it help share the burden of unemployment by getting those in the queue for the longest to the front of it? Thirdly, as the hon. Member for Ribble Valley (Mr. Evans) said, how will it affect confidence and therefore help to return the economy to one of fuller employment, at least to the level that existed before the current recession or slump? Finally, the most important challenge is how the Budget will help to return the economy back to one of full employment.
  Beatrice Webb, at the end of her long life, said that the most significant change that she had seen in Britain was the absence of beggars from the streets. Under the Government, however, begging is back in force and, sadly and appallingly, it is one of our growth centres. Those beggars have been made destitute by the rising tide of unemployment. To what extent will the Budget return us to a state where, whatever else is happening, people are not reduced to sheer destitution? The Budget is silent on that.
  What will the Budget do to ensure that those who have borne unemployment longest have a chance to get to the front of the queue? The Secretary of State for Employment and others are right to say that some jobs are available. It

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  is crucial that those who have been out of work the longest stand the best chance of getting those jobs. Some pilot schemes have been announced by the Government, but one that I have proposed to them is the simplest of all. I hope that it will not only run in one centre, but will be adopted generally. Those who have been out of work for five years, or even 10 years—many of our constituents have been out of work that long—should be able to keep their benefit for a year if they are able to get a job and earn a minimum of between £50 and £60 a week.
  My proposal is simple, it requires little policing and it would make those who have been in the dole queue the longest that much more attractive to employers. It has the edge over the scheme that the Department of Employment is currently favouring, presumably because of pressure from the Treasury.
  One of the advantages of my proposal is that it would save the Exchequer some money, because I believe that the benefit and the wages should be taxable. The cost of unemployment would, therefore, be reduced by a small amount. My proposal would bring people to the front of the queue. It would make them attractive to employers and give them the chance of entry into work. It would give them the chance to hear about jobs and at the end of that trial year they might remain in the labour market.
  Even if my scheme did not achieve that, it would allow the rest of the family to work without the loss of any income. It would give them the chance to reduce some of their debts and it would restore some hope to those people who have been crushed by the year upon year upon year burden that they have borne for us as we fight inflation by making people unemployed. On that front, the Government have some credit from the Budget.
  Will the Government sustain that credit and will the Budget get the recovery under way? We all hope that the strategy will be successful, but I fear that it will not be. We have a Chancellor who has an extraordinary gift of announcing measures in a way that does least for confidence rather than boost it.
  We have had dribbling cuts in interest rates, instead of bold, imaginative moves to try to convince people that we have turned the corner. We are now faced with a VAT increase which will come into force next year, whatever happens. I propose that we should have a VAT increase when unemployment has fallen below a certain level, which would mean that people had an incentive to spend now. That would reverse the increase in the savings ratio, which has bedevilled an immediate recovery.
  The fourth test by which we need to judge the Budget is how effective it will be in returning the economy to full employment. I congratulate the hon. Member for Hertfordshire, North (Mr. Heald) who mentioned full employment as an objective. My hon. Friend the Member for Wallasey (Ms Eagle) pointed out that the Department of Employment did not set such an objective in its annual report this year. She also warned that the hon. Member for Hertfordshire, North will probably be taken outside and done over by his colleagues for even mentioning such a heresy as full employment.
  In a previous Budget debate, I mentioned that it was crucial for the Government to maintain their stance on the GATT round. Given how dependent our economy is on world trade, the worst that could happen to our constituents who are in work, let alone those who are desperate to work, would be for trade barriers to go up.
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  There might be short-term gains, but the long-term costs would be enormous. It is, therefore, important to support the Government on this point.
  Secondly, there are huge markets in eastern Europe and Russia that do not have much purchasing power. The Marshall plan played an important part in ensuring that western European economies moved toward and maintained full employment after the second world war, and we need to be as economically bold as the Americans were then. That means giving people in these areas the chance to buy our goods and services and cementing friendly relations with them. If we cannot do that for good economic or sound moral reasons, we should do it for strategic reasons.
  There has been an outbreak of tribalism in much of Europe. Some of those tribes are hungry; others possess nuclear weapons. It is now a much more dangerous world than it was before the Berlin wall fell. For reasons of survival, if nothing else, we should take that course.
  I want to offer one last idea about full employment. If we are to move back to it, we must begin thinking the unthinkable. There is an employment cartel to which most of us belong. We take measures that make it difficult for those outside it to join. I know that the world is not quite as simple as this, but I suggest that if those of us in work were prepared to accept wage cuts of 12·5 per cent. and those wage cuts were translated into new jobs—assuming all went smoothly—everyone who wanted a job would have one. We desperately need a Government who will pressurise those of us fortunate enough to be in full-time jobs throughout all recent recessions to hand those outside the employment cartel a chance. Unless we are prepared to do that, all that the Budget will do—if it is successful—is push unemployment down, possibly to 2·75 million. That is a worthwhile objective, but many people whose lives have been devastated by unemployment, and who have borne that unemployment for up to 15 or more years, will have no prospect of a job in their lifetimes unless we begin to entertain thoughts the like of which we have not had before or uttered in this Chamber.
  8.2 pm
  Dr. Liam Fox: It is a pleasure to follow the hon. Member for Birkenhead (Mr. Field), whose thoughtful style and good grace in recognising good news when he sees it are a great joy. I pay tribute to the good work he has done for many of my constituents who are Maxwell pensioners—it is much appreciated by large numbers of people.
  It gives me great pleasure to welcome the Budget, which I regard as excellent, timely and perhaps a little overdue. It gives rise to two questions whether a recovery is under way, and what our long-term strategy for the economy and employment should be. When the Chancellor made his famous remark about the green shoots, I think that he was probably correct. The economic indicators suggested that growth was imminent at that point, but there was one complicating factor—our membership of the exchange rate mechanism. Furthermore, no one could have foreseen the effects of the reunification of Germany and its economic domino repercussions.
  I hope for the sake of future generations that we have learnt some powerful lessons from this experience. Currency stability is desirable, but not at any price. Strong currencies do not make strong economies, but strong

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  economies can lead to strong currencies if low inflation and the value of money are maintained. When our party came to power in 1979 we used phrases like "honest money", "real value", "honest savings", and so on, far more than we do now, so I was delighted to hear the Chancellor return to using many of those phrases in recent weeks.
  We have also learnt that Governments cannot fix exchange rates in the modern world. We do not have the cash to enable us to take on the currency markets and win. There is no inherent value in either a strong or a weak currency. It is merely one economic variable; sometimes a currency at a different level is relevant to a country's economic circumstances. Our currency at present is more realistically valued, I believe. It is false to talk of revaluation and devaluation when it is clear that the markets regard the currency now as slightly undervalued, and as a result of the Budget it is appreciating. The hon. Member for Ashfield (Mr. Hoon) seemed to fail to understand that, just as he failed to understand the fact that unemployment has fallen.
  The ERM was supposed to be a semi-fixed mechanism with variable exchange rates. That was what the present Prime Minister and Lady Thatcher believed it to be when they took Britain in, but during the time of our membership the system was hijacked and became what was supposed to be the precursor of a single currency. As a result of Labour policies and of our experiences of nationalisation, we above all people should recognise that economic decisions made for political reasons will always end in tears. If we go along with proposals to move to a single currency which does not evolve naturally but is forced on us by means of an artificial political timetable, we shall live to regret it.
  I believe that a recovery is under way, as witness the surge in mortgage demand, the cuts in interest rates and the fall in underlying unemployment. I welcome the fall of 2,900 in the west country—the first fall in unemployment for three years in an area hard hit by changes in the defence industry. Its plight, however, has been nothing to what it would have been if Opposition Members had been allowed to make the cuts of £7 billion about which they told us last Friday. Having supported that proposal for huge defence cuts, they are hardly in a position to tell us about job losses in defence industries in the west country.
  The Chancellor was left with a difficult balancing act. If the recovery was indeed under way, when should we increase revenue and balance our public finances? There are Conservative Members who say that raising taxes will not harm the recovery if monetary conditions are right. I have some sympathy with that view, but it takes no account of the fact that confidence has been knocked hard by the length of the recession. The Chancellor was thus absolutely right not to raise taxes this year and to go for a neutral Budget but to increase taxation as economic growth gets fully under way. That is a responsible attitude.
  The final confirmation that this was the correct course was given to me by my London cab driver this morning, who said that, although he might not have done well out of the Budget, it was not going to do the recovery any harm—and was not that what counted at the end of the day? Looking around for advice, one can always do worse
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  than take a ride in a London taxi. Perhaps some of the drivers would like to stand for safe Labour seats and inject some sense into the Opposition for future Parliaments.
  Our primary duty is to provide sound money. That was why the Conservative Government were elected in 1979. Tax cuts, low Government spending and low borrowing are at the heart of our philosophy, and every Conservative Member would like to cut taxes and Government spending and borrowing—if all these things were possible in a perfect world. Unlike the Labour party, however, we do not occupy office for short periods at a time. We are a great national party and we have to look to the long term because we tend to be in Government for rather long periods. At the moment we are at the beginning of one of our longer periods. Therefore, it cannot be enough for us to ask ourselves, "What would be a quick fix for the coming year and what will make us popular this year?"
  We must look to the longer term with a view to establishing sound Government finances so that the generation coming after us do not have to take on the burden of debt that the Labour Administration left to the incoming Conservative Government. Of course, we repaid that debt to a great extent during the economic growth that took place in the 1980s. The Opposition tell us so often that we have been in office for 14 years and that we are responsible, but during the 1980s the Government repaid a greater amount of national debt than anyone believed was possible. It was the greatest amount ever to be paid back in our history. That is what economic growth and success can enable us to achieve.
  The holy grail of a longer-term strategy has always been sustainable non-inflationary growth, but that is not so easy to achieve. Lord Lawson, who was one of the most important reforming Chancellors since the second world war, was wrong to believe that any Chancellor or any Government could perform an economic miracle. The battle against inflation is never won. Inflation, like sin, is always waiting round the corner to tempt anyone who might be susceptible. The battle against inflation must never be stopped. In other words, we must always be on our guard.
  If we are to have sustainable growth, the economy must be based more on exports, both of goods and of services, and less on domestic consumer demand. I applaud my right hon. Friend the Chancellor for taking the far-sighted view and taxing consumption rather than income, encouraging exports and providing further supply side reforms. At last we have been presented with a Budget with a vigour and vision reflecting the early Budgets of Lord Howe when he occupied 11 Downing street.
  In the late 1980s, we abandoned our monetary targets, we had too much domestic consumption and there was too little export growth, though it must be said that there was a remarkable export performance during the late 1980s. If there is too much domestic demand and too little export growth, we shall be on the road to a balance of payments deficit and inflation. That is why the measures outlined by my right hon. Friend the Chancellor are to be welcomed.
  There has been a continuing fall in interest rates—not a small trickle, as the hon. Member for Birkenhead suggested, but a huge fall in interest rates over a relatively short period, which has provided massive stimulation for business. A realistically valued currency is helping our exporters. In addition, there is the announced increase in export credit. As my right hon. Friend the Chancellor said, there must be a two-pronged attack. Export credit can be

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  extremely expensive, so we must try to reduce the subsidies given by our competitors while we expand our own export credit. Recognition must be given both to the Treasury and to the Department of Trade and Industry for the efforts that they have made in that area. Until our subsidies are reduced by our competitors, we must help our domestic industries. That, in effect, is what my right hon. Friend the Chancellor announced when presenting the Budget. We welcome reduced premiums as we welcome the fact that by 1995–96 the allocation of Export Credits Guarantee Department cover for certain markets will have increased by 75 per cent. Those will be important markets such as China, Indonesia, Malaysia and Mexico.
  We are surely right to continue to press for increasing liberalisation of world trade, and the commitment of my right hon. Friend the Prime Minister to achieve a successful resolution of the current GATT dispute cannot be overestimated. It is extremely important for the entire world—for all developed and developing countries—that we achieve a resolution of the dispute.
  My right hon. Friend the Chancellor has recognised that to allow the public sector borrowing requirement to continue on its present path would threaten our long-term non-inflationary objectives. He is undoubtedly correct. However unpopular the moves may be in the short term to correct the course of the PSBR and to ensure that it shrinks as a proportion of gross domestic product in coming years, they must be made. My right hon. Friend is correct to stress that we must export to survive. He is also correct to say that we cannot spend what we do not have and that we need sustainable, non-inflationary, long-term growth. We have a Chancellor with the right philosophy and the right Budget. I urge him to keep faith and to keep us free.
  8.14 pm
  Mr. Harry Barnes: The hon. Member for Chingford (Mr. Duncan-Smith) took the Opposition to task for not understanding the nature of successful enterprises. Presumably we must have a system in which there is entrepreneurial zip. No doubt profitability must be greatly increased. I suppose that stroppy labour must be pushed down so that businesses can develop vigorous virtues that lead to people standing on their own two feet, or on the feet of others, to make their way in the world.
  The arguments that are advanced about the European Community seem, strangely, not to coincide with the philosophy of market economics. In the context of the EC, we are told that there will not be fair competition. Instead, there is to be fixed competition so that 11 nations will operate under the social chapter while we, the United Kingdom, shall be allowed not to be part of it. It seems that the normal rule that everyone starts from the same position is not to apply and that we, the United Kingdom, are to have some special privileges.
  If the development of successful enterprise and entrepreneurial zip that the Government have been following for the past 14 years has been doing so well, why are we in such a mess? I am not allowed to explain what the mess is because that would be talking Britain down. I know that the markets will he much concerned with what I say in the House at 8.15 pm, so I must not say anything that is critical of the Government's actions. If I were to
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  engage in such criticism, there would no doubt he a further collapse in share values and the strength of the pound. I would be talking Britain down.
  Accordingly, I shall not explain what all the problems are and I shall not go into the details of unemployment, deprivation and homelessness that others have mentioned. Instead, I shall concentrate on the position in which we find ourselves.
  We are told that the public sector borrowing requirement is to increase from £35 billion to £50 billion. At the same time, little has been done to advance the position of the economy. That has been put off until the time when money will begin to be recouped to pay off the debt that will be incurred by increasing the PSBR.
  Before I develop my argument, perhaps I should say something about growth and development, while cautioning that entrepreneurial zip, private enterprise and the market might not be the be-all and end-all. The Government have siad that they are not to blame for the mess in which we find ourselves because it is the result of the international situation. That, of course, has been influenced considerably by the extension and development of Thatcherite ideals. The entire world was beginning to take up the British revolution in terms of the market, private enterprise and privatisation. Perhaps it was somewhat successful. Indeed, it has been so successful that it has been fed back to us. That has helped to put us in the mess in which we now find ourselves.
  The alternative to possessive individualism is collectivism and collective provision. There is the approach that markets should be limited to the places where they operate well. There are, for example, the markets that operate in all or most towns. The system works effectively as the public move from stall to stall. Something approaching perfect competition can operate in those circumstances. That is because the public can check prices between stalls. That system does not operate in the context of monopoly capital and large firms, but it is one which should be nurtured for small businesses. That means that there should be more controls over larger firms and other large influences. We know that there is considerable exploitation if they are allowed to let rip. I am not talking about a command economy or about massive bureaucratic domination within an economy. The corrective is democratic involvement and participation with collective decisions being made about the areas in which improvements and advances should be made.
  Mr. Nigel Evans: Which of the 47 industries that have been privatised since 1979 would the hon. Gentleman bring directly back into public control?
  Mr. Barnes: It is difficult suddenly to produce such a list. For one thing, we are in a mighty economic mess with a public sector borrowing requirement of £50 billion. If industries were taken back into public ownership, the resultant compensation would impose an extra burden. However, some public utilities could begin to be returned to public control. They are natural monopolies which capitalist economists such as Marshall at the back end of the 19th century used to describe as requiring a great deal of public regulation in their operation. That principle should be put back on the agenda as an advance of collective provision.
  It is interesting that the public sector borrowing requirement is to be allowed to let rip during the next year

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  and is to be tackled only in the subsequent two years. During the first year, some extra moneys are to be collected for distribution in different areas. Those extra moneys are to come from the freezing of allowances, not just this year but in the subsequent two years. According to the Red Book, the freezing of allowances at the level determined by the Budget is to become permanent.
  Excise duty provisions also have a knock-on effect. The increase in petrol prices has an impact on almost everything that depends on transport, such as food prices. Income from that and from the change in mortgage interest tax relief will go towards meeting the cost of widening the 20p band, which will take place this year and in the two subsequent years. That will result in more money being collected through income tax than would otherwise be the case, because allowances for each of the following two years have been frozen while a £500 band has been added to the 20p provision.
  Many people who were paying tax at 25p in the pound and would have been taken out of tax if no change had taken place other than the development of the thresholds will find themselves having to pay 20p which will be pushed down further year by year.
  The Financial Secretary to the Treasury (Mr. Stephen Dorrell): I am sure that the hon. Gentleman does not want to mislead the House. I can confirm that, in all the revenue projections in the Red Book in respect of 1994–95 and beyond, the assumption underlying those figures is full indexation in accordance with the statute.
  Mr. Barnes: The figures on allowances and basic rate limits which are frozen show an income this year of £660 million, in the following year £920 million and in the year after that £960 million. It is now said that in the last two years such sums will be indexed. However, even allowing for that and the omission of indexing this year, the extension of the principle about which I am talking remains, even if the details need to be adjusted.
  This year, another £300 million will be collected as a result of the freezing of the allowances and the 20p band provision. Next year, it will be £210 million and the year after that it will be £110 million. Therefore, more money will be collected through the income tax provisions than previously and there is a knock-on effect from year to year, despite the Minister's clarification of the figures in the Red Book.
  Other measures include VAT relief on bad debts and cuts in business tax and rates, but the biggest changes are to be left until the following years—most significantly, the massive VAT increase on domestic fuel, and the national insurance contribution increases.
  We may need some more statistics to check out the point that I am about to make, but if we take into account the amounts of money that will have to be paid in the next two years by consumers, who are also, in different ways, earners, in the form of income tax contributions, VAT payments, excise duties—which continue during the subsequent two years—and national insurance contributions, the amount of money raised is equivalent to an increase of 4p on the basic rate of income tax in 1993–94 and almost 6p—5·66p recurring—in 1995–96.
  Not only is that a massive amount to be taxing people, but it is being done in a most regressive way. It is not done
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  by extending income tax by way of a progressive increase in the number of bands, but in a way that continues the principle of the poll tax—the most regressive form of taxation that could be imagined—and extends regressive provisions. All that is done without any investment or improvement in the economy.
  Only the Heathrow Express, crossrail and the channel tunnel provisions were mentioned earlier. They may be important projects, especially for London and the south-east of England, but where are the equivalent measures that will spread through the rest of the economy? Such projects were supposed to trigger developments throughout the nation. There was supposed to be some sort of ripple effect. Some stones need to be thrown into the pool elsewhere so that the ripple effect reaches other areas of the economy.
  Mr. Tony Banks: If those transport infrastructure decisions go ahead rapidly, as I hope that they will, there will be a big spin-off for manufacturing industry in parts of the country other than in London—for example, those manufacturing rolling stock.
  Mr. Barnes: I was not arguing against the plans and provisions. I was saying that this is all that we get in terms of investment, despite the fact that we move from deficit of £35 billion to a deficit of £50 billion. Surely what we wanted was the expansion of such arrangements to ensure growth in the economy and so that the knock-on consequences could be taken into account.
  Some of us should start a campaign for fair taxation. The anti-poll tax campaign had a "Can't pay, won't pay" slogan. We should have a "Can pay, want to pay" slogan for the fair taxation campaign. The equalising impact of income tax should be taken into account when determining areas of expenditure. No fairer tax has been devised. All other forms of taxation are regressive. The whole package should be considered to see whether it is progressive or regressive.
  In recent years, we have moved rapidly under this Government away from fair forms of taxation towards unfair forms of taxation. That development should be changed. Fair taxation to make the resources available for growth of the economy needs be be put in the forefront.
  Mr. Lidington: Would the hon. Gentleman care to tell the House, since he has obviously given a great deal of thought to the tax structure, how many bands he would introduce, at what levels they would start and at what levels they would end? Would we eventually get back to the good old days of socialism, when we had a top rate of 98p in the pound on unearned income and 83p on earned income?
  Mr. Deputy Speaker (Mr. Michael Morris): Order. I hope that the hon. Gentleman will not be tempted down that route. A number of hon. Members wish to speak this evening.
  Mr. Barnes: I was preparing to finish when the hon. Gentleman intervened. When I am Chancellor of the Exchequer and allowed a two-hour introduction, I will certainly spell these things out in great detail. One of the worst things that occurred in terms of the high band of taxation was when we had a Budget that changed the level from 60 per cent. to 40 per cent. That was an absolute

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  give-away and a disgrace, while other areas of our economy were being hit very hard. Provisions to take into account such a top rate need to be reintroduced.
  8.32 pm
  Mr. Geoffrey Clifton-Brown: I rise in a totally confused and bemused state.
  Mr. Tony Banks: He should be the Chancellor.
  Mr. Clifton-Brown: I have listened to the whole debate today, and have tried to secure some clarity and light from the Opposition Benches. It was not until I saw the hon. Member for Newham, North-West (Mr. Banks) climbing up in the rafters, trying to find the metaphorical light switch, that I suddenly realised that the hon. Member for Derbyshire, North-East (Mr. Barnes) was telling us it all. He was telling us really good, old-fashioned socialism—clause 4, renationalisation, a centrally planned economy, the lot. It was no longer a socialist dream of reform coming to fruition; it was back to the old nightmare.
  I watched with interest the recent television programme in which the hon. Member for Holborn and St. Pancras (Mr. Dobson) was busily telling us how he would save 20,000 jobs in the defence industry. I am very interested in employment in the defence industry because in my constituency it is of key importance. I studied his last election manifesto with great interest, and I seem to recall that it told us that he would reduce expenditure on defence to the lowest level among our European allies. I believe that that would involve a cut of some £7 billion in our defence budget, which would mean the elimination of the Air Force, the Army or the Navy.
  I congratulate my right hon. Friend the Chancellor on an excellent Budget. It meets his twin objectives of a continuing recovery this year and a return to sound public finances within the economic cycle. It is a very ingenious Budget; it is a big Budget that contains a great deal. It sets the trend for fiscal and monetary measures over the next two to three years, and for the next autumn statement, when I hope that my right hon. Friend will take the opportunity, as the Chief Secretary to the Treasury is doing at the moment, to make a thorough review of public finances and see where we can hold them to their present level.
  We have three ways of reducing our public sector borrowing: we can—as is undoubtedly happening with the increase in employment prospects and the reduced interest rates from the Bundesbank—encourage the recovery which has already started and which will bring in large extra tax receipts; we can reduce public expenditure; and we can raise more money. I hope that my right hon. Friend will do all three, as he has done by producing a fiscally neutral Budget this time, looking forward to raising £6·5 billion next year and £10·5 billion the year after.
  It was interesting that, on Tuesday, my right hon. Friend projected a growth rate of 1.25 per cent. this year and over 3 per cent. next year. If that happens—I have no reason to doubt it—we will have one of the highest growth rates in the industrialised world. We have heard a lot from Labour Members about creating employment, but the only true way to create employment is to encourage growth in the economy. If it was a question of spending more money, we would have the highest rate of employment in the western world, because our public
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  sector borrowing requirement as a percentage of gross domestic product is rising far faster than it should. That is why my right hon. Friend has taken the measures that he has.
  I want to comment on one or two of the fiscal measures in the Budget that even Labour Members might have been magnanimous enough to admit have some merit. There cannot be an entire Budget that takes two hours to introduce without a single measure that they might consider had some merit.
  In my bemused and confused state, there was just one chink of light, and that was cast by the hon. Member for Birkenhead (Mr. Field). I first met the hon. Gentleman when I was lying next to him in a Blue Circle cement bag, when we were sleeping out on the tiles. It was a cross-party venture. I was rather sorry when the hon. Gentleman said that we were not doing anything for the homeless, because, as he knows only too well, we have introduced a huge range of measures on their behalf—rough sleepers initiatives, initiatives to help the non-governmental organisations, rents above shops initiatives, rents to mortgages initiatives, and many others.
  The hon. Gentleman had some very good ideas, and I am sure that one thing of which he would approve in our Budget is the arrangement to take people out of the tax net altogether. Of course, the former Chancellor, Lord Lawson, started this process by taking 3·5 million people out of the tax net, and my right hon. Friend the Chancellor continued this process last year by introducing the new 20 per cent. tax band.
  The extension of that tax band this year will benefit some 4·9 million taxpayers, and I calculate that next year, with the further extension, it will benefit 1 million taxpayers. These are very large numbers of people at the lowest income level who will benefit by not having to bear such a high burden of taxation as hitherto.
  The principle of widening that 20 per cent. band is fundamentally right. My hon. Friends believe that distorting tax reliefs should be gradually reduced. Therefore, I thoroughly welcome my right hon. Friend's measures to limit mortgage interest relief at source to the 20 per cent. tax band. It will raise a very useful sum of money to be deployed elsewhere. I also thoroughly welcome the reduction of the married person's allowance to the 20 per cent. tax band.
  One of the most far-reaching reforms that my right hon. Friend announced concerned the self-regulation and current year basis of assessment for the self-employed. He has introduced a truly visionary measure which follows his consultation paper which, as I told him at the time, I greatly welcome. I urge him to examine the American system carefully. It could be a complicated system to introduce, but it could benefit 8 million self-employed people, so it is extremely important. The American model is simple to operate. Let us face it. We want the self-employed people out there earning a living and benefiting the country and the system will be of no benefit if it is too complicated for them to operate.
  I ask my right hon. and hon. Friends to consider the following bold initiative to encourage self-employed people to take up the new system. As the new system will save civil servants in the Inland Revenue a great deal of time, my right hon. Friend might offer people an incentive to use the system. How about offering a £300 reduction to anyone who is prepared to change to the new system? That

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  would be worthwhile in terms of the administrative costs that the Inland Revenue will save in sorting through the tax returns of 8 million people.
  Other measures might have been welcomed by Opposition Members, such as those relating to gifts to charities. The reduction in the gift aid to charities from £400 to £250 a year seems thoroughly worthwhile and we now have the equivalent of the old covenanting system. There are other measures to help charities, such as the increase in the payroll giving scheme from £600 to £900 a year. As we gradually reduce our tax take as the economy recovers, and as prosperity returns to Britain, we need to encourage individual responsibility, which certainly includes giving to charities.
  There was one measure to encourage self-reliance that I regret my right hon. Friend did not introduce. I am sorry that the hon. Member for Birkenhead is not in the Chamber, as I agree with him about pensions. We need to reduce reliance solely on the state pension and encourage occupational and private pension schemes. I am sorry that my right hon. Friend did not choose to increase the cap on earnings-related tax relief on private and occupational pensions. I hope that he will consider that in the near future.
  I now move on to measures for businesses. We have had a thoroughly worthwhile Budget for businesses which will encourage small, medium-sized and large businesses to succeed. My constituents will welcome in particular the increase in stamp duty and another year of freezing the uniform business rate. They will particularly welcome the increase in the turnover limit for the cash accounting system for VAT purposes from £500,000 to £350,000.
  I am a business man, and I understand these matters only too well. After the Keith report—here I am a little critical of my right hon. and hon. Friends—Customs and Excise were given quite unnecessarily draconian powers as regards penalties. I very much welcome the changes that have been introduced.
  During my right hon. Friend's speech I was looking carefully around the Chamber and I noticed right hon. and hon. Members on both sides of the House nodding off during the complex provisions on advance corporation tax. I welcome those provisions, not least the reduction from 25 per cent. to 20 per cent. on dividends paid which will increase the cash flow of British industry by £2 billion. That is a significant amount of money.
  I had hoped that, as well as limiting the amount of income tax that can be reclaimed from the 20 per cent. band, my right hon. Friend would have left it at the 25 per cent. band as that would have been simpler to administrate. As the measure raised only £200 million, my right hon. Friend could have raised the money more easily elsewhere.
  In conclusion, much has been made in the past few days of the imposition of VAT on fuel and energy costs. I know only too well that after the Rio summit containing the convention on climate change we have to stabilise our emissions of carbon dioxide and other greenhouse gases at the 1990 level by the year 2000. That is an extremely tough target.
  If we are to meet our international treaty obligations—Opposition Members always play green until it comes to hitting their pockets and then they are not quite so keen
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  —we have to introduce severe measures. Energy is one of our industries with the highest emissions of those gases. If we can encourage people to insulate their homes better and use less energy sensibly we shall go a long way towards meeting our Rio targets.
  Opposition Members moan and groan, but if my right hon. Friend the Chancellor had really wanted to be unkind he would have imposed the 17·5 per cent. VAT from midnight on Tuesday and given people no time to adjust. He has been extremely generous in giving everybody plenty of time to plan. There are generous insulation grants available and people can move to more energy-efficient ways of heating their homes. By imposing an 8 per cent. tax next year and a 17·5 per cent. tax the year after, my right hon. Friend has given everyone plenty if time to adjust. I am sure that Opposition Members would have squealed and moaned just as much had he imposed VAT on newspapers, sewage, books, children's clothes or food.
  We have to be prudent about the economy and raise a substantial amount of money to reduce the PSBR. I believe that we have had an excellent Budget. It was a Budget for growth, for exports and for allowing us to take the maximum advantage of the single market. Above all, it was a Budget for jobs. I want to create jobs just as much as any Opposition Member and I believe that the Budget will put us on course for recovery and creating as many jobs as we can in the western world.
  8.47 pm
  Mr. Tony Banks: It really is a bit much for the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) to try to dress up a tax on the poor—which is precisely what a 17·5 per cent. VAT charge on fuel, albeit delayed, actually means—as though it was an environmental measure to be applauded. One can only assume that, if he wanted to go a bit further, logically, too many people are breathing too much air and no doubt the hon. Gentleman could come up with a very good scheme to stop them doing so.
  The hon. Gentleman went out of his way to praise former Chancellors who took 3·5 million people out of tax. He could have congratulated the present Government on taking another 4 million people out of tax by rendering them unemployed.
  I have many criticisms of the Budget, but who does not? All honest people will have criticisms to make. That is not to say that there was nothing good in it, and I pay tribute to all those good things now and move hastily on to the main part of my speech.
  I am grateful that this is the last time that we will have a great Budget setpiece, now that the Government are moving towards a unified statement. At least that will mean that future Chancellors will have to eat their words only once a year rather than twice a year.
  I found it offensive from the Chancellor's statement onwards to hear the accusation that, when we criticise the Government's economic policies, we are somehow running Britain down. Such accusations are wholly unprincipled: they represent the last refuge of a scoundrel.
  The Government have dragged Britain down. When we say so, we are merely attacking the incompetence of the Conservative Government, and we are certainly not criticising or running down the country in which we live and suffer the incompetence of the Government's

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  economic policy, along with so many millions of our fellow citizens. The country deserves something better than an ideologically fixated Government, made up of economic illiterates, but I am afraid that the country will have to wait for the change that only a general election can bring.
  I have to confess that I have a grudging liking for the Chancellor of the Exchequer. I try to dislike him, but I find it difficult. I like him; it is rather like having Arthur Daley in charge of the Treasury. He is a likeable rogue. I would regret it, but I fully expect one day to wake up and read that he had been nicked around midnight, halfway up a drainpipe, probably at the back of Kensington palace, clutching a bottle of champers, 20 fags and a box of Cadbury's Milk Tray. He will no doubt give us a good laugh when he goes. In the meantime, he is giving us a lot to think about, and much misery to be shared round.
  I will not begrudge the Chancellor today's glimmer of good news that unemployment has fallen by a few thousand. That is true for the country as a whole, but not for the capital city. Unemployment in London has gone up. We are still inexorably heading towards 500,000 unemployed in the capital. The right hon. Member for Brent, North (Sir R. Boyson) was right to argue the case for London having assisted area status.
  I understand that the Secretary of State for Employment, who is in her place, has supported that case. I am going only by newspaper reports, but it seems that there has been an argument about it in Cabinet between her and the President of the Board of Trade. It will not be much use to the right hon. Lady to have my support, but she should know that among Conservative and Labour Members, and among Conservative and Labour councils in London, there is unanimity about assisted area status.
  We have an unanswerable case. We have the largest concentration of unemployment in the country. If we use the labour force survey, which the Secretary of State seems to prefer, London has the largest number of unemployed and the highest percentage rate of unemployment in Britain. In areas such as Hackney, Haringey, Lambeth, Newham, Tower Hamlets and Southwark, unemployment rates are well in excess of 20 per cent. and have been for a considerable time. If one becomes more particular in the examination and starts looking, for example, at unemployment among black males between the ages of 20 and 24, the unemployment rates are up to 70 per cent.
  Unemployment is a big problem in London, and anything that the Secretary of State for Employment can do to bring relief will be much appreciated. In two and a half years, London has lost over 250,000 jobs. There are 56 people, twice the national average, chasing every job vacancy in London. Our case for assisted area status is overwhelming and it has all-party support.
  Other hon. Members want to speak, so I will not delay the House, but I want to concentrate on one aspect of the Budget speech which had particular reference to London—the transport element. The Heathrow-Paddington link is to go ahead. That is good news. It is noticeable that that is a straightforward partnership scheme between the British Airports Authority and British Rail. They were able to get their act together, probably because the Government were not much involved. That is the way it should be.
  When we come to transport infrastructure decisions in which the Government are integrally involved, we run into difficulty. We were promised that public money had been earmarked for crossrail. We understood that the project
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  was secure, but now it is to be pushed on to the back burner as the financial package is re-examined. One way to finance crossrail would be to dump the M25 widening scheme in Surrey and transfer the money to the crossrail project. I believe that the sums involved are almost exactly equal. That would be good for the environment and much better for the south-east than widening the M25.
  As to the channel tunnel fast link—some fast link. We are not sure where the link will end, and we do not know how it will be paid for. As to the route, I have been given by my hon. Friend the assiduous Member for Thurrock (Mr. Mackinlay) a copy of tomorrow's Thurrock Gazette, which announces the line of the route. I understand that the Kent Messenger has also leaked the route.
  My hon. Friend the shadow Secretary of State for Transport, the hon. Member for Kingston upon Hull, East (Mr. Prescott), is at the moment doing his head-butting thing outside, in an angry mood, because newspapers and television companies apparently have got information about the route before the House has had an opportunity to discuss it. That is shameful. The Secretary of State for Transport is to make a statement some time next week, but as the information has leaked into the public domain, it would be only decent if a Minister came to the Dispatch Box to make a statement.
  My hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) asked why we should concentrate on transport decisions affecting London and the south-east. I pointed out to him that they are not of importance just to the south-east. There will be an enormous spin-off for manufacturing industry throughout the country if the decisions are made speedily. It would mean more rolling stock and investment in manufacturing output other than in London. London's industrial base has fallen dramatically. London used to have one of the great concentrations of industrial employments; now it has one of the smallest concentrations in the European Community.
  We are still waiting for the Jubilee line extension to the east, again mentioned by the Chancellor, by the Minister for Transport in London and by the Secretary of State for Transport. How many times will it be announced as something the Government favour? When will we see a sign of the scheme going ahead? It is a strange way to run a railroad. When the line is started eventually, we should call it the green shoots railway because it is always being promised but it never turns up.
  If investment decisions are good, they are good investment decisions, period. They are as good for public investment as for private investment. Recession is the time to make those decisions, because investment decisions on transport infrastructure will help advance the upturn in the economy; they will prepare the way. They would form the basis for the prosperity that we hope will return one day to manufacturing industry and the economy generally.
  We need speedy decisions on such projects. We do not want to have the Government launching and relaunching them all the time while there is no apparent move to get the railroads built and the rolling stock ordered. We must prepare the way for economic recovery through these decisions. They would provide valuable public assets for the 21st century. We want no new excuses or delays from the Government: we want action.
  8.57 pm
  Mr. Jacques Arnold: I have been in the House on and off throughout the debate. I listened with a twinge of sympathy to the speech of the hon. Member for Holborn and St. Pancras (Mr. Dobson). It was obvious that he had prepared a speech with his characteristic polish. It was to be a long, self-indulgent gloat over the inexorable rise in unemployment, so we can imagine his feelings when he heard of the welcome drop in unemployment, down nationally and down in Gravesham, to the pleasure of my constituents. In his characteristic style he must have expressed his feelings with a cry of "We woz robbed". Instead, at such short notice, he has had to rely on the immature scribbles of a research assistant to prepare his speech.
  Our debates have been a feast of words, but there has been a ghost missing from the feast. There has been almost a conspiracy of silence among the party leaderships on that ghost, the exchange rate mechanism. The ERM was doubtful at the best of times. It became even worse when it was used to fix exchange rates. It might have been good at the time the exchange rate was fixed, but within days it all came out of line with the relative performances of different economies and, therefore, their currencies, thus putting pressure on the exchange rate. It was like a pressure cooker whose vents had been stopped up: it was bound to explode.
  That pressure was added to by the thoroughly irresponsible way in which the German Government carried out reunification and absorbed and converted the ostmark into the deutschmark. The consequence was that German economic policy required higher interest rates which, in turn, were inflicted upon Germany's ERM partners. Since golden Wednesday we have been out of the ERM. We have been free. We have set our own economic policy. The others remain trapped. The high interest rates imposed because of German policy have led to their economies being crucified. If we want to see real difficulties, let us look at the economies of France, Spain, Italy, and so on—the countries which remain within the exchange rate mechanism.
  This debate has a whiff of hypocrisy about it. If the Government favoured an exchange rate mechanism which had that impact, so did the Opposition. I remember hearing in this House the Leader of the Opposition taunting the Government, saying that the Government believed that we should be in the ERM wide band but that the Labour party believed that we should be in the narrow band and that, with its socialist comrades on the continent, it would adopt the single currency. The leader of the Liberal party was not far behind. I could quote what he said, which was exactly the same thing.
  A fashion was created for high interest rates. That fashion created the recession. We now have the freedom to set our own exchange rates and to lead our own destiny. The fact that we are leading our own destiny is leading to lower interest rates, growth and the good news today on unemployment.
  The results of our ERM policy, supported by the Opposition, inevitably created a large deficit. On Tuesday we heard my right hon. Friend the Chancellor of the Exchequer courageously plan to eliminate the deficit. It is hypocritical of the Opposition not to address the problem
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  of how to cope with that deficit. We have heard not a word about that from those who sit on the Opposition Front Bench.
  There is one aspect of closing the deficit gap by increasing taxes to which I intend to refer—the imposition of VAT on domestic fuel bills. In June last year this country signed the United Nations framework convention on climate change. It commits all developed countries which are party to the convention to take measures aimed at returning their emissions of carbon dioxide and other greenhouse gases to 1990 levels by the year 2000. What are we doing about that? The objective is to reduce the emissions of carbon dioxide by 10 million tonnes.
  Steps are already being taken by industry, commerce and the motor industry, not least through fiscal encouragement. They have already resulted in the elimination of 7 million tonnes of emissions. The task must now pass to domestic households to make up the missing 3 million tonnes. The announcement of the imposition of VAT on domestic fuel from April 1994 provides a lead time within which individuals can prepare to save energy by the more efficient heating and insulation of their homes. The minor works assistance scheme, available through local councils, will help people to do that. The Government also have time to prepare for the protection of the less well off and the elderly who will face higher bills. That is why I welcome today's clear commitment by my right hon. Friend the Prime Minister.
  There is much good news in the Budget. In particular, I welcome the measures to improve the Export Credits Guarantee Department. The cut in ECGD insurance premiums is very welcome. Also welcome is the £1·3 billion increase in ECGD capacity. I noted in particular the statement of my right hon. Friend the Chancellor of the Exchequer about limiting that increase to what he termed the fastest growing and most important markets around the world. It will not surprise my colleagues on the Treasury Bench if I draw attention to the fast-growing markets in Latin America. The economies of the Latin American countries rose, on average, by 3 per cent. in both 1991 and 1992. That growth rate is accelerating. An Organisation for Economic Co-operation and Development report on the economic outlook published in December 1992 showed that last year both Argentina and Chile were likely to exceed 7 per cent. growth, Mexico and Colombia 2 per cent. growth, and Brazil was expected to have a trade surplus of 15 billion US dollars. There are big opportunities for British exporters. Let us back them up with the proper application of this increased ECGD capacity.
  After the Chancellor's major trailer for the high-speed rail link through Kent one assumed that the announcement of the route would follow very quickly. It was therefore with some disappointment that we found that the statement was to be made not on Wednesday but next week, which is the last week before the deadline. It is becoming apparent why the statement was not made on Wednesday. In a very busy Budget week, the Government had apparently pencilled the statement in for Wednesday; in accordance with the usual channels practice of the House, they advised the main Opposition party so as to enable it to field its spokesman. That is a normal courtesy, but what happened? Thinking about the fancy speech of its Treasury spokesman and about the importance that the Labour party attaches to Kent, the Opposition said, "No, we will not have it on Wednesday."

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  The hon. Member for Kingston upon Hull, East (Mr. Prescott) said recently on Radio Kent, "Quite clearly, if the Government hadn't aborted the statement on Wednesday, the Labour party would have withdrawn normal co-operation and gone in for trench warfare." What is the consequence of that? The hon. Member for Newham, North-West (Mr. Banks) has referred to his hon. Friend the Member for Kingston upon Hull, East, Labour's transport spokesman, as being outside, head-butting with the media. What is the hon. Gentleman head-butting about? He is head-butting about so-called leaks of the route—leaks which may or may not be true—but he is head-butting the people of Kent, the people who are worried about the rail link.
  What we want is a definitive announcement from the Secretary of State. We could have had a statement on Wednesday but for the action of the Labour party. As a result not least of a question that I put to the Leader of the House earlier today, we are to have it early next week, as originally planned. The Labour party should not be playing party political games with my constituents. Next week the Secretary of State will be here to answer questions put by Kent Members. What happened today was quite shameless.
  The Budget contains much that is painful and some good news. Above all, however, it indicates plenty of courage. It tackles the problems of Britain today—something that the Opposition have patently failed to do—and deserves our support.
  9.7 pm
  Ms Angela Eagle: Listening to the Chancellor's ponderous and technical speech on the Budget, I was reminded of two Tory election posters. The first appeared on the streets in 1979. It depicted a long dole queue and carried the words "Labour isn't working". Let me remind the House that that was a time when unemployment stood at just over 1 million—a level to which it has never returned in the 14 years of the Tory party's stewardship of the economy, though the figure has often been 3 million. Then there was the Labour tax bombshell poster of the 1992 election campaign. When I was reminded of those two posters, I realised that I was listening to a Chancellor from a political party which is prepared to devalue the political currency as much as he has devalued the pound.
  On Tuesday, the right hon. Member for Shropshire, North (Mr. Biffen) said:
  "I…stand here, shamelessly, as a taxing Tory."—
  [Official Report, 16 March 1993; Vol. 221, c. 202.]
  I was driven to wondering whether the right hon. Gentleman had done the same in April. Certainly the Tory party did not. The voters will remember for a very long time the Government's cynical and shameless Budget and their behaviour surrounding it. It is the equivalent of George Bush's, "Read my lips: no new taxes", and it will come back to haunt them.
  Lord Gilmour, in his hook Dancing With Dogma, summed up the Government's stewardship of the economy in the past 14 years in a way that I cannot better. He said:
  "The Thatcher era saw a grim failure of economic management. The two worst slumps and the most irresponsible boom since the war is a record nobody should be proud of."
  As my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) said so well, billions of pounds of
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  North sea oil revenue have also been squandered to finance mass unemployment as our industrial base has been sacrificed on the altar of monetarism and Thatcherite orthodoxy by a Conservative party in thrall to the City. Also thanks to their free market dogma, we have seen the deregulation of credit, which unleashed a massive credit boom and caused household debt to rise from about £10 million in 1979 to a staggering £52,894 million last year. That represents £l2,300 for every household in Britain. There will be no recovery of confidence or anything else as long as there is such a massive debt overhang and the constant threat of unemployment, which stifles our prospects for recovery.
  The Tory Government's monumental irresponsibility and economic incompetence seem to be matched only by their capacity for self delusion or deliberate deception, one of which they have practised on a grand scale. Even Lord Lawson, now safely retired and out of the way, refutes his own ludicrous claims of an economic miracle, which he attributes to rather too good a dinner one night before he returned to the Chamber. I note that he now has the dubious pleasure of being the latest in a long line of scapegoats paraded to explain the Government's colossal economic failure.
  The truth is—and the Budget proves it in no uncertain terms—that the failure is a Tory failure, caused by dogma and incompetence. As yet, there is no sign of an end to it. The scale of the failure can be summed up by the three structural deficits revealed in the Red Book. The first is the public sector borrowing requirement, estimated at £35 billion this year and set to rise to a massive £50 billion next year.
  The second is the balance of trade, £17·5 billion this year rising to £18·5 billion next year. In the depth of a continuing recession, that is quite unprecedented. The third is unemployment which hovers between 3 million and 4 million, depending on whether one believes the real figures or the Government's altered statistics. In any event, the figure represents 10 per cent. of the work force. That is a triple whammy if ever there was one.
  Unemployment is not only a symptom of recession and economic failure but is a contributory factor to that failure. It is a scourge which must be eliminated, but, unfortunately, as today's debate has proved, we have a Government who, during their long and disastrous management of our economic affairs, have scarcely even bothered to pay lip service to the view that unemployment should come down, let alone targeted it as a problem to be solved.
  I believe that the Government decided early on that they could get away with mass unemployment and not be punished by the electorate. They have shown no concern. Despite billing the Budget as a Budget for jobs, they have done nothing. The costs of unemployment to the economy are considerable. Three million unemployed, or 10 per cent. of the work force, cost about £27 million—or £9,000 per person on the dole—in lost tax revenues and increased social security payments. As for the gross domestic product, unemployment costs up to £66 billion in lost production. If we had that production, the deficit—massive as it is—would disappear.
  In the north-west, 334,700 people are out of work. The cost to the Exchequer of unemploymnent in that region alone is £3 billion. The social costs are incalculable, and the personal tragedy involved has been referred to many times, at least by my colleagues. Unemployment is

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  economically inefficient and morally unjustified. Unlike the Government, we believe that it is a legitimate concern of Government to minimise it, so was the creation of employment at the core of the Budget's strategy? I looked and looked, but, it must be said, it was not.
  We had to wait until the Chancellor was well over an hour and a half into his speech to hear employment referred to for the first time. The Government's so-called employment package consists of two measures. At the micro-economic level, there is supply-side tinkering, involving five new initiatives, but not one job has been created. At the micro-economic level there is nothing but forecasts of a continuing rise in the number of jobless. The Red Book's unemployment forecast says:
  "The rate of increase should start to slow down again as the economy recovers; though since the level of unemployment typically lags behind the cycle in activity it will be some time before it starts to fall again."
  The detail in the Red Book reveals that despite the supply-side measures, which must be welcomed, although they are minuscule compared to the size of the problem, the forecast is that an extra 200,000 people will be unemployed by the end of the year, and that the level of about 3 million will persist for the next two or three years.
  The projection for growth this year—1£25 per cent.—is not enough to prevent a continuing rise in unemployment. The only other policies designed to create employment are essentially indirect, such as the deregulation and general freeing up of business taxes that have often been mentioned by Conservative Members. However, there is no guarantee that deregulation will create more jobs. Those policies could lead to an increase in profitability or dividends—we have seen that British business likes to pay increased dividends rather than create more employment. There is no guarantee that there will be any more employment as a result of that side of the Budget.
  The overall expenditure on supply-side measures is a paltry £125 million. We lost £5 billion in an afternoon to try to save the Chancellor's face, yet all that we can spare for the tragedy of the 3 million unemployed, many of whom have been on the dole for a long time, is £125 million. One speculator made £1 billion in one day last September. The level of waste in which the Government indulged during that folly puts the employment measures, trumpeted though they are, and welcome though some of them are, in the perspective that they deserve.
  Like my hon. Friend the Member for Birkenhead (Mr. Field), I was amazed when I examined the strategic aims of the Department of Employment and found that no mention was made of full employment, merely of creating a flexible and efficient work force. It is not good enough for the social fabric of the country if that is all that the Department of Employment exists to do. The references to the unemployed said simply that the Department would provide training to give people a better chance of getting jobs.
  That deals only with the supply side. There is almost nothing to stimulate demand. In Wallasey we have almost 6,000 people unemployed, and only 75 notified vacancies. People can be trained until they are blue in the face, but the vast majority of them still will not succeed in getting jobs, because the jobs are not available. There must be measures on the demand side to create employment
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  I welcome the Budget promises, such as they were, about the great capital programmes for south London. If they actually happen, if the famed private finance actually shows up, jobs will be created—but we must do much more. There is much wrong with our infrastructure after 14 years of total neglect. There is much wrong with our roads, our schools and our hospitals, and many skilled construction workers are on the dole, waiting to work. It is not beyond the wit of the Government, or any Government, to introduce employment-creating measures that will improve the infrastructure, and to spend public money on them. It has been done in the past.
  At least the Government have done us a favour, in that they have proved that we can never trust a Tory promise at a general election. That has been demonstrated so starkly that I believe that the electorate will never forget it. The Government are incapable of an imaginative response because of the dogma that has tied them up for the past 14 years, so they condemn 3 million people to more years of idleness. Instead of tackling the cause, they plan to cut welfare even more to pay for the hole that they have created in the Budget.
  The Budget is shameless and cynical, full of broken election promises and huge tax increases, and it will do nothing for the unemployed.
  9.19 pm
  Lady Olga Maitland: I very much welcomed the Budget and today I especially welcome the news announced by my right hon. Friend the Secretary of State for Employment that there has been a 22,000 drop in the number of unemployed. The suggestion made by the hon. Member for Wallasey (Ms Eagle) of Conservative neglect was wholly wide of the mark. If we had been so neglectful, how could we have been elected for four terms on the run? I found it rather unworthy of the hon. Member for Holborn and St. Pancras (Mr. Dobson) that he almost choked on the news of the drop in unemployment and that he tried to dismiss it as a freak. We should study the matter in its real context.
  Mr. Dobson: Were you here?
  Lady Olga Maitland: I am very much here.
  This is a Budget for jobs and I congratulate the Government on the many employment initiatives. All told, Government spending on employment initiatives now amounts to £2·5 billion, which is not inconsiderable. It takes considerable vision to keep up the momentum with five new initiatives which could provide at least another 100,000 opportunities for individuals.
  The initiatives are timely. I agreed with the hon. Member for Birkenhead (Mr. Field) when he said that it was painful for people to lose their jobs. Losing a job is devastating—I could not agree with him more. His comments were sensitive, correct and appropriate. I have seen what a shattering experience losing a job can be for those of my constituents who have never been out of work before. It is hard on their dignity because the vast majority of people want to work. We are not basically a nation of whingers and whiners.
  The good and interesting news is that growth is already beginning. It is beginning quietly and it is beginning in a way that makes me feel comfortable because it will be sustained. There are examples of that growth in my constituency. The evidence shows that people are getting

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  back to work far more quickly than ever before. As has been said in many ways today, one quarter of those who are unemployed find work within a month, one half find work within three months and two thirds find work within six months. It is also worth bearing in mind the fact that last year, in any six-month period, 4 million people moved in and out of work. The unemployment figures are not static; there is constant movement.
  I give the example of the experience of the Sutton enterprise agency. It has found that the range of middle and senior management seeking work has stabilised since January. It has noticed that last year seven PhD postgraduates and any number of graduates came to it for help. So far this year, there has been none. The Sutton enterprise agency finds that the most positive programme is the business start-up scheme. The success rate is high. About 75 to 80 per cent. of the companies that are started under the scheme are still trading after two years, which is slightly better than average for small businesses.
  As time is short, I shall deal with one area that has not been especially mentioned. I congratulate my right hon. Friend the Secretary of State on her initiative in introducing the workstart pilot schemes. I believe that it is appropriate that we should pay a lot of attention to helping unemployed people who have been out of work for two years. Such people lose heart and they lose the habit of work. They find that they lose morale and that it affects their family life. It is appropriate that we should seek every possible way to place them back into the system.
  I understand that work start has taken its inspiration from workfare in America. It is an enterprising way to move forward. I pay tribute to my hon. Friend the Member for Norfolk, North (Mr. Howell), who opened up the debate initially. The programme is still in its infancy and I wish my right hon. Friend the Secretary of State well with the talks with the TECs next week.
  There is a great deal of work to be done. Businesses need an incentive in taking on people. The scheme will take a great deal of structuring. We shall want to know precisely who will be taken on, by what kind of companies and for how long. It will require careful monitoring. None the less, workstart will be of tremendous benefit to the long-term unemployed. It will help to break the vicious cycle of lack of confidence and help people to get back into the workplace. There are high hopes that, by getting the habit of working, people will in turn be taken on for work.
  9.25 pm
  Mr. Andrew Smith: The tragedy of the Budget and the failure of the Government is that at a time when Britain needed a Budget for jobs, the Tories gave us a Budget for tax increases costing the average family £8·50 a week. Where we needed a Budget to reverse economic decline, the Chancellor delivered one which will deepen it. Where the Budget should have been fair, it hit viciously those on average and below average incomes.
  In the Budget the Prime Minister was tested against his general election promises and was seen by everyone throughout Britain to have broken them. On 27 March last year he said:
  "We have no plans and no need to extend the scope of VAT".
  On 31 March last year the Chancellor said:
  "We will not have to increase taxes. I cannot see any circumstances in which that will be necessary."
  The Prime Minister said:
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  "I have no plans to raise the top rate of tax or the level of national insurance contributions."—[Official Report, 28 January 1992; Vol. 202, c. 808.]
  None of the Conservative Members who have spoken today has apologised for the breaking of those promises. Indeed, the hon. Member for Surrey, North-West (Sir M. Grylls) said that they were a trivial and nitpicking matter. Of course, all Conservative Members said in last year's general election campaign, "Vote Conservative on Thursday and the, recovery will continue on Friday."
  We must ask what happened to that recovery. Since 9 April last year, more than 40,000 families in Britain have lost their homes. More than 60,000 people have lost their businesses. Broken promises. Some 300,000 people have lost their jobs. More broken promises. Today, even on the Government's figures, and even with the small welcome improvement in the unemployment total, there are 3,042,614 people unemployed. That is not the mark of a successful Government or effective policies.
  Last Thursday, recoiling from the onslaught of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), the Prime Minister, in one of those unwise, unscripted rejoinders which he occasionally gives, said:
  "If France is so successful, why are there 3 million unemployed there?"—[Official Report, 11 March 1993; Vol. 220, c. 1102.]
  It is interesting that the Prime Minister is finding time to reflect on the problems of France. But is there not a more important question that he ought to think about? If his Government here in Britain are so successful, why are there 3 million unemployed people here? Of course, the answer is that the Government have failed to invest in industry, in our economic and social fabric and in skills. As a result, Britain's production of goods and services lags woefully behind that of our competitors. The consequence of that is the mounting unemployment, the suffering of individuals and families and the grotesque waste which diminishes the lives and living standards of us all.
  Mr. John D. Taylor: While I agree entirely with the hon. Gentleman's analysis of the current recession, does he agree that it has been caused by the high interest rates which occurred as a result of our membership of the exchange rate mechanism? Will he say that the Labour party would not join the ERM?
  Mr. Smith: The extent of unemployment has been caused by the Government's failed policies. They have failed to invest in the British economy as our competitors have invested.
  Some of my hon. Friends suggested measures that the Government could take to arrest the rise in unemployment and to reverse it. My hon. Friends the Members for Barnsley, Central (Mr. Illsley) and for Coventry, South-East (Mr. Cunningham) said that the Government could act, could keep the pits open and could save 100,000 people from joining the dole queues. The Government could act to meet the needs of manufacturing industry.
  Yesterday, the Financial Secretary to the Treasury issued a challenge to Opposition Members on industrial production. Let me give him the figures during the years of Conservative government. Since 1979, manufacturing output has grown by 25 per cent. in Germany, 36 per cent. in the United States, 50 per cent. in Japan and 4·7 per cent. in the United Kingdom.
  Mr. Dorrell: Just for the sake of completeness, will the hon. Gentleman also tell us what happened to
  manufacturing output during the years of the last Labour Government?
  Mr. Smith: Let me tell the Financial Secretary that we advance our economy and create the prosperity that we all need through investment in manufacturing. Let us compare that investment now with when the last Labour Government left office. The answer is that manufacturing investment has fallen in the United Kingdom by 6·3 per cent., and during the same period it increased by 53 per cent. in Germany and by 128 per cent. in Japan. That is where we find the roots of our economic failure and national decline.
  As my hon. Friends the Members for Lewisham, West (Mr. Dowd) and for Newham, North-West (Mr. Banks) said, when we point out such matters, Conservative Members claim that we are talking Britain down. We are not talking Britain down, but the Government are doing Britain down. It is not those people who call for action who are doing Britain down, but those who have failed to take the necessary action to secure economic prosperity.
  On Tuesday, the Chancellor claimed that his proposals would help business and promote employment. What is the reality? What is the judgment of key industries affected by the Budget? The director-general of the Engineering Employers Federation said:
  "This Budget does nothing to bring about the massive switch from consumption to investment which is essential for lasting recovery."
  The Machine Tool Technologies Association said:
  "We were disappointed that little emphasis was placed on improving investment in high technology."
  My hon. Friend the Member for Cambridge (Mrs. Campbell) pointed out that nothing was being done to assist technology transfer, which we so desperately need.
  If there is no Government action to allow British shipping to compete fairly, it faces extinction and there will be a loss of 20,000 jobs and a net loss of £2·3 billion to our balance of payments. Mr. Edmund Vestey, the president of the Chamber of Shipping, said of the Chancellor's Budget:
  "it is extraordinary that he has ignored the shipping industry. This is a missed opportunity for Britain."
  I promise the Government and Conservative Members—some of whom have expressed concern on such matters—that during the passage of the Finance Bill we will provide ample opportunities for them to join us in the Lobby to vote for effective measures to promote crucial national industries. Those industries are all the more crucial because of the startling deterioration in the balance of trade referred to by my hon. Friend the Member for Wallasey (Ms Eagle). The current level of the deficit, although alarming, is not the only disturbing factor, because the forecast is shifting and is becoming worse. A £9 billion deficit was forecast for 1993–94, but it is now forecast to be £17·5 billion. There could be no surer measure of the Government's failure to enable Britain to pay its way in the world.
  What of the measures of which the Chancellor and the Secretary of State for Employment have boasted to help the unemployed? In common with my hon. Friend the Member for Birkenhead (Mr. Field), I believe that we need a measure to help those—to use my hon. Friend's striking phrase—who have been in the queue longest to get to the front of it. That is why we proposed in our budget for jobs
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  that national insurances rebates should be given to employers who are prepared to take on people who have been unemployed for more than a year.
  If we consider all the measures in the Budget, it is clear that they are too little, too late, too poorly financed and will have too little impact when set against the £1·2 billion cut in the value of the schemes for the unemployed that has been imposed since 1990.
  Of course it is good to help those who want to start up their own businesses, but does the Chancellor not realise that, to succeed, those businesses need customers? Of course it is good to let unemployed people study vocational courses, but why is that good for just 30,000 people? What about the many students who cannot undertake such courses because they cannot gain the discretionary awards to which my hon. Friend the Member for Norwich, South (Mr. Garrett) referred?
  I accept that there is much work that needs to be done in the community, but, instead of introducing schemes with allowances barely above benefit levels, why are the Government not prepared to pay a proper rate, offer schemes that include proper training and create proper jobs? How on earth have the Government decided on the number to whom those schemes apply? Why did they choose 100,000 people? Does that stand for one in three of those who have lost their jobs since the election or the one quarter of those who face losing their jobs next year? Whatever the answer, the Government's proposals are a colossal betrayal of unemployed people, especially the long-term unemployed, who should have a right to quality when they train and a right to proper payment when they work. The Budget has also missed other opportunities to help the unemployed.
  Real programmes for environmental action and improvement could and should have been used to generate jobs. The Government's attempts to dress up their punitive extension of VAT to domestic fuel and, for that matter, the increase in petrol duty as green measures are utterly unconvincing. Greenpeace rightly called the VAT proposal a setback for the environment.
  If the Government wanted to help the environment by saving energy they would expand investment in rail and public transport and widen the differential between leaded and unleaded petrol. It would have been better if the Government had provided money for insulating pensioners' homes properly rather than inflating their fuels bills. They should have followed the national energy efficiency plan proposed by the Labour party. That would cut four times as much in CO2 emissions as the Government claim will result from the VAT imposition. Our proposals would not simply save energy but create jobs.
  The true recycling in the Budget was that done by the Chancellor when he recycled construction projects that had been announced before. It is high time that we had less of Ministers mincing their words and more of construction workers mixing cement. The question is when those projects will start. The Chancellor announced that crossrail would be subject to further delay. How do we know that that will not be an indefinite one? The Jubilee line project, which the Chancellor trumpeted in the autumn statement, is now subject to further problems. The north-south Thames 2000 link has also been postponed.
  How can we have any confidence in the Chancellor's vague promise of a channel tunnel rail link by the end of the century, given the Government's previous mishandling

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  of the scheme, which was described by the president of the European investment bank as a "disaster"? Alastair Morton, the chief executive of Eurotunnel, has described the scheme as
  "a tragicomedy in umpteen acts."
  When the channel tunnel opens within the next year, the Government will have left the country with the French end of the tunnel linked to the European high-speed rail network and the British end plugged into Network SouthEast.
  Above all, and as many of my hon. Friends have argued, why do not the Government even now allow the accelerated release of accumulated local authority capital receipts so that homes can be built and a start can be made on getting the 400,000 construction workers on the dole back to work?
  If action is to be taken for jobs, we also need to look to international action. In his Budget statement the Chancellor welcomed, as we all do, the re-emergence of growth in the United States—a ray of light, he called it. But he failed to acknoweldge the limited extent to which such growth in the United States will have an impact in the United Kingdom. Analysts Phillips and Drew put the ratio at eight to one vis-à-vis the EC. A 5 per cent. increase in United States demand raises Europe's GDP by only 0·5 per cent. and that of the United Kingdom by only 0·3 per cent. Does not that show that much more effective and urgent international co-ordination is needed to secure expansion, including the sort of measures for eastern Europe to which my hon. Friend the Member for Birkenhead referred?
  Why did Downing street dismiss Jacques Delors' call for an emergency G7 summit to consider urgent action on unemployment? When I tabled a parliamentary question about that, why did the Government refuse to commit themselves to such a summit? Will they give such a commitment this evening?
  By making only contemptuous references to the European Community in the Budget speech, did not the Chancellor signal not merely the fact that he needs to cultivate the Euro-sceptics on the Tory Benches but his wanton disregard of the importance for jobs of urgent and co-ordinated European action for economic recovery? Christophersen, the Commissioner for economic policy, is calling for further measures—he has said that much more than what was agreed at Edinburgh needs to be done. He expects that the Danish presidency will propose as much. I challenge the Government to tell us their intentions. Do they believe that further measures should be taken? 'What are they; and will they give the urgency to this matter which they so signally failed to do during the British presidency?
  Will the Minister apologise to the House for the fact that the Government forced out of the Edinburgh summit, despite the commitment to it of the other 11 member states, a £160 million programme for training for those who had lost their jobs or whose jobs were at risk?
  There may be another reason for the Chancellor's contemptuous references to the European Community. Conceivably, he wanted to throw some of his hon. Friends off the scent of what was, at least to them, an important issue. The Chancellor said of carbon taxes:
  "Tax policy should continue to be decided here in this House, not in Brussels."—[Official Report, 16 March 1993; Vol. 221, c. 182.]
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  However, if the right hon. Gentleman is allowed to proceed with the 8 per cent. and then the 17·5 per cent. rates of VAT on domestic fuel, under the terms of the 1991 and 1992 European agreements this House would never again be able to levy a zero rate of VAT on fuel. I challenge the Paymaster General to make the Government's position on that clear tonight. Do they concede that what I have said is true?
  Will the Government answer a question that they have so far failed to answer—the one put to them by my hon. Friend the Member for Barnsley, Central? Will pensioners be compensated in full for the extra costs of VAT on domestic fuel? I challenge Conservative Members—the right hon. Member for Brent, North (Sir R. Boyson) for one, since he expressed his concern on this point—to join us in the Lobbies on Monday to honour their election promise and defeat this extension of VAT, to afford some protection to pensioners and others on low incomes by not proceeding with this disastrous and punitive measure.
  Far from being the Budget for jobs that Britain needed, this was a Budget for tax increases, for lengthening dole queues and for more broken promises and wrecked lives—from a Government who can no more be trusted with the economy than they can be trusted with their own words to the British people.
  Mr. Frank Field: On a point of order, Mr. Deputy Speaker. I ask you to draw Madam Speaker's attention to the fact—this applies to right hon. and hon. Members on both sides of the House—that most of those whom she called to speak earlier in the debate have not had the courtesy to stay to the end. She might bear that in mind when she is next drawing up a list of speakers.
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): It has been noticeable for a few weeks that the courtesies of the House, which have been observed over many years, are being overlooked. I hope that hon. Members will take note. I will draw the matter to the attention of Madam Speaker.
  9.44 pm
  The Paymaster General (Sir John Cope): I am delighted to commend the Budget to the House. It sets out the strategy to give confidence to the economy. My right hon. Friend the Chancellor of the Exchequer has managed to show—despite all the comments that were made in advance of the Budget—how we shall tackle the deficit without damaging the recovery. Those are a difficult pair of aims to pull off at the same time, as all the comments before the Budget made clear. Nevertheless, that is what my right hon. Friend has been able to achieve. He has done it by setting out further ahead than usual what we shall do, and planning to legislate for that as far as possible. I have found during the day or two since the Budget statement that this has been welcomed by businessmen, who themselves have to plan ahead. That is why the Budget is so important for confidence in business.
  It is, of course, businesses that create jobs. I know that some Opposition Members find that difficult to accept, but it is a fact. We need sustained growth with low inflation, and that is what the Budget will achieve. That is the primary reason why it is good for jobs, as my hon. Friend the Member for Hertfordshire, North (Mr. Heald) said. The hon. Member for Wallasey (Ms Eagle) spoke as

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  though only infrastructure or spending on training by the Government would create jobs. That is a simplistic approach.
  I shall respond to some of the arguments which have been advanced and draw particular attention to two important features of the Budget. First, there are the measures to help small businesses. Secondly, there is the impact of the single market. After all, this is the first Budget of the single market.
  My hon. Friend the Member for Surrey, North-West (Sir M. Grylls), who for so long and so diligently has championed the cause of small businesses, correctly said that this is a five-star Budget for small businesses. My hon. Friends the Members for Ribble Valley (Mr. Evans) and for Taunton (Mr. Nicholson), and others, supported that assertion. It was important that it should be a Budget for small businesses because they are capable of creating the jobs that we need. Stan Mendham, the active boss of the Forum of Private Business, said yesterday that small businesses created about 1 million jobs in the 1980s and could do the same again in the 1990s. I am proud of the Conservative party's record, and that of the Government, on small businesses and of the contribution that those businesses have made to the economic life of the country. It is one of the great changes that we have seen since the socialist years, when large centralist organisations—preferably nationalised—were in fashion.
  At first, efforts were directed to help small businesses start. All these schemes were focused on start-up. We are still concerned to foster new businesses, but at a time of recession we need to help existing businesses. Much of the help comes from the things which help every business—interest rates, confidence and other general considerations. There are, however, specific proposals for small businesses in the Budget. My hon. Friend the Member for Surrey, North-West mentioned especially the loan guarantee scheme. Like him, I am a strong supporter of the scheme. It makes bank finance possible for those who could not otherwise get it due to lack of security to put up to secure a loan or because of an inadequate track record. That is important.
  My right hon. Friend the Chancellor of the Exchequer announced that the premiums would be lowered and, in particular, that they would be a ½per cent. only on fixed rate lending. That is valuable encouragement to this finance—which is important to small firms. Following the Budget, we are to discuss with the banks increasing the guarantee from £100,000 to a maximum of £250,000—a major increase—and increasing the proportion guaranteed from 70 per cent. in most cases to 85 per cent. There is also a further cut to a 00BD; per cent. in the premium for loans in inner cities. London has been mentioned a number of times in the course of the debate in that context, although most attention was obviously on the large infrastructure projects. However, it is important in this context too.
  My hon. Friend the Member for Surrey, North-West quoted two leading bankers who are in favour of the loan guarantee scheme. As Minister with responsibility for small firms, I know from personal experience of the difficulty of selling the loan guarantee scheme to local bank managers, who are not always keen to take it up. Therefore, my advice to small firms is to ensure that they ask for the scheme, that they press for it if it is the right one
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  for them, if necessary by going to a higher level within the bank, or for that matter by going to another bank. It is not always easy to persuade a local bank manager to go in for the scheme.
  There are many other changes to help small firms—in particular, to value added tax. A couple of weeks ago, with our European Community partners, we negotiated a special agreement to raise the maximum for the cash accounting scheme to £350,000 turnover—by far the highest in the EC. In the Budget, my right hon. Friend announced that that is exactly what we are doing. This is a useful scheme, particularly for small businesses which have bad debts or are worried about bad debts. I urge all those firms who are eligible to consider joining if they have not done so already. We are also making it easier to join the scheme and consulting about simplifying the scheme altogether. In addition, we have cut the time limit for all firms for bad debt relief to six months. The need for that came out strongly in discussions with small firms—and large ones, too, for that matter—and their organisations.
  We have also improved the VAT penalty regime, as several hon. Members have remarked. We have attempted to keep a balance between the necessity to collect the revenue and the need to recognise the problems that firms, particularly small firms, may have. The VAT penalty regime has to balance the necessity to collect the revenue with a realistic attitude to firms' difficulties. Hon. Members see in their constituency postbags, and from time to time send to me, hard cases of firms with difficulties of that sort. Sometimes one can assist, sometimes not. But most businesses pay promptly and properly and they have a right to expect that we will also collect the proper tax from those who are reluctant. The revenue cannot stop trading with someone it regards as being a doubtful debt in the way that a trader can. That is why we need penalties. We are not relaxing our duty to collect the tax, but we are introducing, for example, flexibility to mitigate penalties, as my right hon. Friend the Chancellor announced, something which was much requested by business organisations.
  Another important deregulatory measure which has been mentioned this afternoon is the reform of the system for assessing the self-employed personal tax. Some small firms worried that we were passing over to the self-employed work currently done by the Inland Revenue, making them do more of the work. In fact, self-assessment will be voluntary. It will be able to be on the pay-and-file basis—to borrow a phrase from corporation tax—but the self-employed will also be able, if they wish, to fill in a return and let the Inland Revenue send the bill as happens at present.
  My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) made an entertaining and vigorous speech in which he referred to some of this. He did, however, leave one big unanswered question, which perhaps he will deal with at some point—how on earth he and the hon. Member for Birkenhead (Mr. Field) came to be wrapped up in cement bags. He never got around to telling us how that came about, but perhaps he will do so at some later stage.
  There were many other measures in connection with small firms which I have no time to go into at the moment. There was the unified business rate, affecting 800,000 properties. Again, in London, 40,000 small shops and 40,000 other business premises will benefit from what my

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  right hon. Friend announced. There were also the prompt payment measures, the capital gains tax scheme, and so on. It is truly a five-star Budget for small firms.
  This is the first Budget in the single market and I realise that many people are worried about the effects on trade of the opening up of markets, particularly trade in goods subject to excise duty. Our value added tax is below average in the Community, but our excise duties are higher than most, though not all, in the Community. Every member state has different rates, and that is exactly how it should be. Our rates are fixed here in this country by the House.
  We have a land border between Northern Ireland and the Republic and that, of course, is where the problem is, or could potentially be, most acute. Our excise duties and VAT are very similar to but just below those of the Republic for the most part, so cross-border shopping where it is easiest is least distorted with the rates previously and the rates as proposed by my right hon. Friend in the Budget.
  With regard to the sea border between this country and the continent, the position is, of course, different. Most of our neighbours there have lower excise duties. That means that, when it comes to personal shopping, there is an incentive which we have always recognised and which was taken into account by my right hon. Friend in making his judgment on fixing excise rates in this Budget.
  I will say only two things about this at the moment. First, it is not only the duty but, as far as the customer is concerned, the price that matters. Over the last 10 years the proportion of the retail price of beer and whisky, and for that matter wine, represented by the tax has come down by 10 per cent. and 20 per cent.
  Mr. Andrew Smith: I appreciate that the hon. Gentleman's time is short, but can he answer the questions put by me and my hon. Friends? First, will he reimburse in full the cost to pensioners of the extra VAT on domestic fuel? Secondly, can he confirm that the British Parliament would not be able to return to a zero rate on that fuel under the European agreement?
  Sir John Cope: On the first point, I have nothing whatever to add to what my right hon. Friend the Prime Minister said earlier, what my right hon. Friend the Chancellor said in his Budget speech, and what other Ministers have said in the course of this debate. On the second point, under the agreement made by the last Labour Government, it is true that we should need to renegotiate that in order to lower the rate. That is something which will no doubt be discussed in Committee as we go through these proposals.
  Before the hon. Gentleman cut in, I was talking about cross-border shopping. People are concerned not only about personal shopping but also about potential bootlegging—people bringing back and re-selling here goods on which duty has been paid in the Community. These are early days, but the Customs have already caught quite a number of people and there are some prosecutions coming forward. Anyone who thinks of going in for bootlegging should remember that the penalties are severe—seven years imprisonment at the top, but also the duty, plus a fine, while the goods and their vehicles are subject to confiscation. If a pub or an off-licence re-sells bootleg alcohol or cigarettes, those concerned risk losing their licence. The penalties are very heavy and they will be imposed, so those who contemplate going in for it should make sure that they understand exactly the risks that they are taking.
  We have had a wide-ranging discussion today. I have not had time to report to my right hon. Friend the Chancellor that the hon. Member for Newham, North-West (Mr. Banks) confessed to liking him. I have to tell my right hon. Friend, when he comes to read it in Hansard, that it was wrapped up a little and was rather a back-handed compliment. The hon. Gentleman was in the course of praising my right hon. Friend for introducing the unified business rate—
  It being Ten o'clock, the debate stood adjourned.
  Debate to be resumed tomorrow.

  Criminal Injuries Compensation
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]
  10 pm
  Mr. Michael Shersby: At the outset of the debate, I wish to declare an interest: I am president of the Uxbridge Victim Support Scheme, which, like the National Association of Victim Support Schemes, is greatly concerned with compensation for criminal injuries. I have taken this position recently, and I am proud to occupy it.
  As the House knows, I am also parliamentary adviser to the Police Federation of England and Wales. However, I wish to make it clear that I am not speaking on its behalf in tonight's debate, if for no other reason than that police officers now account for less than 10 per cent. of all applicants to the Criminal Injuries Compensation Board and it therefore follows that 90 per cent. are civilian innocent victims of crime.
  On 23 November last year, my right hon. and learned Friend the Home Secretary announced, in reply to a parliamentary question from my right hon. Friend the Member for Westminster, North (Sir J. Wheeler), that the Government had decided that introducing a simplified procedure based on a tariff structure offered the best prospects of providing quicker payments to claimants through a means that is fair, straightforward and understandable. He went on to say that further work was needed to develop the practical aspects of these new arrangements, and that that work should be completed by the first half of this year, when a White Paper would be published setting out the details of the proposed new arrangements. He expects them to come into operation this year.
  Following that announcement, I decided to apply for an Adjournment debate because I believe, first, that compensation by the state for criminal injustice is a vital part of our British way of life; and secondly, that we should be very careful before we move away from the present satisfactory scheme to one which, although it might be quicker, might well provide the claimant with what I can only describe as rough justice.
  It is worth recalling why the Criminal Injuries Compensation Board was brought into existence and why the scheme came about in 1964. It was realised that, in most cases, victims of crime could not bring civil proceedings for compensation against their assailants, because those assailants would be without funds.
  The Government of the day recognised that the fact that there are increasing numbers of victims of crime was a sign that society itself had somehow failed the victim by allowing him or her to be assaulted. That being so, perhaps it is right that the Government should ensure that victims receive compensation.
  Compensation is treated by victims as a very important part of their recovery, fulfilling as it does their desire for some sort of justice, and the payment of compensation, coupled with the successful prosecution of the offender, is usually a large factor in their recovery.
  Victims of crime need proper compensation to reimburse them for their out-of-pocket expenses and to
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  recover from any financial embarrassment that might have resulted from the assault. They also need it to deal with the interests of justice from a personal standpoint.
  One important feature of the new tariff-based scheme upon which the Home Office is working could be the complete prohibition of the Criminal Injuries Compensation Board making awards for past or future loss of earnings. That is an important point. I hope that I am wrong about that, but if not, it means that 90 per cent. of civilian applicants who suffer injuries so serious that they are unable to earn their livelihood could be obliged to rely on existing social security benefits, which usually would in no way make up for the shortfall in income. It would not be right for any new scheme to deprive innocent victims of crime of the right to recover income lost through violent crime.
  The essence of a tariff scheme such as my right hon. and learned Friend is contemplating is to identify types of injury and to give a standard figure of damages for each injury, rather like the Northern Ireland model. If that is the case, I trust that the figures will be increased by the rate of inflation. However, my concern and the principal reason for raising the matter is that huge anomalies are bound to occur.
  The recent guidance given to the judiciary and the Criminal Injuries Compensation Board by the Judicial Justice Board identifies types of injury and, according to the seriousness of the injury, gives a bracket within which compensation would be appropriate. The brackets are often wide because it is recognised that each case is individual and turns on its own factors, and that it is impossible to fix a figure appropriate for any type of injury. One broken arm is often different from another broken arm.
  The present scheme allows experienced lawyers to study all aspects of the case and to reach an appropriate valuation in accordance with the principles of common law. The system is fair, and puts the criminal victim in roughly the same position as a claimant in a civil case. It must be remembered that there can be no duplication of state benefits. All benefits paid by the state, all private pensions and much private insurance are taken as a credit against damages to reduce the state's outlay.
  If a victim is injured by the use of a motor vehicle as a Weapon—in other words, if a victim is deliberately run down—that victim can apply to the Motor Insurers Bureau for compensation under common law. If a victim is injured by a very differently shaped piece of metal, such as a crowbar, something which we would all deplore, that victim would have to apply to the Criminal Injuries Compensation Board and would obtain much less by way of damages. Can that distinction be justified?
  My other worry is that, in many types of injury, it will be impossible to provide any meaningful tariff for damages. Facial and bodily scarring, post-traumatic states, stress disorder and sexual abuse, including rape, are obvious examples. How can any standard figure be set for those injuries? Why should not the present system continue, under which damages are assessed by a lawyer, usually a Queen's counsel, who is experienced in the art?
  I cannot believe that my right hon. and learned Friend takes the view that changes in the present scheme are necessary to improve the access of victims of violence. That is obviously not the case. I have the terrible feeling that my right hon. and learned Friend's proposed changes

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  to the present scheme are to save the Government money. In other words, the proposals are what is commonly called Treasury-driven.
  If that is the case, I do not think that the Treasury is in any position to press my right hon. and learned Friend to save money. At a meeting of the Public Accounts Committee, held on Monday of this week, the deputy secretary who is the accounting officer for an organisation called Forward, a wholly owned Treasury organisation providing catering to the civil service, had to admit to substantial maladministration, to the loss of up to £1 million, to the payment of cash sums to ghost workers who did not exist and also to other malpractices.
  When I read the papers for the meeting of the Public Accounts Committee on Monday of this week, I was reminded of my late right hon. and noble Friend Lord Ridley of Liddescale, to whom I pay tribute, who in 1979 introduced the Ghost Workers (Abolition) Bill. I obtained from the Library a copy of my late right hon. and noble Friend's speech. I was able to deploy it to considerable effect in the Public Accounts Committee and to demonstrate that Her Majesty's Treasury was in the business of employing ghost workers. I thought that that was a particularly splendid tribute to the work in this House of my late right hon. and noble Friend.
  If the Treasury cannot even run the modern equivalent of a whelk stall, in the form of the civil service catering department, it is hardly, I suggest, in a position to tell my right hon. and learned Friend the Home Secretary to start saving money by reducing compensation to the victims of violence.
  According to the National Association of Victim Support Schemes, which is to issue a report entitled "Band Aid for Victims?" tomorrow morning:
  "the current scheme has some serious deficiencies".
  One of these
  "is the long delay before awards are made."
  However, the report also points out that this situation has been improved and that the proportion of cases resolved within a year has increased from 25 per cent. in 1990–91 to 49 per cent. last year. The chairman of the Criminal Injuries Compensation Board, my right hon. and noble Friend Lord Carlisle of Bucklow, himself reminded the victim support association at its annual conference:
  "he who gives twice gives quickly."
  The improvement in the speed with which the board deals with claims has to a considerable extent resulted from pressure from activity, including the management reviews carried out by my right hon. and learned Friend and in particular by the Home Affairs Select Committee. As a result, working procedures and the turnover of claims has increased enormously. The position is in no sense the same as it was three or four years ago.
  I warmly congratulate the board on making the improvements it has. If those improvements are allowed to continue, there can be little doubt, by any standards that my right hon. and learned Friend cares to adopt, that the Criminal Injuries Compensation Board is likely to be meeting its targets. As you know, Mr. Deputy Speaker, targets and milestones—the jargon of management consultants in 1993—are very important and very dear to the hearts of the Treasury, the Public Accounts Committee and this House. There cannot therefore be any justification for changing the scheme, and any suggestion that it can be improved by cutting benefits simply does not stand up to examination.
  504
  The present scheme, in fact, excludes classes of people from receiving benefit. It excludes those who have criminal convictions, those whose way of life makes it inappropriate that they should receive compensation, and those who consented to the risk of injury by indulging in, say, a good pub fight. Those restrictions are bound to continue to apply, so the innocent victims—those who are left—will merely suffer potentially vast diminution of benefits.
  I wanted to wind up by putting to the Minister of State some questions that I know he will answer with his customary diligence.
  How would a tariff scheme take sufficient account of the personal circumstances in a rape case? These cases are tremendously difficult and require careful consideration—not a cheque for £500. How would a tariff scheme take account of the average and future working life of a claimant? Would a man of 75 be paid the same for the loss of a limb as a man of 30 who had 35 years of working life left?
  How would a tariff-based scheme take account of the effect of scarring on a young woman with her life ahead of her and with prospects of marriage and a family, compared to the effect on, say, a woman in her 50s or 60s or an older man, whose marriage prospects would not be lessened to the same degree?
  How would payment for, say, a broken nose or a broken jaw be calculated? Under the present scheme, the Criminal Injuries Compensation Board considers medical and police evidence most carefully. If it did not do so, the payment could be too great.
  I do not believe that a tariff system would be quicker than the present system, bearing in mind the need to take into account police evidence and medical reports. If those were to be dispensed with, justice would fly out of the window. Anyone reading the 28th report of the Criminal Injuries Compensation Board will be deeply impressed by the fact that, in the year ended 31 March 1992, the board received 61,400 applications, as against 50,820 in 1990–91.
  I urge my hon. Friend not to replace the excellent scheme that we have at the moment with a cheaper, tariff-based scheme—a scheme based on rough justice. If the Home Office decides to do that, I for one will have the greatest possible difficulty in supporting it.
  10.17 pm
  The Minister of State, Home Office (Mr. Michael Jack): I congratulate my hon. Friend the Member for Uxbridge (Mr. Shersby) on obtaining this debate and on the very courteous and careful way in which he has put his case before the House. I shall certainly do my very best to answer his questions, although, as will be apparent, there are some areas in respect of which I shall be unable, for very good reasons, to give at this stage the detailed information that he has requested.
  My hon. Friend mentioned his role in victim support. I congratulate him on his appointment and take this opportunity to pay tribute to the organisation. I too was much taken with the words in its latest press release, issued ahead of the report that is to come out tomorrow. The press release says that payment should be prompt. On that point, there is no gap between us.
  This is a very important subject. Clearly it is an emotive issue for many people, and I am grateful for the probing questions that my hon. Friend has put. I hope that I shall be able to allay some of his anxieties and use this

  505
  opportunity to explain a little more fully why and how we intend to change the criminal injuries compensation scheme.
  The Government are anxious to maintain the response to those who are victims of crime that was enunciated in the 1964 White Paper, which first described the criminal injuries compensation scheme. This said that it was right that the public's sense of responsibility for and sympathy with the innocent victim of a crime of violence should find practical expression in the provision of compensation on behalf of the community. We believe that that philosophy is no less valid today. I am glad that my hon. Friend took us back to that starting point, where we share common cause.
  The scheme was of course set up to deal with the volume of crime and levels of claims expected to arise in the mid-1960s. I do not think that anyone could have envisaged how, sadly, both have risen or how much more difficult the administration of the scheme would become as the range and complexity of cases increased. Despite the best efforts of the Criminal Injuries Compensation Board over the years, there has been an inexorable rise in the backlog of cases awaiting resolution.
  The backlog exceeded 81,000 at the end of the financial year 1991–92, and most claimants were having to wait more than a year for their case to be settled. The House will agree that that serves to show just how far we have moved away from the intention of the scheme's founders, which was to provide a quick and simple method of recompensing victims.
  As my hon. Friend said, compensation is currently assessed on the basis of common law damages—in other words, what a civil court would award in damages in a comparable case. That process necessitates finely balanced judgments or assessments by board members of the claimants' degree of suffering and financial loss. It tends to make speedy and consistent decision-taking all the more difficult.
  Last year, we concluded that the scheme in its present form was intrinsically incapable of delivering the type of service that victims now expect, a service that produces awards reasonably quickly, straightforwardly and in an understandable way. In saying that, I must emphasise that I imply no criticism of the board itself, and join my hon. Friend in paying tribute to Lord Carlisle for his work and that of his colleagues. They have made determined efforts to provide a better service, and with some success. It is rather a reflection of the nature of the scheme itself that we felt that we should consider a better way of delivering payments to victims.
  We believed that a scheme based on a tariff of awards, which broke the link with common law damages and with the inevitable delays built into the system, was the best way forward. In order for my hon. Friend's voice to continue to be heard, I must point out that we intend to set out our proposals more fully in a White Paper to be published in the summer. I hope that my hon. Friend will understand that that is why at this juncture we are listening carefully to people's views, and this is the first parliamentary occasion on which we have had the opportunity to do so. Clearly they will be taken into account when we publish the White Paper
  506
  It is important to reflect for a moment on the rules of eligibility which we intend to follow. They are essentially that claimants must have been the blameless victims of a crime of violence, and must subsequently have co-operated fully with the criminal justice services. We do not intend to exclude the police or any other occupational group from the scope of the scheme. There will continue to be provision for cases to be reopened if the claimant's medical condition deteriorates after an award has been made. I hope that my hon. Friend finds that reassuring.
  Mr. Shersby: Will my hon. Friend be kind enough to tell the House whether claims under the new scheme will take account of the loss of wages?
  Mr. Jack: I shall deal with that aspect in a few moments.
  It is important to take some time at this stage to explain the conceptual change in the nature of the new scheme. Many people will accept that no amount of money can fully or properly compensate people for criminal injury, and that it is perhaps unrealistic to believe otherwise. There is no such thing as an "absolute" or "right" figure for the hurt suffered. Awards under common law damages are necessarily subjective, not objective. Even the courts are sometimes accused of inconsistency in the awards they make.
  Our new scheme will no longer attempt that almost impossible task. It will continue to provide a tangible recognition of society's sympathy and concern for the blameless victims of crimes of violence. It will do so by making a payment related to the nature of the injury rather than to its effect on the victim. The new system will be based on the tariff or scale of awards under which injuries of comparable severity will be grouped into bands for which a single fixed payment will be made.
  We are currently examining about 20,000 cases resolved by the board in 1991–92. That is one third of the cases that it resolved. The extensive case sampling exercise will help to decide how injuries should be grouped together, how many tariff bands there need to be, and what level of payment should be made for each grouping. Our intention is to set the tariff bands so that the average award under the new scheme is broadly the same as the average award under the current system.
  I should point out that, in its first full year of operation, the board paid out £400,000 to 1,164 victims, whereas last year it paid nearly £144 million to more than 39,000 recipients. The vast majority of awards were for less than £5,000, with more than 66 per cent. falling within the range £750 to £3,000. The average payment was £3,660.
  The design of the new tariff will build on the existing matrix of cases, so allowing us to take full advantage of the collective and distilled experience and wisdom of the present board. The average claimant will receive much the same award as he or she would have received under the present scheme. Our tariff scheme will remain the most generous state compensation scheme anywhere in the world.
  In response to several of the points that my hon. Friend made, I refer him to paragraph 8.2 of the board's most recent report, which shows the narrow financial band within which the present scheme operates. If my hon. Friend considers that, and thinks about the element of discretion, that should give him some reassurance that what we propose will build on the collective distilled

  507
  wisdom gained from what the board has done. Clearly, our mapping exercise will deal with some of the problems that he has put before the House.
  I maintain that our new system should be no less fair than the current one. It will ensure that people suffering the same injury receive the same award, which is often not the case now. The payments will still be very generous when compared to those of any other state compensation scheme. In addition, victims may, depending on the circumstances, also be able to look for help from social and other support mechanisms, such as medical and social care, and from unemployment, invalidity and other social security benefits; so victims will still get all the help that the state can reasonably provide.
  I should make it clear that there is much further work to be done in drawing up the detail of the new scheme. I mentioned that we envisaged the rules on eligibility remaining broadly as before, but we are also looking carefully at administrative procedures, including the handling of police and medical reports, and at such things as how the body that will run the new scheme might best be organised and managed. I note that my hon. Friend mentioned that most pertinent point.
  We aim to introduce the new scheme on 1 April 1994, but claims lodged before then will be resolved by the present board under the current arrangements. Claims lodged after that will be dealt with under the tariff scheme.
  We are also determined to ensure that there should be a fair and equitable appeals system. We envisage a two-stage appeals process. The first would be a higher-level review of the papers by the scheme administrators. This should help to sift out frivolous or vexatious appeals and enable any obvious mistakes to be corrected quickly. Stage 2 would be to an independent appeals panel, which might include members of the medical, business, legal and other professions and groups.
  508
  I am afraid that I cannot answer questions on points of detail involving precisely how the arrangement will work, but such matters will be dealt with in the White Paper.
  Of course, there will be an opportunity for the House to consider our proposals when the White Paper is published. It is fair to say that our proposals are not set in stone at this stage. We shall listen carefully to what people have to say. I should be delighted to receive any further input that my hon. Friend wishes to submit. I appreciate that he, like me, is restricted by time in his attempt to get all the detail into tonight's debate. We have already received papers from the chairman of the Criminal Injuries Compensation Board and from the NAVSS, and we are considering their views most carefully.
  I emphasise that we are determined to introduce the new tariff scheme early in 1994, so we shall work hard to settle the details by autumn this year, so that matters concerning communication, the publishing of details, guidance, training of staff and everything else that goes into bringing a complex new arrangement into being can be done effectively and efficiently.
  In embarking on an attempt to improve the service to victims of crime, we too are conscious of the issues that my hon. Friend correctly put before the House. The central necessity is to focus on the preparation involved by way of the extensive mapping exercise. That is the way to take the best of what we have now, both in human and in financial terms, and to provide it in a more effective and efficient way to the victims of crime. At the end of the day, it is their interests that must be uppermost in our minds.
  We must not forget the relative generosity of our scheme compared with anything else in the world. I am glad that our new scheme will be more effective and efficient, and will remain the best that there is.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes past Ten o'clock.

FOREIGN AND COMMONWEALTH AFFAIRS
  Juanito Silva
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  Committee of the Regions
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HOME DEPARTMENT
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SCOTLAND
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  Defendants (No Fixed Address)
  Defendants (No Fixed Address)
  Police Officers, Strathclyde
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  Pupil Exclusions
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  NHS Charges
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  Crime, Strathclyde
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  Nursing Home Residents
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  Integrated Administration and Control System Scheme
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  Children in Care
  Children in Care
  Textbooks
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  Housing
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  Bridges, River Clyde
  Bridges, River Clyde
  Water and Sewerage Services
  Water and Sewerage Services
  Fraud
  Fraud
Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Ripon.): The LORD CHANCELLOR on the Woolsack.

Audit Services: Cost-Effectiveness
Baroness Gardner of Parkes Baroness Gardner of Parkes asked Her Majesty's Government:
What organisations are obliged to use the district auditor and what control do these organisations have over the cost-effectiveness of the service provided.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, the bodies whose accounts must be audited by auditors appointed by the Audit Commission are specified in Section 12 of the Local Government Finance Act 1982. The principal audited bodies are local authorities, probation and pension authorities, drainage boards and health service bodies. The commission, not the body being audited, is responsible for the cost-effectiveness of the audit service.
Baroness Gardner of Parkes: My Lords, I thank my noble friend for that Answer. My concern is with who regulates the regulators. I serve on a health authority. We are most concerned when told how many days are required and the amount is set for us. It is entirely outside our control. Can my noble friend tell me why there is no element of competition or any way in which the bodies using the service can speak up for better terms or for competitive quotes? At the moment anyone using a private accountant is querying his expenses.
Lord Strathclyde: My Lords, the whole point of the Audit Commission is to make sure that the audit is done in the proper way. I sympathise with my noble friend's point as to who regulates the regulators. The hourly rate is set by the Audit Commission following consultation with local authorities, health service organisations and the accountancy bodies. The number of hours is negotiated by the auditor and the body concerned, but the Audit Commission super-vision system includes checks on whether the number of hours is in fact reasonable.
Lord Bruce of Donington: My Lords, will the Minister cause an investigation to be made into why the district auditor to the Westminster City Council finds it very difficult to exercise his powers? Bearing in mind the quite open scandals that have occurred in connection with the cemeteries and also the gerrymandering as regards types of building, will the noble Lord ensure that the investigation is carried out as a matter of expedition?
Lord Strathclyde: My Lords, I shall certainly look into whether or not there is the problem described by the noble Lord.
Lord Finsberg: My Lords, following the answer to my noble friend Lady Gardner of Parkes, can my noble friend say why it is not possible for the local authority or the health authority to go to whatever audit firm is needed provided that guidelines have been laid down by the Audit Commission in exactly the same manner as, for example, guidelines were laid down for those valuing for council tax purposes and no one was forced to use the district valuer? As we believe in privatisation, does my noble friend agree that the opportunity should be available for responsible bodies to go to outside firms if they wish?
Lord Strathclyde: My Lords, it is government policy, and has been for some years, that the Audit Commission should be the responsible body for making sure that the audits of public bodies are done in the proper way.
Lord Williams of Elvel: My Lords, can the Minister advise us how we can complain about the Audit Commission if we are not satisfied—as the noble Baroness, Lady Gardner of Parkes, is not satisfied —with the service which is given? We are told that we are all customers of the Inland Revenue. Presumably, health authorities and other bodies are customers of the district auditor and the Audit Commission. Can the Minister tell me how, as customers, we set about getting proper value for money?
Lord Strathclyde: My Lords, customers of the Audit Commission should complain first to the commission; secondly, to the National Audit Office, its auditors; and, thirdly, to my department, the Department of the Environment.
Lord Cockfield: My Lords, perhaps I may ask my noble friend a simple question. If the audit is carried out for the purposes of the Audit Commission, why should that body not pay for it?
Lord Strathclyde: My Lords, the Audit Commission is set up as a body to be fully funded by the fees which it charges its customers.
Lord Grimond: My Lords, harking back to the question asked by the noble Lord, Lord Bruce of Donington, can the Minister say exactly what powers the auditors have if they are dissatisfied with the accounts which they are auditing?
Lord Strathclyde: My Lords, I believe that that question is beyond the scope of the one of the Order Paper.
Baroness Gardner of Parkes: My Lords, will my noble friend the Minister ensure that the consultation which he has referred to between the body setting the charges and the one paying it is really being carried out? Will he assure the House that that will be so because, as I understand it, the charges are simply imposed?
Lord Strathclyde: Yes, my Lords. I shall make sure that consultation is being carried out. I shall write to my noble friend.
Lord Clark of Kempston: My Lords, does my noble friend agree that, as regards the Audit Commission and government departments, there are very many personnel looking for value for money? Would it not be a good idea to extend that to district audits?
Lord Strathclyde: My Lords, currently the Audit Commission does not audit government departments: it is done by the National Audit Office. That is another issue altogether.
Lord Williams of Elvel: My Lords, who, then, audits the National Audit Office?
Lord Strathclyde: My Lords, it is trusted to do its own auditing, but ultimately such bodies are responsible to Parliament.

Rail and Coal Industries: Pension Funds
3.8 p.m.
Lord Ezra Lord Ezra asked Her Majesty's Government:
What are their intentions with regard to the pension funds of British Rail and British Coal, if those industries should be privatised.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, we have given assurances that we intend that the pension entitlements of serving employees and pensioners will be safeguarded on the privatisation of British Rail and British Coal.
Lord Ezra: My Lords, I thank the noble Earl for repeating the assurances previously made. Nevertheless, is he aware that there has been public disquiet about the possibility that the Government might take over that part of the pension funds of the coal and rail schemes relating to pensioners and deferred pensions? Is the Minister aware that there are, in fact, about 700,000 persons involved of whom I am one? Is he further aware that their concern is that if that takeover were to happen they could be deprived of benefit improvements which might otherwise accrue to them? In those circumstances, can the Minister give an assurance that, in the event of privatisation, no firm proposals will be made for dealing with those funds without full consultation with the trustees concerned?
The Earl of Caithness: My Lords, let me make it absolutely clear that in no way would we countenance the pension scheme funds being used for purposes other than for paying for pensions.
Lord Clinton-Davis: My Lords, is the Minister aware that, following the betrayal of retirement pensioners and the poor by the VAT impost on fuel bills, coupled with a succession of broken pledges which were given at the election, the people of this country have absolutely no faith in assurances given by Ministers about anything at this stage? Does he not agree that it is imperative, as regards the kinds of assurances which he has given this afternoon, that
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existing pension schemes need to be secured by statute? Therefore, will the Minister give the House an assurance that the Government will in fact be supporting the amendment to Clause 116 of the Railways Bill, which is being moved in another place by the Labour Opposition, to achieve precisely that objective?
The Earl of Caithness: My Lords, what is for another place is for another place.
Lord Clinton-Davis: My Lords, will the Minister therefore give an assurance that those rights will be protected not by verbal assurances from him and his colleagues but by statute?
The Earl of Caithness: My Lords, the noble Lord heard what I said clearly in my first Answer. They will be safeguarded. A Bill will be coming—
Lord Clinton-Davis: My Lords, by statute?
The Earl of Caithness: My Lords, a Bill will be coming before your Lordships' House.
Lord Barnett: My Lords, I wonder whether the Minister can add to the assurance that he has given, which I welcome, the assurance that if there is an actuarial surplus in those funds the Government have no intention of taking it for themselves?
The Earl of Caithness: My Lords, a surplus was disclosed on the 1990 revaluation of the main BR scheme. It was allocated between the pensioners, the current contributors and BR. A further valuation takes place in April of this year. If a surplus is disclosed, it will be allocated in exactly the same way.
Lord Stoddart of Swindon: My Lords, but suppose there is an actuarial deficit, will the Government guarantee that?
The Earl of Caithness: My Lords, if there is an actuarial deficit, we will be advised on the appropriate method of bringing the pension fund back into balance.
Lord Ezra: My Lords, could the noble Earl give me the assurance about consultations with the trustees for which I asked?
The Earl of Caithness: My Lords, as the noble Lord knows, a consultation document is out on the British Rail pension fund. We have received a number of replies to that paper. The consultation period ended in early March—on 8th March, I believe—and I understand that the trustees were fully informed.

Manufacturing Industry: Government Strategy
3.11 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
Whether, following the Answer given by Baroness Denton of Wakefield to Lord Benson's question on industrial strategy (H.L. Deb. 1st

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February 1993, col. 1), they have given further consideration to publishing a White Paper on this subject.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, yes.
Lord Peyton of Yeovil: My Lords, I am dumbfounded. Would I be justified in assuming that the word "yes" means that the Government intend to publish a comprehensive White Paper stating what their industrial strategy is? I beg your Lordships' pardon for not having a prepared riposte to that Answer.
Baroness Denton of Wakefield: My Lords, you will forgive me if I take this as a moment of high glory. While congratulating my noble friend on his success with horseracing matters, perhaps I may inform him that on this subject we remain of the view that the publication of a White Paper would not in itself make a real contribution to industrial growth.
Lord Peston: My Lords, I must say that I am now a trifle lost by the answers given by the noble Baroness. Is she not aware that from my experience of your Lordships' House the noble Lord, Lord Peyton, never loses on this sort of matter so, to save our time, the noble Baroness should really give him what he wants now? I understood that the real import of the Question was, "Are we going to have a White Paper?" I cannot understand the answer "yes" in relation to further consideration if it is not going to lead to a White Paper. Why should her department consider these matters further if not with a view to stating its policy in a document? Can the noble Baroness at least clarify what she wants us to learn from this? Will she accept from me (since I have to speak from this Bench on such matters) that I should like to get this over and done with now because I cannot bear the thought of the noble Lord, Lord Peyton, asking the same Question week in, week out until he gets what he wants?
Baroness Denton of Wakefield: My Lords, I am afraid that I cannot help the noble Lord, Lord Peston. It is not our intention to publish a White Paper on industrial strategy. We believe that we are doing it. We believe that Tuesday's Budget showed an absolute commitment to business. We also believe that there is already an excellent publication in this area. I refer to your Lordships' Select Committee report on innovation, which my right honourable friend the President of the Board of Trade has recently reconsidered, among other matters.
Lord Stoddart of Swindon: My Lords, does the noble Baroness not agree—
Viscount Caldecote: My Lords, does my noble friend agree with the widely held view that as we come out of recession, imports will be sucked in a major way thus increasing further the huge deficit in the balance of trade? Further, do the Government believe
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that everything possible is being done to stimulate greater investment by industry on the development of new competitive products to alleviate that problem?
Baroness Denton of Wakefield: My Lords, I am pleased to tell my noble friend Lord Caldecote that we believe that things in this area are moving in the right direction. Manufactured exports are at a record level, and are 6.5 per cent. higher than a year ago. In the latest quarter, business investment was nearly three-fifths higher than in 1981. We constantly hear stories about people looking to source from the quality goods of this country items which had previously been imported.
Lord Stoddart of Swindon: My Lords, does the noble Baroness not agree that the message given by—
Noble Lords: Cross-Bencher!
Lord Benson: My Lords, I wonder whether the noble Baroness recalls that she wrote to me on 23rd November giving a full statement of the Government's industrial strategy. I replied on 1st December. In the absence of a White Paper, would she be willing now to publish that correspondence which discloses the Government's industrial strategy?
Baroness Denton of Wakefield: My Lords, I should be extremely happy to place that correspondence in the Library, as the noble Lord, Lord Benson, requests.
Lord Stoddart of Swindon: My Lords, in spite of that—
Lord Mackay of Ardbrecknish: My Lords—
Lord Stoddart of Swindon: My Lords, no, it is our turn now. I have given way twice and to do so three times would be far too much. In spite of that last answer, does the noble Baroness agree that the message coming through in the Budget was extremely confused in relation to industrial strategy? What the country needs is to have that strategy clarified in no uncertain terms. Will she reconsider the answers that she has already given and advise her right honourable and honourable friends that we need a White Paper and should have one soon?
Baroness Denton of Wakefield: My Lords, I am afraid that I must disagree with the noble Lord, Lord Stoddart. I do not believe that cutting the tax burden on business by £1 billion is at all confused.
Lord Mackay of Ardbrecknish: My Lords, will my noble friend remind the noble Lord, Lord Stoddart, and my noble friend Lord Peyton that the strike rate of government-produced industrial strategies and government-produced national plans is about as good as the strike rate of the English cricket team?
Baroness Denton of Wakefield: My Lords, I wish that I could answer my noble friend by being more loyal to the English cricket team but, regrettably, I must agree with him.
Lord Monkswell: My Lords, in her answers the Minister said that the Government's industrial policy is contained in a report of a Select Committee of your

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Lordships' House. She also advised the House that it is contained in a letter to the noble Lord, Lord Benson. We are now getting terribly confused—and I suspect that the Government are a bit confused. It might be useful if a comprehensive document laying out the Government's current industrial strategy could be made available to the public at large as well as to your Lordships' House.
Baroness Denton of Wakefield: My Lords, I am sorry that I have confused the noble Lord. What I said was that there has been an excellent publication on the subject by your Lordships' Select Committee. That was not the Government's industrial strategy; the report related to the importance of manufacturing industry. Perhaps I may make it absolutely clear that the Government's strategy is to create the climate within which industry can thrive and to ensure that the policies of both the DTI and the rest of government take the needs of business into account.
Lord Eatwell: My Lords, is the Minister aware that the Red Book, published with the Budget, shows that business investment this year will fall by half of 1 per cent., and that her optimistic comment about business investment in an earlier answer is belied by that statistic? Given that business investment is expected by the Treasury to fall this year, will she give an assurance that the increased capital allowances for investment, introduced in last year's Autumn Statement, will be continued for a further year?
Baroness Denton of Wakefield: My Lords, I am sure that the noble Lord would not expect me to make Treasury statements while standing at this Dispatch Box. However, perhaps I may point out that the Budget forecasts included one that manufacturing output was to rise by 1.5 per cent. in 1993. That is important.
Lord Peyton of Yeovil: My Lords, does my noble friend agree that, on reflection, her original Answer to an innocent Question verged uncharacteristically upon the tricky? Will she confirm, or otherwise, that the Government have some ideas on matters such as investment, innovation, taxation, employment training and trade? Would it not be useful for other people also to have the Government's views on those important matters in one document so that they could be understood clearly?
Baroness Denton of Wakefield: My Lords, I apologise to my noble friend if he thought my Answer verged on the tricky. It was meant to be accurate. We shall continue to practise rather than preach. One of the figures that proves that we are doing that is that in February—I am delighted to be able to say this—seasonally adjusted unemployment figures were down by 22,000.
Lord Dormand of Easington: My Lords, as the coal industry plays an important role in industrial strategy, will the Minister tell us how much longer we shall have to wait for a Statement on what is to happen? Is she aware that all kinds of things are happening in the coalfields, including the fact that some pits, as I have
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said in the Chamber before, are literally crumbling? We should have a Statement soon. The matter has gone on for long enough.
Baroness Denton of Wakefield: My Lords, I am sure that the noble Lord will recognise that precipitate action must not be taken on this matter and that the report of the review will come as soon as it is right that it should do so.

Schools: Provisions for Dyslexic Children
3.22 p.m.
Lord Merlyn-Rees Lord Merlyn-Rees asked Her Majesty's Government:
Whether they will provide six-monthly reports from each local authority in England and Wales for their primary and secondary schools (annotated separately), and also directly from grant-maintained schools, giving details by league tables of special facilities provided for pupils designated as dyslexic.
The Minister of State, Department for Education (Baroness Blatch): My Lords, I understand the concern underlying this Question but to provide six-monthly reports would serve no particular purpose. It would also be impracticable, costly and bureaucratic to do so. The Government are however taking action to improve the education of all children with special educational needs, including those with dyslexia, by means of the Education Bill currently before the House.
Lord Merlyn-Rees: My Lords, will the Minister consider the fact that we have league tables for the railways, the police, and secondary schools (the swans of the education system)? Can not we do the same for special schools? All those involved believe that the 1981 Act is not working; that there are not enough facilities and trained teachers; and that it is easy to backslide on this because public demand for results is not as great as it is in individual schools. If the reports cannot be six-monthly, can they be annual? If it is good enough for the police and the railways, it is good enough for the children in our system who have educational problems.
Baroness Blatch: My Lords, the noble Lord addresses an important point. I look to him to support us on this side of the House, because we do have league tables for young children. We need to know every year what their reading and writing levels are and what is their competence in numeracy. The identification of those difficulties in young people, and the addressing of their weaknesses and building upon their strengths, form an important part of the reforms that we put on the statute book. The 1981 Act, which the noble Lord mentioned, is not just an important piece of legislation; we are building on that legislation in the coming Bill, and the noble Lord will have an opportunity to discuss the subject then.
Lord Molloy: My Lords, is the Minister aware that in almost every town and city people give their services voluntarily to look after dyslexic children? They

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would welcome the implementation of the recommendation made by my noble friend Lord Merlyn-Rees. I should have though that the Government would acknowledge that those people—there are thousands of them—who do that work for nothing should receive some attention so that views about the problems of dyslexic children in one town or city could be compared with those in others. Surely those volunteers should have some support, even from this Government.
Baroness Blatch: My Lords, the last thing that we want is an increase in bureaucracy. What we do want is early identification of learning difficulties, including dyslexia. We want to address those needs properly and to ensure that children learn to overcome those difficulties or to live with them, as some dyslexic people have to do. All the measures we have introduced, not just in the 1981 Act, recognise and record progress for all children from whatever ability levels they start. All the things that both noble Lords want are in place. We now want to make them work.
Lord Judd: My Lords, but does the Minister agree that this is a good illustration of the limited value of league tables as at present presented? Is not far fuller social information required? Will the Minister tell us how many children were statemented as dyslexic in 1991, and what research has been carried out for the DFE on dyslexia to define it more clearly?
Baroness Blatch: My Lords, first, I disagree with the noble Lord's first statement. Unless a child is assessed, it is not possible to identify weaknesses and strengths and then to influence programmes for them. We are actively involved, and have been for many years, in research work for dyslexic young people. We are at the moment working with the Harris CTC on an exciting dyslexia project which involves the expenditure of £250,000 over three years. We are also working with the Hereford and Worcester British Dyslexia Association, together with the University of Birmingham, to research early learning. We are doing what we can to improve early identification.
Lord Monkswell: My Lords, is the Minister aware that one of the best incentives to develop good practice is to make available as widely as possible information on what is going on in the education system with particular reference to dyslexia? May I point out—
Noble Lords: No!
Lord Monkswell: My Lords, is the Minister aware that over the past few years Manchester has developed a system of support service by specialist teachers for children in our mainstream schools suffering from dyslexia, which appears to be beneficial to the children involved? I am sure that we would welcome the national collation of statistics on the subject so that best practice can be identified and spread more widely.
Baroness Blatch: My Lords, I agree with the noble Lord. That is what we want to do. There has been an information revolution. We are finding out how our children are learning, and whether the system and the
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teaching are effective. But the noble Lord and his colleagues—in a party political sense—have opposed that information being made public. We want to see the information made public. We want to see young people with learning difficulties having their needs addressed by the schools, not by increasing bureaucracy but by good teaching and the early identification of young people with learning difficulties.
Lord Merlyn-Rees: My Lords, I merely say to the Minister that I am glad that research is taking place at the university; but has her department addressed its mind to last July's report of the Audit Commission and the inspectorate in which they said that a system of assessment and statementing was failing badly? They uncovered a lack of clarity about who should be given a statement. Assessments were generally uninformative. Statements were vaguely worded and took a long time to prepare. One does not need research at universities into that; one needs to get the local authorities and schools to do the job properly. It is up to the department to see that that is done. There should be a league table.
Baroness Blatch: My Lords, I think that we shall be in for a happy time when we introduce the Education Bill into your Lordships' House. I look to the noble Lord, because these matters are important. A substantial part of the Bill which will start its life in the House on Tuesday is devoted to the problems that the noble Lord has just enunciated. The hope is—I believe that there is support across the House—that we will put that Bill onto the statute book as soon as possible, because the system has many faults and we want to see it work well.
Lord Campbell of Alloway: My Lords, will my noble friend confirm that the report to which reference was made was taken into full account in the preparation of Part III of the Education Bill, which has received support and a measure of acclaim from associations concerned with dyslexia?
Baroness Blatch: My Lords, my noble friend was right in saying that I was referring to Part III of the Bill, which deals entirely with the points made by the noble Lord, Lord Merlyn-Rees. I thank my noble friend who has been instrumental in pressurising us during the months and years to ensure that that is brought about.

Business
3.30 p.m.
Lord Hesketh: My Lords, it may be for the convenience of the House to know that the Committee stage of the Trade Union Reform and Employment Rights Bill will be adjourned at about 7 p.m. for about one hour and that during this adjournment the Commons amendments to the Judicial Pensions and Retirement Bill will be considered and a Motion to approve the Child Support Appeals (Jurisdiction of Courts) Order 1993 will be taken.

Trade Union Reform and Employment Rights Bill
3.31 p.m.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Viscount Ullswater)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 13 [Right not to be excluded or expelled]:
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 43:
Page 24, line 14, leave out ("a union") and insert ("an independent trade union").
The noble Lord said: Clause 13 has a wider significance than is sometimes appreciated. It is sometimes thought that the clause is concerned only with the agreements between the trade unions affiliated to the Trades Union Congress and the arrangements between them, through the TUC, under what are sometimes called the Bridlington principles, to arrange for a system otherwise than anarchic of the frontiers and patterns of trade unionism in Britain.
Although the clause has an impact on those arrangements it is much more fundamental. It redesigns and regulates for the first time in this country—and it would be for the first time in most European countries—the reasons why and the manner in which trade unions are allowed to admit, exclude and expel members. It is true that in many ways some of the principles are obvious; for instance, allowing a trade union to have rules which relate to occupation, trade and so forth. However, there can be no doubt that the clause is an infringement—a further infringement, as it happens—of various international instruments which we have long since ratified and accepted. I refer, for example, to the European Social Charter of 1961, and its rights to organise, and to the International Labour Organisation Conventions Nos. 87 and 98. Convention No. 87 provides that:
"Workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organisation concerned, to join organisations of their own choosing".
It continues:
"Workers' and employers' organisations shall have the right to draw up their constitutions and rules, to elect their representatives in full freedom, to organise their administration",
and, finally:
"The public authorities shall refrain from any interference which would restrict right or impede the lawful exercise thereof".
We were one of the primary ratifiers of that convention. I take it that the Government do not intend to denounce the convention on the freedom of association, as they have many other ILO conventions. I say immediately that the ILO and everyone
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else interprets such conventions in a sensible way. However, there is no doubt that a code of law such as that in Clause 13 goes beyond what is acceptable.
Oddly enough, the Government are now scoring a first because their approach to the problem is also different from that of the common law. It is rare to find these principles conjoined against what the Government wish to do. The common law principle was put with usual clarity by Lord Diplock in a case in 1983. He said:
"My Lords, freedom of association can only be mutual; there can be no right of an individual to associate with other individuals who are not willing to associate with him".
He made it clear that there may be some circumstances in which it is necessary to look at the small print but as a principle that stands against what the Government are trying to do.
The threads will be worked out as we go through the clause, but, finally, it contradicts the concept which is common in all international instruments. If one must cite such an instrument it would be the 1949 ILO Convention, No. 98, which outlaws interference by workers' organisations, employers' organisations and employers in workers' organisations. Clause 13 of the Bill runs counter to that philosophy.
Members of the Committee will see on page 24 of the Bill what is permitted, and we have only four headings as regards what is permitted in terms of the individual and his relationship with trade unions. Subsection (2)(c) states:
"in the case of a union whose purpose in the regulation of relations between its members and one particular employer or a number of particular employers who are associated, he is not, or is no longer, employed by that employer or one of those employers".
It is to that point in this tapestry of unfortunate proposals that the amendment is directed. It is clear that subsection (2)(c) gives a particular advantage to a union which is organised in one employer or a group of associated employers technically as different companies.
Labour relations have known of the union which is organised at the place of one employer for a long time. They are known as "house" unions or sometimes as "yellow" unions. In many cases they are not independent from the employer. Therefore, we have a Bill which for the first time since the 19th century, and possibly ever, gives an advantage to an organisation which if it is not clearly a house union is more likely to be in a majority of cases. Why is that? In tabling the amendment we say, "If you want to give this advantage—that is to say that your rules and practice of exclusion can be based on this principle—surely it must apply to independent trade unions".
We have taken the point here although it arises in other parts of the Bill. It is a test point for the Government. Do the Government really plan to put onto the statute book the provision that unions, including unions which are not independent, can have that advantage as against others who organise at different places of work? Under some systems of trade union and labour law it is regarded as a mark of a trade union that it organises outside one employer. It is interesting to note that in the European discussions it is regarded as more important than in ours. The amendment points to a major problem for the

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Government in their approach to trade unions. Do they intend to treat house unions with a major advantage? I beg to move.
Baroness Seear: I support the amendment. The more I study the proposed legislation the more it appears to me that the Government are no longer concerned solely with reforms in trade unionism but with undermining the very principle of trade unionism itself. That is a completely different matter.
In the past Members on these Benches have been in favour of certain reforms. However, we are equally determined to ensure that proper trade unionism, which can act properly on behalf of members, can continue and strengthen throughout the country. The crux of the matter is the existence of independent unions. House unions are not unions in the real sense of the term. They cannot support the proper freedom of association and when it comes to a test of power they cannot stand up adequately against employers. Therefore, we strongly support the insertion of the words "an independent trade union" into the legislation.
Lord Campbell of Alloway: Leaving aside Lord Diplock and the ILO for the moment, this amendment has some merit because Section 174(2) of the 1992 Act must be construed conjunctively—paragraphs (a), (b), (c) and (d). I am far from satisfied that the Government really intend paragraph (c) to be in that context and as restrictive as it appears to be at present. I am not satisfied that that is so and should like to hear what the Minister has to say.
In that context, the independent trade union is defined by Section 5 of the consolidation Act. I am not satisfied, with great respect, that the Government necessarily know how restrictive this is. I look forward to hearing the Minister's reply.
Baroness Turner of Camden: I rise to support the amendment moved by my noble friend. I do not wish to cover the same ground. However, the amendment correctly attempts to draw a distinction between genuinely independent unions and what used to be called—and still are in some instances—staff associations, which tend to be in the pocket of the employer. Not all staff associations are like that. Some are registered as independent unions and their position would be adequately covered by my noble friend's amendment. However, there are organisations which are in the pocket of the employer and can in no way be regarded as independent. For that reason I believe that this is a sensible and useful amendment.
Viscount Ullswater: I begin this afternoon by making a declaration to the noble Lord, Lord Wedderburn, because this covers much of what we shall discuss this afternoon. If I make the declaration, perhaps we can put the matter on one side.
We believe that nothing in general employment law or in the Bill contravenes any ILO conventions ratified by the UK. Where ILO committees have made observations on aspects of UK law, the Government have always responded and we shall continue to respond when called upon to do so.
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As regards the amendment, whether or not a trade union is defined as "independent" is in a sense irrelevant to the essential purposes of the clause. It is concerned with giving individuals the right to join the union of their choice within certain sensible limitations.
One of those sensible limitations applies in the case of staff associations. It is obviously sensible that an association that recruits only within a particular employer should not have to accept into membership employees of another, possibly rival, employer. The noble Baroness, Lady Seear, is surely not suggesting that the NatWest Staff Association, for example, should have to accept employees of Barclays Bank into membership.
The independence or otherwise of the staff association in question is simply not relevant in this context. To be protected by the clause, the association will have to be a "trade union" in the terms of Section 1 of the 1992 Act. Its independence, as defined at Section 5 of that Act, is beside the point.
It may indeed be that an association is not truly independent—that it was set up and even funded by the employer in question and that the employees are entirely happy with this arrangement. There is no good reason why such associations should be any less protected from having to accept inappropriate applicants into membership than trade unions generally.
The amendment is illogical and potentially damaging to the legitimate interests of some unions. I hope that the noble Lord will be prepared to withdraw it.
3.45 p.m.
Lord Murray of Epping Forest: The Minister spoke about the desirability of protecting the position of those employees who are happy with the existing situation. He says that they should be left alone. Will he comment on a situation in which some employees are unhappy with the staff association of which they are members and who would wish another organisation to represent their interests? They wish to invite another external union to undertake that. Would that be permitted or would that be denied by this provision?
Viscount Ullswater: That seems to be a disarmingly simple question posed by the noble Lord. Perhaps he will quote the particular case that he has in mind.
Lord Murray of Epping Forest: The Minister spoke in general terms about classes of employees who belong to staff associations, who are happy to belong to them, who are well treated by their employer and do not wish anyone to interfere in that happy family situation.
On the other hand, I have talked to classes of employees who are disturbed by the attitude of their employer and who wish someone to come to their rescue. I should like the Minister to deal with that situation.
Viscount Ullswater: I believe that the noble Lord is referring to one particular situation. I know of no other which has been brought to my attention.
Lord Wedderburn of Charlton: I have never had a ministerial declaration advanced to me before and I do not know how to deal with it. With great respect, it was not a declaration but a plea of not guilty. I note that plea. We shall continue to argue for a rather different plea. It is like the man who when going into court was asked what charges he faced and he said, "I don't know but I am going to deny everything". That was the posture of the Minister. ILO conventions stand where they stand. If the noble Viscount wishes to take them in his hand and argue them with me, I shall be happy to do so.
There is a point of great importance in this respect if one takes staff associations, as my noble friend Lord Murray has done. I do not know whether the Minister wishes to remain on the record as suggesting that the NatWest Staff Association is or is not independent. I am not sure which view he was taking of that.
Where house unions operate in the enterprise of a particular employer, the awkward member—and this legislation is said to be all about the chap who wants to make a different choice and to argue for different policies—finds that he has no protection. Indeed, the clause says that the way to get rid of him from membership of the union is for the employer to dismiss him from that employment.
The theme of the clause is spelt out clearly. Where a union is in the pocket of the employer, as the noble Baroness, Lady Seear, said, members are protected and the member who is awkward is removed immediately from employment and union membership. I thought that the Government had been fighting for 10 years to get rid of that kind of thing. It is a curious example of union security put on the statute book for the house or non-independent union. I hope that the Minister will look again at this matter before Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 44:
Page 24, line 19, after ("employers") insert:
("() where the union does not represent employees at his place of work, exclusive negotiating rights on their behalf being held by another union with the employer,").
The noble Baroness said: This is one of the most important debates that we shall have on this legislation. As I understand it, the aim of Clause 13 is to take away the right of the trade union movement to regulate itself as it has done effectively for many years.
The Government's argument is that they seek to give individuals the right to join any union of their choice. On the face of it, that sounds seductive. However, we must look at the main reason for unions in the first place. As I said on Second Reading, it is becoming necessary to argue the case for unions despite the fact that they have been with us for more than 200 years. There is an international acceptance, through organisations like the ILO and the EC where they are regarded as social partners, for them to be
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part of the social environment and necessary for working people. Sometimes I think that the Government, if they could get away with it in the modern world, would like to go back to the thinking of 1799 and the first combination Act. Ever since they first appeared, unions have had to contend with hostile legislation instigated by some but not all employers, supported by hostile governments.
It cannot be too often stated that the main reason for unions is to enable work people to combine to protect their interests at work. Unions are not friendly societies although many offer services akin to friendly societies. In recent years unions have developed individual services such as legal aid services, discount purchasing services, discount holidays and so on. However, their main purpose remains, as it has always been, that of collective bargaining and representing people at work. Over the years the Trades Union Congress has developed its own procedures for resolving disputes between unions. These are called the Bridlington principles—we have referred to them before in discussion on this Bill—because the basis of them was decided at a congress held in Bridlington in 1939.
As I explained on Second Reading, the general council has a disputes committee consisting of three people: two sidespersons, who are senior officials drawn from a panel, with a member of the general council in the chair. Disputes go to an oral hearing following the submission of documentation from each of the parties. It is an effective way of resolving disputes between unions about membership. I am myself a member of the panel. It is our aim to take the kind of decisions that will strengthen collective bargaining in the establishment concerned because we know, even if the Government do not, that that is the best way ultimately to protect individual as well as collective rights.
The union in a strong bargaining position is much better able to look after the individual with a problem than a union that is not in such a position or a union that has no bargaining rights at all. The question we always ask is: which union is recognised and bargains on behalf of the employees collectively in a dispute between two unions or, if neither is in such a position, which has the best chance of so doing? Clearly, a development of which account must be taken is the growth—this has occurred largely under the influence of Japanese companies and investors—of single union deals. There is no doubt at all that the proposition contained in this clause would, if enacted, undermine single union deals. It is easy to see how that could happen.
Let us take the case of a company where there is a salary deal which some people—they form perhaps only a small minority—do not like. We all sometimes have to accept minority views that we do not like. However, these people approach another union. With the Bridlington TUC principles still in place, the other union would refuse to accept them on the very legitimate ground that another union held bargaining rights and there would be nothing the second union could do for them. With Clause 13 in operation, the second union could not take that line. It would have

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to accept those people. Once in membership, if that small group became active in their new union they could start agitating for their new union to start recruiting, pressing for bargaining rights in competition with the union already there and holding the agreement. That would put the employer in an impossible position. Indeed, Nissan envisaged that position. I hold in my hand a letter from the Nissan Motor Manufacturing Company UK Ltd. It is signed by the director of personnel and information systems. It states:
"My view is that in allowing each individual to join the union of his choice, the Government is in effect potentially causing problems for single union deals. This is strange when the White Paper was enthusiastic about inward investment and the resulting single union deals. The Bill provides for people to join a union of their choice but does not require the company to recognise that union. This could mean that a non-recognised union could successfully recruit members in a single union company and then claim recognition. The employer would be most likely to refuse such a claim but could then end up in a difficult situation in which its employees were members of a non-recognised union. Should the membership grow and should it refuse recognition, the company would find itself in a very difficult position. If it does recognise the new union, then the single union position disappears".
Yesterday I had the pleasure of entertaining in this building two representatives of the staff of the Japanese Embassy in London. I entertained a First Secretary who was accompanied by his adviser on labour relations. Both were concerned about the Bill. Their views were similar to those advanced in the Nissan letter.
Clearly, the clause threatens single union agreements. I fear, however, that the Government basically care little about that. I cannot help feeling that they would prefer that unions did not exist at all as they have made it clear that they are not in favour of collective bargaining anyway. They are chary of saying so outright because they have some international obligations. The Government are a signatory to two important ILO conventions—87 and 98—governing freedom of association and the right to organise and bargain collectively.
I do not believe that the Government's philosophy in that regard has much public support. Recent polls indicate that trade unions are not unpopular, as the Government would have us believe. As my noble friend Lord Murray of Epping Forest said on Second Reading, the amazing thing is not that trade union membership has declined as it was bound to do at times of high unemployment and when large chunks of manufacturing industry have virtually disappeared, but rather that in this situation so many people have stuck with their unions. They have done so in a hostile climate when every encouragement has been given to employers to end collective agreements and when individual employees' rights relative to employers have been severely diminished.
The idea of my amendment is to preserve at least some basic order in the industrial scene. I am sure many employers would give that wholehearted support as they do not wish to see industrial anarchy either. If carried, the amendment would mean that single union situations would be protected as it would
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be possible for a union to refuse membership to people covered by such an agreement who wanted to join another union. I beg to move.
Lord Campbell of Alloway: I wholly accept that collective bargaining is the only appropriate way in which industrial relations should be conducted in our highly industrialised society. I listened with great care. I agree that this matter constitutes an important point. We are concerned with what the noble Baroness described as the basic order of industrial relations in their modern setting aimed at protecting the sanctity of the single union agreement. That is supported notably by large Japanese companies which have invested here.
This is an interesting matter because it was not so long ago that the trade union movement was seriously opposed to single union agreements—the Ford fiasco being but one example. I make no criticism of that; I merely state the position as I see it. It is not for me to criticise. Today the trade union movement seems to be moving towards support for the single union agreement. What worries me is whether this amendment could in effect signal the reintroduction of the closed shop by the back door. If that were to be its effect, I, assuredly, would be bound to oppose it.
Baroness Seear: The right to join the union of one's choice is, of course, a phrase that at first sight is attractive to any libertarian. However, one has to consider the balance of advantage between what is proposed in the amendment and the right to join a union of one's choice. I remember, as some other Members of the Committee will, the absolute chaos that existed 30 years ago when employers were sometimes attempting to negotiate with no fewer than nine or 10 different unions.
The Government claim that their legislation led to improved industrial relations in this country. Some of us consider that increased unemployment has contributed to that improvement. Certainly one factor which has contributed to improved industrial relations is the single union agreement. I am persuaded that that is the direction in which industrial relations should go, from the point of view of both economic advantage and orderly industrial relations.
There is no doubt that when Nissan first came to this country it was determined to have a single union with which to negotiate. I recall being told that at the time and thinking that it was fantasy and that it would never be achieved. However, Nissan has achieved it and the economic advantages and the benefits in terms of industrial peace are plain for all to see.
Therefore, for my part I would forgo any possible advantages in terms of the ability to join the union of one's choice and give preference to supporting and increasing the development of the single union agreement in the interests of companies, the economy and union members. I support the amendment.
4 p.m.
Lord Murray of Epping Forest: Clearly the Government's ideal—which is understandable—is a union-free society. They see unions as impeding the free flow of market forces and interfering with

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employers' ability to do as they will with their assets and property. That is a perfectly understandable point of view, although I do not agree with it. It is a condition which leaves employees totally at the mercy of employers. If employers were philanthropic and benevolent people that might even be acceptable. Some employers agree with the Government; many do not.
Many employers share the view of the noble Lord, Lord Campbell of Alloway, that they are stuck with trade unions and that workers are in the habit of banding together for their own protection as a form of mutual insurance. Since unions will exist and the employer is stuck with them he wants the most reasonable structure of trade unionism possible; hence the preference for single union organisations. At the TUC we discussed that issue with Nissan in the mid-1970s. It did not emerge as a result of the policies of Conservative governments, it developed quietly and steadily from the mid-1970s onwards.
I welcome the support of the noble Lord, Lord Campbell of Alloway, for the concept of collective bargaining of an orderly kind. Clearly, one union is better than none. On the other hand, I believe that two unions are four times as much trouble as one, three unions nine times as much trouble, and so on, exponentially. The Bill is a recipe for precisely that.
I take issue with the noble Lord, Lord Campbell of Alloway, on his reference to the closed shop. This proposal has nothing to do with the closed shop. The AEU has a single union agreement with Nissan. It certainly does not have a closed shop arrangement with Nissan. There is no question of forcing people into membership of the union. Therefore, Members of the Committee should put the issue of the closed shop right out of their minds.
Only those noble Lords opposite who share the view of the Front Bench that a union-free society is not only desirable but achievable should support the Bill as written. Those who take the view, which my noble friend Lady Turner and the noble Baroness, Lady Seear, put forward so persuasively, that we should do all that we can to develop and sustain single union organisations must strongly support the amendment.
Finally, in case the Minister is tempted once again to remind us of what my friend Gavin Laird, general secretary of the AEU, has said, I remind him that it was Gavin Laird who came knocking on the door of the TUC when the Ford development at Dundee was threatened, urging the TUC to use its regulatory powers to stop anybody else interfering. Gavin Laird is as great a supporter of the single union organisation as I or any of my colleagues on these Benches. I am sure that Gavin Laird would not vote for this particular aspect of the Bill.
Lord Stoddart of Swindon: I find the discussion fascinating. It is incredible that a Conservative Government should come forward with a clause of this sort, which is quite clearly opposed to the single union agreement, as was pointed out by my noble friends.
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I worked in industry before entering the other place. I negotiated in industry at every level: local, regional and national. I therefore met many employers. I can assure the Committee that it was their view that if only they could have a single union agreement things would be much better: they could negotiate much more efficiently; they would be able to pay us so much more money because they would not have to spend money talking to this union and that union for hours and hours, and we could all have better conditions. I can assure the Committee that that is absolutely right.
Baroness Seear: Is the noble Lord agreeing that the employers are right?
Lord Stoddart of Swindon: I am merely setting out my experience in industry, and putting the employers' point of view.
I represented Swindon in another place. In Swindon we had a branch of British Leyland, which was then run by Sir Donald Stokes, now the noble Lord, Lord Stokes. The motor industry was in a very bad way. I went to see him on a number of occasions. He said: "What can I do about the strikes? I have to negotiate with 31 trade unions". He said that if he could only have a single union agreement the company could solve all its problems. The government of the day agreed with him, although I am not sure which government it was because I cannot remember the date. However, the Conservative Party certainly agreed with the noble Lord, Lord Stokes, that single union agreements would be a good thing, in the same way as they believed that amalgamations of trade unions would be a good thing. Yet here we have a Bill which contains a clause saying the reverse.
The Government cannot have it both ways. I urge them to listen to what my noble friends and the noble Baroness, Lady Seear, have to say, because they have great experience in these matters. My noble friend Lord Murray of Epping Forest is a former general secretary of the TUC. My noble friends are practitioners in this field. They know the trade union movement in its wider sense. I know it in its narrower sense, having been at the coal face. Here we have a vast range of experience and I hope that the noble Viscount will listen to what my noble friends have to say and agree to the amendment, or at least go back and consider it further.
Lord Boyd-Carpenter: I was intrigued to hear the noble Lord, Lord Stoddart, give the employer's point of view, as he described it. I can only say that as a former chairman of a number of industrial companies I do not recognise his description, but no doubt the noble Lord's experience has differed from mine.
However, I agree that the issue is an important one. I do not dispute that. I do not dispute the desirability of the Committee debating it carefully and scrupulously. But there is surely great importance in the individual having the right to decide which union he will join. It may be very convenient—it often is —for the employer to deal with only one union. I do not dispute that for one moment. It is also very convenient from that union's point of view. But does

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that justify denying to the individual the right to join the union of his choice? He may have good reasons for his choice; he may have bad reasons. But surely those are his reasons? Sometimes the reasons may be good. Let us take one example. The most prominent union in an industry may be politically very active, and the individual happens to have other political views from those of the union, and prefers therefore not to acquire membership of a union which is pursuing a violent political line with which he does not agree.
We are concerned with an important aspect of political liberty. For that reason I was particularly surprised to hear the noble Baroness, Lady Seear, advocating denying to individuals the right to choose the union of their choice. That is certainly a new aspect of liberal policy—spelt of course with a small "1".
4.15 p.m.
Lord McCarthy: Before the noble Lord sits down, perhaps I may ask him how far he extends the principle of choice of entry. For example, does he consider that every individual would have the right to join every club of his choice? It might be the Carlton Club or the Reform Club. Does he say that every individual ought to be entitled to join every tennis club of his choice? Alternatively, does he say that sometimes those organisations have a right to say who shall belong?
Lord Boyd-Carpenter: The noble Lord fascinatingly widens the scope of the debate. We are not concerned with joining a club. Generally the question is whether a club will accept the candidate. Many people have had experiences where clubs have not been prepared to accept them. All I say is that it is wrong for the law to intervene and deny, in the case of a trade union, the right of an individual to join the one that he wishes to join.
Lord Howie of Troon: I wish to say a word from these Benches on behalf of the employer. My noble friend Lord Stoddart put the case extremely well. I have been a member of a number of trade unions for the past 40 years, or even 50 years—I hesitate to count how long. I regard myself as a trade unionist. But I have been an employer for a substantial time. I have been a negotiator on both sides of the table so I know a good deal about that business on a fairly low level on the industrial scale.
As many noble Lords will know, I have been involved in publishing for some time. The unions with which I have had to deal were those dealing with journalists, Natsopa (or whatever it is now called). I believe that it is now called SOGAT. Its name changes from time to time. Perhaps I may say this in parenthesis. Temperamentally I am extremely interested in the notion of freedom, of people being able to choose freely. As older Members of the Committee will know, I have opposed the closed shop in this Chamber every time it has been mentioned. We can therefore lay that issue to one side; I close my parenthesis.
I have faced the possibility of our journalists being represented by the NUJ which is a highly political
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union of the kind of which the noble Lord who spoke previously would not approve—I must say that sometimes I do not approve of it myself; I hope that it does not get to hear of that—and the Institute of Journalists. Some of our members wished to be in the Institute of Journalists and some in the NUJ. I could understand arguments on both sides in favour of freedom of expression. I sympathised closely with them. However, it became clear when dealing with the employees that it was a recipe for disaster to have them in rival unions. They were not rivals in gaining things from the employer, which was me, but rivals in gaining influence in some strange way in society as a whole. That seemed to me a business in which I did not wish to be involved. Luckily I was able to leave that to the employees. The NUJ came out on top and the IOJ withered on the vine as regards my organisation.
I do not like the fact that the Bill seems to have an underlying notion that people should not be in unions. I do not believe that that is right. As my noble friend Lady Turner said, unions appeared for a purpose. The purpose was to defend the weaker in an argument between employer and employee. That is still true.
I referred to SOGAT. Luckily I never had printers in my organisation; thank God for that. But SOGAT organised the clerical employees. They were extremely useful, valuable people. For reasons which were nothing to do with me—I encouraged trade unionism in my organisation—SOGAT disappeared. My clerical employees are unrepresented by unions. There is no doubt in my mind that they are worse off as individuals in that condition because as a tyrant I deal with them harshly, whereas if they were represented by a union I would deal with them in a rational, civilised manner.
I do not like that underlying notion. I know that the Front Bench will deny that they are anti-unions. They need not deny it; no one will believe them. I believe that the amendment is wholly appropriate and right. I speak as a lifelong trade unionist and, more importantly, as an employer. The amendment should be supported.
Lord Murray of Epping Forest: Before the noble Lord sits down, I should like to ask whether he agrees with me. He spoke as an occasionally benevolent employer. Is the main appeal of a second union to employees the approach that, "We will get you more than that lot"? Its purpose would be to up the ante and thus force the first union to raise its sights even higher. The consequence for the noble Lord as an employer is very deleterious. Does he agree that that is the situation?
Lord Howie of Troon: There is absolutely no possibility of my disagreeing with my noble friend. There is no doubt that the scenario that he depicts is completely disruptive, entirely wrong and ought to be stopped.
Viscount Ullswater: I have listened very carefully to the arguments put forward by noble Lords, but I remain unconvinced of the case that they wish to press. Their case rests on a fundamental confusion of

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two very different concepts: that of union membership, which is what Clause 13 is all about; and that of union recognition with which the waters have become muddied.
I should like to take this opportunity to set the matter straight. The two are fundamentally different. Union membership is a matter for individual trade union members, and certainly not a matter on which they should be overruled by the TUC. Trade union recognition is a matter for employers. It is for them to decide, on the basis of their particular circumstances, whether or not they wish to recognise a trade union for collective bargaining purposes, and if they do, whether they will bargain with a single union or with several.
We are told that single union agreements are special. I am interested to hear that argument from Members of the Committee opposite. Those in the TUC have not always been so keen to promote single union deals as the EEPTU, which was expelled for espousing single union deals, knows to its cost, and as my noble friend Lord Campbell of Alloway said.
Lord Murray of Epping Forest: If I may intervene, the noble Viscount perhaps did not hear me say that long before the EEPTU was negotiating single union deals the TUC, in concert with Nissan, was encouraging the development of the first single union agreements in the mid-1970s.
Viscount Ullswater: Those may be the facts, but during the 1980s the facts were quite different. That is why we lost the Ford deal at Dundee. I am surprised that the noble Lord should be so brave as to make those remarks when there was an anti-single union deal motion passed at the TUC conference as recently as 1991. It referred to the alien approach to trade union organisations which several recent Japanese projects had brought with them. Why should those arrangements be so special?
Lord Howie of Troon: If I may intervene briefly, the noble Viscount is quite right to chide the TUC for its past misdeeds, but will he agree to welcome the one lost sheep? It is hard lines on the ninety and nine, but now that the TUC has reformed itself, should not the Government say what a good thing that is instead of going over past misdeeds?
Viscount Ullswater: I have to question why those arrangements should be so special. A single union agreement is nothing more than the result of an employer's decision to negotiate with one union and one union only. Of course, it may influence an individual's decision whether or not to join a particular union. But it should have no effect on the fundamental right of the individual to join the union of his or her choice.
I understand that noble Lords would be extremely concerned if single union deals, which may have been established after considerable effort and negotiation by all parties, were to be damaged by some mass defection once this provision becomes law. I emphasise again that, whatever union members do, it is entirely for the employer to decide what union, if any, he wishes to recognise.
Lord McCarthy: Is the noble Lord seriously saying that it is nothing to do with the workers, that it is just to do with the employers and that the employers could recognise any union, whether or not it was representative, whatever membership it had and no matter what the workers felt? It is a one-sided deal. He does not mean that.
Viscount Ullswater: The noble Lord is exaggerating my words. What I am saying is that it is entirely up to the employer as to whether he has a recognition agreement with a union or none. That is the choice that the employer has. I emphasise again that whatever union members do, it is entirely up to the employer to decide.
Lord Stoddart of Swindon: I wish to deal with that point. Perhaps we should look at the other side of the coin. Let us suppose that an employer has negotiated a single union agreement with, say, 1,000 employees and then 800 decide that they want to set up or join eight other trade unions. They then force the pace on recognition and come out on strike, take all kinds of industrial action and make things difficult for the employer. What will the noble Lord say to the employer then?
Viscount Ullswater: If I were an employer I would think to myself that the union that I had recognised did not represent the wishes and desires of the employees in my business. If they were so dissatisfied with the trade union and wished to move to another one, I should carefully consider what recognition agreement I had, whether I was prepared to continue with it or move to another one. But it is up to the employer to decide. I understand the importance that noble Lords attach to single union deals. I entirely agree that they are one of the valuable developments of industrial relations in the 1980s. No one wants to see a return to the inter-union disputes which did so much damage to industrial relations in this country in the 1960s and 1970s.
What I find difficult to understand is the suggestion that the TUC's Bridlington principles strengthen and support single union deals. In the first place, official TUC policy has been, at least until recently, hostile to the idea of single union agreements. That was the effect of a notorious resolution passed at the 1991 conference.
However, I assume from the remarks we have heard from Members of the Committee opposite that the resolution no longer represents TUC policy. But the history of the TUC in the 1980s has hardly been one of enthusiastic support for single union agreements.
I entirely recognise the long and devoted service given by the noble Lord, Lord Murray, to the unions and his great experience. I mentioned Gavin Laird and I have to remind the noble Lord on this occasion as well that writing in the Sunday Times on 6th September 1992, Gavin Laird said:
"In the past, the Bridlington rules have been used to force workers to join a particular union. Their replacement must have as a guiding principle the fundamental right of freedom of choice".
He went on to say:

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"Only if the unions are able to meet the demands of the membership and reflect its aspirations will the future of trade unionism be secured. Employees must have the freedom to join a union of their choice".
Those are his words, not mine. Unions cannot be exempt from people's freedom of choice. According to The Times of 9th May 1991, this is what Bill Morris said about the Bridlington rules:
"today when we are about choice and opportunity for the individual there is no choice or opportunity within them".
I believe, therefore, that there is evidence that the rules are ripe for development and that the TUC understands that. I am surprised that Members of the Committee opposite should mount such a defence today for the principles. I have reminded the Committee about what I consider to be the fiasco of the Ford company's proposed new factory at Dundee. The company wished to give a single union deal to the AEU, but it was violently opposed by the TGWU.
Lord Murray of Epping Forest: Perhaps I may intervene. Can it be the same Gavin Laird who on the one hand questioned Bridlington and on the other hand went knocking on the door of the TUC, begging it to use the Bridlington rules to exclude other unions so that a single union agreement could be maintained at Dundee? I wonder whether it can be the same man or whether there are two under different guises.
Viscount Ullswater: Perhaps, like the noble Lord, Lord Howie of Troon, he has seen the light, now that times have moved on, and perhaps he is moving with them. This has been a sorry tale.
Lord Howie of Troon: Will the noble Viscount—
Viscount Ullswater: I believe that I have given way sufficiently. I submit that the story of the Ford company, sorry as it is, lends no support to the argument that the TUC Bridlington principles are a necessary bulwark of single union agreements—quite the contrary. Nor should it come as a surprise to anyone because, as I said, the Bridlington principles are concerned with deciding which employees should join. Bridlington is not concerned with deciding which union employers should negotiate with about pay and other conditions of employees. Decisions about which union should have negotiating rights is quite rightly a matter for the employer, not for the TUC.
If an employer decides to recognise a union for collective bargaining purposes, he will naturally choose a union with which he feels he can do business, certainly. But he is hardly likely to feel that a union meets that description if it is a union whose members will leave it in droves at the first opportunity. Yet that is what seems to be what Members of the Committee fear.
The noble Baroness, Lady Turner, quoted Nissan. When it signed its famous single union deal with the then AUEW, it explained, "That was the union we felt the majority of our employees would want to join". But what if a few individual employees at Nissan who hitherto have been members of the engineering union decide that they want to join another union when this clause becomes law? They might decide that another union offers better services, or that they have a personal commitment to another union. Why should
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they be prevented from joining the union of their choice by the TUC or anyone else? I simply do not accept that the clause would undermine single union agreements. Where employers wish to negotiate or to continue with agreements of this kind they will be free to do so. Most employers recognise that. The Engineering Employers' Federation, which has considerable experience both of single union agreements and of the impact of the Bridlington rules, has reached the right conclusion. It said in response to our Green Paper proposal:
"The EEF will not mourn the demise of the Bridlington agreement. We do not believe that its passing will create major inter-union rivalries, neither do we believe that individual employees will 'chop and change' from one union to another".
The clause strikes an important blow for the freedom of choice of individual union members. It removes the restrictions that have been placed on them for decades by the TUC's Bridlington rules. The amendment would significantly erode that new freedom and for no good reason. We strongly oppose it.
4.30 p.m.
Baroness Turner of Camden: Members of the Committee will not be surprised to learn that I am in total opposition to everything that the Minister said in response to the clause. I should like to deal with some of the points that were made by, for example, the noble Lord, Lord Boyd-Carpenter. He spoke about political liberty. I do not quite understand the point that he was making. Surely he is aware that unions now have, and have had for a very long time, separate clauses relating to political funds. One can opt out of paying the political levy. Many union members do that. So I do not see where the issue of political liberty comes in.
Lord Boyd-Carpenter: Perhaps the noble Baroness will give way. I indicated that it was possible, where a union took a very strong political line one way or another, that an individual might not wish to join that union, but might prefer to join another union which took a more neutral or objective view of the matter. It is not a question of whether or not there is a political fund. It is a question of whether the individual wishes to join one union or another.
Baroness Turner of Camden: Again, I return to the issue of political views and political liberty. I made the point when I moved the amendment in the first instance. Unions basically exist for a collective bargaining function. Political activities are normally separately governed by political levy rules. I cannot accept the argument advanced by the noble Viscount. I do not believe that it is at all relevant to industrial relations and the situations we have discovered. Much of the discussion that has been forthcoming from the government side overlooks the basic reasons for the existence of trade unions. As I said earlier, unions exist in order to represent people in a work situation. They are not friendly societies.
The situation in Germany is often held up as a great example. There are only 16 German unions. In that country, if one belongs to a particular trade or industry, one either belongs to the union for that trade

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or industry or one does not belong to a union at all. Only those 16 unions are available to people. There is absolutely no choice whatever.
As to the arguments advanced that union membership and union recognition are two fundamentally different things, I have to say that that really is not so. When one attempts to organise into a trade union, one is anxious to recruit as many members as one can because union recognition and agreements on union recognition depend absolutely on the degree to which one is representative of the workforce in that employment. Therefore, it matters that one has a number of members and one can go to the employer and say: "We represent X number of people in your workforce and therefore we want to have a recognition agreement". Of course, the recognition agreement is negotiated between the union and the employer. The recognition is not simply a matter for the employer. The employer responds to the pressure from his workforce exerted through the union that it has chosen to represent it.
As to the points that have been made about the EETPU, and so on, I have to say—I believe I said so earlier—that I am a member of the TUC disputes panel. I was a member of the panel that sat on the EETPU case. It was not expelled for single union deals—not at all. It was expelled because it refused to accept the award on the basis that it should return to the T&GWU members that it had taken from that union in opposition and in default of TUC rulings and regulations. It then refused to accept the award. Everything possible was done to try to persuade the EETPU to stay within congress itself. It refused to do so, and therefore eventually it was expelled. But it was a very long saga, and the TUC does not like excluding trade unions from membership. I believe that there is no answer to the points that we made in an industrial relations context.
It is not only a question of Nissan. The CBI told the Government in response to the Green Paper:
"CBI members are keen to see the continuation of the current trend towards single union agreement and single table bargaining. Members see a risk that the introduction of the legislation at this stage in the process of industrial relations change could threaten existing arrangements that work well".
It is talking about existing single union agreements and it wanted them to continue. The Association of British Chambers of Commerce said:
"Some Chambers feel that a number of problems may arise for the employer. It could mitigate against single union company agreements and the benefits they are generally perceived to bring."
The Institute of Personnel Management gave a particularly strong warning about the dangers of the proposals in Clause 13. It said, in regard to the Bridlington rules on union membership and the proposal to sweep them away:
"Though imperfect, this arrangement contributes to stable industrial relations in most organisations".
Nobody has claimed that the Bridlington principles are perfect. The TUC does not claim that they are. From time to time the rules are revised, and there is no reason why they should not be revised again. But the proposition in Clause 13 makes it impossible for them to be revised and for them to operate at all. For those
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reasons, and because in my view the proposals threaten industrial stability and take away the right of the trade union movement to self-regulate, I intend to divide the House on the amendment.
4.37 p.m.
On Question, Whether the said amendment (No. 44) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 135.

Division No.1

CONTENTS

Acton, L.

Irvine of Lairg. L.

Addington, L.

Jay of Paddington, B.

Airedale, L.

Jeger, B.

Annan, L.

Jenkins of Hillhead, L.

Archer of Sandwell, L.

Jenkins of Putney, L.

Ardwick, L.

John-Mackie, L.

Aylestone, L.

Judd, L.

Beaumont of Whitley, L.

Listowel, E.

Blackstone, B.

Longford, E.

Bonham-Carter, L.

McCarthy, L.

Bottomley, L.

McNair, L.

Brain, L.

Mallalieu, B.

Broadbridge, L.

Mayhew, L.

Bruce of Donington, L.

Merlyn-Rees, L.

Callaghan of Cardiff, L.

Mishcon, L.

Carmichael of Kelvingrove, L.

Molloy, L.

Carter, L.

Monkswell, L.

Cledwyn of Penrhos, L.

Morris of Castle Morris, L.

Clinton-Davis, L.

Mulley, L.

Cocks of Hartcliffe, L.

Murray of Epping Forest, L.

Croham, L.

Nicol, B.

David, B.

Ogmore, L.

Dean of Beswick, L.

Peston, L.

Diamond, L.

Plant of Highfield, L.

Donaldson of Kingsbridge, L.

Ponsonby of Shulbrede, L.

Donoughue, L.

Rea, L.

Dormand of Easington, L.

Redesdale, L.

Eatwell, L.

Rochester, L. [Teller.]

Ennals, L.

Sainsbury, L.

Foot, L.

Seear, B.

Gallacher, L.

Serota, B.

Gladwyn, L.

Shackleton, L.

Graham of Edmonton, L. [Teller.]

Shaughnessy, L.

Stallard, L.

Grey, E.

Stoddart of Swindon, L.

Hanworth, V.

Strabolgi, L.

Harris of Greenwich, L.

Taylor of Blackburn, L.

Hilton of Eggardon, B.

Tordoff, L.

Hirshfield, L.

Turner of Camden, B.

Holme of Cheltenham, L.

Wedderburn of Charlton, L.

Houghton of Sowerby, L.

Williams of Elvel, L.

Howie of Troon, L.

Winchilsea and Nottingham, E.

NOT-CONTENTS

Abinger, L.

Caithness, E.

Alexander of Tunis, E.

Caldecote, V.

Archer of Weston-Super-Mare, L.

Campbell of Alloway, L.

Campbell of Croy, L.

Arran, E.

Carnegy of Lour, B.

Astor, V.

Chalker of Wallasey, B.

Banbury of Southam, L.

Chilver, L.

Belhaven and Stenton, L.

Clanwilliam, E.

Beloff, L.

Clark of Kempston, L

Bessborough, E.

Cockfield, L.

Biddulph, L.

Colnbrook, L.

Blatch, B.

Cranborne, V.

Boardman, L.

Cullen of Ashbourne, L.

Borthwick, L.

Cumberlege, B.

Boyd-Carpenter, L.

Dacre of Glanton, L.

Brabazon of Tara, L.

Davidson, V.

Braine of Wheatley, L.

Denton of Wakefield, B.

Bridgeman, V.

Eccles of Moulton, B.

Brougham and Vaux, L.

Eden of Winton, L.

Butterworth, L.

Elliot of Harwood, B.

Cadman, L.

Elliott of Morpeth, L.

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Elton, L.

Park of Monmouth, B.

Ferrers, E.

Peel, E.

Finsberg, L.

Pender, L.

Fraser of Carmyllie,

Platt of Writtle, B.

Fraser of Kilmorack, L.

Pym, L.

Gainford, L.

Rankeillour, L.

Gainsborough, E.

Reay, L.

Gardner of Parkes, B.

Rennell, L.

Gisborough, L.

Renton, L.

Goschen, V.

Renwick, L.

Gray of Contin, L.

Rippon of Hexham, L.

Greenway, L.

Rodger of Earlsferry, L.

Hailsham of Saint Marylebone, L.

Romney, E.

St. Davids, V.

Hankey, L.

St. John of Bletso, L.

Harding of Petherton, L.

St. John of Fawsley, L.

Hayhoe, L.

Saltoun of Abernethy, Ly.

Henley, L.

Sanderson of Bowden, L.

Hesketh, L. [Teller.]

Sandford, L.

Holderness, L.

Sandys, L.

HolmPatrick, L.

Selborne, E.

Hooper, B.

Selkirk, E.

Hothfield, L.

Shannon, E.

Howe, E.

Skelmersdale, L.

Hylton-Foster, B.

Stewartby, L

Ingrow, L.

Strafford, E.

Lauderdale, E.

Strange, B.

Lindsey and Abingdon, E.

Strathclyde, L.

Long, V.

Strathmore and Kinghorne, E. [Teller.]

Lucas of Chilworth, L.

Mackay of Ardbrecknish, L.

Sudeley, L.

Mackay of Clashfern, L. [Lord Chancellor.]

Suffield, L.

Swansea, L.

Macleod of Borve, B.

Swinfen, L.

Mancroft, L.

Swinton, E.

Marlesford, L.

Terrington, L.

Masham of Ilton, B.

Teviot, L.

Merrivale, L.

Thomas of Gwydir, L.

Mersey, V.

Thorneycroft, L.

Mottistone, L.

Torrington, V.

Mowbray and Stourton, L.

Trumpington, B.

Munster, E.

Ullswater, V.

Murton of Lindisfarne, L.

Vaux of Harrowden, L.

Nelson, E.

Vinson, L.

Norfolk, D.

Vivian, L.

Onslow, E.

Wakeham, L. [Lord Privy Seal]

Orkney, E.

Orr-Ewing, L.

Wise, L.

Oxfuird, V.

Young, B.

Resolved in the negative and amendment disagreed to accordingly.
4.45 p.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 45:
Page 24, leave out lines 20 and 21 and insert:
("(d) the reason or, if more than one reason, the principal reason for his exclusion or his expulsion is attributable to his conduct.").
The noble Lord said: In case this Bill ever reaches the statute book, we should arguably look closely at what it says and see whether the Government in fact mean it. There is a particular reason for that. As my noble friend Baroness Turner, among others, suggested to the Committee a number of times the day before yesterday, the essence of the Bill is a structure that would be happiest without trade unions or at any rate trade unions effecting friendly society functions. That may be the conscious or unconscious reason for the extreme drafting that one comes across.
The amendment is to page 24, line 20, where the proposed new Section 174(2) (d) notes that the exclusion or expulsion which is permitted by conduct
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has to be entirely attributable to conduct. We shall see later that various forms of conduct are not permitted within the state list of acceptable factors for inclusion or exclusion from a trade union. That is part of the new structure.
However, looking ahead to when we have this legislation, albeit for a very short time, the paragraph implies that the Government have now become extreme. In all conscience I believe that they ought to think again. Someone may be excluded from any body or association by reason of his or her conduct—accepting for the moment that it is not conduct within the prohibited range in subsection (4)—but there may be many different strands to that conduct. Life being what it is, there may be many thoughts in the mind (or on paper) of any body which makes a decision to exclude. It is particularly unlikely that such a body would be able to reach the standard of proof required in the witness box to say that the exclusion was,
"entirely attributable to his conduct",
which must mean a particular type of conduct. Obviously, his conduct cannot include dozens of different things. There might be a case in which someone was well known to be dishonest and also to be a practical joker. I had a student who had that failing. It is all right for students but at work it can cause a great deal of danger. There are well known cases in which practical jokers have been made liable to other workers by whose side they work. He might have other attributes.
The relevant committee, body or conference might have people who in some cases voted because of what they thought was his dishonest past. It is another question as to whether or not it has to be objectively proved every time. Some might know about his practical joking record; others could have different factors in mind. Surely it is reasonable that the most that the body has to show, under this new regime of state-controlled trade union admission and exclusion, should not go further than the amendment suggests; namely, that there is a,
"reason or, if more than one reason, the principal reason for his exclusion".
Perhaps that is what the Government meant. If so, I hope that they will reconsider the matter. I beg to move.
Lord Campbell of Alloway: I oppose the amendment. With respect to the noble Lord, it is far too clever by half. Let us look at it for a moment. It says,
"the reason or, if more than one reason, the principal reason".
Let us consider that one is sitting as an arbitrator, as a judge or as part of a committee which has to operate the provision. Those words mean "the reason"; that is, the reason that would have to be given if one was giving a reasoned award. The reason in the amendment must be attributable to a person's conduct. If it is attributable to his conduct and if it is a reasoned award, it is totally acceptable to suppose that it is exclusively attributable. One does not take into account extraneous considerations to one's reasoning. The amendment presupposes that the person making the decision simply does not know how to make it.
Lord Stoddart of Swindon: Perhaps the Minister can help me. I am sure that I must be wrong. Paragraph (d) seems to be absolute. It says that the exclusion or expulsion is entirely attributable to the person's conduct. What sort of conduct? Is it to do with his trade union membership? Is it to do with his employment or his employer? Or could he just be a drunkard?
Viscount Ullswater: Perhaps I can assist the noble Lord, Lord Stoddart. If he refers to subsection (4) he will understand what "conduct" means.
Lord Stoddart of Swindon: I shall come back to that.
Baroness Turner of Camden: Perhaps I may intervene briefly to support my noble friend. It seems to me that he is utilising words that have appeared in legislation for many years—since about 1906. The amendment would cover a number of cases where it may be felt desirable that the individual concerned should no longer continue to be associated with a union. I can think of a number of such situations. The individual may be involved in racial or sexual harassment of another union member or something of that sort. The wording would cover that kind of case. I do not understand why the noble Lord, Lord Campbell of Alloway, is opposed to it.
Viscount Ullswater: I do not believe that the instance quoted by the noble Baroness would fall foul of the clause. That would be conduct which it would be perfectly reasonable to exclude. The definition of "conduct" is contained in subsection (4), which is quite specific. Those are the grounds on which a person can be excluded.
The purpose of Clause 13 is to give individuals a greater right to join the union of their choice. Yet there are circumstances in which a union might legitimately seek the exclusion or expulsion of an individual. Those are set out in the clause as the "permitted reasons" for exclusion or expulsion.
The amendment tabled by the noble Lord seeks to dilute one of those permitted reasons. We have allowed that a union may exclude individuals when that exclusion is entirely attributable to his conduct. Under Amendment No. 45, exclusion would be permitted if it was—and I paraphrase slightly—wholly or principally attributable to his conduct.
The noble Lord made what appears to be a case for his amendment. But let us consider the circumstances in which it might be applied, and its implications. If there is more than one reason for excluding someone from a union, and the first reason is his conduct, the second will, to state the obvious, either be a reason already permitted by the clause or one that is not. If it is a permitted reason, then by virtue of that reason, the individuals may lawfully be excluded. If it is not a permitted reason—for example, if it is membership of another trade union—then, even taken in conjunction with concerns about the individual's conduct, to allow an exclusion from the union would be to allow the Bridlington principles in through the back door. The
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whole purpose of the clause is, after all, to prevent the Bridlington principles preventing individuals joining the union of their choice.
I believe that I have outlined sufficiently why I encourage Members of the Committee on this side of the Chamber to resist the amendment, and I ask the noble Lord to withdraw it.
Lord Wedderburn of Charlton: The Minister rightly refers to the clause and says that "conduct" is defined in subsection (4). If we look at that we do not find a definition of "conduct" but of which conduct is not permitted. The conduct that is not permitted is set out.
We go back to paragraph (d) on line 20 where the issue arises. There is a form of conduct on which unions are allowed to have a view with regard to exclusion or expulsion. From there we come to the curious objection to the amendment. We all know that to prove something is "entirely attributable" to a particular circumstance is extremely difficult. The Minister and the noble Lord, Lord Campbell of Alloway, objected to the phrase in the amendment,
"the reason or, if more than one reason, the principal reason for his exclusion or his expulsion".
I have known the noble Lord, Lord Campbell of Alloway, for a long time. I have never before heard him object to a point which flies in the face of legislation which already exists. One can find it in a number of places but I turn to Section 152 of the consolidation Act 1992, which reads,
"For purposes of Part V of the Employment Protection (Consolidation) Act 1978 … the dismissal of an employee shall be regarded as unfair if the reason for it (or, if more than one, the principal reason) was that the employee … had taken part … in the activities of an independent trade union",
and so forth. I did not make up the formula. The noble Lord knows perfectly well where it comes from. It comes from existing legislation. To hear the Minister and the noble Lord, Lord Campbell, one would think that the Government had to tear up all the sections which use definitions and phrases such as,
"the reason for it (or, if more than one, the principal reason) was that the employee",
and so forth.
The noble Lord will agree that those who have far more experience of tribunals than I will have frequently come across that phrase. If one is making a case on behalf of an employer or an employee who has been dismissed on one of the alleged grounds in Section 152, then one' knows where the burden of proof lies. If the section read that dismissal of an employee would be regarded as unfair if the reason for it was "entirely" one of the following, it would be rather different. People would be up in arms and would say that it was an absurd burden of proof.
First, we have established that the form of my amendment has been acceptable to the legislature for a long time. Secondly, we have not heard a word as to why the burden of proof should be heavier. As on Tuesday, the reason that the burden of proof should be on a higher plane is that the screw is being tightened; that even after this shackle, the trade unions are to be put into an even more difficult position. What the amendment means is that, whereas on paper it first looks as though the wording of

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paragraph (d) of Section 174(2)—"entirely attributable to his conduct"—would allow the union certain scope when faced with people whom one would not want in union membership, for a variety of reasons, and there were rules to say so, in fact it would be extremely difficult to prove and operate.
Here we have the first case. We can itemise the others as we go along. It is true that the clause is not only to do with the Bridlington agreement. It is to tie down the rules and practices of trade unions in a new system of state control that is contrary to all instruments of freedom of association. The tiny phrase "entirely attributable" could be replaced by a phrase that is acceptable to the legislature, of which I have given an example.
That proposal will not be acceptable; the Minister and the Government will not accept it because they know, regrettably, what they are about, as evidenced by the opposition to the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 46 and 47 not moved.]
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 48:
Page 24, leave out lines 40 to 45.
The noble Lord said: It is right to press the Government as regards the amendment. Unjustifiable discipline was invented by the Government in the 1988 Act and involves a series of instances, the most important of which is where a member of a trade union refuses to accept any form of majority decision to take industrial action and refuses to take any step that is contrary to his employer in his employment contract, no matter whether the union has held the necessary ballots and no matter whether the industrial action is lawful—which it might be even after the Bill.
I regret that I have to trouble noble Lords with this matter, but it has not been debated since 1988 and is of central importance. The Government stated that no matter how lawful the industrial action, the union cannot operate rules, without the sanction of compensation, which relate to a member's refusal to take part in industrial action.
The subject has been much argued in international circles. I should like to read two short passages from reports of experts of the International Labour Organisation of 1988 and 1992. I hope that the Minister will not be too dismissive of the experts who expressed those views. They number 20 and include constitutional court judges from 20 countries, professors and senior judges and practitioners in the field from around the world. They are not, as Ministers sometimes imply, a group of mad Bolshevik lawyers. They are people of the greatest and highest standing in the field, from all sides. The expert from this country is Sir John Wood, a professor of law at Sheffield. He is a gentleman of the highest standing. I hope that the Government will bear that fact in mind in any comments that they make about the opinions of the committee of experts.
In 1989 the argument was put to the committee that Section 65 was contrary to the fundamental principles of the convention on freedom of association. The report stated:
"The Committee recalls that one of the basic rights guaranteed by the Convention is the right of organisations of workers and employers to draw up their constitutions and rules free from any interference which would restrict this right or impede the lawful exercise thereof. It is clear that provisions which deprive trade unions of the capacity lawfully to give effect to their democratically determined rules are, prima facie, not in conformity with this right. Section 3 of the 1988 Act clearly has this effect, and on that basis is not in conformity with Article 3 …
"It follows that proper respect for the guarantees provided by Article 3 requires that union members should be permitted, when drawing up their constitutional rules, to determine whether or not it should be possible to discipline members who refuse to participate in lawful strikes and other industrial action or who seek to persuade fellow members to refuse to participate in such action".
The experts were particularly worried by the second matter; that the union is not allowed to take any action, subject to compensation, against a minority member who positively runs a campaign against the democratic and lawful decision of the union. The experts stated that Section 3 should be amended to take account of that view.
I appreciate that there has been further correspondence and argument between the Government and the experts. In the 1992 report they stated:
"In its previous observation the Committee concluded that those parts of Section 3 which deprive trade unions of the right to discipline their members who refuse to participate in lawful strikes and other industrial action or who seek to persuade fellow members to refuse to participate in such action, constituted an impermissible incursion upon the guarantees provided by Article 3".
It states one of the Government's arguments at paragraph (c):
"The Government … observes that unions are still able, if they wish, both to have rules which allow them to discipline members for refusing to take part in industrial action and to implement those rules—as is demonstrated by a number of instances, since the adoption of the 1988 Act".
The committee repeated its view that that was a breach of the convention, but asked the Government to give further details on cases since 1988 where disciplinary penalties could be imposed on people who refused to participate in a strike.
I should appreciate an indication of the Government's argument because it is a new argument and not one that I have come across before.
As the experts made clear, it would not alter the fundamental judgment that Section 3 of the 1988 Act, which is now to be found in the 1992 Consolidation Act, was contrary to the convention.
The following situation would arise. Someone may say to a union, "I want to join the union but I am never going to accept a call to take industrial action from any officer, committee or body, however many ballots are held; you can ballot until you are blue in the face, I am never going to join in". What is wrong with the proposition that the union is entitled to say, "Very well, do not join"?
The right of association of choice is being distorted. Where is the right for the majority, as Lord Diplock called it, which has to be respected in regard to freedom of association, as well as the right of the individual or minority? Lord Diplock stated that

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freedom of association can only be mutual. If the Government are not going to outlaw anyone who even thinks of industrial action—no doubt that will be in the next Bill—it must be right to allow a union an area of discretion in respect of admitting members that is related to the rules that concern the launching of industrial action. If the proposal goes on to the statute book in this form; namely, that in relation to Section 65 conduct, members must not be disciplined for refusing to join in a lawful action, it will be quite unique except for some codes in some parts of the world which the ILO has been trying to put in a more democratic form.
I hope that the Government will seriously consider, in their own interests, whether paragraph (b) requires amendment or amelioration. I beg to move.
Lord Campbell of Alloway: I oppose the amendment. If the specified conduct is removed, subsection (2)(d) would become ineffective. The noble Lord, Lord Wedderburn, wants a wide area of unfettered discretion so that the union would be totally free to manage its own affairs. In my book that would not be reasonable. We have had mention of Lord Diplock twice today. Perhaps we can leave him to rest for the moment. We have had more allegations about breaches of convention which we can also forget about. Other matters have been raised which seem totally extraneous, such as outlawing people who dream of industrial action.
I return briefly to the amendment. It is seeking to substitute for specified conduct which is plain, an area of discretion. It is because that conduct is specified and because conduct as regards dismissal—which is another section in another Act to which the noble Lord referred—is wholly at large, that the analogy he sought to draw between the two, to my disadvantage, was totally misconceived, and he knows it.
Baroness Turner of Camden: I am surprised that the noble Lord, Lord Campbell of Alloway, should oppose the amendment in the terms which he has used. I am surprised because I was under the impression that he was a supporter of the findings of the Donovan Commission. To my recollection, that commission clearly envisaged that a union should be free to run its own affairs. It also supported the idea of collective bargaining quite specifically and, by inference, collective action. My noble friend's amendment seeks to give a union at least a small area of choice when it comes to excluding people who are against participating in any form of collective action and who say so at the time when they are approached to join the union. It is an eminently sensible amendment. I am surprised that it should meet with opposition from that quarter.
Lord Finsberg: I have spent about 30 years in personnel management and industrial relations. I have been a paid-up member of a trade union all that time. I am sure that the Government are as aware of the value of the ILO and its experts as they are aware of
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the Wedderburn-McCarthy axis. I am sure that both are highly respected by those who understand industrial relations.
I am not a lawyer, but I believe that at the heart of this matter is the protection of the individual's right to say that he is not going to participate in a strike. Donovan was years ago and the world has moved on from Donovan—thank goodness! I believe that this amendment is trying to go back to the cosy days when it was possible to intimidate members of a union, and I am not for that. That is why I support the opposition to this amendment.
5.15 p.m.
Viscount Ullswater: I understand that this amendment is grouped with Amendment No. 51. The first of these amendments strikes at one of the fundamental provisions of the clause. It is therefore unacceptable in principle. The second amendment appears to be intended as a consequential amendment to the first one.
Members of the Committee will be familiar with the concept of unjustifiable discipline by a trade union. This Government introduced provisions in the Employment Act 1988 to prevent a union from disciplining a member for certain reasons.
The purpose of the provisions was to prevent union members from being expelled from their union, or having other disciplinary action taken against them, for following their own conscience in certain matters rather than obeying an instruction from their union with which they disagreed. A member cannot now be victimised in this way, for example, because he exercised his right to work when his union had called its members out on strike.
I am grateful for the support which I have had from my noble friend Lord Finsberg. Indeed, I respect the ILO committees such as the committee of experts. I do not believe that any remarks that I have made would lead any Member of the Committee to think differently. I understand that it has made observations on aspects of United Kingdom law. I indicated earlier that the UK Government have always responded. We continue to respond when called on to do so.
Our most recent response has been in relation to queries raised about UK compliance with the ILO Convention 87; for example, on freedom of association, which was made a few months ago. As is usual in such cases, that response was made available to the TUC and CBI. In combination with earlier responses it explains why we believe that our arrangements are in fact compatible with the requirements of that convention. I believe that for the moment that is where the matter rests.
It would surely be wrong, having given the individual union member this very important protection, for the underlying principle involved to be eroded by this clause. The clause allows for a union to exclude or expel someone on the grounds of his conduct. This is only right. We certainly would not wish to force a union to accept, for example, someone who had a history of not paying his union subscriptions. But it is important that a union cannot use this conduct exemption to refuse membership to

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an individual just because he had, for example, not followed a strike call by a union of which he used to be a member.
The provision that Amendment No. 48 seeks to remove means that such conduct while a member of one union cannot be used subsequently by another union as a reason for refusing membership. If this provision was not specifically included it would be possible for a trade union to exclude or expel a member or former member of another union for his actions as a member of the first union, even though that union would have acted unlawfully if it had disciplined the individual for that behaviour when he was a member.
It is clearly right that we should protect against this and the amendment is therefore entirely unacceptable. I urge the Committee to reject it, and Amendment No. 51 which is intended as a consequential change.
Lord Wedderburn of Charlton: I apologise to the Minister for not mentioning Amendment No. 51 which is linked to the present amendment. Perhaps I may make three points. First, I understand Members of the Committee who say that the Government are "aware"—that is the word which I believe the Minister and the noble Lord, Lord Finsberg, used—of the ILO and its experts. I am saying that the Government should give some credence to them. It is over five years since the reports of 1987 and, more particularly, 1989, and in some respects that concerning freedom of association. The Government should base itself to some degree on the conclusions of the committee of experts.
In fact in every single case the Government have made their own law more extreme, going in the opposite direction from that which has been requested by the committee of experts. That is so as regards the dismissal of strikers, Section 65 and other matters. I am sure that my noble friends will remember, if no one else does, that that is still the situation as regards the GCHQ where the Government have taken no heed at all of the central recommendations of the committee of experts. There is not one of its recommendations which the Government have taken up. If anyone gives any importance to the ILO then the burden is on the Government for not discharging it.
Secondly, no doubt we can have a different discussion about the right to work. The situation of someone who is losing his job because of dismissal by the employer and who risks expulsion from the union, is one which I very well recognise. It is one which we have struggled with over many years as have other systems of law. I have not raised that issue. I have not said in every case that I believe that the Government should give way on the matter. I would not start from where they are starting. It is like going to York, and then starting from here.
Surely there must be some cases in which the majority have rights as well as the minority. Members of the Committee opposite have spoken about the right not to take part in a strike. I understand that proposition. But I say to them that the majority also have a right not to have such people in the union, at
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any rate in some circumstances. Why do they deny the majority all rights when they put forward the rights of the minority?
I call in aid the experts of the ILO because this is exactly the sort of argument that they make. There will be some cases where industrial action is lawful and where there is no case for the minority's individual rights overcoming those of the majority. The majority members are the union. A union is not some curious anthropomorphic entity with special qualities of its own; it is the majority, or its members as a whole. Where a union has 3,000 members and one person wants to join it saying, "I am going to break all the rules on industrial action however lawful, reasonable and sensible", I say that the majority should have the right not to have that person in the union. There should be a chink of light—
Viscount Ullswater: I believe that the noble Lord is trying to give the impression that the minority (although vociferous) can somehow outweigh the wishes of the majority. Surely he is not suggesting that in a lawfully organised industrial action the will of the minority can take sway.
Lord Wedderburn of Charlton: I am assuming that a union has held all the ballots that the Minister could wish and that out of its 3,000 members 2,999 have voted yes with one voting no. What does one then do with somebody who knocks on the door and says, "I want to be a member of your organisation, but I am not going to pay any attention at all to your rules on industrial action however reasonable and lawful"? That seems a wholly extravagant proposition, but that is what the Bill means. It states, "You cannot take account of conduct when that conduct is prohibited by Section 65".
Gradually over the years we have put the cold light of analysis upon the Government's legislation and now, at long last, this Bill (together with the White Paper People, Jobs and Opportunity) marks out finally the Government's clear direction. On this point of minority/majority, it is the extremity of drafting once again which shows the Government's aim and intention in the Bill. Having said that, however, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 49:
Page 25, leave out lines 1 to 3 and insert:
("() In the case of a union or unions which are in membership of the Trades Union Congress, the individual claiming to be excluded or expelled in contravention of this section may in the first instance appeal to a Disputes Committee of the Trades Union Congress. In the event that he remains unsatisfied, he may appeal to an Industrial Tribunal. In the case of a union or unions not in membership of the Trades Union Congress, the individual claiming wrongful exclusion or expulsion may appeal directly to an Industrial Tribunal under section 176 of the 1992 Act.").
The noble Baroness said: This amendment argues for self-regulation. Unions are voluntary organisations. Other voluntary organisations are allowed—indeed, encouraged—to self-regulate. Financial institutions, which arguably have much greater power and more potential to damage than the unions

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nowadays, are allowed their own self-regulatory mechanisms. They are often enforced by codes of conduct rather than by a highly detailed and bureaucratic piece of legislation such as that we are discussing now.
I should make clear that I am not knocking self-regulation. I have been involved with SROs in the financial sector myself. The ones that I have encountered really do endeavour to improve standards. Their remit, however, is limited, and as can be seen from the financial scandals of recent years, they have sometimes been powerless to protect consumers in affairs such as that of the collapse of the Bank of Credit and Commerce International and the Maxwell pension scandal. We now have the desperate problems facing the members of Lloyd's, some of whom apparently stand to lose everything.
Unions do not have that kind of power, yet it is their organisations, built up over many years by devoted voluntary workers often for very little monetary award, which are to be tightly encased in massive and, in some cases, not very comprehensible laws. I am sure that I am not the only Member of your Lordships' House who has found clauses in the Bill very difficult to follow.
The courts in the first instance—the industrial tribunals —are being called upon to regulate disputes between unions. At a time when there are already long delays with industrial tribunals, which can be even longer if there is an appeal to the employment arbitration tribunal, under this Bill the Government are finding yet more work for the industrial tribunals while no additional resources seem to be provided. I know that the Minister will probably say that the Bill proposes some form of solution by allowing the chairman to sit alone in certain cases, but I do not find that an acceptable solution.
My amendment seeks to provide the Trades Union Congress with a role as a sort of industrial SRO. The disputes panel could be broadened or changed. In the financial sector, for example, it is common for the SRO to include persons who are representative of public or consumer interests, as well as practitioners. A number of variants are possible. What I find unacceptable is the notion that unions cannot be allowed to participate in self-regulation, so along comes the nanny state—the Government used to be very fond of referring to the nanny state—to perform that regulation and 8.5 million ordinary trade unionists, through their elected organisations, are not to be allowed to self-regulate.
That is happening after the Government have boasted about the so-called "reforms" which have given the unions back to their members. If they have been so successful at giving the unions back to their members, why do the Government jib at allowing the elected authorities within the trade union movement to have some form of self-regulatory role? That is the basis of my amendment and I commend it to the Committee. I beg to move.
Lord Boyd-Carpenter: I hope that the Committee will not accept the amendment. The appeal provisions in the Bill as it stands are perfectly straightforward.
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The appeal lies to an industrial tribunal. I take the noble Baroness's point that industrial tribunals are quite heavily worked at the moment, although I believe that there is some reason to anticipate some measure of relief. However, they are not going to be given relief if the amendment is accepted because, as I understand the amendment, when the individual has appealed to the Trades Union Congress on the grounds that he is dissatisfied (as he may well be) with its decision, he goes to the industrial tribunal as the second stage of the appeals procedure.
Therefore, it is somewhat misleading to suggest that one of the advantages of the amendment, if adopted, will be to give relief to the industrial tribunals. I do not think that it would. The appeal provision in the Bill as it stands is clear. Anybody can understand it and will know what their rights are. I hope that we shall leave it like that.
Lord Campbell of Alloway: The argument for self-regulation is acceptable in many aspects but not, surely, so as to affect Clause 13. Clause 13 is a fundamental clause which provides for the freedom of members to belong to a union of their choice. It is a right which has never as yet been recognised by the trade union movement. We have to face the fact that this is a political division. What we are debating here and now is a manifesto commitment. It is a matter which, as we debate here and now, the trade union movement has never accepted. In principle, I accept the manifesto commitment and so, indeed, do the many distinguished trade unionists to whom I referred on the Second Reading at col. 484. of the Official Report. Reference has already been made to Mr. Gavin Laird, who was referred to on that occasion.
Mr. Laird's concept was that the Bridlington rules were no longer appropriate. Indeed, Bridlington is designed to ensure that the unions can maintain the stand that they have always taken. It is the antithesis in principle of Clause 13. Let us face it. The object of Clause 13 is to ensure that Bridlington can no longer operate to compel an individual to belong to a trade union which the TUC considers to be appropriate albeit that up to now that system has operated solely in the context of poaching considerations.
We now have another situation, one to which in particular the noble Baroness, Lady Seear, referred. The single union agreement, and the question of the effect of Clause 13 on single union agreements arose on Second Reading, and it has arisen again today. I take the view, as my noble friend the Minister has said, that it is confusing to deal with Clause 13 as affecting single union agreements, because Bridlington, as such, is concerned only with recognition.
Irrespective of whether Clause 13 can or does affect single union agreements, the amendment, on either showing, could well affect and challenge the fundamental principle embodied in our manifesto commitment: that members are free to belong to the union of their choice. In view of the stark division of principle, it is hardly appropriate that the onus should be put on a dissatisfied member to challenge the decision of the TUC disputes committee. We all know that the Bridlington procedure has not worked too well in the past in the resolution of inter-union

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disputes as to membership, and looking at the matter straight up, there is little reason to suppose that it would work much better in the future, either in the context of poaching or in the context, if it be applicable, of single union agreements.
My own experience in the courts in this context is limited, but it started with Stratford and Lindley. It is of course selective, and may not be truly representative. But the question is merely whether it is appropriate that the complaint should be resolved by an independent tribunal that is seen to be independent, which is the basis of the Government's proposal, or whether the TUC should have a first bite at the cherry—an opportunity to seek to resolve the complaint before its own domestic tribunal being, in a sense, judge and jury in a cause in which it has an interest.
With great respect to those who think otherwise, I cannot think that my noble friend the Minister could conceivably accept the amendment.
5.30 p.m.
Lord Finsberg: My noble friend Lord Boyd-Carpenter made the point, following the noble Baroness, Lady Turner, that the acceptance of the amendment would not speed up justice. I can imagine that if the matter had to go first to a trade union disputes committee, endless time could pass. I say that from personal experience. At the last moment the union officer cannot be there, and one loses another month. First, I believe, justice would be delayed.
Secondly, governments must take note of history. It was not so long ago that trade unions were vehemently defending the rights of unions to refuse membership to a man, which meant that he could not obtain a job. For example, with the TGWU, if one did not meet with the approval of a certain West Midlands regional organiser, whose name I think is not unknown to Members of the Committee opposite, one could not be employed as a driver. Those circumstances must not be allowed to return. The amendment could open the door to that happening. The Government are right to resist it.
Viscount Ullswater: This clause is about freedom, the freedom of the individual to join the trade union that he or she wishes to join free from "rulings" from the TUC that take no account of the wishes of individual trade union members.
We recognise of course that that right cannot be unfettered. There are many legitimate reasons why a union may wish to deny someone membership—because of their occupation or geographical location, for example—and the clause of course, as we have seen, allows for those exceptions.
But when that exclusion or expulsion is on the grounds of a so-called "Bridlington" ruling by the TUC which simply protects what amounts to a cartel arrangement, denies the opportunity for free and open competition between trade unions, and denies individual freedom of choice, then the exclusion or expulsion will be unlawful under this clause. Who at present makes the kind of rulings which this clause seeks to prevent? Who has often sought to enforce the
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Bridlington principles against the wishes of the ordinary, individual union member? It is the TUC disputes committee, the same committee that was unable to resolve the inter-union dispute at Dundee in 1987. Yet what does the amendment do? It proposes that the first line of complaint for individuals who believe that they have been refused union membership unlawfully in the terms of this clause should be the very same committee that for so many years, as my noble friend Lord Finsberg said, has sought to uphold the vested interests of trade unions, and in doing so often denied the individual freedom of choice in a way that this clause will in future prevent. Poachers may occasionally turn gamekeeper, but I am sure that the Committee will forgive me if I express my doubts in this particular instance.
I believe, as my noble friends Lord Campbell of Alloway and Lord Boyd-Carpenter have said, that the Bill provides union members with new rights and, as is customary, gives a cheap system of remedies via the tribunal system. There are no good grounds for putting an initial obligatory stage into the complaints procedure in this area. There are no good grounds for giving the TUC such a role. If unions obey the law set out in the clause, as of course they should, there will be no additional burdens on industrial tribunals. Therefore I urge the Committee to oppose the amendment, and I ask the noble Baroness to withdraw it.
Baroness Turner of Camden: I repeat that the amendment is about self-regulation for the trade union movement. We are not the only area of life in which there has been some degree of self-regulation in the past and there still is self-regulation. I was surprised by the comments of the noble Lord, Lord Campbell of Alloway, because he will be well aware that the domestic tribunal applies in his own profession. I happen to be a lay member of the General Council of the Bar and a member of the disciplinary committee. I know well that self-regulation applies there.
I fail to see why self-regulation cannot be applied to the trade union movement. It is not true to say that the disputes committee's rulings have never been good. In fact, I cannot remember one occasion when there has been an effective challenge in the courts to a disputes committee award. There have been a number of attempts to challenge decisions, but the courts have always upheld the TUC disputes committee award when it came down to it.
I know Gavin Laird. He is very much his own person. I cannot think that even he would say that he was speaking for the trade union movement as a whole. In any event, as my noble friend Lord Murray of Epping Forest has pointed out, he has not been averse to attempting to use the TUC Bridlington procedures when he thought that would be to his union's advantage, and he is not alone in adopting that posture.
If dissatisfied, under the TUC proposals that I have put before the Committee the individual could of course proceed to an industrial tribunal. The comments of the noble Lord, Lord Boyd-Carpenter, seemed to be based upon the assumption that the

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individual was always likely to be turned down by the TUC. The idea of putting down the amendment was to provide a self-regulatory form of sifting mechanism. I do not accept what was said by other noble Lords who attempted, it seems to me, to confuse the argument somewhat by references to past practices when the closed shop was in operation. Those days have long since gone and we are addressing the situation as we see it today.
I realise that there is no point in pressing the amendment at this time. However, I was anxious to put on the record the statement that the trade union movement has a right to be considered in the same light as other voluntary organisations and has a right to have self regulation as have other organisations. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 50:
Page 26, line 36, at end insert ("unless the event is a failure to pay subscriptions due from the individual as a member to the trade union and the lapse or termination of membership is thereby automatic under the rules upon the failure to pay.").
The noble Lord said: The amendment is simple and scarcely controversial but it is important. On page 26 of the Bill we find that for the purposes of the new sections certain notional expulsions or refusals to admit are set out. That approach is sensible. The amendment relates to subsection (2)(b) which brings within the range of expulsion:
"an individual who under the rules of a trade union ceases to be a member of the union on the happening of an event specified in the rules".
That is consolidated within the area of expulsion. We are not discussing questions of discipline; we are dealing with a case where an event occurs which, according to the rules, terminates membership.
Everyone knows that in trade unions, as in any other association, the most important event which automatically terminates membership is the non-payment of contributions for whatever period is set out in the rules. Usually trade union rules specify a period after which non-paying members cannot claim benefit and a further period after which membership ceases. That is the most common form of cessation of union membership. I assume that there is no evidential problem about payment or non-payment. Many studies have examined the situation, especially in regard to the construction industry where people move from one site to another and do not keep up their contributions. As a matter of administration it is important.
The amendment accepts that any event, other than non-payment, which is specified in the rules shall have the effect of termination of membership. It would be open to any organisation to adopt rules which did not make termination automatic. With one exception I do not see what the Government achieve. The exception is that a parallel provision has been on the statute book since 1980. The 1980 Act contains provisions about trade union membership in the area of employment, or where workers were seeking
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employment covered by union membership agreements. Whatever merits the provision may have had, the discussion was special. I looked again at the debates in this House and in the other place and they relate to the whole issue of union membership agreements or closed shop. We are not now concerned with that issue; we are making a general rule for all trade unions in any situation.
In that context, merely to take the rule from a previous statute is not the best idea from anyone's point of view. Lapsing by reason of non-payment of subscription should not rank as an expulsion by the union. If I said to any trade union member, or to a member of any club, "If you don't pay your subscription for six months you will no longer be a member", he or she would say, "Yes, I see that". I would then say, "But the Government say that that is an expulsion". I do not believe that anyone would treat that as an expulsion either in language or in understanding. I hope that the Minister will give the matter a little consideration, which may bring greater clarity into administration. I beg to move.
5.45 p.m.
Lord Finsberg: Before the noble Lord sits down, surely what he is stating in the amendment is inaccurate. The penultimate line reads:
"termination of membership is thereby automatic".
Does that mean that the rules of the trade union would not have any right of appeal as regards a member whose subscription may be unpaid? To my non-legal mind that provision makes the situation 100 per cent. black with the union rule giving the member no right of appeal.
Lord Wedderburn of Charlton: I should be happy to look at the amendment again. I had not seen it in that light. I understand the amendment to add to the end of the clause the provision that an event which terminates membership will count as an expulsion unless the event is the failure to pay subscriptions. The lapse which stems from a failure to pay is thereby automatic. If a union had an automatic forfeiture clause that would then operate but the case with which we are dealing would not count as an expulsion because the union had not expelled anyone. We are defining the word "expulsion" in subsection (2) (b).
Lord Finsberg: The noble Lord made the point that I tried to make. He said, "If the union had an automatic forfeiture clause". If the union does not have such a clause his amendment will make forfeiture automatic. Is that what he intends?
Lord Wedderburn of Charlton: No, that is not my understanding. If it were I should join the noble Lord in writing something different. It is open to the union to have a clause which will not fall within those words. In the case of Radford in the 1970s the High Court held that what looked like an automatic forfeiture clause was not. Therefore, it is open to the union to say no. For instance, if the rules specify that after 52 weeks one is not only out of benefit but out of membership unless the branch considers otherwise that would fall outside my words. It would then be up to the branch to observe natural justice, to observe the

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issues before it and to decide whether membership had ceased. Some unions do not have automatic forfeiture clauses but the majority practice is to have such a rule. It is slightly offensive to tell a union which has an automatic forfeiture clause, "If you let that lapse the member who has failed to pay according to the rules has been expelled". It is silly.
Viscount Ullswater: I hope to be able to reassure Members of the Committee that the amendment is unnecessary. New Section 177(2)(b), which is inserted into the 1982 Act by Clause 13 of the Bill, provides that expulsion of an individual from a trade union happens not only when the union takes overt action but also when the individual's membership is deemed to have lapsed by virtue of an event specified in the union's rules; for example, the non-payment of union subscriptions. The amendment would provide that in the particular case of non-payment of subscriptions automatically lapsed membership would not be treated as expulsion.
I sympathise with the noble Lord's concerns that trade unions should not be prevented from shedding those of their members who do not pay their due subscriptions, but there is nothing in this provision which will prevent unions from doing so. It does not follow, though, that just because a trade union member's automatically lapsed membership is treated as expulsion that it will therefore be treated as expulsion which breaches the new provisions in Clause 13.
Let us consider how Clause 13 works. It provides that an individual may not be excluded or expelled from a union unless it is for a permitted reason. One of those permitted reasons is the conduct of the individuals, and I think we can all agree that non-payment of subscriptions constitutes conduct for which expulsion from the union might well be an appropriate penalty.
It is true that a limited number of activities are specifically excluded from this provision, but non-payment of union subscriptions most certainly is not one of them. Provided that non-payment of subscriptions was the genuine reason why this individual was expelled from the union, then, that expulsion would be for a permitted reason, and the union would have acted entirely lawfully.
I trust that this reassures the noble Lord and that he will be persuaded to withdraw this amendment.
Lord Wedderburn of Charlton: I am grateful to the Minister. Previously he gave me a declaration and now he is giving me some sympathy. Therefore, we are making some progress.
We are concerned here with the definition of "explusions". Two issues arise. Let us consider the position of the member who complains. He must show an exclusion or expulsion and then he must show a reason which is not justified. I am not concerned with the reasons. I agree with the Minister that we are dealing with expulsions. I do not quite understand why the Minister insists upon the ordinary lapse of membership being treated as an expulsion. I do not see where it gets the Minister. He said that it did not get me anywhere. With respect, that is not quite right.
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When tempers are hot—and even in your Lordships' Chamber disputes become heated on occasions—the member who must prove his case will get over the first hurdle if he can show a lapse. He will say, "Ah, I have been expelled. Let's get onto the real reason". It seems to me that that should be proved in a rather different way. Otherwise, he is already half-way home—I use the language of the court room.
I ask the noble Viscount to look again at this matter because it is an important administrative issue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 51 and 52 not moved.]
On Question, Whether Clause 13 shall stand part of the Bill?
Lord McCarthy: The Minister is like Justice Adam Overdo in Bartholomew Fair. He gets out his little black book and looks for enormities—more and more enormities. However, he only finds them in trade unions. He finds them everywhere in trade unions. He finds it an enormity that the Bridlington rules failed to impose a single union deal. I suppose that if they had imposed a single union deal and Gavin Laird or someone else had complained, as he did when a single union deal was imposed on him, that would have been another enormity.
The biggest enormity of all is that the trade unions are still attempting, despite the introduction of this clause, to retain some degree of control over entry into and exclusion from their organisations. That is a real enormity. That is what sets off Justice Adam Overdo this evening. It is such an enormity that it justifies the clause.
The problem is that it cannot justify the Government continuing to say that they subscribe to the principle of freedom of association in the ILO because the ILO, along with the Government and all members of the Government, will accept that the principle of freedom of association is a two-way flow when they are not discovering the enormity of trade unions.
The noble Lord, Lord Boyd-Carpenter, says that of course everybody should not be allowed to enter the Carlton Club. The members and committee of the Carlton Club are entitled to have some say—of course they have almost total say—over who joins the club. There is a three-year waiting list to join the Garrick Club. It is proper that the Garrick Club should have some degree of control over entry to and exclusion from the organisation. Everyone cannot go to Balliol. The fellows of Balliol decide who goes there. Everybody cannot join a political party. Everybody cannot join the Trustee Savings Bank. Everybody cannot have a bank account. Most important, everybody cannot have a job. You can have the right to join a union but you cannot have the right to a job because the employer decides whom he will employ.
Only in the field of trade unions can we do away with the two-way flow which is accepted everywhere else. It is accepted in the ILO as regards the freedom of association. If you form an association, you are entitled to decide in certain ways, in general, who joins the organisation. It may be our fault because of the way in which the debate has developed this evening.

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We have concentrated too much on exclusions. The Bridlington agreement is essentially about poaching. It is essentially about unions which have taken into their organisation members who are already in one organisation but who have become disaffected and in some way or other believe that they will receive a better deal by joining the other organisation. The TUC is saying that if that is allowed to happen, there will be chaos. The Bridlington principles do not apply to entry of organisations. That does not need to go to a disputes committee; but this clause does.
This clause does not deal only with exclusions. Of course we are right to stress that it will undermine single union agreements. The Minister said that that is another enormity. It is an enormity to believe that single union agreements will be undermined in that way and even if they are, employers have a simple way out because they need not sign any agreements at all. Basically what is involved is the freedom of association for trade unions. The Government must explain why those principles which apply to all other organisations—you cannot obtain a credit card in Marks & Spencer without filling in the form—should not apply to trade unions.
Some people have tried to dig up the fact that once upon a time, a long time ago, trade unions operated closed shops. They no longer operate closed shops. There are still closed shops because many professional associations still have closed shops. However, we are dealing with trade unions. One cannot argue the closed shop case because we now have open shops. I put it to the Committee that there is no reason why we should accept the extremely narrow grounds on which the Government intend to allow trade unions to choose, namely, area qualifications, qualifications relating to occupations and a very narrow area of conduct. If trade unions took that seriously and made that a guiding principle, there would be no general unions. The only way in which to exclude people would be to narrow down the definition to such an extent that it would not be possible to have more than a couple of dozen members. Perhaps that is what the Government want.
Of course we need general unions. We need unions which have a diverse approach to different industries and occupations. Of course they must be regulated and must be able to have single union deals. That is why we intend to divide the Committee on whether the clause shall stand part of the Bill.
Lord Murray of Epping Forest: The paradox of the proposal is that it is not about union rights at all. It is about union responsibilities and about good order in industry for employers. It is not the unions which will suffer from the removal of Bridlington. It will set many humans free, as they would like to have been free in the past, to go on their merry way, picking up members wherever they like, putting pins in employers wherever they like and raising the ante wherever they like. They have only been prevented from doing that, in the interests of good industrial relations, by the TUC. My prediction is that the outcome of all this will either be the law of the jungle reigning to some extent in industry with the more aggressive unions making
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hay at the expense of employers, or—the more likely outcome—employers themselves developing methods of limiting the ability of their employees to chop and change between unions. That will be a further limitation of the rights of individuals. I believe that employers will respond in a quite pragmatic way.
I often felt, when I was dealing with these matters in a previous incarnation, that I should have sent the bill for my services to the employers concerned as they were the people who had the benefit of my services. It is a paradoxical situation that those who claim to represent, or are accused of representing, the interests of labour should be arguing for a quieter life for employers. Be that as it may, but when the day of reckoning comes we shall know who was responsible for it.
6 p.m.
Lord Wedderburn of Charlton: I am emboldened to add two or three sentences by what my noble friend Lord Murray of Epping Forest has just said. I agree with my noble friend on the Front Bench that the base of one's opposition to the clause, whatever its effect upon TUC arrangements—and that will certainly be severe—must be the infringement of fundamental values and principles as to freedom of association. The Minister has not really answered that point today; no doubt he will have to do so in other places.
No principles of this kind have been adopted, or in most cases could be adopted for constitutional reasons, in France, Germany, Italy, Spain, Portugal, the Netherlands, Greece or Luxembourg. One day someone will ask the United Kingdom what it thinks it is doing with the level playing field in terms of workers' associations in the Community. However, the real point I am prompted to make concerns a matter that my noble friend Lord Murray mentioned. Some would consider I should not mention it because in a sense it may constitute a way out. However, I do not consider this matter to be merely a game of ludo or snakes and ladders. We must look at what is being enacted. There may be ways out and they involve all the problems that my noble friend outlined.
The union is to be allowed to operate its rules according to whether it represents people in a trade, an industry, occupation, grade or other category. What is a trade or industry? My mind goes back to the good days of Schedule 11 in the 1970s when an issue came before the central arbitration committee as to whether someone who was working in a factory which manufactured gum boots should be categorised as being in the footwear industry, where a set of collective agreements obtain, or in the rubber industry, where other collective agreements obtain. The CAC had to do the best it could with that situation.
That makes one realise that some form of arbitration as regards who is working where and who is organising where would not be illegal under the clause. It certainly would not be illegal other than for compensation but I wonder whether it would be in any sense touched by the clause. If the Government say it is touched, we can see how deep we have gone. If the Government say it is not touched by the clause, no

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doubt they will tackle the matter in the next piece of legislation. I am sure there will be another Bill on the issue unless the Government meet their just fate at the hands of the electorate. If what I have suggested is correct, the Government will take action because they cannot bear trade unions to have what my noble friends have referred to as freedom of action in this area.
The definitions of some of the terms in this part of the Bill will be pored over. I should not say any more about the matter because I am sure many would say that the lawyers will do well out of considering it. That, no doubt, will be another disadvantage from the Government's point of view. Let us divide on this clause, but let us not give up because even now there are ways around certain parts of it. If we take those ways, we shall discover whether the Government intend to take the final step towards clamping down on freedom of association.
Lord Stoddart of Swindon: New employers come to this country and say that they want to see a single union agreement and everyone agrees to it. On seeing this legislation they then realise that the single union agreement has been watered down. They discover that there may be trouble which they had not anticipated, trouble that did not exist before. If the Government believe in the single union agreement and the Conservative Party believes in it, then the Government are shooting themselves in the foot in this Bill and this particular clause.
My second point concerns the ability of a trade union to take action against one of its members who has injured that organisation. That is what we are talking about—individuals who have caused distress and injury to a trade union. We are not talking only about strikes; we are talking about industrial action. That action could be a strike or it could be industrial action that is short of a strike. It could, for example, be industrial action about safety, and the action, or the non-action—
Viscount Ullswater: It could not!
Lord Stoddart of Swindon: I am afraid it could. The action or non-action of a person not acting in concert with his colleagues could very well put someone in jeopardy. That may seem far-fetched but there are other occasions when a single individual, or group of individuals, may undermine action which the huge majority believe is right and proper for the good of the majority and the good of all people working in an organisation. A small group may, perhaps by co-operating with an employer, undermine a decision which virtually everybody else has agreed is in the interests of those employed. Surely that cannot be right. Good heavens above, the Conservative Party was in turmoil about a week ago when a number of its members voted against the Government. There were immediate calls for deselection and even expulsion from the organisation. If that process is good for one organisation, surely it is good for another.
Those in the Conservative Party who wanted people expelled believed that in voting against the Government they had done the organisation harm.
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They wanted those people expelled. Yet here in this Bill we have a situation where a group of people who actually work in industry—they are much more important than the people I have just mentioned—and provide a living for us are not able to take action against people who may have undermined their wages, their conditions of service and the very working practices at the factory where they work. Those are the points which have been raised by my noble friends and they are reasonable points. They concern individual liberty. We should not forget that. The whole democratic system, the country and the Government work on the basis of a majority vote. In the case of the present Government that is only 42 per cent. We govern our country and our institutions, whether they be clubs, the Stock Exchange or trade unions, on the basis of the will and the good of the majority. That is the principle which the Government are undermining in this particular clause.
Lord Boyd-Carpenter: Members of the Committee opposite, and the noble Lord, Lord McCarthy, in particular, have said that they intend to divide the Committee on the question that the clause stand part of the Bill. I do not flatter myself that I have the slightest chance of dissuading them from that foolish intention. However, I consider that one word should be spoken in support of my noble friend the Minister and in opposition to their proposal.
We have covered the ground dealt with by Clause 13 at considerable length, in considerable detail and with a great deal of patience and goodwill. There is, of course, a difference of view between both sides of the Committee on the general merits of the case. This is an old controversy. For many years there has been a difference of attitude between the two major parties in respect of certain aspects of trade union law. There is a genuine difference of opinion that can only be resolved in our usual democratic way, by a vote.
I say to my noble friend the Minister that, having listened to the whole of the debate, I am fully satisfied that this is an excellent clause, that it follows on from the previous legislation on this subject for which the present Government and their predecessor were responsible and that it will help to continue the industrial peace and good order, which is one of our strongest points today. Therefore, the sooner we enact it the better.
Viscount Ullswater: I am grateful for the support of my noble friend Lord Boyd-Carpenter. I am also slightly surprised, as he was, that the noble Lord, Lord McCarthy, is determined to divide the Committee on the issue. Therefore, we have no debate on the issue. The noble Lord's mind is made up and I dare say he is not prepared to listen to whatever I say. However, in one last effort perhaps I may ask him to consider again that the clause should stand part of the Bill.
We believe that it is time that individuals had the right to join the trade union of their choice. The Bridlington principles operate to restrict that right and amount to nothing short of a cartel arrangement whereby trade unions, under the auspices of the TUC, carve out monopoly spheres of influence.

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We have heard it argued that this provision will lead to mayhem in the workplace. If that argument is to be believed, when the Bridlington rules cease to have effect we can expect little short of anarchy. We have heard a sorry tale of constant trade union squabbles over members, the breakdown of single union agreements, the loss of inward investment and so on.
I remain unconvinced by those arguments. I simply do not believe that the passing of the Bridlington agreement will create major inter-union rivalries and that suddenly individual employees will chop and change from one union to another. As to trade union squabbles, the recent evidence shows that the Bridlington rules serve to provoke rather than restrain these.
These proposals will not have the destabilising effect suggested. There is no reason why they should undermine single union deals, which I recognise are important to some overseas investors. Individuals already have the right not to join a particular union, whether it is recognised or not. These proposals will mean that they still have that right, but they will also have the right not to be unreasonably excluded from any union—again, regardless of whether or not the union is recognised or is party to a single-union deal. Indeed, it is my view that it is the operation of the Bridlington principles that puts inward investment at risk—as Ford's decision to locate £40 million of investment and 1,000 jobs in Spain rather than Dundee shows.
I have studied the text of the Bridlington principles. I understand that they were drawn up in 1939, in a very different climate from the present one. As far as I can see, nothing in the text of the principles makes the slightest reference to the wishes of trade union members or potential members in deciding which union should be able to represent them. Can that be right? Should not individuals have the right to decide which union would best serve them and the right to join that union? Would it not be better for trade unions to be subject to that sort of competition, encouraging them more accurately to meet the needs and aspirations of their members? I believe that it would, and many of the more enlightened trade union leaders have apparently come to that view.
The clause therefore aims to prevent a trade union from expelling or excluding individuals from membership except on certain reasonable but closely defined grounds. The clause will introduce real freedom of choice to trade union members and I commend it to your Lordships.
6.15 p.m.
On Question, Whether Clause 13 shall stand part of the Bill?
Their Lordships divided: Contents, 106; Not-Contents, 42.

Division No.2

CONTENTS

Abinger, L.

Arran, E.

Allenby of Megiddo, V.

Ashbourne, L.

Archer of Weston-Super-Mare, L.

Astor, V.

Belhaven and Stenton, L.

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Beloff, L.

Lucas of Chilworth, L.

Blatch, B.

Mackay of Ardbrecknish, L.

Boyd-Carpenter, L.

Mackay of Clashfern, L. [Lord Chancellor.]

Brabazon of Tara, L.

Bridgeman, V.

Macleod of Borve, B.

Brigstocke, B.

Marlesford, L.

Broadbridge, L.

Marshall of Goring, L.

Brougham and Vaux, L.

Merrivale, L.

Cadman, L.

Mersey, V.

Caithness, E.

Mottistone, L.

Campbell of Alloway, L.

Moyne, L.

Campbell of Croy, L.

Munster, E.

Carnegy of Lour, B.

Murton of Lindisfarne, L.

Carr of Hadley, L.

Napier and Ettrick, L.

Chalker of Wallasey, B.

Norfolk, D.

Chilver, L.

Orkney, E.

Clanwilliam, E.

Oxfuird, V.

Clark of Kempston, L.

Park of Monmouth, B.

Colwyn, L.

Pearson of Rannoch, L.

Cox, B.

Pender, L.

Craigavon, V.

Platt of Writtle, B.

Cranborne, V.

Pym, L.

Cumberlege, B.

Rankeillour, L.

Dacre of Glanton, L.

Reay, L.

Davidson, V.

Rennell, L.

Denton of Wakefield, B.

Renton, L.

Dudley, E.

Rodger of Earlsferry, L.

Elibank, L.

St. Davids, V.

Elliot of Harwood, B.

Saltoun of Abernethy, Ly.

Elliott of Morpeth, L.

Sanderson of Bowden, L.

Elton, L.

Skelmersdale, L.

Ferrers, E.

Strathclyde, L.

Finsberg, L.

Strathmore and Kinghorne, E. [Teller.]

Fraser of Carmyllie, L.

Gilmour of Craigmillar, L.

Sudeley, L.

Gisborough, L.

Suffield, L.

Goschen, V.

Swansea, L.

Hayhoe, L.

Swinfen, L.

Henley, L.

Switon, E.

Hesketh, L. [Teller.]

Torrington, V.

HolmPatrick, L.

Trumpington, B.

Hooper, B.

Ullswater, V.

Howe, E.

Vaux of Harrowden, L.

Hylton-Foster, B.

Vinson, L.

Ingrow, L.

Vivian, L.

Jeffreys, L.

Wakeham, L. [Lord Privy Seal.]

Kinnoull, E.

Layton, L.

Westbury, L.

Leigh, L.

Whitelaw, V.

Lindsey and Abingdon, E.

Wise, L.

Long, V.

Young, B.

NOT-CONTENTS

Airedale, L.

McCarthy, L.

Ardwick, L.

McIntosh of Haringey, L.

Clinton-Davis, L.

McNair, L.

David, B.

Mallalieu, B.

Dean of Beswick, L.

Merlyn-Rees, L.

Donoughue, L.

Morris of Castle Morris, L. [Teller.]

Fitt, L.

Gallacher, L.

Murray of Epping Forest, L.

Graham of Edmonton, L. [Teller.]

Nicol, B.

Ogmore, L.

Grey, E.

Pitt of Hampstead, L.

Harris of Greenwich, L.

Plant of Highfield, L.

Hilton of Eggardon, B.

Richard, L.

Houghton of Sowerby, L.

Rochester, L.

Irvine of Lairg, L.

Seear, B.

Jay of Paddington, B.

Shackleton, L.

Jenkins of Hillhead, L.

Strabolgi, L.

Kennet, L.

Tordoff, L.

Leathers, V.

Turner of Camden, B.

Listowel, E.

Wedderburn of Charlton, L.

Longford, E.

Williams of Elvel, L.

Resolved in the affirmative, and Clause 13 agreed to accordingly.
6.23 p.m.
Clause 14 [Right not to suffer deduction of unauthorised or excessive subscriptions]:
Lord McCarthy Lord McCarthy moved Amendment No. 53:
Page 27, leave out lines 33 to 37.
The noble Lord said: The title of Clause 14 is,
"Right not to suffer deduction of unauthorised or excessive subscriptions".
The provision concerns the check-off. The clause provides that deductions in union subscriptions must be authorised in writing to an employer within three years by a member who wishes to have his money deducted in that way. It provides that all increases shall be notified in advance and agreed by the worker; and that any complaint about the process can be taken to an industrial tribunal.
I set that out because the amendment does not challenge nine-tenths of the provisions of the clause. We argue that much of what the clause stipulates by law in fact operates already in industry. All we wish to do is to leave out subsection (3) which states that an authorisation is effective and current only if it falls within a period of three years. That means that there has to be reauthorisation every three-year period in order to maintain the legality of the check-off. Therefore one would still need to have authorised deductions. One would need to have the worker's signature which could subsequently be withdrawn. The employee would need to be told of increases and would have the right to cancel those increases. There would be the original complaints procedure. We simply state that the signature would continue and would not have to be reactivated every three years.
I dare say that the Minister will say that this would be another enormity. It would certainly put the trade unions in a position alongside all other organisations regarding authorised deductions. I refer to such matters as direct debit arrangements with our banks, payments to mortgage companies, membership of clubs, the moneys that we give to the income tax man and so on. We have an agreement which lasts until we cancel it. I have no doubt that the Minister will say that that is right for all those organisations but that in the case of trade unions it would be an enormity.
When the issue was debated in another place, three arguments were advanced. I do not know whether the Minister will give us different arguments today. We were told that at present the union can assume consent by the existence of a prior collective agreement without individual consent and that the clause deals with that. The amendment does not touch that issue. The provision continues.
We were told that mistakes can be made without periodic consent. That may be so. It can be so in all other such direct debits. Mistakes can be corrected. The Government do not come forward with concrete evidence—but when one has an enormity one does not need evidence.
We were told that at present—it was the strangest thing that we were told in another place—if one cancels the check-off there is no way of rejoining or remaining in the union. That is a strange view for
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which there is no evidence. Thousands of members pay their dues in some other way when they come off the check-off.
The arguments advanced to date do not relate to the basis of the amendment. I can envisage only one argument, and the Government have not put it forward, which might justify making this special case for the check-off system. Of course many employers object to the provision; we could read their names out if necessary. The only argument that I can envisage is that it puts strain on the employer. The Engineering Employers' Federation, the CBI and the IPM have stated that. That is what the issue is about. It will put strain on employers. Employers will need to go through the process every three years. It is a considerable annoyance, as I understand the noble Lord, Lord Mottistone, will argue later. Therefore let us keep it in the Bill and perhaps they will cancel the check-off system anyway. But if one seeks a better argument, I do not believe that one can find it. I beg to move the amendment.
Lord Rochester: In my experience in the chemical industry, in which it is the general practice to operate the check-off system, employees have had no difficulty in exercising control over the payment of their union subscriptions. The initial authorisation should certainly continue to be required on an individual basis. But insistence on reauthorisation every three years on the basis proposed in the clause is bound, as the noble Lord said, to cause an unreasonable increase in the administrative burden, not only on trade unions but also on employers who would nevertheless not wish to withdraw from check-off arrangements.
For the life of me I cannot understand why the Government should treat union members as morons and, in that capacity, as less capable than individual citizens and other ordinary people of cancelling such arrangements as and when they wish. I gladly support the amendment.
Lord Stoddart of Swindon: I too wish to support the amendment. I cannot understand why the Government are taking this line with trade unionists. Why on earth should people be able to have charitable deductions taken from their pay and give one authorisation which remains for all time, but if they want to give a donation to their trade union they must renew it every three years? That is the way I understand the clause. Why should there be any difference?
What will cause anxiety to many people is that the employer will be put at risk if he continues to deduct subscriptions for which there is no authorisation. I believe that there is an amendment that may put the duty on a trade union to get in touch with its members about renewing their authorisation. In the last analysis, the responsibility lies with the employer because he will be liable if an amount is wrongly deducted from a wage or salary of one of his employees. Therefore, it seems to me that, one way or another, a great burden is being put on employers unnecessarily.
I hope that the Government and the noble Viscount will seriously consider what has been said because this

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is a serious point which worries employers—probably employers more than trade unionists. Nevertheless, it is a worry. There is absolutely no necessity for the three-year rule. I agree that it is fine to have a personal authorisation. I do not quarrel with that although the present system seems to be working all right. But once the authorisation is made, it would save a great deal of trouble for everyone, including employers, if the Government accepted the amendment.
6.30 p.m.
Lord Finsberg: It is really Alice in Wonderland to hear the arguments on the other side pleading for poor employers. It may be convenient but it does not ring true. If one decides to have one's state pension paid by post every year, someone has to certify that one is still alive—not every three years, but every year. Every time there is a new electoral register, one has to fill in the form. So I believe that it is right that there should be this check. I wish to see it properly maintained and I believe that it is right.
Lord Stoddart of Swindon: Would the noble Lord mind if I intervene? He said that someone has to certify that a person is still alive. But the employer will know whether an employee is still alive because he is paying his wages.
As for pensions, the DSS knows very well whether a person is alive and, so far as I know, no one has to authorise every three years that the pension is to be paid or that a person is entitled to the pension.
Baroness Seear: I have been paid a pension for 15 years and no one has ever asked whether I am alive.
Lord Finsberg: I am bound to say that I remember employers in the newspaper industry paying Mickey Mouse, who was never there. So I do not believe that that is a good argument.
Lord McCarthy: That is why I say to the noble Lord that that is precisely the case. Mickey Mouses are used, enormities are found. There is no evidence whatever adduced by the Government that Mickey Mouses come in to check off an authorisation. Nothing has been put forward to that effect, these are just phrases thrown about the Chamber.
Lord Stoddart of Swindon: May I pursue the point? The employers might well be happy to pay the wages, but I am not at all sure that employers will want to pay the union dues as well.
Lord Murray of Epping Forest: The noble Lord, Lord Finsberg, reminded us of Alice in Wonderland, but this is an Alice in Wonderland clause. This is the Red Queen saying, "Off with his head!" It is a measure of the Government's disappointment with the effects of their previous legislation. The clear intention throughout the whole of the Government's industrial relations legislation has been to weaken the unions, to weaken the ability of combinations to protect the interests of working people. That is what they have been about, right from the beginning. They had hoped to see the trade unions wither on the vine, but it has not happened.
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In spite of all the unemployment, there are still 10 million people who insist on maintaining their trade union membership. I can understand the disappointment, the chagrin, the frustration of the Government. I can understand them searching for some means of genuinely weakening trade unions. This is what they have come up with. Here we come to the heart of the Bill, or rather to the jugular vein of the Bill. It is not a unique provision. We have seen it in relation to the merger provisions, the withdrawal of funding, and so on. That is what it is all about.
I said earlier, and repeat, that the purpose of the Government is to provide employers, if possible, with a union-free society. The purpose of the provision is to sap the resources of unions. That is what it is about. It is not about technicalities or obligations on employers, and so on.
I doubt whether the Government will succeed in their ambitions, but in the wish that their efforts may be weakened, I hope that the amendment will be carried and will improve the Bill.
Baroness Denton of Wakefield: First, I reassure the noble Lord, Lord Murray of Epping Forest, that we are not regretting the numbers of people who are members of trade unions, but are celebrating the improvement in industrial relations.
Clause 14 introduces significant new protections for employees who pay their union subscriptions by means of the check-off. For the first time, all employees will have the right to give their consent before deductions are made; they will have the right to withdraw that consent without being obliged to leave their union; they will have the right to be informed before increased deductions are made; and they will have the right to reconsider at intervals whether they wish to continue to pay their subscriptions in this way.
The requirement that an employer should seek the renewed consent of his employees to check-off deductions at periodic intervals has been included in this provision for important reasons of principle as well as for practical considerations.
Clause 14 treats employees who pay their union dues through the check-off as individuals rather than as a homogeneous group which would appear to be the preferred approach of some parties. It is, quite simply, only right that individual employees should have the opportunity to decide whether they want to continue to pay their subscriptions through the check-off. Their continued payment through the check-off should not be taken for granted: this provision gives them that right.
There are also important practical arguments for seeking renewed consent. There is simply no logic in arguing that an employee should have a right which he can exercise only once and then never again. An employee may work for more than 40 years for the same employer. A lot can happen in that time. The policies of both his trade union and his employer may change. The nature of the leadership of his union and the ultimate ownership of the company for which he works may change. Where is the sense in saying that he must have a right to consent to a deduction—
Baroness Seear: Is the noble Baroness seriously saying that the individual member cannot say, "I do not want to go on"? He does not have to wait to be asked. He has a tongue in his head and a pen in his hand. Surely he can say that he does not wish to continue to pay.
Baroness Denton of Wakefield: I point out that at the moment the only way he can leave check-off is to resign from the union.
Noble Lords: That is not true.
Baroness Turner of Camden: I have to tell the Minister that that is not so. It is absolute nonsense. In my union we had many people who withdrew from check-off and paid by direct debit. When they were promoted they did not want the employer to know that they had continued their union membership. Now they were middle managers, but they continued their union membership, not through check-off but by direct debit or cheque annually to the union. It is quite possible to do that.
Lord McCarthy: Perhaps I may say again to the noble Baroness what has been said many times. The Government use a technicality. Of course, if one cancels the check-off and does nothing else, one's membership will lapse. In that sense, if one cancels the check-off one leaves the union. But one is not without any other option. One can decide, as the noble Baroness said, that one wants to pay by direct debit. One can ask for a card. One can pay union dues in any way one wishes. It is only if one does nothing that membership lapses.
Baroness Denton of Wakefield: I am sorry that the noble Lord, Lord McCarthy, should so describe the matter. The only legal right to leave check-off is by leaving the union.
Noble Lords: That is not true at all. It has nothing to do with the matter.
Baroness Denton of Wakefield: Perhaps I may continue on the renewed consent issue—
Lord Dean of Beswick: The Minister speaks in the hope that friends behind her will go through the Lobbies again. But on this side we expect her to put the case factually and not live in fantasy. She is quite wrong in principle in what she is saying. The facts of life in trade unions regarding the check-off are quite different from how she describes them.
Baroness Denton of Wakefield: I repeat that the legal right is as I have described it. If I may return to the comment of the noble Baroness, Lady Seear, I suggest that of course people can say no, and can use their own initiative. But over a period of possibly some 40 years, drawing attention to the fact that that is an option can only be of benefit to the individual.
Against all the evidence of recent years about how the check-off operates in, for example, the building industry, it would be frankly naive to assume that every employee covered by the check-off would be given an effective right to opt out if his employer was required to seek his consent only once. The hundreds
1598
of building workers in London who discovered that they were not members of UCATT although they had been paying the check-off for years certainly had no effective rights. As one of them said at the time, "A member known to me thought he had been paying his contributions for two and a half years and subsequently found he was not a member. Now he asks, where has the money gone? Is he alone?"
Lord Murray of Epping Forest: Perhaps the noble Baroness will forgive me. I believe that she is speaking on exactly the wrong point. The example she mentions relates to a point about fraud on the part of employers, who deducted payment and did not credit it to the member. It has nothing whatever to do with the member's rights to be or not to be a member of the union. It is about the employer defrauding his employees.
6.45 p.m.
Baroness Denton of Wakefield: Members of the Committee will appreciate that I said earlier that the position can change with both the employer and the union. Nor is that the only example. It was revealed last year that two employees of Hackney council who thought that they were members of the EETPU were in fact paying subscriptions to the TGWU because their check-off forms had been forged. Their subscriptions had been switched from one union to the other without their knowledge or permission. The forgery only came to light because of the subsequent dispute over the alleged poaching of union members. An opportunity to reaffirm their consent at regular intervals would have ensured that they were not dependent on chance to discover the fraud. This is an example not just of how the check-off can be abused but of how a requirement on the employer to seek consent every three years would ensure that that abuse was brought to light.
Secondly, if there is no increase in union subscriptions there will be no obligation on the employer to remind employees of the check-off or their right to opt out of it. Recently, union subscriptions have been increased quite often but that has not always been the case. Or let us take the case of the union which sets its subscription rate at a percentage of earnings. We accepted the suggestion of the Opposition in another place that employers should not be required to notify their employees in advance of increases which are due solely to a change in earnings. That may mean, however, that those employees whose subscriptions are calculated in that way will never receive a notification of increase, as the percentage rate may never change. Without the requirement to seek renewed consent at intervals, their continued subscriptions would be taken for granted without further information or consultation.
In the Government's view it is not good enough to rely simply on an initial requirement to seek consent and then to rely on an increase in dues to trigger a reminder from the employer that there is a right to opt out of the arrangement. That reminder may never come. The only certain way to make sure that there is

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an effective freedom of choice throughout an employee's employment is to ask him or her every few years if he or she wants the arrangement to continue.
It has been argued that the requirement places an unacceptable burden on employers. Let me make it clear that, when it comes to the check-off, we are discussing an arrangement which is in no sense the result of government regulation. Check-off arrangements between employers and trade unions are entirely voluntary so far as employers are concerned. No legislation has ever required or even encouraged employers to adopt those arrangements. There is not, and never has been, any tax incentive for them to introduce the check-off. Indeed, surveys show that a majority of employers who operate check-off arrangements do not even charge the unions concerned for the administrative cost.
If, therefore, there are any burdens involved in the check-off, they are burdens which employers have assumed entirely voluntarily. Furthermore, as I am sure the Opposition agree, it is already the practice of good employers to make sure that the check-off operates with the full knowledge and consent of their employees. There is, as we have pointed out, currently no legal requirement on employers to seek individual consent to the check-off if that arrangement is part of a collective agreement. In that case the arrangement becomes part of the contract of employment of each employee covered by the agreement.
But although there is no legal requirement on employers to seek the consent of each employee to the check-off, a good employer will not want to rest simply on the legal position. He will want to be sure that all his employees are happy with the arrangement. The purpose of this clause is in large part to ensure that all employees enjoy, as a legal right, the protection which many employees already enjoy as a matter of good practice.
What is the nature of the burden that such a requirement will impose on employers? All the employer needs to do is send each employee a slip of paper once every three years with a simple question, "Do you still want your union dues deducted from your pay?" The employee must reply yes if the deductions are to remain lawful. That slip of paper could be enclosed with the payslip or sent out in any other way which suits the employer. That is not a major burden. And, of course, if every employee says yes there will be no further action for the employer to take.
It has been suggested that some employers' organisations support the proposition that there should be only one consent requirement. That is not the case. When the Green Paper was published a number of employers' organisations supported the original proposal for annual consent. Some suggested a longer period. But none suggested that we should dispense totally with the proposal to require renewed consent at some period after the initial consent given when someone first starts their employment.
I certainly cannot recommend that the Committee accept an amendment which would not provide for any review of check-off once an employee had given
1600
his or her initial consent. I have already said that none of the employers' organisations which asked for a modification of the original proposal for annual review went that far. As I indicated, to do so would be wholly illogical. If there is a case for establishing the right to consent to the check-off when someone begins employment, there is certainly a case for requiring that consent to be sought periodically thereafter. Three years seems the right period for that periodic consent and that is what I recommend to the Committee.
Lord Wedderburn of Charlton: Before the noble Baroness sits down, there is a point which I took up with the Minister in previous discussions and on which I hope she can say a few words. She mentioned, as the Government have always said, that where a collective agreement had an arrangement for check-off, it always automatically entered into the terms of the individual contracts of employment. On a previous occasion I ventured to suggest that that was not necessarily always so and there was more difficulty about it.
I regret that I do not have a copy of Hansard with me, but I believe the Minister said that he would try to bring an example with him of that type of collective agreement. I wondered whether he or the noble Baroness have anything of that kind with them or whether they can bring it forward later in the proceedings because the point will arise again.
Baroness Denton of Wakefield: Let me repeat the current legal position which is that the situation of collective agreement regarding check-off is unsatisfactory because it can, by virtue of that collective agreement, be imposed on a worker without his prior knowledge or consent. However, I shall look at the issue and come back to the Committee.
Lord McCarthy: It is very difficult to answer the points put by the noble Baroness and equally difficult to put them in any order. She started by saying that there had been a great improvement in industrial relations. That was said three times tonight. The Red Queen has already been mentioned—the Red Queen said that what she said three times was true. So perhaps there will be improved industrial relations.
It is difficult to square the improvement in industrial relations that the Government always claim with the need to discover and thrash out more and more enormities. Nevertheless it is the case. The first reason given by the noble Baroness was that there are reasons of principle. People use the expression "reasons of principle" when there are not many reasons of practice. The reason of principle that she advanced was that individuals—not groups—may not want to continue to have a check-off, but wish to decide as individuals rather than as groups. That was the point; but it does not cover the amendment. It covers the argument that we ought to ask individuals to agree and not have it arranged by collective agreement. I see that point and do not contest it. Therefore the reason of principle does not apply.
She also said that it could not be right to ask only once and not ask ever again. But one does not have to ask. People can do it off their own bat. People receive

1601
a monthly or weekly pay slip on which is shown a deduction, if there is one, for the trade union check-off. On the pay slip there is regular notification of what they pay and they can ask for it to be removed. I do not think that the point applies. However, if it is quite wrong for people to be told only once and they have to be reminded, they will be reminded when there is an increase. But if they have to be reminded every three years, then why does that reminder apply only to trade unions? I may be foolish enough to have done nothing about having undertaken 15 years ago to be a friend of Covent Garden. It is my fault if I do not take the initiative to remove myself from it because I do not know what I get out of it. But in the case of check-off and trade unions, it seems that a reminder has to be given every three years because otherwise it would be monstrous; but it would be monstrous to do something else only in the case of trade unions. Why is that so?
Finally, the noble Baroness dragged in certain pieces of evidence about what went on in the building industry and in Hackney Council. As my noble friend said, they were all criticisms of employers, employers who fleeced workers by taking away money, pocketing it and not signing up the workers to the union. That could happen at any time. I do not suppose there is a check on that because such an employer would probably put a deduction on the pay slip month by month anyway.
I do not believe that there has been any argument advanced by the Government. Unfortunately, it is five minutes to seven and far on in the day. We do not intend to divide the Committee at this time.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 54:
Page 28, line 3, leave out from ("by") to ("at") in line 4 and insert ("the union to the worker and notification thereof given to the employer").
The noble Lord said: This amendment is the substantive one. Amendments Nos. 57, 58 and 59 are consequential amendments relating to complaints of infringement of rights.
It has frequently been said during discussion of earlier amendments that companies have no objection to the check-off. That is absolutely true. It has also been said that companies were against the idea of having a three-yearly check. That is certainly not something I have been told by the CBI, which has concentrated on this particular point.
The point of Amendment No. 54 is not to affect the protection of union members from unauthorised deductions. It is only concerned with the cost of membership, which employers see as a matter for the unions to communicate to their members. In the Bill as it is written at the moment, subsection (5)(b) of the new Section 68 of the 1992 Act requires employers to give notice to the workers of the amount of increase, if such occurs.
Employers feel that they should not have to do that. Their feeling in the main is that how much people pay for membership is entirely a matter for the union and the member. The word "implore" is perhaps too strong; I ask very strongly my noble friend the Minister (who has not agreed in the past) to give very
1602
careful thought to whether it is reasonable to expect employers to be responsible for what is essentially a matter between a union and its members.
The employers are perfectly happy to be the agents in collecting dues. But the responsibility for notification surely should be from the union to the member and from the union to the employer, so that the employer makes the deduction. To make the employer responsible for telling the member that his subscription rate has gone up seems to me unreasonable. If I were the member and found notification in my pay packet that I had to pay more but the union had not told me about it or even suggested to me that the subscription would cost more, for whatever reason, I should feel very aggrieved. As I would see it, the employer had taken the initiative to put up my subscription for a reason that I did not know.
It cannot be for the employer to tell the union member why the subscription rate has gone up. That must be a matter for the union. Only the union will make the decision that that should happen. The wording of the amendment places too heavy a responsibility on the employer to tell the union member that his subscription rate is to be increased. One cannot expect the employer to know why. He probably has a good idea, but theoretically it is not his responsibility to explain the reason why; that is the responsibility of the union.
It may be that the wording of the amendment is not ideal. But the principle surely must be that the most that the employer can be expected to do is to apply an increase about which he is assured the union has already informed its members. It may be possible to find a better wording than the wording of the amendment.
That is my first point. I turn quickly to Amendments Nos. 57, 58 and 59, which are linked to Amendment No. 54. They are strictly consequential amendments to make sure that if the matter is referred, as it may be, to a tribunal, the tribunal is aware that the responsibility for informing the member of the increase is that of the union and not of the employer. After all, the employer is not responsible for the increase. I beg to move.
7 p.m.
Lord Rochester: I added my name to the amendment and, at least in principle, support the intention of the noble Lord, Lord Mottistone, in tabling it. It is significant that so many employers, organisations and companies of repute have complained in regard to the burdens which would be imposed upon them by the requirement that the employer, rather than the union, should give notice to the employee of any increase in the amount of union subscriptions.
In my view most significant is the way in which the TUC treated the point in its briefing to the Committee. It said,
"We accept that there should be an obligation on trade unions through appropriate channels to notify members of any increase that is to be made in subscriptions. We consider that this obligation should properly fall on unions rather than providing an additional burden on employers".

1603
That opinion comes from the TUC. The note continues:
"In addition, on notifying members of increases to be made in subscriptions, that would be an appropriate point at which to remind them of the right that is available to them at any time to withdraw their authorisation for deductions to be made from their wages".
I agree with the TUC on both points. In my view, it follows that if complaints are then made that appropriate notice has not been given to the employee under Section 68 of the 1992 Act, it is inescapable—as the noble Lord, Lord Mottistone, said—that for the purposes of the Wages Act 1986, the union should be joined as a party to any proceedings that may ensue and that industrial tribunals should be empowered to order the union to make an appropriate payment to the employee.
I stress—and I hope that it is apparent from what I have said in relation to previous amendments—that I do not like the clause. But if there is no escape from it, then the logic of the situation is as I have described. Along with the noble Lord, Lord Mottistone, I hope that the Government will think carefully before rejecting the principle underlying the amendment.
Lord McCarthy: We agree with almost everything that was said by the noble Lord, Lord Mottistone. He is quite right. The TUC has been attempting to negotiate some kind of agreement with the Government on the issue. The position of the TUC is as he stated. It accepts that deductions from an individual's wages should be made only with that individual's explicit and written consent. It accepts that the obligation to notify members of any increase to be made to subscriptions should be a trade union obligation. It considers that that obligation should properly fall on unions rather than provide an additional burden for employers.
The TUC believes that by accepting the two provisions it is enabling the Government to honour their election manifesto. That was basically what the Government said they would do. In so far as that is what is intended by Amendment No. 54, tabled by the noble Lord, Lord Mottistone, and supported by the noble Lord, Lord Rochester, that can be supported. Whether the wording is sufficient or whether the Government wish to suggest different wording, is open to further discussion. The central principle that deductions from an individual's wage should be made only with that individual's consent and that there is to be an obligation on trade unions, through the appropriate channels, to inform members, is accepted.
With regard to Amendments Nos. 57, 58 and 59, I agree again with what I take to be the spirit of what was said by the noble Lord, Lord Rochester. There is a great deal wrong with them and we are not necessarily committed to going along with what they say in the way that they say it. More importantly, we should like to hear from the Government.
Baroness Denton of Wakefield: I have every sympathy with the desire of my noble friend Lord Mottistone to lessen burdens on employers. However, I hope that I can show him and other Members of the
1604
Committee who have spoken that the amendments are not necessary and that they are at odds with the principles underpinning Clause 14.
Our starting point is the protection of the interests of the individual. Under the check-off, it is the employer, and not the union, who collects union subscriptions from the individual. It must therefore be the employer who is responsible for ensuring that the rights of the individual are safeguarded. That means ensuring that the individual has given his consent in writing before deductions are made. That means giving the individual the opportunity to consider whether he wishes to continue to pay his union subscriptions in this way at least every three years. And that means notifying the employee in advance before deducting a higher amount of money.
It would represent a fundamental distortion of the relationship between employer and employee to divert the responsibility for issuing notification of increases from the employer to the union. It is not the union who is deducting money from the employee's salary at source, but the employer. The notification issued by the employer to the employee is not simply a piece of random information. It is the employer's opportunity to say, "Next month I am going to deduct more money from your salary". That is information which the individual should be entitled to receive. I believe that we agree on that point. It is only right that the employer should himself let the employee have that information.
It has been argued that increases in union subscriptions are a matter between unions and their members—and indeed they are. I hope that all union members, not just those who pay their subscriptions in a particular way, are notified in advance when their subscriptions increase. That is not the issue here where we are concerned only with the check-off. Our concern is to ensure that employers notify their employees in advance before making those higher deductions.
My noble friend Lord Mottistone drew attention to an instance where an employer may be criticised because the union had not made the information known to the employee. It is important that the employee knows the situation.
Let us not forget that employers choose to operate the check-off and to make the deductions from their employees' pay. They must also accept the responsibility that goes with that decision by ensuring that their employees' interests are properly protected. However, it is no part of our intention that excessive burdens should be placed on business, and I should like to offer reassurance to my noble friend, who clearly has the interests of business at heart in relation to this point. I do not believe that our proposals need be burdensome in the way he fears.
First, as I have already said, the operation of the check-off is a choice that employers make. Any burden is therefore a voluntary one. All that we are requiring of employers is that they should ensure that they have written consent, renewed at intervals, to the making of the deductions, and that they should provide advance warning of an increase in those deductions. I should be surprised if any of those tasks

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require much in the way of additional effort from the majority of employers who operate a computerised payroll system.
If the employer wants the administrative assistance of the union, it is open to him to obtain it. More importantly, if the employer wants to charge the union for providing that service, that remains open to him. Many employers already charge unions for collecting their members' subscriptions on their behalf. Employers will continue to be free to charge unions for any additional administration involved in the proposals. If employers are concerned about possible tribunal cases where wrongful or excessive deductions are made, they will be free to ask the union concerned to indemnify them against any eventual financial consequences.
Employers can therefore protect themselves from any cost or the risk of any legal proceedings. However, they must take all the necessary steps to protect the interests of the employees from whom they make the deductions, and that must include the issuing of advance notices of increases. I hope that my noble friend will reflect on my remarks and withdraw the amendment.
Lord Mottistone: I hope that my noble friend will reflect on my remarks—that is much more important. The reply was most inadequate; it did not take up the points that I made.
The point at issue is that the employer is not responsible for the requirement of an increased subscription that is made by a union to one of its members. The union makes that decision.
It will be necessary to draft a new amendment. My noble friend did not reassure me at all. I hope that she and the Minister, who is more directly responsible, will look very carefully at how the relevant part of the Bill can be reworded to make it quite clear that an increased subscription is not the employer's responsibility, as the Bill appears to state.
I shall move further amendments that deal with the situation of making the employer more responsible for the union's responsibility than is reasonable. The fact that the employer may have more work to do is important. A check-off system has advantages for both sides, as everyone agrees—although it depends on the size of the company as to how helpful the system is. However, that is not a good argument for saying, "Because you are doing it voluntarily, you can do a lot more". That is what my noble friend Lady Denton appeared to be stating.
I do not think that this is an appropriate time to make an issue of the matter and take it to a Division. It would not be a good plan to do so because I am hoping to persuade the Minister that the situation should be altered.
In the meantime, I shall set to work to find another way of dealing with the matter and perhaps between us we can succeed. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Vipcount Goschen: I beg to move that the House be now resumed. In moving this Motion, I suggest that the Committee stage on the Bill be resumed again at 8 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Judicial Pensions and Retirement Bill [H.L.]
7.15 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(The Lord Chancellor.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
[References are to Bill [83] as first printed for the Commons.]
1 Clause 10, page 11, line 5, after 'provision' insert '(a)'.
2 Page 11, line 8 at end insert '; or
(b) imposing conditions with respect to the exercise by any such person of any entitlement (whether or not under paragraph (a) above) which he may have to make any such voluntary contributions.'.
3 Page 11, line 35, leave out from 'of', to end of line 37 and insert
'any authorised provider who is, or may he, concerned in the investment of the voluntary contributions or the provision of the additional benefits in question.'.
4 Page 12, line 8, after 'scheme' insert 'constituted by this Part'.
5 Page 12, line 14, at end insert:
'but paragraphs (c) and (d) above have effect only in relation to a voluntary contributions scheme constituted by or under this Part.'.
6 Page 12, line 27, leave out 'paid' and insert 'made'.
7 Page 12, line 29, after 'rights' insert '(i).
8 Page 12, line 31, at end insert 'or
(ii) under any voluntary contributions scheme which, on termination of his membership of that scheme, may fall to be transferred into another scheme;'.
9 Page 12, line 42, at end insert:
'(k) specify any authorised providers—

(i) who are to invest any prescribed voluntary contributions, or

(ii) who are to provide any prescribed additional benefits, and, if two or more authorised providers are so specified, may make provision entitling any person who makes prescribed payments by way of voluntary contributions to elect between those authorised providers.'.

10 Page 12, line 48, leave out from 'Parliament' to end of line 4 on page 13.
11 Page 13, line 15, at end insert:

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"'authorised provider", in relation to the investment of any sums paid by way of voluntary contributions or the provision of any benefit, means a person who is authorised under Chapter III of Part I of the Financial Services Act 1986 to invest those sums or, as the case may be, to provide that benefit;'.
12 Page 13, line 20, at end insert 'or, in relation to Northern Ireland, Article 2(2) of the Social Security Pensions (Northern Ireland) Order 1975;'.
13 Page 13, line 22, at end insert 'or, in relation to Northern Ireland, Article 2(2) of the Social Security (Northern Ireland) Order 1986;',
14 Page 13, line 40, leave out 'or personal'.
15 Page 13, line 43, at end insert:
'and, where a person's voluntary contributions are made by deduction from salary, any reference to payment of, or by way of, voluntary contributions shall be taken to include a reference to the making of voluntary contributions by deduction or, as the case may require, to any voluntary contributions so made.'.
16 Page 13, line 46, at end insert:
'(10) Without prejudice to subsections (5) (c) and (d) and (6) (a) above, they may be paid out of money provided by Parliament—

(a) any sums required for or in connection with the operation or administration of any prescribed voluntary contributions scheme;

(b) any administrative expenses incurred under or by virtue of this section by a Minister of the Crown or government department.

(11) Any sums received under this section may be paid into the Consolidated Fund.'.
The Lord Chancellor: I beg to move that the House do agree with the Commons in their Amendments Nos. 1 to 16 en bloc. The amendments to Clause 10 are purely technical. They are drafting and clarificatory amendments. They do not alter the substance of the clause and have no new policy implications. One of their main aims is to ensure that the clause provides in practice the necessary regulation-making powers to cover the 3 varieties of voluntary contribution scheme which will fall within its scope; the additional voluntary contributions scheme; free-standing additional voluntary contributions schemes; and the purchase of added years. In particular they are directed at making sure the powers are appropriate to regulate free-standing additional voluntary contribution schemes which the existing draft of the clause somewhat overlooks. Other amendments are designed to ensure that administration costs are charged on the appropriate central Government fund. The remainder serve purely stylistic and clarificatory purposes. Unless there are any detailed points on specific amendments, I move Amendments Nos. 1 to 16 en bloc.
Moved, That the House do agree with the Commons in their Amendments Nos. 1 to 16 en bloc.—(The Lord Chancellor.)
Baroness Mallalieu: My Lords, I am personally grateful to the noble and learned Lord the Lord Chancellor for his helpful note of explanation to the amendments which I was able to see before this evening. It has been of great assistance to those noble Lords who, like me, have been seeking to understand
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them, I accept that they are purely technical drafting and clarificatory amendments and as such they have our support.
Lord Meston: My Lords, we are grateful to the noble and learned Lord for his explanation and comments and we support the amendments.
On Question, Motion agreed to.
COMMONS AMENDMENT
17 Clause 11, page 14, line 4, leave out 'that' and insert:

'(i) any scheme established by regulations under section 10 above which may fall to be regarded as a judicial pension scheme; and

(ii) the scheme'.

The Lord Chancellor: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 17.
This is a technical amendment. The voluntary contribution schemes established under, or regulated by, Clause 10 will be (by virtue of the definition of 'judicial pensions schemes' in Clause 30) judicial pension schemes in their own right. Clause 11(1) (a) prohibits judges who are members of the new pension scheme from deriving pension benefits from more than one judicial pension scheme (except that they may also derive benefit from the top-up scheme established under Clause 19). The clause as drafted therefore appears to prevent a judge who joins the new scheme from earning pension benefits under a voluntary contribution scheme regulated by Clause 10. That is obviously not the Government's intention and the amendment rectifies this impression.
Moved, That the House do agree with the Commons in their Amendment No. 17).—(The Lord Chancellor.)
Baroness Mallalieu: My Lords, we support the amendment. It clearly does not reflect the intention of the Bill and we welcome the alteration.
On Question, Motion agreed to.
COMMONS AMENDMENTS
18 Clause 26, page 23, line 45, after 'order' insert
'(a)'.
19 Page 23, line 46, at end insert '; or
(b) amend subsection (8) above by adding offices to those for the time being specified in that subsection.'.
The Lord Chancellor: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 18 and 19 en bloc. These are technical drafting amendments which rectify an earlier oversight and will enable the appropriate Minister by order to add to the list of "one-off" posts in Clause 26(8) of the Bill as well as to the list of posts of an ongoing nature in Schedule 5.
Moved, That the House do agree with the Commons in their Amendments Nos. 18 and 19 en bloc.—(The Lord Chancellor.)
On Question, Motion agreed to.
COMMONS AMENDMENT
20 Clause 31, page 28, line 10, leave out subsection (8).
The Lord Chancellor: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 20. This amendment is to remove the standing 'privilege' amendment inserted by your Lordships at Third Reading.
Moved, That the House do agree with the Commons in their Amendment No. 20—(The Lord Chancellor.)
On Question, Motion agreed to.
COMMONS AMENDMENT
21 Schedule 2, page 31, line 43, at end insert:
"occupational pension scheme" has the meaning given by section 66(1) of the Social Security Pensions Act 1975 or, in relation to Northern Ireland, Article 2(2) of the Social Security Pensions (Northern Ireland) Order 1975;'.
"personal pension scheme" has the meaning given by section 84(1) of the Social Security Act 1986 or, in relation to Northern Ireland, Article 2(2) of the Social Security (Northern Ireland) Order 1986;'.
The Lord Chancellor: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 21. This technical amendment serves to define the terms "occupational pension scheme" and "personal pension scheme" as they are used in Schedule 2 which deals with the transfer of accrued pension benefits in and out of the new pension arrangements. The definitions follow those used in Clause 10.
Moved, That the House do agree with the Commons in their Amendment No. 21—(The Lord Chancellor.)
On Question, Motion agreed to.
COMMONS AMENDMENTS
22 Schedule 3, page 38, line 7, after '(1)' insert 'after the word "provision" there shall be inserted "(a)" and'.
23 Page 38, line 8, at end insert '; or
(b) imposing conditions with respect to the exercise by any such person of any entitlement (whether or not under paragraph (a) above) which he may have to make any such voluntary contributions.".'.
24 Page 38, line 34, leave out from 'of,' to end of line 36 and insert 'any authorised provider who is, or may be, concerned in the investment of the voluntary contributions or the provision of the additional benefits in question.".'.
25 Page 38, line 43, at end insert:
(4A) At the end of that subsection there shall be added the words—
"but paragraphs (c) and (d) above have effect only in relation to a voluntary contributions scheme constituted by or under this Act or the Sheriffs' Pensions (Scotland) Act 1961.".'.
26 Page 39, line 1, leave out 'paid' and insert 'made'.
27 Page 39, line 3, after 'rights' insert '(i)'.
28 Page 39, line 4, at end insert 'or
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(ii) under any voluntary contributions scheme which, on termination of his membership of that scheme, may fall to be transferred into another scheme;'.
29 Page 39, line 15, at end insert:
(k) specify any authorised providers—

(i) who are to invest any prescribed voluntary contributions, or

(ii) who are to provide any prescribed additional benefits, and if two or more authorised providers are so specified, may make provision entitling any person who makes prescribed payments by way of voluntary contributions to elect between those authorised providers.".'.

30 Page 39, line 24, leave out from 'Parliament' to end of line 28.
31 Page 39, line 42, at end insert:
"'authorised provider", in relation to the investment of any sums paid by way of voluntary contributions or the provision of any benefit, means a person who is authorised under Chapter III of Part I of the Financial Services Act 1986 to invest those sums or, as the case may be, to provide that benefit;'.
32 Page 39, line 50, at end insert 'or, in relation to Northern Ireland, Article 2(2) of the Social Security Pensions (Northern Ireland) Order 1975;'.
33 Page 40, line 2, at end insert 'or, in relation to Northern Ireland, Article 2(2) of the Social Security (Northern Ireland) Order 1986;'.
34 Page 40, line 23, leave out 'or personal'.
35 Page 40, line 26, at end insert:
'and, where a person's voluntary contributions are made by deduction from salary, any reference to payment of, or by way of, voluntary contributions shall be taken to include a reference to the making of voluntary contributions by deduction or, as the case may require, to any voluntary contributions so made.
(10) Without prejudice to subsections (3) (c) and (d) and (4A) (a) above, there may be paid out of money provided by Parliament—

(a) any sums required for or in connection with the operation or administration of any prescribed voluntary contributions scheme; or

(b) any administrative expenses incurred under or by virtue of this section by a Minister of the Crown or government department.

(11) Any sums received under this section may be paid into the Consolidated Fund.'.
36 Page 43, line 21, after '(1) insert 'after the word "provision" there shall be inserted "(a)" and'.
37 Page 43, line 22, at end insert '; or
(b) imposing conditions with respect to the exercise by any such person of any entitlement (whether or not under paragraph (a)) which he may have to make any such voluntary contributions.".'.
38 Page 43, line 48, leave out from 'of' to end of line 50 and insert 'any authorised provider who is, or may be, concerned in the investment of the voluntary contributions or the provision of the additional benefits in question.".'.
39 Page 44, line 7, at end insert:
(4A) At the end of that subsection there shall be added the words—

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"but paragraphs (c) and (d) have effect only in relation to a voluntary contributions scheme constituted by or under this Act.".'.
40 Page 44, line 18, leave out 'paid' and insert 'made'.
41 Page 44, line 20, after 'rights' insert '(i)'.
42 Page 44, line 22, at end insert 'or
(ii) under any voluntary contributions scheme which, on termination of his membership of that scheme, may fall to be transferred into another scheme;'.
43 Page 44, line 33, at end insert:
(j) specify any authorised providers—

(i) who are to invest any prescribed voluntary contributions, or

(ii) who are to provide any prescribed additional benefits, and, if two or more authorised providers are so specified, may make provision entitling any person who makes prescribed payments by way of voluntary contributions to elect between those authorised providers.".'.

44 Page 44, line 43, leave out from 'Kingdom' to end of line 48.
45 Page 45, line 7, at end insert:
"'authorised provider", in relation to the investment of any sums paid by way of voluntary contributions or the provision of any benefit, means a person who is authorised under Chapter III of Part I of the Financial Services Act 1986 to invest those sums or, as the case may be, to provide that benefit;'.
46 Page 45, line 38, leave out 'or personal'.
47 Page 45, line 41, at end insert:
and, where a persons voluntary contributions are made by deduction from salary, any reference to payment of, or by way of, voluntary contributions shall be taken to include a reference to the making of voluntary contributions by deduction, or as the case may require, to any voluntary contributions so made.
(8) Without prejudice to subsections (3) (c) and (d) and (4A) (a), there may be paid out of money provided by the Parliament of the United Kingdom—

(a) any sums required for or in connection with the operation or administration of any prescribed voluntary contributions scheme; or

(b) any administrative expenses incurred under or by virtue of this section by a Minister of the Crown or government department.

(9) Any sums received under this section may be paid into the Consolidated Fund of the United Kingdom.'.
The Lord Chancellor: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 22 to 47 en bloc. Schedule 3 makes minor and consequential amendments to the legislation governing the existing pensions arrangements for the judiciary. In particular it amends the Judicial Pensions Act 1981 to ensure that the provisions of that Act relating to additional voluntary contribution schemes (which have not yet been brought into force) are workable and can now be brought into force at the same time as the analogous provisions of this Bill. Amendments Nos. 22 to 47
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duplicate the amendments we have already agreed to Clause 10 of this Bill in respect of the existing pension arrangements.
Moved, That the House do agree with the Commons in their Amendments Nos. 22 to 47 en bloc.—(The Lord Chancellor.)
Baroness Mallalieu: My Lords, in supporting these amendments, I understand that if the Bill completes its final stages and receives Royal Assent, it is still unlikely that it will come into force before the end of 1993 because there would appear to be a great deal of work still to be done in relation to the regulations, much of it of an actuarial nature. In view of the welcome recent announcement by the noble and learned Lord the Lord Chancellor that there are likely to be further appointments to the High Court Bench in the near future, and which one hopes will take place before the end of 1993, it is clearly desirable that these provisions should be in force.
Perhaps I may add that, notwithstanding these amendments made in another place, many of us continue to have anxieties which were expressed by a number of noble and learned Lords at Second Reading of this Bill about the effects of certain of its provisions, in particular those in relation to recruitment and judicial staleness. We hope greatly that, notwithstanding these amendments, those fears will in time prove to be unfounded. We support the amendments.
Lord Renton: My Lords, I am glad to support these amendments. I have one minor query as regards two of them, and it is the same point in each. If noble Lords will look at Amendment No. 35, at the top of page 5, which is the new paragraph (11), it states:
"Any sums received under this section may be paid into the Consolidated Fund".
If we look at the final two lines of Amendment No. 47, we find the same provision. That puzzles me because either the sums have to be paid into the Consolidated Fund or not. If they are not paid into that fund, into which fund might they go?
The Lord Chancellor: My Lords, perhaps I may first say a word or two about the point raised by the noble Baroness, Lady Mallalieu. I am aware of the anxieties that were expressed. I have explained at some length our view of them. The provisions of Clause 10 and the amendments which have been made there, and also these amendments, are designed to deal with a situation which was brought to our attention; namely, the possibility that a person appointed to judicial office might not be able to take advantage, fully at least, of the retained benefits provision.
One of the reasons why the 1981 Act provision has not been brought into force is that the view of the Inland Revenue was that, by the nature of the judicial pension scheme, it was most unlikely that there would be any scope for additional contributions under that provision. In the course of discussions on this Bill, I was able to persuade the Inland Revenue that at least there might be some cases in which such a provision as this would be useful. In that situation the point which is dealt with in Clause 10 and subsequently, is an

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important addition to the reasons which were given at the very beginning of consideration of this Bill about what the situation was.
As regards the point on the Consolidated Fund, I believe that the reason for this provision is that sums under that section might be appropriately payable into either the Consolidated Fund or into the ordinary Vote Fund. It is necessary to have power to pay them into the Consolidated Fund. That is my understanding of the position, so the power is all that is required.
On Question, Motion agreed to.
COMMONS AMENDMENTS
48 Schedule 4, page 47, line 13, leave out 'and'.
49 Page 47, line 16, at end insert 'and
(d) for the purpose of determining, in the event of his death, the rate of any surviving spouse's or children's pension payable under sections 5 to 8 of that Act in respect of his service as Comptroller, as if references in those sections to the annual rate of the deceased's judicial pension were references—

(i) where a pension had commenced to be paid to him by virtue of subsection (5) above, to the appropriate annual rate of that pension; or

(ii) where no such pension had commenced to be paid to him, to the rate that would have been the appropriate annual rate of the pension payable to him by virtue of subsection (5) (b) above, had he not died, but been disabled by permanent infirmity for the performance of the duties of his office on and after the date of death;:

50 Page 47, line 19, leave out from 'sections' to end of line 20.
51 Page 50, line 19, leave out 'and'.
52 Page 50, line 22, at end insert 'and
(d) for the purpose of determining, in the event of his death, the rate of any surviving spouse's or children's pension payable under sections 5 to 8 of that Act in respect of his service as Commissioner, as if references in those sections to the annual rate of the deceased's judicial pension were references—

(i) where a pension had commenced to be paid to him by virtue of sub-paragraph (1) above, to the appropriate annual rate of that pension; or

(ii) where no such pension had commenced to be paid to him, to the rate that would have been the appropriate annual rate of the pension payable to him by virtue of sub-paragraph (1) (b) above, had he not died, but been disabled by permanent infirmity for the performance of the duties of his office on and after the date of death;'.

53 Page 50, line 25, leave out from 'sections' to '13' in line 26.
54 Page 53, line 15, leave out '107' and insert '91'.
55 Page 54, line 26, leave out 'and'.
56 Page 54, line 29, at end insert 'and
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(d) for the purpose of determining, in the event of his death, the rate of any surviving spouse's or children's pension payable under sections 5 to 8 of that Act in respect of his service as Comptroller and Auditor General, as if references in those sections to the annual rate of the deceased's judicial pension were references—

(i) where a pension had commenced to be paid to him by virtue of paragraph (4), to the appropriate annual rate of that pension; or

(ii) where no such pension had commenced to be paid to him, to the rate that would have been the appropriate annual rate of the pension payable to him by virtue of paragraph (4) (b), had he not died, but been disabled by permanent infirmity for the performance of the duties of his office on and after the date of death;'.

57 Page 54, line 32, leave out from 'sections' to '13' in line 33.
58 Page 57, line 26, leave out 'and'.
59 Page 57, line 29, at end insert 'and
(d) for the purpose of determining, in the event of his death, the rate of any surviving spouse's or children's pension payable under sections 5 to 8 of that Act in respect of his service as Commissioner, as if references in those sections to the annual rate of the deceased's judicial pension were references—

(i) where a pension had commenced to be paid to him by virtue of sub-paragraph (1), to the appropriate annual rate of that pension; or

(ii) where no such pension had commenced to be paid to him, to the rate that would have been the appropriate annual rate of the pension payable to him by virtue of sub-paragraph (1) (b), had he not died, but been disabled by permanent infirmity for the performance of the duties of his office on and after the date of death;.

60 Page 57, line 32, leave out from 'sections' to '13' in line 33.
The Lord Chancellor: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 48 to 60 en bloc. These are purely technical amendments. Schedule 4 permits the Comptroller and Auditor General (and the other senior public investigative officers listed in Clause 25) to elect under certain circumstances to join the new pension arrangements. However, the schedule, as drafted, does not contain the definitions necessary to enable surviving spouses' and children's pensions in respect of those officers to be calculated. The amendments rectify this by inserting definitions of the annual rate of an officer's pension at four different places in the schedule. It is by reference to the annual rate of an officer's pension that his or her spouse's or children's pension will be calculated. Amendment No. 54 corrects a reference to the National Health Service (Scotland) Act 1978.
Moved, That the House do agree with the Commons in their Amendments Nos. 48 to 60 en bloc.—(The Lord Chancellor.)
On Question, Motion agreed to.
COMMONS AMENDMENT
61 Schedule 8, page 88, line 22, after 'effect),' insert in paragraph 3,'.
The Lord Chancellor: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 61. This is a purely technical amendment which modifies a reference to the Administration of Justice Act 1973.
Moved, That the House do agree with the Commons in their Amendment No. 61.—(The Lord Chancellor.)
On Question, Motion agreed to.
COMMONS AMENDMENT
62 Page 89, line 21, leave out from 'words' to end of line 23 and insert "qualifying judicial office, within the meaning of the Judicial Pensions and Retirement Act 1993.".'.
The Lord Chancellor: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 62. This is another minor technical amendment. Paragraph 15 of Schedule 8 is a consequential amendment to Section 93 of the Supreme Court Act 1981. That section identifies the persons who are eligible for a judicial pension. The existing amendment identifies those persons listed in Schedule 1 to this Bill as being eligible for a judicial pension. However, only those persons who hold offices listed in Schedule 1 on a salaried basis are to be eligible for a judicial pension under the new arrangements. Amendment No. 62, therefore, refines the existing amendment to Section 93 of the 1981 Act to refer to "qualifying judicial office", a term the use of which in this Bill is limited to salaried office holders who are eligible for a judicial pension.
Moved, That the House do agree with the Commons in their Amendment No. 62.—(The Lord Chancellor.)
On Question, Motion agreed to.

Child Support Appeals (Jurisdiction of Courts) Order 1993
7.28 p.m.
The Lord Chancellor The Lord Chancellor rose to move, That the draft order laid before the House on 8th March be approved [23rd Report from the Joint Committee].
The noble and learned Lord said: My Lords, the Motion before the House is one of a number of orders made under the Child Support Act 1991 which comes into force on 5th April this year for some purposes. It is made in accordance with powers conferred on my noble and learned friend the Lord Advocate and me by Section 45 of that Act. Those powers allow me to make provision for appeals or alternatively a certain class of appeals, to be dealt with in a particular way.
In general, an appeal against a review by a child support officer will be heard by a child support appeal tribunal. It is envisaged that the tribunals will be able to handle the majority of appeals quickly and
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efficiently. It is expected that they will soon develop expertise in this specialist area of work. However, a case which involves disputed parentage falls into a category of fundamental importance. In the circumstances, it is more appropriate that the matter is determined by a court. That is the policy of the main provisions of the Bill as it was enacted. However, in order to make absolutely sure that appeals raising this issue are dealt with in that way, the order has been proposed in draft to your Lordships.
Articles 3 to 5 provide accordingly for England and Wales, and for Scotland, both for appeals against reviews and for appeals against refusals of applications for reviews. As a consequence, Articles 6 and 7 make consequential amendments to Section 20(2) to (4) of the Act. Article 8 contains a consequential amendment to Section 8 of the Law Reform (Parent and Child) (Scotland) Act 1986, which contains a definition of "action of declarator".
My noble and learned friend the Lord Advocate concurs in seeking approval of the order in so far as it relates to Scotland. I commend it to the House.
Moved, That the draft order laid before the House on 8th March be approved [23rd Report from the Joint Committee]. —(The Lord Chancellor.)
Baroness Mallalieu: My Lords, the draft order has the support of this side of the House. While we believe that it is generally undesirable that questions of child support should be settled in the formal surroundings of a court in which some appellants may be inhibited by the prospect of appealing to a court of law, where the question at issue is a child's parentage the rights and liabilities at stake are sufficiently fundamental and important that we believe they justify an appeal to a court.
This order, which provides that an appeal under Section 20 of the 1991 Act shall be made to a court instead of to a child support tribunal in such cases, seems good sense and has our approval.
Lord Meston: My Lords, I thank the noble and learned Lord for his explanation of the order. Generally speaking, this House is alert to prevent or curtail powers allowing for the modification of primary legislation by orders or by other secondary legislation. However, since the noble and learned Lord, Lord Simon of Glaisdale, is not in his place, I suspect that the order is unobjectionable.
In this case, the power under Section 45 of the Act is used to move certain appeals from the tribunals to the courts. Without wanting to refight the battles of 1991 when the Act was a Bill, we feel that the move in this order from the tribunals to the courts is a move in the right direction. I suspect that in reality very few appeals will get that far. Modern DNA profiling techniques have taken most of the "fun" out of paternity disputes; but I suppose that there may be some arcane questions of parentage which may need to reach the court for guidance. I ask whether legal aid will be available for such appeals, subject of course to their merits being assessed.
Practitioners are now waiting for next month when the Act comes fully into operation. We are waiting with suspended judgment and with admirable (if

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rather costly) computer software. We have been provided by the department with excellent guidance booklets which reduce the ghastly formulae to something comprehensible. I seriously hope that those responsible for the "Plain English" awards will look at those booklets because, given the complexity of the legislation and the regulations, they are remarkably good.
I hope that the order is not to be the only use to be made of the courts instead of the tribunals. It seems to many of us that a fundamental problem in the working of the Act will be that of financial non-disclosure by parents whose finances are not straightforward. Practitioners know how difficult it can be to penetrate the underlying financial realities of self-employed people with skilfully drawn accounts or with no reliable accounts at all. They are often people who manage to show a healthy loss in their business accounts but who are unable to conceal a high standard of living. Frankly, we doubt how much time or expertise the agency will have to discover the realities of such cases. The family courts already have the expertise (as well as the powers) to obtain proper disclosure. I hope that that will not be altogether lost.
I venture to suggest that consideration should be given to the use of the courts for appeals where at least the ground of appeal is major non-disclosure of finances. The alternative is that appeals will go to the tribunals which, as I understand it, expect to be heavily burdened with appeals. Legal aid is not available. There is no power to award costs—only a power to award expenses out of public funds. There is no power to direct questionnaires, as I understand it —questionnaires being a common device in financial proceedings in the courts. It would be quite unreal to expect a partially-informed mother (in the typical case) to cross-examine a father as to his means.
Practitioners feel that dealing effectively with inadequate disclosures may well be a fundamental problem in the working of the Act. I suggest that there will be a category of appeals in such cases that should be allocated to the courts under this power. In so doing, the burden on the tribunals will be reduced in what would otherwise be inevitably long appeals. The tribunals themselves will be able to sustain the confidence to which they should expect to be entitled and they will have the ability to deal swiftly with other appeals.
Lord Renton: My Lords, although of Scottish ancestry the noble Lord, Lord Meston, has a much respected and successful practice in our Family Division in England. I agree with most of what he said.
Parliament has always been very jealous in taking upon itself the responsibility of deciding what jurisdiction each court and any statutory tribunal shall have. Until this matter arose, I did not know that powers had been taken under Scottish law for the courts in Scotland to come into the picture. Normally, I would have been alarmed at the prospect of primary legislation not being the method by which that is done. It is being done by secondary legislation. However, as the noble Lord, Lord Meston, said, to some extent this is a welcome move for the reasons which my noble and
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learned friend has given, and for other reasons which the noble Lord has given. Therefore, speaking for myself, I do not propose to divide the House on this order —to do so would be contrary to our custom, anyway. However, I do think that we should normally bear in mind that it is the responsibility of Parliament to decide the jurisdiction of every court and every tribunal.
The Lord Chancellor: My Lords, I am grateful for the support that my Motion has attracted from all of your Lordships who have spoken. For appeals to the court, legal aid will be available on the usual conditions to be effective after this Act comes into force.
On the point raised by the noble Lord, Lord Meston, the tribunal is given considerable powers. The important thing about the Child Support Agency is that it will have considerable investigative powers in relation to income. The noble Lord perhaps doubts the nature of the expertise available, but I am sure that that is something that can be developed, and your Lordships may take it that my noble and learned friend the Lord Advocate and I will wish to see how that develops. It is a new system, and one in which considerable emphasis is placed on obtaining the money. The noble Lord, Lord Meston, and others of your Lordships who practise in this field, will know that one of the complaints about the present system is that having obtained an order, it is not a great deal of use until one receives the money. Sometimes it is difficult to obtain the money.
I hope that the Child Support Agency will be effective in recovering money which a parent is obliged to pay. We have proposed this system in the light of the general policy of the Act itself. Parentage questions should be for the courts. I hope that the rest of the scheme will work as was expected when the Bill was being considered by your Lordships. However, I shall keep its working under review, especially with respect to the point of view to which the noble Lord, Lord Meston, has directed attention. I commend the order to the House.
On Question, Motion agreed to.
The Earl of Strathmore and Kinghorne: My Lords, I beg to move that the House do adjourn during pleasure until eight o'clock.
Moved, accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.41 to 8 p.m.]

Trade Union Reform and Employment Rights Bill
House again in Committee on Clause 14.
Lord McCarthy Lord McCarthy moved Amendment No. 55:
Page 28, line 14, after ("withdraw") insert ("or renew").
The noble Lord said: This is a minor, tiny amendment that befits this time of night. Under the Bill the individual member must be informed with appropriate notice in writing of a proposed increase in subscriptions. He must agree to renew at the new rate

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and he must be told that he can withdraw from the check-off arrangement at that time or, as is stated in the Bill, "at any time".
Our amendment desires merely to establish a balance of information. We believe that the legislation should state not only that the member can withdraw but also that he can renew. It should state that he can withdraw at any time or renew at any time. It is a small balancing act. I beg to move.
Baroness Denton of Wakefield: I understand the argument put forward by the noble Lord but I suggest that the amendment is unnecessary. At the moment the law does not give an individual any right to withdraw from check-off arrangements except where he or she resigns his union membership. Clause 14 will provide individual trade union members with the right to withdraw from check-off at any time. There is no equivalent statutory right to pay union subscriptions by this method, nor have we any intention of introducing one. Check-off arrangements, quite rightly, are a matter of voluntary agreement. The amendment, therefore, serves no practical purpose. As no right to pay trade union subscriptions through the check-off exists it is a nonsense to remind people of a "right" to renew their consent.
The holding of an authorisation from a worker by an employer does not mean that the employer must operate check-off arrangements. Unless he has entered into a contract to the contrary the employer remains free to withdraw check-off arrangements at any time. If a renewed authority were to be submitted to an employer it would no more place any obligation on the employer to continue operating check-off arrangements than an existing authority. I hope, therefore, that the noble Lord will not press the amendment.
Lord McCarthy: I find it difficult to follow the argument. Perhaps it would help if we did not use the word "renew" but used the word "continue". Surely that would be a statement of the fact that the individual member could withdraw or continue. It would be a description of the situation that existed. The Minister has become involved in whether there is a right to renew or withdraw. Surely there must be a right to continue, so would the Government feel any different if we were to use such a word?
Baroness Denton of Wakefield: It would not change the issue. It would not place an obligation on an employer to continue to operate the check-off arrangements. It would be misleading because there is no statutory obligation on the employer.
Lord McCarthy: I still do not understand. What is the statutory obligation on which the employer leans in order to continue? If the member receives a notice informing him that he can withdraw but he does not do so, the check-off continues. Presumably that is perfectly lawful so why cannot they be told that it is lawful to continue?
Baroness Denton of Wakefield: I am saying that the right to withdraw is the privilege of the individual. The arrangement with the employer and the union on check-off is voluntary.
Baroness Turner of Camden: I do not understand. Surely the individual has the right to renew or not to renew. He is simply told that he has that right. I cannot understand why the Minister should believe that it is not voluntary because he is given the opportunity to renew or not to renew.
Baroness Denton of Wakefield: I am sorry if my reply is not clear. I am trying to explain that because the right of the employer to participate in check-off is voluntary were he to offer the right to renew or to continue the employer could make a decision separate to that.
Lord Wedderburn of Charlton: Would not my noble friends help the Government more if they said that when the worker is told that he can withdraw rather than renew or withdraw he is more likely to withdraw?
Baroness Denton of Wakefield: I appreciate the noble Lord's attempt to be helpful. Again I stress that that arrangement is with the individual.
Lord McCarthy: Would the Minister allow us to state that the individual member could decide to withdraw or not to withdraw? Would that be acceptable?
Baroness Denton of Wakefield: We would not think that that brought anything to the clause.
Lord McCarthy: All the same, we shall try to bring it to the clause on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 56 to 59 not moved.]
On Question, Whether Clause 14 shall stand part of the Bill?
Baroness Turner of Camden: I wish to put a few remarks on the record. In my view the clause is totally unnecessary and quite vindictive. It requires that no deduction should be made from pay for the purpose of union subscriptions without individual written authorisation. No one disagrees with that. As I said on Second Reading, my own union operates check-off arrangements with employers and has always done so on the basis of signed individual authorisation from members. Even so, there are members who would prefer not to have their subscriptions deducted in that way. Usually the reasons is that they do not want the employer to know that they are union members. Arrangements are then made for them to pay direct to the union. That is in order and I was surprised to learn tonight that the noble Baroness, Lady Denton, believes that if an individual opts out of check-off he or she automatically opts out of union membership. That is not my experience.
Check-off arrangements have developed on the basis that they would be of benefit to both employers and the unions. Employers did not want people going around collecting subscriptions and unions welcomed

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the opportunity to be relieved of the administrative problems of keeping tabs on collectors and finding new collectors when others gave up.
We have absolutely no objection at all to securing written individual authorisations. What is so outrageous about the proposition contained in the Bill is that there must be a three-yearly check. I see no reason—this has been said by my noble friends in debate—why that should be done for trade union subscriptions and not for other deductions such as deductions for charities or welfare facilities which are quite common in some establishments.
The Government seem to believe that there is some kind of individual right here. I must say that it does not seem to be perceived as that by individual union members. I recently received an extremely irate letter from a NALGO member who was querying that provision in the Bill. He said that he pays to a number of other organisations—charities and a welfare club —through check-off and he queried, as I have done, why the Government have decided to interfere in the arrangements that he had made with his union and his employer. It is clear that he does not regard this as being provided with an extra right. He believes that the Government are interfering with his right to make an on-going arrangement to have the deductions made.
There is an apparent requirement hidden away in the schedule, to which we shall come later, which appears to stipulate that unions and employers have one year from the passage of the Bill to collect fresh authorisations and they have to do that again three years later. That is quite an horrendous requirement. There are about 6.5 million employees currently paying by check-off from whom authorisations will have to be obtained, even if they have only recently given them. It is no wonder that employers are unhappy about this proposition. Why are the Government doing this? Nothing that the noble Baroness has said this evening convinces me that there is a justifiable case for it.
There seems to be nothing in the way of defalcations, fraud or legal cases that have led them to that conclusion. Indeed, the cases quoted by the noble Baroness were all cases which would occur even with the three-year check-off because as far as I can see, fraud was committed by individual employers.
I can only hope that if the Government persist with this and it reaches the statute book as they intend, it will have the reverse effect from that which they desire. I can well remember legislation about the political fund and the requirement that all unions should ballot their members on whether or not they should have a political fund. The media gurus prophesied that my own union would almost certainly lose its political fund. It was believed that our members would vote almost unanimously against having a political fund. Instead, the union had perforce to campaign to keep its fund and did so very successfully. Not only did the ballot go overwhelmingly in favour of keeping the fund, but we ended up with more people paying the political levy than we had had previously.
The Government underestimate the degree to which their constant sniping at unions is resented. It
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may well be that as a result of this legislation, if it becomes effective, the result will be to increase union membership rather than the reverse because the unions will have to campaign to ensure that their members maintain check-off. That is not what the Government intend but it would be a just outcome. However, that is speculation. As it stands, the clause is unnecessary. It is an administrative burden on employers and unions alike. No case has been made out for it and I do not think that it should stand part of the Bill.
8.15 p.m.
Baroness Denton of Wakefield: The provisions of Clause 14 have been discussed at some length. The main issues have already been fully aired and I do not therefore intend to delay your Lordships' consideration of other important clauses in the Bill by simply repeating the many arguments that we have already heard.
This clause will ensure that all employees enjoy, as a legal right, the protection which many employees already enjoy as a matter of good practice. It will also give individual trade union members the legal right to withdraw from check-off arrangements at any time without resigning their union membership.
The clause further provides that individual consent to check-off must be reaffirmed at intervals not exceeding three years. It has been argued that such a provision is unnecessary. I do not accept those arguments.
Taken as a whole the provisions of Clause 14 will provide individual trade union members with valuable new rights and will provide a remedy if these rights are not upheld. I urge the Committee to support the Motion that this clause stand part of the Bill.
Baroness Turner of Camden: It is not my intention to press this matter to a vote. Therefore, we shall not press our opposition to a Division. On the other hand, I am grateful to have had the opportunity to place on record the Opposition's grave anxieties about this clause. I have no doubt that we shall return to the matter with other amendments on Report.
On Question, Clause 14 agreed to.
Clause 15 [Extension of right not to be unjustifiably disciplined]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 60:
Page 30, line 18, at end insert ("provided that the activities so undertaken could not be held to be damaging to the best interests of the union and its members." ").
The noble Baroness said: This amendment is intended to insert into the Bill a provision that an individual could be dealt with under disciplinary rules if the activities undertaken by the individual were damaging to the best interests of the union and its members.
I read carefully the Committee stage proceedings in the other place. It seemed to be accepted by the Government that if an individual undertook an activity which was really damaging to the union, he could be dealt with under disciplinary rules. There are instances of individuals deliberately infiltrating trade

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unions in order to be as damaging as possible. There are even organisations specialising in such activities. Sometimes they will provide funding and general support for such people.
In the Commons it was asked whether, if it could be shown that an individual had joined a union simply to undermine it and if it could be proved that that is what was done, that would be grounds for disciplinary action, even expulsion. The Minister's reply on behalf of the Government on that occasion was in the affirmative.
There are instances which arise when individuals —and we know this happens—are found to be guilty of racial or sexual harassment of other members. I have already raised that briefly in our discussions on earlier amendments. Surely if the union continues to countenance that kind of activity on the part of individual members without doing anything about it, it is clearly damaging to the general interests of the members and places the union in an entirely wrong and very bad light.
There should be provision in the Bill for that kind of action to be dealt with under disciplinary procedures. That is what Amendment No. 60 provides. We are seeking to write into the Bill what we understand has already been conceded by the Government in the other place as being correct and proper use of union disciplinary rules. I beg to move.
Viscount Ullswater: I am grateful to the noble Baroness for explaining the purpose of the amendment but I find it unacceptable because I believe that it undermines the provision in the clause which it seeks to amend.
The Government have introduced many reforms aimed at improving and enhancing the rights of ordinary trade union members. Some of these rights enable the individual member to require certain action of his union; for example, he is entitled to a copy of the scrutineer's report on a union ballot on request; under the new provisions in Clause 9, he may request an additional copy of the statement of the union's financial affairs.
It is important that the individual can exercise any such rights free from the threat of union discipline for so doing. New paragraph (j) of this clause ensures that the individual has this protection.
The amendment proposes that such protection will not apply when the statutory obligation which the union is required to fulfil is against the best interests of the union and its members. How can a statutory requirement be against the interests of those whom it is designed to protect? We surely cannot introduce rights to protect the interests of union members and then allow their ability to exercise those rights to be undermined by the fear that they may be disciplined if they do.
It may be that the concerns underlying this amendment are the same as those expressed in Committee in another place: that is, that the provisions will protect a union member whose conduct genuinely is against the interests of the union; for example, if an individual joins a union and then proceeds to attempt to undermine its members from
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the inside, possibly with the intention of persuading them to join another union of which he is also a member. Concern was expressed that the union might be prevented from disciplining him because of paragraph (g), which prevents discipline on the ground of membership of another union.
Let me reassure the Committee on this point. In that example the conduct is certainly not mere union membership, and is therefore not covered by that subsection. Similarly, any other conduct that is not covered specifically by the other unjustifiable provisions may lawfully be invoked by a union wishing to apply its disciplinary procedures. I hope that will reassure the noble Baroness and that she will be persuaded to withdraw the amendment.
Lord Stoddart of Swindon: I really must spend a couple of minutes on this amendment, which I support. Just exactly what sort of people do the Government think trade unionists are? This clause seeks to show trade unionists as thugs and bullies and as people who intimidate their colleagues at work and elsewhere when the opposite is the truth. People join trade unions in order that they can work together for their common good. In my experience the sort of people who are being legislated for in this clause simply do not exist.
I cannot understand why the Government have to regulate voluntary organisations—that is what these organisations are—in such a tight way. In any event, if any trade unionist behaved in the way that is being suggested in this clause he could be guilty of criminal offences. He could be guilty of conspiracy, intimidation and of a host of offences. Why on earth must we have special regulations and special statutes to regulate the activities of people who simply work together to protect their own interests? The trade union movement which the Government have in mind exists only in their own imagination and not in practice.
Viscount Ullswater: Section 65 of the 1992 Act has proved to be useful because it provides for members of trade unions not to be unjustifiably disciplined. This clause adds another few measures to the provisions of Section 65. They are quite justifiable.
Lord Stoddart of Swindon: That is precisely what I am saying. Various Acts have placed further burdens on trade unions and have regulated them as no other voluntary organisation is regulated. Here we have five further regulations to govern their conduct. In virtually every case that I know of, the conduct of trade unions has been reasonable and often exemplary.
Baroness Turner of Camden: I welcome the assurances given by the Minister that the type of activity to which I referred when moving the amendment will be regarded as the type of activity which could be dealt with under the disciplinary rules of unions. If I may say so, that is similar to the kind of assurances that were given in another place, and I welcome them. I have tabled the amendment because although we welcome the Government's assurances, given here and in another place, they are not in the

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Bill. It is because they are not in the Bill, and therefore it could be assumed that certain types of activity would not be capable of being dealt with through disciplinary rules, that we decided to table this amendment.
There is, of course, no point in pressing the amendment at this late hour in the Committee proceedings this evening. While I welcome the assurance we have been given, I would feel happier if there were an assurance on the face of the Bill so that unions would be aware that in the kind of cases I have mentioned they were free to utilise their disciplinary procedures. However, having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 61:
Page 30, line 18, at end insert:
("(1A) After subsection (2) of section 65, there shall be inserted—
"(2A) Paragraphs (a) and (b) shall not apply where the strike or other industrial action complies with section 219 to 235 of this Act.".").
The noble Lord said: I am moving this amendment for one reason—to have the Government's response to it on the record. We are discussing the position where a union may not use its lawful rules in order to discipline a member who opposed and refused to conform to the decision taken within the union on a strike which was completely lawful and complied with Sections 219 to 235 of the legislation. I seek to ascertain that in that situation the union would have the right to operate its rules without the threat of actions for compensation.
I know we have discussed this matter on previous occasions and in a sense it reappears in the next amendment. I wish to comment on two matters that the Minister has just referred to as they are relevant to the amendment. First, he said that Section 65 has proved useful in many cases. Will he mention those cases? Secondly—this is the case with all Members of the Government—he took the matter out of the realm of fact or history when he asked how statutory provisions can be against the interests of the members. I hope I have written down his words correctly. With great respect to the Minister, I must inform him that those are the words of Big Brother. I am sure the Minister will not like being referred to in that way. It is claimed that once a provision is enshrined in statute it cannot be against the interests of members. That is the philosophy of Section 65. To extend that philosophy is a serious matter.
In moving this amendment I seek to ensure that a union that is taking action within its lawful rules in the area of lawful strikes or industrial action may be permitted to operate those rules to the full and will not be under the threat of the provisions of Section 65. I beg to move.
Viscount Ullswater: It seems to me that the Opposition sometimes appear to claim that they accept many of this Government's reforms of industrial relations and trade union law that have been passed since 1979, but amendments such as this
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confirm that they remain steadfast in their resistance to some of the important rights and protections which we have given trade union members.
In simple terms, this amendment seeks to restore the unions' freedom to discipline, with impunity, members who decide that they wish to honour their contract of employment and not take part in industrial action. In direct terms, unions are to have some of the freedom they enjoyed before our Employment Act 1988 so that they can, once again, have a free hand to force individual members who would otherwise prefer to keep working, or to cross picket lines, not to do so. As such, we find it unacceptable.
Baroness Seear: I am sorry to interrupt the Minister. I realise that, in a way, we are going back in history, but he refuses to allow the unions the right to discipline members who continue to work after strike action, that action having been taken after a legally required and legally applied ballot. If the result of the ballot is a decision not to strike, I take it the Government would be only too pleased if the unions disciplined people who did strike. If the Minister accepts that, how can he possibly deny that unions should also have the right to discipline people who, when the ballot is in favour of a strike, refuse to go on strike? The Minister cannot have it both ways.
Viscount Ullswater: This is what one might call a triangular argument. The employer and employee have a contract between them. The trade union is provoking the breaking of that contract. If it does so in an organised way the union can have immunity from the law. What we are doing and what we have done is to make certain that those who wish to honour their contract can continue to do so. Those who, having taken steps, quite properly, wish to indulge in some industrial action then they effectively break their contract. That is the state of the law at present.
8.30 p.m.
Lord McCarthy: Will the noble Viscount admit, at half past eight at night, that, because of what he has just said, so far as concerns the individual worker in this country there is no right to strike and the penalty for striking is dismissal on the basis of breach of contract? Is that the position?
Viscount Ullswater: I did not go as far as to say that. The noble Lord puts into my mouth words that I did not say. However, the individual employee certainly has the opportunity to honour his contract and of not being unjustifiably disciplined by his union. That is what we are talking about with the amendment.
Baroness Seear: Then what is the point of allowing a ballot in any case because the Government will say that the result of the ballot can only be applied if the action is in line with what the Government want and not what the ballot has shown?
Viscount Ullswater: I am not certain that I can follow that argument of the noble Baroness. As I said, we regard it as unjustifiable for a union to impose a disciplinary penalty on a member who has decided

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that he would rather honour his contract of employment and continue to work or to cross a picket line rather than take part in industrial action. It is neither here nor there why the individual has reached such a decision. The point is that he should be free to do so without the fear that he could be left defenceless if his union tries to coerce him into joining the action or refusing to cross a picket line by imposing some form of penalty upon him.
The amendment is also unacceptable because it introduces what would be both a novel and unfortunate confusion between the law which can protect the organiser of industrial action and the situation of the individual who takes part in such action.
A worker who takes industrial action chooses to break his contract of employment, or otherwise seeks to bring pressure to bear on his employer. Our law gives all employees complete freedom to take such action. To some extent the law constrains an employer's freedom to respond but it leaves him with sufficient means to do so. That is as it should be.
The amendment would mean that where a union had the protection of the statutory immunities for organising industrial action it would also have complete freedom to discipline members who did not want to take part in the action. That is so much the better for the unions but so much the worse for those individual members. The members may feel that in the particular circumstances they wish to honour their obligations to their employer, or they may feel that they do not wish to risk the loss of pay or even dismissal which could follow from their taking part in the action. The amendment, if accepted, would put them back in the situation which applied before 1988. It would leave them at the mercy of disciplinary action by their union, designed to punish them for being loyal to their employer, or to their own best interests as they see them.
I expect that the noble Lord will not accept my argument. I hope, however, that he will appreciate that on this matter our policy is clear and that he will withdraw the amendment.
Lord Wedderburn of Charlton: I am grateful to the Minister. It is not so much his argument that I find displeasing as his grounds for it, especially the factual grounds. For example, we shall come later to the question of breach of contract in industrial action. I merely say now that we are in a massive minority among labour law systems in advanced countries in regarding the worker who leaves his employment in lawful industrial action as breaking his contract. I hesitate to say it, but I feel that the Minister has not been well advised on this matter.
Simply to repeat English common law, on the basis of what was said in 1825 or thereabouts, which still says that the worker who leaves his post on any occasion whatever without permission is in breach of contract, even a lawful strike, is labour law of an antiquarian character. We shall debate that issue later. That argument reveals that, if the individual employee is not protected in some way—and I believe that one
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of the best ways is to act collectively through a trade union—very often he is in a position in which he lacks power in making what we lawyers call a contract.
It is no good referring to what individual contracts say. We are concerned with the justice of the position. It seems totally unjust. I suggest that my noble friends use the phrase "the majority of members" instead of "union" because that is the issue. The majority have used all the devices that legislation puts before them, leapt across all the hurdles with ballots and have ensured that their rules are lawful. The Minister does not seem to understand that the clause does not make the rules unlawful. The Government dare not do that, for various reasons. The clause simply imposes compensation if unions apply what the Government regard as terrible and unjustified discipline.
The union can look at its rules and ensure that they are lawful. It can do everything that is required of it in calling a strike. One of the rules may say that if someone continues to object to union policy, which is lawful, for a specified period a penalty can be imposed. Every association in the world does so. The Government, however, say that that cannot be the case because the employee may have to cross a picket line, even though the picket line is lawful. The individual is perfectly free not to strike, just as the union is free to say that the majority of its members no longer wish to associate with that individual member.
I repeat that Lord Diplock, in an appeal case in 1983, said that freedom of association must be mutual. Lord Diplock was no Bolshevik, but he saw very clearly the character of freedom of association, which the Government are now infringing at every turn.
We shall return to these matters, but it is worth getting the Government's reply on paper each time. I know that it will not change, but let us say for once just what the position is instead of sometimes, as in the past, passing over some of the measures that the Government have placed on the statute book. To reject the amendment is a very serious step which one day the Government may regret. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 62:
After Clause 15, insert the following new clause:
("Annual report
.The Secretary of State shall publish an annual report setting out the reports or other documents relevant to the law relating to freedom of association and other provisions affecting trade unions in the United Kingdom published by bodies whose international instruments the United Kingdom has adopted or ratified, including the Council of Europe and the International Labour Organisation, together with the United Kingdom's replies to such documents or bodies.").
The noble Lord said: The amendment covers similar ground to the previous amendment. I shall not try to put forward propositions which would find agreement from the Minister about where we stand in respect of each of the important international instruments in the world of labour relations. I took it earlier that the Minister agrees that they are important.
Primarily, those instruments are the Council of Europe Social Charter of 1961 and the ILO conventions, especially Conventions 87 and 98. I leave aside European Community sources because I do not believe that they fall into the same category.
This may be a point which is common ground. One of the reasons why students and others study international instruments of the kind I have described less in this country is that those international instruments, such as the ILO conventions, do not enter into our laws, even theoretically, merely on being ratified. They enter into our law only if we pass a statute admitting them to the positive rubrics. It is perhaps for that reason, and because in most continental jurisdictions when the conventions are ratified they automatically enter, at least theoretically and often more than theoretically, into local law, that we are regarded as very odd in that respect. Perhaps that is one of the reasons why people have not studied the ILO conventions, the Council of Europe documents and other similar documents sufficiently in the past.
The position has begun to change in the past five to 10 years. There has been a growing interest in those documents, partly because many people, including many Members of this Chamber, have taken a special interest in the European Convention on Human Rights which, in Article 11, deals with the right of association. Whereas the European Convention on Human Rights is angled towards individual rights, understandably the Council of Europe social charter is angled towards collective rights; and similarly so is the ILO.
The clause provides that the Government publish a document, perhaps annually or at whatever suitable period, outlining where we stand. The Government cannot have much objection to doing that because they have to do so for the Commission in the Community. The Government published their first contribution in the recent document, No. 511, for the Commission setting out how we were progressing a year after the Social Charter of the Community. However, I do not speak on that today. The document would be a parallel type of document stating our progress in respect of international standards. It does not commit the Government to anything. It saves a little time by setting out the arguments and indicating where we stand.
I give one example. Today we have already today encountered a difficulty. I am aware that the Government have already put forward replies after the 1992 report to the committee of experts. I am also aware that the current practice of the United Kingdom Government and experts is not to publish them until the experts publish their report. I apprehend that that is not true of all governments and that experts are willing to have some parts published previously.
Taking that example, I should like to have before us a document which indicates in a couple of pages the arguments between the Government and the experts on Section 65 of the 1992 legislation. It would save time. I do not seek to pull a fast one on the
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Government. That procedure would test the arguments both ways. It would be useful to have the material before us. At present that is not always the case.
I believe that such a publication would contribute to a greater transparency and publicity for those international instruments which are of considerable importance in the world in which we live when the position of large numbers of working people is less secure than it has ever been, more difficult and more deserving of fundamental human rights, of which those documents from the European conventions through to the ILO comprise. I beg to move.
Baroness Turner of Camden: I rise to support the amendment which requires the Secretary of State to publish an annual report setting out reports or other documents affecting workers and unions in the UK, published by the ILO and the Council of Europe.
Plainly it is an excellent idea. On this side of the Chamber we have often claimed—I believe that we are right —that the Government are in breach, at least in spirit, of ILO conventions. My noble friend thinks that they go beyond that; I am sure he is right about that, too. The Government may insist that that is not so even though the ILO committee of experts has condemned the UK's legislation on at least nine counts to my knowledge as being in breach of ILO Convention 87 which gives the right to organise and for unions to draw up their own rules and constitutions free of state interference. The convention also includes the right to take industrial action. The UK has ratified the convention.
It would be useful for Parliament to know what the ILO thinks about legislation introduced on industrial relations. I see no reason why an annual report should not be made. Why should not people, in particular Parliament, know about ILO conventions and about the ILO's reaction to industrial relations legislation in this country? Unfortunately, very little publicity is given to ILO declarations and very few people know about the rights which are enshrined in those conventions. There has to be a level of parliamentary accountability in that area. For those reasons, I support the amendment.
8.45 p.m.
Viscount Ullswater: I have listened with interest to the points which the noble Lord and the noble Baroness have put forward on the amendments. However, as they will anticipate, I believe the amendment to be unnecessary.
The amendment would add a new clause to the Bill requiring that the Secretary of State publish an annual report setting out the reports or other documents on all provisions affecting trade unions in this country. That means not just on the law relating to freedom of association, but on all provisions affecting trade unions which issue from such international bodies as the ILO and Council of Europe, whose instruments the UK Government have ratified or adopted, together with the UK Government's replies to those reports or other documents.

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Perhaps I may begin by once again refuting the noble Lord's allegations that the Government's legislation somehow represents an erosion of rights in this country. On the contrary our previous legislation, and the Bill now before us, is all about reinforcing rights and protections: the rights and protections of working people, of individual trade union members, of members of the public, of employers.
We are not doing anything underhand in this. The Government have proceeded openly, in full public view, and the electorate's verdict on term after successive term reflects the wide degree of support that its policies on those matters command.
Secondly, I should make clear that the Government entirely recognise the importance of our international commitments. I can assure the noble Lord that we do take very seriously indeed the obligations we have entered into under ILO conventions which we have ratified and articles of the European social charter which we have adopted. But unlike the noble Baroness, Lady Turner, we firmly believe that nothing in its legislation or practice deviates in any way from our commitments under those instruments. We consider every instrument scrupulously before we ratify or adopt it, so that we can be quite sure we are wholly in compliance. We set the highest store by the rule of law at national and international level and are always at pains to comply with all the requirements of international bodies.
Quite contrary to the impression given by the noble Lord, the ILO has not "condemned" us for having legislation which provides remedies for union members who are subject to unjustifiable discipline by their union or which allows employers to respond to those who choose to take industrial action against them. Where ILO committees, such as the committee of experts or the committee on freedom of association, have made observations on aspects of UK law, the Government have always responded.
Similarly where the committee of experts of the Council of Europe has reached a negative conclusion on UK compliance with a particular provision of the European social charter the UK has always responded, and we will continue to do so through the appropriate channels, and to maintain a dialogue on all relevant issues included in the area of freedom of association and other provisions affecting trade unions to which the amendment refers.
However the amendment is simply unnecessary. It is unnecessary because all the material in question is already in the public domain. The reports of the committees of experts of the ILO and the Council of Europe, which comment on the UK's and other member states' application of relevant ILO conventions and of relevant provisions of the Council of Europe social charter, are published annually and made widely available. Similarly the UK's replies to these, which respond to any criticisms raised, are automatically copied to the CBI and TUC who are free in turn to copy them to anyone else they choose.
Once they have been considered by those international bodies, the Government's comments are moreover fully reflected in the bodies' conclusions
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which are also published and made widely available. Similar procedures apply with other ILO reports where trade union matters are covered, in particular the report of the ILO committee on freedom of association, which is published three times a year. Its conclusions on all cases considered take full account of comments received from governments and their social partners, including, where a UK case is involved, any comments from this Government and from the TUC and CBI.
Perhaps by way of a practical example of the fact that there is no real difficulty about obtaining access to the reports and other documents to which the amendment relates, I can tell the noble Lord, Lord Wedderburn, that recently I read an article in the Industrial Law Journal, the December 1992 issue, vol. 21, No. 4. It was entitled, "UK Employment Law and the ILO: the Spirit of Co-operation?" The first article in the journal was by the noble Lord, Lord Wedderburn, entitled "Inderogability, Collective Agreements and Community Law". I cannot say that I studied it as fully as I should have done.
I am indicating by this that the articles referred freely to exchanges of views between the ILO committee of experts and the UK Government. At no point did the authors indicate that they had had any trouble obtaining the documentation to which they referred. I believe that they cited the ILO library in London as the source of the documentation.
In short, all the information which would be covered by the amendment is already in the public domain for anyone who is interested. There is simply no need to publish a report of the kind that the noble Lord has in mind. I believe also that it would perhaps not be the best application of public funds and I ask the noble Lord to withdraw the amendment.
Lord McCarthy: Before the noble Viscount sits down, would he define what he means by "respond"? The Minister has used the word quite a lot today—the Government "respond"; the ILO committee of experts criticises, suggests and proposes that something should be done about GCHQ; about the cancellation of recognition for the teachers' unions; that something should be done about the legislation which denies trade union sanctions and disciplines. The Government respond. When the Government respond, does that mean that they write a letter and do nothing?
Viscount Ullswater: The Government make a full response to the points put forward by the ILO or under the European social charter.
Baroness Turner of Camden: Have the Government ever changed their view on anything because of a view received from the ILO committee of experts or any ILO committee? Or have they persisted with their original view? Has their view been changed as a result of ILO intervention?
Viscount Ullswater: I am quite certain that the comments made by the ILO are taken into consideration.
Lord Wedderburn of Charlton: In winding up on the amendment, I must reply to one or two points made by the Minister, quite apart from urging him to read the Industrial Law Journal more carefully and more often.
I shall complain that he did me less than justice. In moving the amendment, I did not rehearse the argument—which is correct—that the Government are eroding rights, and so on. I said that it was a matter for debate on other amendments—at least, I hope I did. If I did not, then I do so now.
I am concerned about the diffusion of material. First, the authors of the ILJ article certainly had access to more than merely public matter. That is obvious when one reads the article. Secondly, the Minister said that the matters are in the public domain. We are concerned with the United Kingdom's replies to the committee of experts and the committee of experts' replies to the United Kingdom which some people in the Government have in the recent past alleged are confidential. The Minister says that they are not because they are sent to the CBI and the TUC. That is not good enough for me, I am neither the CBI nor the TUC and it is the view of people who receive the material that they are a little anxious about using it as though it were public. I do not wish to cost public funds too much; but will the Minister put all the material which he sends to the TUC and the CBI in the Library? That is the first request.
That would not be unnecessary because all kinds of curious misunderstandings arise on the matter and it is time they were cleared up. For example, the Minister says that we have never been condemned by the ILO. It is true that most of the material I know is in observations of the committee of experts. I have described who the committee of experts are. Therefore they are not to be brushed aside. When the committee of experts, five years running, repeatedly every year comes to the same conclusion in regard to our position in the United Kingdom, one would think that it was important in terms of the ILO.
However, with great respect to the Minister, I submit that he is also wrong in this area. I take this one, although there are others. For example, enough has gone on about GCHQ, as everyone knows, for the Government to be condemned there. If one looks at the decision in the case of the National Union of Seamen—I believe Case 1540, but the reference number is not with me—it was approved by the governing body, having been passed in the Committee on freedom of association of the ILO on 27th February 1991. One cannot go higher than the governing body which accepted the decision of the Committee on freedom of association.
There are other instances. I can understand the Government at the beginning of the saga with the ILO resting on what seemed to be the best bet; namely, that we have not been formally condemned by the International Labour Organisation. Everyone knows that the United Kingdom sent people out to Geneva pleading with people not to vote for resolutions which would do what is called a "paragraph" on the United Kingdom. If a country has a special paragraph then it
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is finally condemned; and I am sure we are to be condemned in that way in the near future. It is true that we have not had a paragraph; but there are many other matters on which ILO bodies of great distinction and experience have said: "In these four or five ways at least, United Kingdom legislation stands below the level of the minimum international standards which the United Kingdom itself has ratified". I was not going to go into that but the Minister provoked me. However, we can put it aside for the moment.
In withdrawing the amendment, I wish to ask the Minister a question, and he may wish to consider the matter for a later stage if that is possible. I ask him to put all the material he describes, as it emerges—at any rate once a year—in the Library so that we can see it. Then there will be no more question about what is secret and what is not. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 [Requirement of postal ballot]:
The Deputy Chairman of Committees (The Viscount of Oxfuird): I must advise the Committee that if Amendment No. 63 is agreed to, I cannot call Amendment No. 64 due to pre-emption.
Baroness Turner of Camden Baroness Turner of Camden had given notice of her intention to move Amendment No. 63:
Page 30, line 31, leave out from ("address") to end of line 32 and insert:
("or
(c) have the opportunity to vote in secret at his place of work under the supervision of the scrutineers.").
The noble Baroness said: I shall not move this amendment in favour of Amendment No. 64.
[Amendment No. 63 not moved.]
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 64:
Page 30, line 32, leave out ("by post") and insert:
("either—

(i) by post, or

(ii) immediately before or immediately after his working hours at or near his place of work or at a place more convenient for him, in a secret ballot under conditions which comply with a Code of Practice to be issued by ACAS under section 199 of this Act.").

The noble Lord said: This amendment is also known territory which raises not so much the issue of strikes and industrial action as the general question of postal ballots and workplace ballots, to put it simply.
The proposal of the amendment is that there should be an option for a union which decides to consult members about industrial action through a workplace ballot. However, I hope that no one will overlook the fact that the amendment requires a code of practice from ACAS on which I would place considerable importance after the experience we have had in the past decade or more.
In other words, the vote should be either by post exclusively, as the Government wish or, in the case of the union which selected it, in accord with the code of practice from ACAS, it should be at a convenient and sensible place at or near the place of work and before or immediately after the employees' working hours. I

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take it that that is a formula which may be improved upon, but it is the kind of proposal we have had before in legislation.
The issue is: what are we trying to do when we have a ballot on industrial action? I have often asked myself: is there one simple rationale about ballots? There certainly was none about the ballots the Government have had on the closed shop, for example. What are they for? Are they there to give democratic validation? Are they there, not for the purpose of legitimacy but to ensure that there is knowledge and approval, which is different, on the part of members?
I take it that when it comes to industrial action, a high imperative is the demand that there shall be the highest possible participation. I take my stand again on the inquiries which have been made into the problems of postal ballots and workplace ballots. I rely especially upon the evidence of 1984 in the work by Undy and Martin which has been quoted in debates in another place and here often enough.
I suggest that the position is this: whereas no doubt we can be marginally more sure of certain matters going right and not going wrong with postal ballots —although, as Undy and Martin say, and as everyone knows, we can have postal balloting papers which go astray—it may be that there is a bit of a margin with postal ballots. The margin in respect of the rate of participation is clearly in the direction of workplace ballots. The need to have high participation is what determines me in asking for an option. I do not just allow an ordinary option in the amendment. I say that ACAS will have a role to deal with such problems as there may be in terms of how the ballot is arranged. For example, I can imagine that ACAS has certain situations in mind in wanting ballot papers to be sent out by post—that is, if we still have a post—or by whatever private means supplants the post. There will be many possibilities and one must be flexible. But I would have thought that the need for high participation was a matter on which the Government and Members on this side were at one.
In terms of what can go wrong, if one looks at the experience of the CROTUM in the first three years of the office of the commissioner, we find that there are very few complaints on balloting, postal or otherwise. Of those few complaints, which come through 137 formal applications for assistance, we find that only eight of the cases were taken up. In three of them assistance was refused; in one the applicant withdrew; in one the High Court rejected the complaint; in two the complaint fell away and there was no industrial action; and in one the High Court awarded an order with costs. That is the officer that the Government set up to look into such matters and to seek out all the injustices which individual members of the unions may present. We know that she has used part of her budget to advertise; that she is there; and that she has a certain number of inquiries. Indeed, during the three years up to 1992, 959 people made inquiries to the CROTUM's office. And yet only one High Court order was made.
I suggest that the evidence is such that one can go straight to the issue if there is a clear advantage on participation rates. More members will vote and express their views. If one has a ballot, that is surely what one wants. And they will express their views properly and without coercion or anything of that kind.
I hope that the Government will not go on using the language which they sometimes use on these matters. Sometimes they speak about this or that practice as being something where all sorts of terrible coercion can go on. But terrible coercion can go on anywhere—except in this House. It is evidence that we need. I put it to the Minister that the CROTUM's three annual reports are very strong and serious evidence that the situation is not full of that kind of thing.
The other argument used by the Government—I anticipate the Minister in case he uses it again—is that all ballots should be completed at home. I am not sure that I follow that argument. It is commonly argued by the Government that one must have the worker completing the ballot at home, not at work. One sees at once that it is true that in the workplace situation—or, more likely under my amendment, a position near the workplace—there will be more discussion and argument on the matter among workers. A man may argue with his wife, which is another point that the Government do not seem to understand. Perhaps they have little experience of such matters. I assure them that arguments at home can be as difficult and delicate a matter as arguments at work. I do not see why workers should not discuss issues with one another. Why should they be divided from one another at the point when they decide.
They will certainly discuss the matter at home. What the Government seem to need—and perhaps in the next Bill we shall have it—is the worker producing an affidavit that he filled out the ballot form in the presence of his wife. That is the logic of the arguments moved by the Government in another place. But another place is not here, and I am sure that they will not push it to that extreme.
The ballot which is now demanded is not necessarily the best for any of the purposes for which ballots might be said to exist. It may be so in a particular case. But there may be other cases where it is not so. It is not necessarily the best in determining the democratic legitimacy of the move to industrial action. It is certainly not the best in terms of turn-out, of the numbers of workers involved—unless there has been research of which I am unaware. Research is always going on, so we may meet something new. I invite the Minister to consider whether the Government could not allow for a flexibility here which would satisfy all the possible objectives of the balloting process. I beg to move.
9 p.m.
Baroness Turner of Camden: I withdrew my amendment in favour of the one drafted by my noble friend because on reflection I thought that his wording was a great deal better than the original wording that we put down. The issue is the right to continue to have workplace voting. As drafted, the Bill removes the

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right of trade union members to have ballots at their workplaces. In future, should the clause be unamended, all ballots will have to be postal. We know that the cost and administration entailed in such a venture is likely to be considerable. We discussed that in an earlier part of the Bill. But as my noble friend said there are other considerations which are even more important. We have now had a number of years of dealing with ballots under existing legislation which allows for workplace balloting as well as postal balloting. There is no doubt at all—I speak from experience in this regard—that workplace balloting attracts greater membership participation. After all, that is where the union is active on behalf of members. The individuals concerned know each other and talk together. Why should they not discuss the industrial issues which unite them and around which they are organised? Unions are organised around workplaces.
In my experience such ballots have always been very well conducted and do not seem to have given rise to widespread fraud or anything of that kind. If we want unions to be fully representative of their members, surely we should choose methods that make it easy for members to participate.
As usual, the Government are trying to have it both ways. They boast of their past legislative efforts having given back the unions to their members; but then they fail to act on that assumption in their subsequent legislation. As my noble friend said, out of a number of complaints made to the CROTUM in the past three years only one related to a strike ballot—one successful one in the sense that it was a court decision. So there is no evidence of widespread fraud. If there had been, it would surely have surfaced in the office of the CROTUM.
Against that, many employers' organisations, including the Engineering Employers' Federation, support workplace ballots because they tend to give a quicker result. That is clearly important in situations of dispute. Postal ballots inevitably take longer. Indeed, in another part of the Bill that we have to discuss, independent scrutineers are given up to four weeks to return the result to the union.
In industrial relations terms this provision makes absolutely no sense at all. Indeed, the Government's 1987 Green Paper Trade Unions and their members said that postal ballots were less suitable for strike ballots. The TUC echoed those views and said it did not believe that there had been any substantial reason to change the Government's assessment of the situation as it then was. The Institute of Personnel Management also says that workplace ballots on industrial action normally have a high participation rate because they are workplace ballots. The Association of British Chambers of Commerce points out that a difficulty with postal ballots is the length of time they take in the context of strike action being called.
In fact, anybody with experience of industrial relations knows that in an industrial dispute or potential industrial dispute situation time is of the essence. One does not want the issue hanging around so that a postal ballot can take place with all the proceedings that that involves and with the scrutineers
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having up to four weeks in which to return the results. It is hypocritical for the Government to say they are interested in the individual rights of union members and want to give their unions back to them and at the same time, quite specifically in this legislation, forbid a system which promotes maximum membership participation in favour of one which is lengthy and cumbersome and where the return is not so high. I hope that common sense will prevail, that the Government will go back to the views expressed in the 1987 Green Paper and that they will not proceed down the path indicated in this section of the Bill. I support the amendment.
The Viscount of Falkland: I have already spoken and voted in support of the Government's proposals in Clause 1 for secret postal ballots for the election of members of union executive committees under independent scrutiny. But ballots on industrial action are quite another matter.
As I understand the position, the Government have already conceded the principle that in the case of organisations employing 50 or fewer people a workplace ballot should be allowed to continue under an arrangement providing for secrecy and independent scrutiny. If I am wrong about that, no doubt I shall be told. If that principle has been accepted, I cannot see why it should not apply equally to organisations employing more than 50 people.
There is no need for me to repeat the arguments in favour of workplace ballots. They were admirably put forward by the noble Lord, Lord Wedderburn, and the noble Baroness, Lady Turner. I fully support what they said.
Lord Stoddart of Swindon: I should like to say a few words on this amendment, which I support. Workplace ballots for industrial action are undoubtedly the proper way in which to conduct ballots. The idea of having a postal ballot about industrial action was perhaps dreamt up because the Government thought that a wife, if she had some influence, would persuade her husband to vote against strike action or other industrial action.
That was in the good old days when wives stayed at home and couples had only one income. But now there is feminism. There are women who are very militant. Today women take much more interest in what happens in the workplace and have a good deal of knowledge about it. Therefore they are much more au fait with matters than they used to be. That is altogether good. It is by no means certain now that the "little woman at home" will persuade her husband not to go on strike. The little woman at home—now the "big" woman —is more likely to discuss the matter with her husband and say, "Look here, it seems to me that you have been treated badly and it is time to do something about it".
So things have changed. The other objection to postal ballots is low turnout. When people receive a ballot form at home they say, "We will fill that out tomorrow". Tomorrow comes and they say, "Let us think about it. We will fill it out tomorrow". By the time they have finished, so many tomorrows have passed that the voting date has gone by and they have

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missed their opportunity to vote. Postal balloting, therefore, is not always satisfactory, especially in matters of industrial action.
I have been responsible for organising workplace ballots. I can assure the noble Viscount that when they were organised they were organised properly and there was no possibility of victimisation; there was no arm-twisting, and we had a system which was at least as foolproof as electoral ballots for local councils or for Parliament. They worked and they worked admirably.
The turnout was extremely high for at least two reasons. One was that people were able to discuss the issues involved among themselves—in the canteen or wherever. That made them more likely to turn out to vote. Also, they saw other people voting. That reminded them to vote and therefore they did vote. I found it a highly successful method of getting people to take decisions in the workplace.
I can assure the noble Viscount that it is an exceptionally good system. It smacks of democracy, and that is perhaps why the Government do not like it, whereas the other system does not. If the noble Viscount believes in democracy, in argument, in discussion between people about issues, and if he believes in high turnout, then he will support the amendment.
9.15 p.m.
Viscount Ullswater: I listened carefully to the points put forward by the noble Lords opposite during the debate on the amendment. However, I cannot agree that a ballot for industrial action, conducted in the way that the amendment would allow, would represent a satisfactory alternative to fully-postal voting as proposed by the provisions as they currently stand.
The amendment would provide trade unions with a choice as to the way they conduct voting in an industrial action ballot, and we believe that that is no longer acceptable. The amendment would not change the provisions in a way which would reassure voters about the proper conduct of a workplace ballot. Nor would they allow voters to cast their vote away from the particular pressures to which they might otherwise be subject if voting took place in the workplace.
Turning to Amendment No. 64, the noble Lord and the noble Baroness will be aware that ACAS Codes of Practice do not have the force of law. They recommend good practice to which the court and tribunals generally may have regard. However, I am unsure whether it is the intention of the noble Lord that that should continue to be the case here.
We heard the question posed as to whether postal ballots would result in lower numbers voting and hence to a less accurate reflection of union members' views. Whatever claims may be made in regard to such matters, we believe that the most important consideration is to make sure that voters can cast their vote, and decide whether to cast their vote, free from the kind of pressures that may be brought to bear in a workplace ballot, or a ballot in which voting papers have to be collected in person from the workplace.
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Where trade union members have a genuine interest in the outcome of a ballot, they can be expected and, I believe, trusted to exercise their democratic right. In my view the noble Lord, Lord Stoddart, indicates a level of apathy. If that indeed is the true feeling of the individual as to whether or not he is inclined to vote, then perhaps it is reflected in the action that he takes.
Lord Stoddart of Swindon: The noble Viscount misrepresents me. I said forgetfulness.
Viscount Ullswater: The noble Lord did not say forgetfulness. His words were, "I will do it tomorrow". That indicates apathy, not forgetfulness. He said that as days go by the member would say again, "I will do it tomorrow". That is not forgetfulness. That is a question of not really caring about casting a vote. If he cared he would post the vote because he receives an envelope with the voting paper.
Lord Stoddart of Swindon: No, he is still thinking about it.
Viscount Ullswater: As we made clear in the 1991 Green Paper, Industrial Relations in the 1990s, and in our election manifesto, we believe that the best way of ensuring that industrial action ballots are conducted democratically, and without impropriety, is to provide each of those entitled to vote with the opportunity to do so by post. Compliance with any ACAS code of practice would not guarantee that right to individual members. That is why we have brought forward the provisions in Clause 16. We believe that this is an important point of principle, where codes of practice are not sufficient.
The amendment seeks to introduce a safeguard into a balloting method which we believe is fundamentally flawed and no longer represents an effective means of protecting trade union members' interests. In our view, the safest way of assuring members that a ballot for industrial action has been properly conducted is to ensure that, as far as possible, each member is given an opportunity to vote by post, as proposed by the current draft of Clause 16. If the noble Lord is similarly concerned about reassuring members in that way, I trust that he will withdraw the amendment.
Lord Wedderburn of Charlton: I am grateful to the Minister and to all noble Lords who have spoken in support of a modest amendment.
The Minister asks whether I meant to say "code of practice". I did mean that and I am aware that that does not create legal norms. On the other hand, the Government should be the first to recognise the force of a code of practice. Once they had issued the code of practice in relation to picketing, stating that in the normal case there should be no more than six pickets, the courts grabbed at it, as a way out, time and time again. Codes of practice can have a considerable effect. If the Minister were to push me and say that there should be a schedule, I would look at that situation, because I want to produce the most legitimate and democratic results.
The Minister's argument is another of those government discoveries. Suddenly in 1988 they found

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an area of discipline that was unjustifiable. They had had eight years in which to find that out. In 1984 the Government introduced strike ballots and they have suddenly discovered that none of the workplace ballots that have been held since 1984 has been other than what the Minister called "fundamentally flawed". It is that kind of argument of rhetoric that we constantly hear attached to government discovery. It is only the Government who are allowed to make discoveries; we are not allowed to make any discoveries.
My noble friend Lord Stoddart made a point which was undeniable. He caught me out in a sexist description of the position. It is correct to state that wives not only participate but in many households the wife is still in work, doing a part-time job, and the husband is unemployed. I know of some women in that position who organised themselves because they realised that although their new rights in areas of equal pay were splendid things, unless they organised together they would not effectively fulfil those rights. There is a very lively imagination in women's groups about workplace activity.
I noted what I can only call the first Freudian ground of argument that has appeared from the Government. The Minister ought to think about his statement the next time he forgets something. He stated that the worker who says "I will do it tomorrow" means that he does not want to vote. That is a very good Freudian argument: it is straightforward repression of the worker who says that he will do it tomorrow. I accept that that may well be the position. It would be a good thing to jog the worker's subconscious mind at the workplace and ask him, "Hey, aren't you going to vote?" That is an argument in our favour. However, the next time that the noble Lord forgets something, he must tell himself that he does not really want to do it. That is not a very good argument in favour of legislation.
This is yet another area where the Government have taken a sudden stand. As one of my noble friends pointed out, the Government did not understand the position in relation to the 1983 Green Paper. They suddenly take a stand and turn the screw more tightly upon unions believing that it will achieve the result that they want—although in this case it is very marginal. If that is correct, it is straight fixing. They are now beginning to fix the machinery to suit what they think are their purposes. I am not surprised by that and I am not surprised that I have to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 16 shall stand part of the Bill?
Lord McCarthy: I do not want to drag out this debate, but we have come to the point where we have to indicate what we feel about this clause. We feel that it is totally unjustified. We have tried to amend it in a number of modest ways but none of them has found acceptance by the Government. I have never accepted the argument that postal ballots were essentially and in general terms, better than workplace ballots or that on grounds of flexibility, speed and turnout and other reasons, the postal ballot seems to be superior.
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The only ground on which one can rule in favour of a postal ballot is if one has positive evidence of abuse. If one has that, there is a case for moving from a workplace system to a postal one in the hope—which is by no means certain—that that will correct the abuse. But we have no evidence of abuse. As Members of the Committee on this side of the Chamber have said from CROTUM, if one goes along the highways and byways looking for enormities and one cannot find any, there is therefore no evidence of abuse. Therefore the balance of the argument runs towards postal ballot.
I believe that I can explain to my noble friend why the Government run the other way. It is easy enough. At the beginning the Government thought that turnout was on their side. At that time they had the simple theory of the militant minority which manipulated the vote. If one had a postal ballot there would be a low turnout, but if there was a workplace ballot there would be a high turnout. With that high turnout the moderate majority would swamp the militants. That was the theory.
What happened was that there were high turnouts but as a result almost all the ballots went in favour of some form of rejection of the employer's position. Indeed, many of the ballots went in favour of industrial action. So the Government said to themselves: "Maybe this workplace ballot is not so good". Then they discovered that not only did the ballot go in favour of industrial action, but that action did not take place. The fact that the union had a pro-strike majority, which may be 80 per cent. or 90 per cent., enabled the union to negotiate a slightly improved offer.
This Government did not like that so something had to be done about it. They went for postal ballots. The idea is that if there are postal ballots the Government will get smaller votes. If the Government get smaller votes—and they hope to do so—and even if a majority of those in the small minority vote for a strike or a great number vote for a strike, the Government will be able to say, "But look at all the people who forgot about it and who put the notice behind the clock and the matter out of their minds. They did not want to strike at all."
So one can add the number of people who did not vote to those who voted against the strike and say that there is a majority against the strike: how dare the union undertake to strike. The union may be in some doubt as to what to do. If it gets a ballot of 50 per cent. or 60 per cent. that gives it a significant majority to undertake a strike, but there are a great number of people who have not expressed an opinion. So the union wants to find out how they feel about the action and that is what the workplace ballot enables it to do, but that is what the Government do not want the union to do. That is why we have this clause and that is why we oppose it.
Viscount Ullswater: The current law requires a trade union to obtain the support of a ballot before proceeding to organise industrial action by its members. If it does not do so, the union will be at risk of proceedings. These proceedings can be either in tort, on the grounds that the union induced a person

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to break a contract or interfere with its performance; or by a union member under the statutory right to restrain a union's call without the support of a properly conducted ballot to that member and others, to take industrial action.
In broad terms, the present law requires that, so far as is reasonably practicable, each person who is entitled to vote in the ballot must be supplied with a voting paper, or have one made available to them immediately before, immediately after, or during, his working hours, at his place of work or at a place which is more convenient for him.
The law also requires that those entitled to vote in the ballot must be given either a convenient opportunity to vote by post; or an opportunity to vote immediately before, after or during their working hours, at their place of work or at another convenient venue; or, as alternatives, both of those opportunities.
It is therefore at present left to the union to decide which of these voting methods, or what mix of methods, will be used for the ballot. These requirements have remained the same since the balloting requirements were first introduced into the law in 1984.
The effect of the new subsection 230(2) is to remove options which previously allowed such a ballot to be conducted by methods other than fully postal voting. It requires that every person entitled to vote in the industrial action ballot must, so far as reasonably practicable, have a voting paper sent to him by post at his home address, or any other address which he has requested the union in writing to treat as his postal address, and be given a convenient opportunity to vote by post.
As I said on a previous amendment, we firmly believe that it is now time to change legislation which has, since 1984, allowed unions to hold industrial action ballots by the far less reliable method of workplace voting. The 1991 Green Paper spelt out our view that conducting such ballots by fully postal voting would provide additional safeguards against intimidation and irregularities in the conduct of such ballots.
Industrial action ballots may well affect union members more directly than, for example, union election ballots. Similarly, they may often be considered more important by union members involved. However, since 1988, election ballots have been required to be held by fully postal voting, but no such arrangements have been introduced for industrial action ballots. In addition, the establishment and maintenance of union membership registers means that it is now more practicable for unions to conduct industrial action ballots by post.
For the reasons that I have outlined, I hope that the noble Lord will consider the issues again and decide not to vote against the Question that this clause stand part of the Bill.
9.30 p.m.
Lord Wedderburn of Charlton: Perhaps I may ask the noble Viscount one short question before he sits down. He pointed out that in 1988 the Government
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exercised their option against introducing postal ballots for industrial action. Presumably, therefore, something happened between 1988 and now. What was it?
Viscount Ullswater: I indicated that we consider that this is the most effective way of protecting the rights of trade union members to cast their vote in secret and to record their views.
Baroness Turner of Camden: But that does not answer my noble friend's point. In 1987 we had the Green Paper, and the Government's position in the legislation of 1988 was that workplace ballots were all right for industrial dispute issues. What has happened in the years since then that has caused the Government to change their mind? With respect, I do not think that the Minister has answered that point.
Viscount Ullswater: I do not want to be drawn too far back—
Baroness Turner of Camden: We are talking about 1988.
Viscount Ullswater: Yes, but it is convenient for the Opposition to go back only to 1988 because if we go back a little further, industrial action ballots were conducted in car parks and on a show of hands. We have moved on, and I believe that this is the right process by which to conduct industrial action ballots now. I ask the Committee to support the clause.
Lord Wedderburn of Charlton: Would the Minister therefore accept that the logic of what he says is that the Government got it wrong in 1988?
Viscount Ullswater: At the risk of boring the Committee, I have to say that I believe that this is progress.
Lord McCarthy: Is it fair to say that the Minister believes that it is progress but that he does not have any evidence?
Clause 16 agreed to.
Clause 17 [Notice of ballot and sample voting paper for employers]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 65:
Page 31, line 4, leave out from ("not") to end of line and insert ("protected").
The noble Viscount said: With the Committee's permission I should like to speak also to Amendments Nos. 67, 86, 274, 275 and 278.
These amendments concern the expression of provisions which, in relevant circumstances, remove immunity for organising industrial action which would otherwise be available. In more detail, they restore references in the 1992 Act to certain acts being "protected", and express new clauses in terms of "protected as respects Section 219" of the 1992 Act.
The 1992 consolidation Act was welcomed widely, not just because it brought together law which had previously been widely scattered among many different statutes, but because of the clarity of its restatement of the law. One well-received innovation was the use of the expression "not protected" in

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Section 219, and subsequent provisions, to describe the removal of the statutory immunities from certain acts.
The amendments restore that "helpful innovation", and express the new matters with which the Bill deals in terms of "protected as respects". Without these amendments, the Bill would change certain references in the 1992 Act so that they became references to acts being
"not prevented by Section 219 from being actionable in tort".
There is nothing faulty in such changes, but, on reflection, we came to the conclusion that the change was unnecessary.
By reverting to the expressions currently used in the 1992 Act, the amendments would significantly improve the expression of the law, as compared to the way it would stand by virtue of changes otherwise made by the Bill. However, they are drafting changes only, and have no substantive effect (in any way) on how the law would apply in practice. I beg to move.
Baroness Turner of Camden: I thank the Minister for his explanation of what appear to be technical amendments. I shall have a look with some interest at Hansard to see what he has said. I am not sure that I have yet understood the amendments. I believe that my noble friend Lord Wedderburn of Charlton may wish to comment.
Lord Wedderburn of Charlton: I wish only to congratulate the Government on a piece of drafting which I think is quite splendid, or at least I hope it is.
On Question, amendment agreed to.
The Deputy Chairman of Committees: I have to advise the Committee that should Amendment No. 66 be agreed to, I cannot call Amendment No. 67, due to preemption.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 66:
Page 31, line 6, leave out from ("ballot") to end of line 10.
The noble Lord said: This is a serious matter. The provision changes the basis of our law in relation to industrial conflict, and should be looked at carefully now and, I hope, on Report. Our law has been peculiar. Whether one says that organisers of industrial action have been protected or given immunity, that has been the basis of the civil law, and even one or two parts of the criminal law, since 1906.
We have not had rights to associate, but this is perhaps the moment to say, because it is relevant to what comes later, that that system which grew up in our law was much admired by people elsewhere when it seemed to be part of a stable system. Until now, there has been a formal parity within the legal system. On one side, any person who committed an act in contemplation or furtherance of a trade dispute would be protected in respect of certain liabilities. That applied generally and not to particular people. Similarly those who were damaged by an act which they alleged and proved was not covered by such "trade dispute immunity", as it was called in the past, could equally sue without formal distinction of
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categories and classes. It is true that in a sense that was a formal equality, but the Government should take note of the fact that it was a central theme.
The Bill introduces a privileged group. With the exception of Clause 21, to which we shall come, which concerns "disgusted of Tunbridge Wells", or "DOT" as it has become known, about which we had a word on Tuesday, the Bill provides that most people can bring an action if there is an industrial tort—if I may introduce the category of inducing breach of contract and so forth—and if they can prove that it is not covered by trade dispute immunity; either that there is no trade dispute or that for some reason it fell outside the immunity. Since 1984 a trade union has had to hold a ballot in support of industrial action or strike.
There is now a group of people in respect of whom the trade union must go through four hoops instead of one. First, it must give the seven-day notice for the members voting. Secondly, it must give the three-day specimen ballot paper for the employer. Thirdly, it must give the result of the ballot under new Section 231A, to which I shall return. Fourthly, it must give another seven-day notice as to which employees are likely to be taking the industrial or strike action.
That is bad enough. But when we discover that the privileged group which can sue unless the union goes through all those hoops is the employer of any of those taking action we realise that there is a serious disjuncture with what hitherto has been a formally equal system. We now have a system in which the employer is permitted to sue the union on grounds which are far more extensive than those accorded to the ordinary citizen. It would be interesting to see two plaintiffs coming to court because one will turn out to be an employer of an employee taking the action, perhaps induced by the union, and the other will be someone who is not technically an employer but who has relations with the employees. Even from the Government's point of view I find it difficult to sustain the view that one should turn out to have remedies which are so far in excess of the other.
Furthermore, the division which I have made between the one-hoop ballot for the ordinary citizen and the four hoops of notices and ballots for the second group is not the end of the story. The drafting of the provision has been extremely carefully done. When I first read it I thought that it might be cunning but I put that aside because there is a further point which the Minister must answer.
Clause 18 stipulates that the union must give the result of the ballot to the employer within a reasonable period. However, that is inserted in the 1992 Act as Section 231A. The ordinary citizen will come along as plaintiff and sue the union. The union will say, "But we had a perfectly proper ballot". The ordinary citizen might say, "I have been damaged by it all and you have not satisfied all the requirements of the ballot provisions". The union's protection under the ballot provisions in Section 219 applies only where, under Section 226(2) (a), the ballot requires that:
"Industrial action shall be regarded as having the support of a ballot only if … the union has held a ballot in respect of the action in relation to which the requirements of sections 227 to 232 were satisfied".
This is no small point. In other words, group 1 is entitled to demand not merely a ballot but also the satisfaction of Section 231A. Were it to be found that the union had not given notice to the employer, the immunity would be lost on the clear words of Section 226(2) (a).
I do not know whether that is the intended result but it is a new point which the Minister may wish to consider—I almost said that he may wish to sleep on it. It is a very serious point because if we reach that point people will say —and I have no doubt that this will give rise to the next Bill—"Well, this is a silly distinction. Why should not everybody be able to say that they must go through the four hoops?" At present the ordinary citizen can demand that the union go through two hoops and therefore these distinctions are rather absurd.
I believe that this is a paving Bill for future legislation which will up the requirements in terms of what the union must do. Section 231A has been put where it has been put quite deliberately so that the division is not between one hoop and four hoops but between two hoops and four hoops. The whole provision will be a platform for further discoveries by the Government in the next measure. Whether or not that be true, I must ask the Minister whether paragraph (b) can, in these circumstances, be sustained. For a union to satisfy all the requirements —and I have not referred to all of them but there are many—and to prove that it has the support of a ballot is not a simple matter because Sections 227 to 232 require a great deal. Therefore, why should we not leave out paragraph (b)? Why is it there? Why does the employer have that special position with regard to bringing civil action? I hope that the Government will consider deleting that paragraph. I beg to move.
9.45 p.m.
Baroness Turner of Camden: I support my noble friend. Listening to him it seems that unless Clause 17(1) (b) is taken out of the Bill, a coach and horses is being driven through unions' immunity. I hesitate to think that we are discussing a measure which could pave the way for even worse and more punitive legislation in the future. I believe that my noble friend has raised some important issues and I await with interest the Minister's reply.
Viscount Ullswater: These are important matters and it is right that the noble Lord, Lord Wedderburn, should draw our attention to them. Under the present law, a union is free to organise an industrial action ballot without providing any kind of notice to the employer of its members who are to be balloted. Similarly, although the law applies certain requirements to the content of voting papers, there is no requirement for the union to provide a sample voting paper to the employer.
As regards the notice of intent to ballot, if his workers are to be balloted about industrial action we believe that an employer should be aware of that. Just as the union is free to recommend voters to vote "yes" in the ballot, an employer should have the
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opportunity, if he wishes, to put the contrary case. In order to do so, he needs to know that a ballot is going to happen, and who will be voting. Provisions in Section 226A will give employers the right to such information.
Employers should also have the right to receive basic information which may be necessary to help them decide whether a ballot has been properly conducted. Unless they are able to see a sample copy of the voting paper, they are not in a position to judge whether the requirements relating to the form of the voting paper have been satisfied. Section 226A gives employers a right to such information.
Without the provisions of Section 226(1) (b), which this amendment seeks to remove, there would be no sanction for a union which failed to take the steps set out in Section 226A. That would, of course, utterly defeat the intended purpose of these provisions. Section 226(1) (b) therefore provides that unless a union takes the necessary steps, it will not have the benefit of statutory immunity if it induces industrial action by the workers of any employer who is denied proper notice or a sample voting paper. I believe that these are reasonable steps to take. I hope that in view of what I have said the noble Lord will consider withdrawing the amendment.
Lord Wedderburn of Charlton: I am grateful to the Minister for what he has said. I understand his case but I do not agree with it. However, the Minister did not address an important point which I shall mention now so that he can deal with it on Report. Clause 17(1) (b) adds hoops. The Minister has said that those are necessary for the employer. By inference he seemed to be saying that they were not needed for what I shall call the plaintiff who is not the employer. That is what Clause 17(1) (a) seems to be saying. I believe that Clause 17(1)(a) is slightly misleading if one looks at it in isolation. I shall explain again why I believe that is the case. It refers to Section 219 which concerns the basic immunity.
Section 219(4) takes effect subject to Section 226 —that is the ballot provision. Section 226 states that the union must comply, in achieving support for the ballot, with the provisions of Sections 227 to 232. That provision appears in Section 226(2) (a). In Clause 18 of the Bill—as the Minister suggested, these clauses are rather interrelated—the demand that the union take steps,
"to ensure that every relevant employer is informed"
of the result of the ballot is inserted as new Section 231A. Therefore it falls between Sections 227 and 232 and is something upon which any plaintiff can rely. I do not know whether that is a mistake. Perhaps the Government will consider that matter as I do not believe that this point has been raised before. I hope that the Minister can reply to me now on this matter. In my submission, if the Bill remains as it is, any plaintiff can utilise a failure to inform every employer of the result of the ballot as a reason why the immunity is lost.
Viscount Ullswater: Perhaps I can assist the noble Lord. I draw his attention to paragraph 73 of Schedule 7. As the noble Lord will note, that alters the wording

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of Section 226 quite considerably. I do not know whether the noble Lord has taken note of that. I would not expect him to have done so this evening. He referred to words in Section 226(2) (a) which, of course, will no longer appear on the face of the legislation after the schedule is passed.
Where a particular employer is not provided with the required information, only that employer will be entitled to restrain the organisation from industrial action. He would of course only be able to restrain the organisation from the action among his own workers. The Bill recognises that, for the purposes of these requirements, only an employer who has not received the information has a real grievance.
Lord Wedderburn of Charlton: I am grateful to the Minister for those comments. I can only submit to him that his second point is wrong. I think the case law has gone far beyond the principle he has elaborated. However, we can consider that matter further. I have noted Schedule 7. It contains a requirement for the union in paragraph 73(b) (ii) where it states that the ballot must be one in relation to which,
"the requirements of sections 227 to 231A were satisfied".
That is exactly the section I have been talking about. It is in the schedule. I had seen it there but I did not think that it would help the Minister, and at this hour of the night I dare not go into the schedules. The Minister has done so. I know that one can cut one's finger on a piece of paper. It may be that a similar fate has overtaken the Minister. Should we not consider the matter at Report? It would be much more sensible to do so. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Ullswater Viscount Ullswater moved Amendment No. 67:
Page 31, line 7, leave out from ("not") to first ("the") in line 8 and insert ("protected as respects").
On Question, amendment agreed to.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 68:
Page 31, line 10, at end insert:
("provided that where interlocutory (or in Scotland interim) proceedings are commenced on a date falling within the balloting period, no order shall be made by the court unless the trade union has failed or is shown to be likely to fail, to satisfy paragraph (a) above.
(1A) In paragraph (b) subsection (1) the "balloting period" is that period commencing with the seventh day mentioned in section 226A(1) (a) and terminating on the day following the last day of the appropriate period defined by subsection (4) of section 234A of this Act.
(1B) Subsection (1) (b) of this section does not apply to an employer who is reported in the scrutineer's report made under section 231B to have been responsible for interference in respect of the ballot, unless that employer proves the contrary.").
The noble Lord said: One of the greatest problems for our labour relations, even before the legislation of the past two years, has always been the interlocutory injunction. That is partly because the union often has little notice and largely because since 1975 the courts have made it clear that the applicant who applies for an interlocutory injunction need prove no more than an arguable case. I do not know whether any Members of the Committee have ever tried to resist an arguable case. One says to one's interlocutor that his
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case is not arguable. That is a very strong thing to say to someone. It verges on saying that they have no sense whatever. Therefore, in interlocutory proceedings the union is facing a burden of proof which requires it to show that the case is not even arguable. Any lawyer worth his brief fee can usually drum up an arguable argument. Therefore, we begin with that problem.
The interaction between the interlocutory injunction—where all that the plaintiff has to do is show an arguable case, since the case of American Cyanamid Co. v. Ethicon Ltd. in 1975—and the new hoops through which the union has to go will make it extremely difficult to succeed. I do not say that if the matter ever went to trial it would be quite so difficult, but the reality of labour relations in law is the interlocutory or interim procedure.
A famous American author wrote a book in the 1930s on the interlocutory injunction. He said very rightly that once the employer has his interlocutory injunction there is almost never a trial because he has won the dispute or it has helped him to win the dispute.
The amendment provides—I am sure with considerable drafting infelicities, and I apologise to any Members of the Committee from Scotland if I have not used the correct language in terms of Scottish procedure—that now that the Government are setting up a prolonged balloting period, with notices for the employer, there ought to be a period in that arrangement during which the employer cannot seek an interlocutory injunction.
Some Members of the Committee may find that rather strong meat. However, let us look at it this way. The union is required not to authorise a stoppage until there is a ballot. It cannot hold the ballot until it has given seven days' notice. Before that it has to tell the employer who is likely to take part. It also has to show the employer a sample voting paper, and so on. Those are new arrangements. Therefore, to expect them to interact with court procedures as delicate as the interlocutory process without specific arrangements is foolhardy or simply antagonistic towards the union defendant in the arrangements. If one wants to make sure that the union loses every time, then one strips away the immunities, increases the number of hoops and leaves the interlocutory process as it is. The Government may wish to do that. The noble Viscount may tell me that that is right. But I say that it is a period when one might wish to consider some equal rules. Just as occurred in Irish industrial relations, it is extraordinary how English lawyers always seem to consider that nothing else is going on elsewhere.
If the Minister's advisers have read the Irish Industrial Relations Act 1990, they will find that once the union has held a ballot it is protected against injunctions, if notice has been given of the action and if it has what is called a fair cause in its argument. The amendment does not provide for quite the same position. But it provides that if the balloting period is to be one during which the unions stand still and cannot launch the action, then on the employer's side it should be a period in which the employer is not permitted to use the interlocutory injunction process.

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The Government might state that the period is too long. But the amendment refers to the period between the two periods of notice.
I hope that the Government will take the matter seriously and not brush it aside. At present the provision in the legislation is extremely one sided. It does not state anything about interlocutory procedures. It would be nice to know that the Government have considered interlocutory injunctions. I beg to move.
10 p.m.
Viscount Ullswater: The noble Lord has made it clear that the purpose of the amendment is to undermine the effectiveness of the new protection for employers which Section 226A will provide. For that very reason, the amendment is unacceptable to us.
If a union does not provide the required notice, or the information to be contained in that notice, its subsequent call for industrial action will not be, and should not be, protected by statutory immunity. Where that happens, or is likely to happen, the employer should not have to wait until the action actually takes place against him before being able to take steps to defend his interests.
If an employer believes, first, that the union has not taken the steps set out in new Section 226A and, secondly, that the union is nonetheless likely to proceed to call for industrial action against him by his workers, the employer should therefore have a right to go to court to seek an injunction which will prevent that happening. That right should be available as soon as the employer feels that those circumstances apply. After all, no call for industrial action as a result of that ballot would enjoy immunity.
Such "pre-emptive" injunctions are a valuable and necessary protection which the law extends to the likely objects of unlawful acts. They are familiar enough and very necessary for those who can demonstrate to the satisfaction of the courts that without their award they will be the victim of an unlawful act.
The courts will not award such injunctions lightly, even on an interlocutory basis. I do not think there is any "danger"—if, indeed, that is really the appropriate word —that unions are going to find themselves constrained because the courts award injunctions without a proper basis for doing so. The Government have confidence in the ability of the courts to exercise their powers properly, and with due regard for the proper interests of all concerned. If noble Lords opposite take a different view, I am sorry for that, but I do not hold it myself.
I turn to the second element in the amendment: the suggestion that, in certain circumstances, employers should not be able to obtain an injunction even where there is evidence that a union has called for industrial action without providing the required notice of its intent to conduct a ballot.
An industrial action ballot is a union's ballot, which a union decides whether to conduct, and which it must conduct if it is to have the special protection which the law can provide for its organisation of
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industrial action. We have to ask ourselves, therefore, just how an employer can really "interfere" with such a ballot. Also, if there is some kind of act by such a "third party" to the balloting process, falling short, of course, of an act which would amount to a criminal offence, why would a civil law sanction be the appropriate way of dealing with what had happened?
If the union—and it is the union which organises the ballot and stands to gain the protection which a majority vote in favour of industrial action can provide—thinks that the ballot has been less reliable than it would wish, for whatever reason, it decides for itself what it wants to do in the light of that conclusion.
If an employer wishes to put his case against taking industrial action to those who may vote in such a ballot, I cannot see how that could, in any real sense of the word, be called "interference" with the ballot itself. It would certainly not be interference with the conduct of the ballot. Indeed, if an employer tells voters what may be the consequences for them or for his business of a vote in favour of industrial action, or of industrial action itself, I would not regard that as "interference" of a kind which ought to be in any way condemned, or which should lead to any kind of penalty on that employer. By like token, if a union recommends voters to vote in favour of industrial action, that in itself should not be regarded as culpable interference.
It follows that there is neither need nor purpose in requiring scrutineers' reports on industrial action ballots to say, as a matter of course, anything about whether there has been any kind of employer interference in a ballot. If a scrutineer chose, for whatever reason, to say something of the kind in his report, that would be entirely up to him. But such a statement, if made, should carry no legal implications for the employer or constrain his freedom of action as the amendment proposes.
In the light of my response, I hope that the noble Lord will withdraw his amendment.
Lord Wedderburn of Charlton: I thank the Minister for the reply. I said nothing about the second part of the amendment, for which I apologise. I thought that it was obvious that the employer who had been guilty of interference in the ballot should not get an injunction. I suppose that I was working on the well-known equitable principle that he who comes to equity must come with clean hands. The Minister asks, "How could the employer possibly interfere with the ballot?". I suppose that unions will be glad to hear that, because the definition of interference is now so narrow, no one will get through the hoop.
Of course people can interfere with the ballot. The Minister has overlooked the cases which I put to him two days ago and I hope that he will look at them properly. For example, in the American jurisdiction, if an employer puts in the wage packet—or perhaps I should say, in the light of the Bill, in the same envelope as the wage packet—a threatening note to workers, in my view that is interference in the ballot. There can be an argument, of course, but there are employers who have threatened workers quite disgracefully. It is not necessarily a crime to say such things. Of course, there

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can be employers who interfere in the ballot and I say that the employer should not have the right to obtain an injunction in that period.
Further, the Minister says that this would undermine the effectiveness of the whole matter. Frankly, that gives it all away. The effectiveness of the whole legislation is to set up the new hoops and make sure that employers can get interlocutory injunctions right, left and centre. The Minister, with great confidence, says that he is quite sure that such injunctions will not be granted lightly. However, I can tell him that a union in the public sector in 1987 which had seen a dispute arising from the membership for a year, suddenly found that on Sunday certain plaintiffs had telephoned the duty judge and, ex parte, without a hearing or notice to the defendant, had obtained an interlocutory injunction which it took three weeks to get rid of; perhaps that will give the Minister the flavour. Of course, it is not a characteristic case; there are such cases but it is quite easy to get an interlocutory injunction, at any rate if one briefs the right counsel. It is silly to suggest that this is a matter where the courts can possibly provide much defence and certainly not of the Bill.
The matter of the interlocutory injunction is very serious and I ask the Government to look at it. Once again, it is fundamental for union funds, costs and everything else. If the Bill is left as it is with nothing in it about the interlocutory process, the Government are simply establishing an Act which is so one-sided that no one could possibly defend it against international standards. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 69:
Page 31, line 10, at end insert:
("(1A) After that subsection there shall be inserted—
"(1A) Wherever an act is prevented by section 219 being actionable because industrial action has the support of a ballot, the contracts of employment of persons taking part in that action shall be presumed suspended until the termination of the dispute." ").
The noble Baroness said: It will be recalled that several times during discussion of the Bill I or one of my noble friends have expressed concern that even when all the considerable hurdles have been surmounted in the way of running a lawful dispute, and despite the UK's commitment to the ILO Convention 87 which includes the right to withdraw labour, the individual does not have a positive right to withdraw labour.
It is true that the union secures immunity from actions in tort if it follows all the procedures. As we have just heard, there is a considerable number of hoops to go through in the various pieces of legislation preceding this Bill and also in the Bill. Nevertheless, if the union itself manages to do all that, it secures immunity from actions in tort.
However, nothing has been done by the Government—who are so concerned, as we have heard this evening, about individual rights—to protect the position of the individual who, along with his colleagues, withdraws his labour in a dispute in which
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there has been a ballot and all the necessary steps have been taken to render it a lawful dispute. When he withdraws his labour, his contract of employment is automatically broken. Moreover, just as a form of frightener, the union will have to have told him so in a statement on the ballot paper. It will have to say, in effect, "If you vote for the strike, you are sacking yourself". That, in effect, is what the union has to tell its members.
I suppose the Government think that that makes matters all right. The member will be told, will take the decision to break his contract, and must therefore take any individual consequences that follow from that decision. I do not believe that it is all right. It is not fair to put the individual in that position and continue to maintain the fiction that we abide by international ILO obligations and maintain the individual's right to go on strike. I believe that it should be possible for the employment contract, when interrupted by lawful industrial action, simply to be regarded as suspended. I understand that that is the position in a number of other EC states.
It is not enough to argue, as I expect the Government will, that in practice people usually resume work after a dispute without any penalty. When the union negotiates a return, it endeavours to ensure that and is very often able to do so. But it is not good enough that the legal position of the individual should remain so ambiguous.
I expect the Government will say, "What about a dispute that goes on for a long time, say for a year? There have been disputes that have gone on for longer than a year. Surely you don't expect the contract simply to stay suspended for the duration of a long dispute?" Perhaps not, and I shall not press the matter to a Division at this point of the evening. But it is important that the principle of suspension is discussed. If the wording of the amendment is not adequate or not right, it can perhaps be adjusted at Report stage. But we have to address the situation of the non-protection of the individual. He will participate in a lawful dispute, in effect have no protection at all and will not have a positive right to withdraw his labour, whatever the Government may maintain. I beg to move.
Baroness Seear: On these Benches we wish strongly to support the amendment. In doing so, I wish to ask the Minister one or two questions. A belief in the right of association, the right of people to join unions, is common ground between us. I am sure the Minister will agree that the purpose of the freedom of association provision is that negotiations can take place between evenly weighted parties. That is a major idea behind the provision; namely, that one does not have a weak person bargaining against a strong person. That is why it is so important in terms of industrial relations. If that is so, the provision does not mean anything unless, when it comes to negotiation, it is possible for the union side to say, "We are not going on. We withdraw our labour". I contend that if there is no genuine right to withdraw labour, there is no reality to the belief in freedom of association. It does not exist unless, at the end of the day and after due processes have been gone through, it is accompanied

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by the right to withdraw labour. If the contract is not suspended, that right to withdraw labour is not a reality; there is a threat that the man will lose his livelihood.
It has always been possible in the past to argue that people were in breach of contract. The fact is that very few employers have ever used the argument. They have recognised, as I have put forward, that there must be the ability to withdraw labour if freedom of association is to mean anything. If the Government do not allow the contract to be suspended, they might as well come out into the open and say that they do not believe in freedom of association.
10.15 p.m.
Viscount Ullswater: I have to reply to the noble Baroness that there is nothing in UK law which prevents the freedom to strike. It is the consequences of those actions which may result in further action being taken by the employer. There is a contract between the employee and the employer. The amendment is very damaging. It was interesting to hear what the noble Baroness gave as justification for this measure. It is a very novel development in the law of employment contracts in the United Kingdom.
Baroness Seear: The noble Viscount says that it is very novel. Will he tell the Committee on how many occasions in the past employers have in fact used the right, which they have always had, to say that the striking employee was in breach of contract? When has it happened?
Viscount Ullswater: The effect of going on strike is a breach of contract between the employer and the employee. By this amendment the noble Baroness seeks to suspend the contract so that cannot take place. For my part, I can think of little that would be more calculated to play into the hands of militants and wreckers. Such a measure would surely risk undermining all this country's recent achievements in terms of improving its industrial relations record and reputation.
We believe in balloting where that is necessary to ensure that union members have a proper say in the conduct of the affairs of the union to which they belong.
An industrial action ballot is necessary, for example, to ensure that members want their union to call on them to take such action. The ballot is therefore a necessary condition if a union is to have the benefit of the protection which the law can give it to call on workers to take industrial action against their employer.
However, such a ballot for such a purpose cannot and should not afford any special protection for workers who choose—it will always be an individual choice at the end of the day —to take industrial action against their employer. If a ballot were capable of affording some special protection to workers who take industrial action, why should they ever vote against the action? I can see that such a law would vastly
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increase the chances of unions obtaining "yes" votes in such a ballot. But surely we have to consider the wider effects of that on this country's business and economy.
UK law has always allowed employers the necessary freedom to respond to strikes by imposing sanctions on those who take such action. That was the case even under the legislation enacted by the last Labour government. Indeed, so far as concerns protection against unfair dismissal, that government allowed employers to dismiss all those taking industrial action without risking claims of unfair dismissal from any of them. Even that Labour government did not believe it right to make it unlawful for employers to dismiss strikers in that way.
Employees who take industrial action will know that there may be damaging financial consequences for them, since they will not be entitled to receive any pay from their employer if they withdraw their labour. They should also be aware that they are putting their jobs at risk because the employer may decide that he has no option but to dismiss them.
In the case of strikers, the amendment would actually produce a truly bizarre result. What is it that a striker does? Surely he or she has decided that he or she wishes to bring pressure to bear on the employer by refusing to do the work which would fall to be done under the contract of employment? What else is that but a decision by the individual to break that contract of employment?
This amendment indicates that the noble Baroness, and I assume the party she represents, want to allow those who have chosen to break the contracts of employment they have made with the special dispensation that the breach will fall to be treated as no more than a "suspension". Even if that had some element of logic—which I cannot find—it would make no sense as a means of helping to improve this country's industrial relations. I hope therefore that she will withdraw the amendment.
Baroness Seear: Let us get it quite clear, the only logical conclusion that one can draw from that is that the Government do not believe in the right to strike. That is the only consequence to be drawn from that speech. The Government had better come clean about it and say so.
Lord McCarthy: Will the Minister do that? What does he mean when he says that nothing prevents the freedom to strike? In exactly the same way, nothing prevents the freedom to libel; nothing prevents the freedom to slander; nothing prevents the freedom to provide shoddy goods or to break commercial contracts. Nothing prevents the freedom to do all those things because an action can be taken: civil actions can lie in cases of libel and slander; and if one goes on strike one can be dismissed for breach of contract. How can it be called freedom? How can one be said to be free to do something when a civil action can be taken to have one dismissed? It can only be a freedom if it carries no consequence of that kind.
Viscount Ullswater: I have the feeling that people look at contracts of employment with scant care; as though they mean nothing. What is suggested is that

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a contract of employment can be suspended—in this case indefinitely—and that the breaking of a contract of employment by the withdrawing of labour should have no penalty.
Lord Wedderburn of Charlton: Before the Minister completes his thought process on this difficult matter, perhaps I may ask this. Is he is aware that what he said was that a breach of a contract is a breach of a contract is a breach of a contract?
Contracts have many terms implied by law, especially in our system. There is the unfair contract terms legislation. It is possible to bring that into operation—we do it every week. We imply terms into contracts. The Minister will find that in one way or another all systems of law are not quite the same. The systems to which I refer imply by law in the contract that where industrial action is otherwise lawful—I stress that—the contract of employment is suspended, in the major cases to the end of the dispute. That is true in Italy, Spain, Portugal, France, Germany—not in Denmark—but in Norway and Sweden; for the most part in the jurisdictions of the United States and it is certainly true in Canada.
The Minister must realise that merely saying that a breach of a contract is a breach of a contract and he cannot do anything about it looks quite strange to other countries. They think that Britain is rather strange. Denmark is not quite so strange because it has other features of law, but it is in our category. The position in Ireland is disputed on the case law.
The Minister appears to think that one can have a right to strike when one can be discharged or otherwise penalised for a breach of contract where one has walked from the job on lawful industrial action. It is the very definition of the right to strike that the worker cannot be so penalised. It is implicit in every study and discussion, and even the noble and learned Lord, Lord Denning, in 1978 tried to introduce it into English law in the case of Morgan v. Fry. He did not succeed because it is not a matter for judicial creation; it is a matter for statute. But his judgment warrants attention, and I am sure that the Minister will give it close consideration.
My noble friend tabled an amendment which the Minister appeared to think was quite shocking. Does he believe that the breach of contract doctrine governs industrial relations? It has an effect and should not exist in its present form because we have moved on and should be looking at people's rights. Sometimes the Government are keen on rights. Let them look at collective rights and the right of association. That is where the right to strike lies—in the centre of the right of association.
The Government are worried about the situation because for the first time in our debates on the Bill they took refuge in what the last Labour government did. Therefore, we know that they are looking at the position carefully.
Baroness Turner of Camden: I am rather surprised at the Minister's response to the amendment. I agree with what was said by the noble Baroness, Lady Seear. Everything the Minister said in response to my amendment indicates that the Government are against
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the right to strike, despite the fact that they have previously ratified ILO conventions that give the right to strike.
I do not understand what balloting has to do with protecting individuals. We support balloting. We have said for many years that unions are in favour of balloting their members, but that has very little to do with protection of individuals. The protection of individuals should follow from a decision taken to withdraw labour in a dispute that has been rendered lawful because the union has gone through all the hoops laid down in the legislation.
The legislation by the last Labour government was intended to be a form of protection because, the government stated, "If you are going to dismiss strikers, you do not dismiss isolated individuals because you think they are ringleaders; you either sack everybody or nobody at all". The intention was to support people who could be said to be ringleaders, and that is something that worked.
In any event, and as the Minister is fond of saying, we have moved on. It is a bit much for him to tell the Committee that the amendment is novel. We have stated on many occasions during discussions on industrial relations that there are many countries in Europe where there is provision for the contract of employment to be suspended if the individual participates in action which is lawful within their system of industrial relations.
I do not understand why the Minister reacted so sharply against the amendment. The Government have something to answer for. They claim to be protecting individuals, and that the Bill is about individual rights, but when we introduce an amendment that is specifically designed to protect the individual, as distinct from the union, we get the kind of response that we have heard this evening. Nevertheless, I will not press the amendment. We may look at the issue and put forward different wording on another occasion. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 70 to 73 not moved.]
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 74:
Page 31, leave out lines 29 to 34.
The noble Baroness said: The group of amendments commencing with Amendment No. 74 covers similar ground, but we regard them as being important.
The Bill states that the union has an obligation to inform the employer who in that employment is entitled to take part in the ballot. In Committee in another place it was stated that that did not imply that the union had to give names to the employer. However, the text does not read in that way. Anyone reading the text would assume that the union was bound to tell the employer who would be entitled to vote in the ballot.
In other words, as my noble friend Lord Wedderburn stated on Second Reading, the union is being compelled to finger its members to the employer. That is an unacceptable situation. As I indicated,

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some members do not want their employers to know that they are union members. For that reason they may not pay by check-off. That situation is particularly true of people who may believe that they have feet on a career ladder and while they may have every sympathy for a union and been in membership for some time, they are not anxious to do something which they feel might endanger their promotion. They may be the very people who vote against strike action, but they pay their subscriptions and they are entitled to vote and should not expect to be "fingered" to the employer.
For that reason we are moving the amendment which would delete in line 30, the words,
"so that he can readily ascertain them".
I refer also to Amendment No. 78. In order to make the point absolutely clear we wish to have written into this section of the Bill the wording:
"This section does not impose upon the union a statutory duty to supply the employer with the names of the employees so described".
In Committee in the other place there seemed to be an acceptance of the views expressed that people on our side were very unhappy about the prospect of individuals being identified in the way in which the Bill seems to provide. Therefore, I hope that this evening the Minister will agree that what is proposed here is very reasonable and that he will accept the amendment on behalf of the Government. I beg to move.
10.30 p.m.
Lord Rochester: At Second Reading I said that my noble friends and I were troubled lest the requirements in both Clauses 17 and 20 that a trade union should so describe employees to an employer that their identities could readily be ascertained, amounted to an unreasonable breach of confidentiality.
At Report stage in another place—to amplify somewhat what the noble Baroness, Lady Turner, has already said—the word "ascertain", which now appears in line 30, was substituted by the Government for the word "identify". But objections, as she has said, were not surprisingly raised to such a limited modification. In consequence, the Minister said, at col. 262 on 16th February:
"I thought that the amendment, … met the requirements requested of us. However, … I shall look at the amendment again".
At Second Reading I said that I understood from those exchanges that the Government might be willing to initiate or to accept an amendment to meet the point in question. I asked the noble Viscount to confirm that that was the case. He had many other questions to answer in winding up the debate so it was understandable that he did not reply to mine then. I hope that he will do so now.
The aim of Amendment No. 78, as has been said, is to replace the offending words with some which are better calculated to provide the necessary degree of confidentiality. If the Government cannot accept the precise terminology proposed, perhaps the Minister will at this stage confirm at least that the Government
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accept the principle involved and that on Report they will bring forward their own amendment to relieve us of our anxieties on this matter.
Viscount Ullswater: Paragraph 3.25 of the 1991 Green Paper Industrial Relations in the 1990s proposed that employers should be entitled to receive notice of a union's intent to hold an industrial action ballot, and that the notice provided should include details of which members of an employer's workforce would be entitled to vote. Those proposals won strong support.
Indeed, I should perhaps mention, in particular, the comments of the Institute of Personnel Management. The noble Lord, Lord Rochester, has spoken to these amendments and he has often spoken of his high regard for that institute.
In its comments on the Green Paper, the IPM said:
"In so far as a ballot is used to ascertain an individual's opinion with regard to possible industrial action … the Institute supports the proposal that employers:—should be informed of the intention to hold a ballot, the workers involved, the questions put, and the voting procedure".
The proposed new Section 226A(2) sets out the matters to be included in the notice that a union will have to provide if it proposes to conduct an industrial action ballot. Subsection (2) (c) states that the notice must describe:
"(so that he can readily ascertain them) the employees of the employer who it is reasonable for the union to believe (at the time when the steps to comply … are taken) will be entitled to vote in the ballot."
During Committee debate in another place, we were asked whether these provisions meant that a union would have to provide the names and addresses of people likely to be balloted. The Minister then made clear that he thought it most unlikely that a union—unless, of course, it wished to do so—would ever have to supply names.
To go some way to meeting these concerns—but, equally significantly, to bring the provisions in this clause into line with similar provisions in Clause 20 concerning notice of intent to organise industrial action—we amended the original wording of those provisions. We accept, however, that the present provisions do not remove the possibility, no matter how remote, that a union might have to supply names, and only the names, to an employer if that was the only means of satisfying the notice requirement.
In correspondence with the Opposition employment spokesman after the Report stage in another place, the Minister made this quite clear. I quote from his letter of 24th February:
"If the only way in which a union could satisfy the notice requirement would be to provide the employer with the names of those it expected to be entitled to vote, then these would have to be provided".
In different ways, each of these amendments seeks to undermine that policy.
Amendment No. 74 is the most direct. It simply removes the requirement to give any kind of indication to the employer, whose workers, I remind the Committee, are to be invited to vote in a ballot about taking industrial action against him, of who is likely to be given entitlement to vote. The employer would be no better off than he is now. Amendments Nos. 76 and 77 would modify the provisions of the

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section. The first would remove the requirement that the description given to the employer had to be one from which he could ascertain those of his workers likely to be balloted. The second would require only a "general" description of the group or group of workers involved. However, I fear that the description that that could produce might in fact be useless to the employer as a means of finding out which workers were likely to be voting in the ballot.
What, for example, if the notice related to a ballot of just a few of many workers employed by some major employer, say, a vehicle manufacturer with many plants and many workers in each of them, and said no more than that the ballot was to be of workers "in a paint shop", of which there might be many? Clearly, the employer would in effect have been given no new right. He certainly would not have been given information of the kind which we judge he may need to help him to protect his business.
Amendment No. 78 attempts a different approach. We do not want to create a situation in which a union would be able to deny an employer the necessary information on the grounds that the only way that it could be supplied was by the provision of names. Too many, I fear, would take precisely that line as a means of avoiding having to provide a key element of the notice requirements.
I listened carefully to the arguments put by noble Lords. I shall of course study the Hansard record equally carefully. However, the provisions with which these amendments are concerned have already been the subject of careful study by the Government, even since the publication of the Bill. I accept that noble Lords may not share my view. These amendments, which seek to undermine the usefulness of the notice requirement, indicate as much. Nevertheless, I hope that in the light of what I have said the amendments will not be pressed.
Baroness Turner of Camden: I am rather disappointed. I had thought that on this matter at least the Minister might be prepared to move in our direction. We have tried a number of different ways of dealing with our anxieties which, I think, are readily understood. As my noble friend put it so graphically, we do not want the union to be forced, as it were, to "finger" (to name) its members to the employer. It is an objectionable provision. For that reason we introduced, as a possibility, the wording of Amendment No. 78, taken from the Committee proceedings in the other place where the Opposition were assured by the Minister that he did not believe that the legislation imposed a duty upon the union to give the names of the employees so described.
I hope that the Minister will take the opportunity of looking again at those proceedings and at Hansard tomorrow to see whether something can be done to meet the legitimate concerns that have been voiced not only by ourselves but by the Liberal opposition this evening. With those comments, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 75:
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Page 31, leave out line 30 and insert:
("(c) estimating the number of").
The noble Lord said: It is important that we move this amendment in view of the important discussion that has just taken place. We tabled the amendment separately from the previous group because it raises a different point. Based on the Government's own argument—their own Green paper even—it is logical to conclude that what the employer needs to know is the size of the sector of the workforce with which he will be confronted.
This part of this nasty big Bill is nasty and unseemly, and I use those words deliberately. I do not know what the Minister imagines. A union official who works with people is being asked to say to the employer, "It is Jack and Jill and Bob who are coming out." Does he have no human sympathy with that situation which overrides this absurdity?
Within the Government's own logic, an estimate of the number is reasonable. I do not like it. I would not move it myself, but I am taking it that the Government will get their Bill through. But will not they consider removing this business of names and addresses, or virtual names and addresses? A colleague of the Minister in the other place spoke of the proposal in this way:
"If the van drivers were to be balloted, it would be sufficient to inform the employer without saying which individuals were involved".—[Official Report, Commons, Standing Committee F, 15/12/92; col. 246.]
That is a nice way of putting it—all the van drivers! Well, we know who they are. The Minister must think again. He referred to the Green Paper. It makes some play with foreign systems which require notice. That is right; there are many systems which require notice, but I defy the Minister to find a system which makes the union name, or virtually name, its members in respect of industrial action.
I move the amendment to put it on the record, and to ask the Minister to look again at this provision before Report. I beg to move.
Viscount Ullswater: I made a full reply to the previous amendment. I have noted carefully all the words that the noble Lord has used in this instance. I should like to read carefully in Hansard what has been said this evening. I am afraid that I shall not be making a full reply on this amendment, but I shall consider carefully what the noble Lord has said on this and the previous amendment, and consider what should be done. In the light of that, I hope that the noble Lord will withdraw the amendment.
Lord Wedderburn of Charlton: I am greatly obliged to the Minister for those words. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 76 to 79 not moved.]
Clause 17, as amended, agreed to.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 80:
After Clause 17, insert the following new clause:
("Majority required in a ballot
.For paragraph (b) of section 226(2) of the 1992 Act there shall be substituted the following—

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"(b) the majority of those voting in answer to the question applicable in accordance with section 229(2) to the industrial action of the kind to which the act of inducement relates, answered "yes" to that question;".").
The noble Lord said: I move this amendment at the request of the Law Society, especially its employment committee, and a number of my colleagues at the Bar. I did not know about this issue until they informed me about it. I can put the matter shortly. Most lawyers had assumed—I am taking the Law Society's account which I believe to be true—that if one had a ballot in which one had to separate the two questions, as one must now; that is, "Are you prepared to strike?" on the one hand, and "Are you prepared to take industrial action short of a strike?" on the other, the Bill's demand for a majority vote related to the one and then to the other.
I refer to proceedings before Mr. Justice Schiemann in May 1992. I am told by some of my informants that these were interlocutory proceedings, and one will often find judges saying, "Well, we have had to do this quickly", and that is no fault of the judge, especially as it was a Friday. Mr. Justice Schiemann was faced with the argument that although a majority, by a very few votes, had been found on the first question, the second question had been lost, however calculated, and therefore when one added up the number of "good" ballot papers, it was found that the majority cast internally for the first question was not a majority of all those who had voted. The argument was ingenious. I had not seen it nor do I believe had many people. It was that the ballot means the whole of the returned ballot papers, which are proper ballot papers, and that there must be a majority on each of the questions. It is common ground that prior to that decision no one believed that that was the case.
It is my belief that the Law Society has made representations. If not I apologise for not sending a letter, which perhaps I should have done, but these are recent matters. The amendment may be phrased badly but it changes the words relating to the question and provides that there must be a majority of those voting on each of the appropriate questions. At least, that is the intention.
I believe that that is fair. The common understanding before the case of May 1992 was fair. I thought that it was right legally but Mr. Justice Schiemann said that it is not. If there are two separate questions, as here, it may be that different shifts of workers are affected in different ways within the balloting groove and it seems absurd to demand that the majority to be required on one question or the other must be measured against those voting overall when the other question may not be attractive to anyone. One could have a good majority in respect of question A, which is cancelled out by a large vote against question B. I do not believe that that is what the Act meant and I hope that the Minister will look at the matter carefully. Those who asked me to deal with it, which I have tried to do briefly, will be grateful. I beg to move.
Viscount Ullswater: I listened with interest to the noble Lord's explanation of the amendment. I
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understand that the Department of Employment was aware of the circumstances of the case which he quoted.
Ever since the balloting requirements were first made part of the law in 1984 a union has, quite rightly, had to obtain majority support for industrial action from those voting in "the ballot" about that action. That law has allowed unions to put two questions to voters in any particular ballot, asking whether they are prepared to take part in either strike action or action short of a strike.
The point, of course, is that the union has chosen to ask two questions as part of the same ballot. That is a union's free choice. It would be open to the union to adopt a different tactic. It could ask each of the two questions individually, treating each as a separate ballot and having separate voting papers for each question.
Where both the questions are covered in one ballot, however, the union must be prepared to live with the potential consequences of its choice. In the circumstances which the noble Lord described, the voters in the ballot did not produce a majority in favour of either strike or non-strike action, as the case may be. Accordingly, they had not given the union a sufficient mandate to allow it to have the protection of statutory immunity for calling on them to take part in either strike or non-strike action.
We are not dealing here with any kind of real anomaly in the law but with its proper effects and results. While I appreciate that the application of the law may have come as a surprise to the union involved in the case that we have heard about, a moment's reflection shows that the court's judgment was quite correct. I hope, therefore, that the noble Lord will withdraw the amendment.
Lord Wedderburn of Charlton: Many people will be disappointed with that reply. The Law Society informed me that the Minister's interpretation, which he now latches on to—I suppose that he must take fortuitous gains wherever they come from—was not generally understood by practitioners in the field, including the Electoral Reform Society. The Law Society continues:
"If correct, the interpretation would require unions to so organise their affairs as to be able to argue that each separate question is a separate ballot".
That is what it comes to. It will put the unions to greater expense because they will have to operate two ballots with two questions instead of one ballot with two questions. The trade union has not chosen to operate in this way because until 1988 it was able to put what I call a rolled-up question; namely, will you strike or will you take industrial action short of a strike? The Government then banned that. The reason that the problem is new is that the banning of the rolled-up question demanding two questions gave rise to this problem.
I suspect that the Minister will not look again at this matter because he knows about it. Many people will be disappointed. Many lawyers, who are not of my persuasion in any other regard, will regard it as extraordinary that the Minister will not look again at

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the matter. However, it will mean that the union must hold two ballots instead of one, which is regrettable. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 agreed to.
Clause 19 [Scrutiny of ballots]:
Lord McCarthy Lord McCarthy moved Amendment No. 81:
Page 32, line 29, leave out from ("ballot") to end of line 31.
The noble Lord said: We now turn to another character—a new kind of scrutineer who looks after ballots. Under Clause 19 that scrutineer must be appointed and, under his terms of appointment, he not only has to carry out the functions of running the ballot, but he must also prepare a report. That must be done:
"as soon as reasonably practicable after the date of the ballot and, in any event, not later than the end of the period of four weeks beginning with that date".
The amendment says that we should not insist upon the last part of the provision; namely:
"in any event, not later than the end of the period of four weeks beginning with that date".
In other words, it would just be, "as soon as reasonably practicable".
If the Committee looks at what the scrutineer is supposed to report on, it can be seen that that is quite extensive. He has to say that:
"there are no reasonable grounds for believing that there was any contravention of a requirement imposed by or under any enactment in relation to the ballot"
and they are quite extensive now. He has to state:
"that the arrangements made with respect to the production, storage, distribution, return or other handling of the voting papers used in the ballot, and the arrangements for the counting of the votes, included all such security arrangements as were reasonably practicable".
I suppose that I should not say that the Minister was astonished by the phrase "reasonably practicable" the other day, and here it is in the Bill. It goes on:
"for the purpose of minimising the risk that any unfairness or malpractice might occur, and … that he has been able to carry out the functions conferred on him under section 226B(1) without any interference from the trade union or any of its members, officials or employees; and if he is not satisfied as to any of those matters, the report shall give particulars of his reason for not being satisfied as to that matter".
We argue that there are certain circumstances in which the four-week limit could be an embarrassment both ways. It might be thought by the scrutineer that he has four weeks and does not need to report in under four weeks when, in fact, he should report as soon as possible, as soon as is "reasonably practicable". On the other hand, there may be circumstances in which four weeks is not long enough and in which the scrutineer may feel that he needs longer than four weeks to do a good job. We do not understand the rationale of the four weeks. Surely, "as soon as reasonably practicable" is sufficient. I beg to move.
Viscount Ullswater: The noble Lord has posed a number of questions about the justification for requiring, as a matter of course and as part of the terms under which a scrutineer for an industrial action will be appointed, that the report on the ballot be produced within four weeks of the date of the ballot.
I think that it may be helpful if I explain exactly why these arrangements are proposed. The fundamental purpose of the scrutineer for industrial action
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ballots is to produce a report on the conduct of such a ballot, and to make that report available not only to the union itself, but also, on request, to union members and employers. Existing law requires that a union must make its first call for industrial action to which a ballot relates, and that some part of the industrial action itself must take place within four weeks of the date of the ballot. There are of course no equivalent provisions in respect of action following a union election, political fund or merger ballot.
A scrutineer may well be able to deliver the required report to the union quite soon after the relevant ballot is held. However, it would defeat the fundamental purpose of the scrutiny process if a union was allowed complete discretion as to when a scrutineer's report was made, and therefore made available to union members and employers on request. It would have little value, even if it revealed that the ballot might have been improperly conducted, were it to become available only long after the industrial action had started—and perhaps only after the action had ceased.
The selection of the particular period of four weeks allows a union which wishes to wait until the scrutineer's report is available before its call for industrial action to do so without risking passing beyond the four week limit and finding that it had to conduct a fresh ballot.
I should add that the provisions of the law will not require a union to wait until a scrutineer's report is available before proceeding to organise industrial action following a ballot. We accept that such a requirement would risk removing a significant proportion of the four weeks presently available in which a union must make its first call for action following a ballot.
I hope that the noble Lord will be reassured by my explanation of why the particular provisions the amendment seeks to remove are a necessary ingredient of the requirements for industrial action ballot scrutiny. Given that, I hope that he will withdraw the amendment.
Lord McCarthy: I shall probably have to withdraw the amendment, but I must say that it does not seem to me that the Minister has explained the matter very well. I do not see why because the union is given four weeks to decide whether to have a strike if it has an affirmative ballot, that figure of four weeks should be taken away and applied to the scrutineer's report which is a totally different exercise. If the Government wanted to have a figure, they could have some other figure. We do not see why there has to be a figure at all. Why not just have the words,
"as soon as reasonably practicable"?
As I understand the position, the only argument that was made against that was that it would give discretion to the union. I wrote those words down. There is a slight sign of enormities again. It is being suggested that the union would in effect manipulate the scrutineer and say to him, "Now look here, my dear chap. The term 'as soon as reasonably practicable' means the year after next". I do not see why the union should do that; but why should the scrutineer take any notice, anyway? It says in the

1667
statute that he is independent and has terms of reference in relation to making a report on a ballot which include the term,
"as soon as reasonably practicable".
If the union claimed that term meant a report did not have to be made until after the following Christmas, the scrutineer would say, "Nonsense. You do not have total discretion. My terms of reference say a report must be made,
"as soon as reasonably practicable."
I do not see why the figure of four weeks is mentioned. Nevertheless I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 82 to 85 not moved.]
Clause 19 agreed to.
Viscount Goschen: I beg to move that the House do now resume.
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Moved accordingly, and, on Question, Motion agreed to.
House resumed.

British Railways Bill
Returned from the Commons with the amendments agreed to.

Cardiff Bay Barrage Bill
Order recommitting the Bill to a Committee of the Whole House vacated; Bill referred to the Examiners in respect of Amendment No. 2 made by the Select Committee; a message was ordered to be sent to the Commons to acquaint them therewith.
House adjourned at eleven o'clock.

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