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Volume 884: debated on Monday 13 January 1975

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[7TH ALLOTTED DAY]— considered.

Public Accounts

4.26 p.m.

I beg to move,

That this House takes note of the First, Second, Third and Fourth Reports from the Committee of Public Accounts in the last Session of the last Parliament and of the Treasury Minutes and Northern Ireland Memorandum on those Reports (Command Papers Nos. 5786 and 5823).
Before I comment in detail on the work of the Public Accounts Committee in the last Parliament, I wish to discharge two other happy duties. First, may I pay a tribute to those who have helped the Committee to do its work, namely the Clerk, who has been its most willing servant, the Treasury Officer of Accounts, Mr. McKean, and the Comptroller and Auditor General's immediate colleagues and staff in the Exchequer and Audit Department, those unseen and, I would say, invaluable watchdogs of the public purpose, whose conscientiousness is as deep as its effect, and, not least, Sir David Pitblado, an old friend from Treasury days, and in Washington, who is a most devoted public servant, whose career has been one of continuous distinction and who is now a great servant of this House.

Second, I thank the members of the Committee in the last Parliament for their personal support and hard work, not least for their ready attendance at the sessions of the Committee.

It is always difficult for members of the Committee, a number of whom I am pleased to see in the Chamber this afternoon, to carry out all the duties required of a Member of Parliament in these onerous days, when the Committee is carrying out so much work and is meeting in so many sessions. The constant support of the members of the Committee was a great encouragement. Perhaps I might congratulate them on the penetrating analysis of their cross-examination, which was never carried out at too great a length.

Those tributes are no mere politeness. The Committee worked under a severe handicap. Due to the General Election in February last, the Committee was not appointed until half-way through April, and we did not hold our first deliberative meeting until 6th May. That meant that time for its detailed researches was extremely limited. Difficulties continued, for, though the report was agreed on 24th July, it was not printed until last December with its ancillary papers. That is the reason this motion was not moved, as is customary, of course, before Christmas. I hope the House will feel that the Committee achieved a very great deal in a very little time. How well it acquitted itself as to the quality of its work, right hon. and hon. Gentlemen will be able to judge for themselves.

I need hardly say that the Committee has carried out its work in an entirely non-party spirit. Perhaps I might remind the House of the rôle of the Public Accounts Committee as it has developed in the 113 years of its existence. As historians in this House will recall, the Committee played a major part in the 19th century in assisting and stimulating the establishment of accounting regularity and making sure that public funds were spent only for the purposes for which they had been granted by Parliament. That remains a primary duty of the Committee, but happily we do not have to spend much time upon it, because serious lapses now are rare. The knowledge that if they occurred they would be brought before the Committee perhaps fortifies the sound practices which have for so long been established in the public service under the guidance of the Treasury.

For many years, therefore, the Committee has been able to devote its time to wider aspects of economy and efficiency, dealing with such questions as the elimination of waste and extravagance, with the development of sound systems of estimating and contracting and with improvements in financial administration. In short, the Public Accounts Committee looks to see whether Departments obtain value for the taxpayers' money.

At all times, the Committee must adopt a critical attitude. But I hope that it is true to say that its members consistently aim to be constructive. I hope that we shall always be fair, never pernickety, ever ready to take a broad view, stern when there have been lapses or foolishnesses, yet supporters of innovation, encouraging of modern techniques for accounting, with perhaps an adventurous outlook in their adoption, and certainly supporters of flexibility of management. I should never wish to hear it said in this House or outside it that the Public Accounts Committee did anything other than endorse the most competent and modern administrative methods.

I have said a few words about the history of the Committee for a special reason. In my view, it is time to reappraise the system of financial control exercised by the House of Commons. However, first I wish to come to the details of our work in the last Parliament.

Our First Report, as usual, was on excess expenditure, some cases of which inevitably arise every year. We recorded that we saw no objections to the sums needed being provided by excess Votes, and the House of Commons subsequently voted those sums.

Two of our Reports, the Second and the Fourth, dealt with Northern Ireland accounts, to which I shall refer in a moment.

I turn now and mainly to the Third Report of the Committee of last Session, because that is our chief report. That is based, as usual, upon the examination of witnesses on subjects set out in the Reports of the Comptroller and Auditor General on the 1972–73 accounts.

First, I draw attention to our passages on the Industry Act. Right hon. and hon. Members will find them in paragraphs 41 to 44 in the Third Report. The control of Government assistance to industry has been a subject considered in specific instances by several previous Committees. The Committee of Session 1973–74, under the chairmanship of the present Paymaster-General—and we are delighted to see the right hon. Gentleman in attendance—had started an early and thorough examination of the administration of the various forms of Government financial assistance to industry under the 1972 Act. When Parliament was dissolved in February last year, the Committee was examining the then Department of Trade and Industry on the basis of a memorandum prepared at the Committee's request by the Comptroller and Auditor General on the measures being taken to provide effective control. The evidence was referred to us, and we completed that examination, though in the knowledge that there might be some alterations in policy resulting from the change of Government.

As we said in paragraph 44 of the Third Report, we were pleased to find that the Department had made considerable efforts to establish a sound framework of financial control. This is a matter which has attracted some notice, and perhaps I might draw the attention of those interested in the subject to the memorandum and the papers given by the Department which are published with the evidence and with our report.

The story cannot be allowed to end there. Huge sums of public money are now involved in support to industry, and, with the agreement of the Committee, we shall need to return at once both to the subject in general in order to establish the principles upon which assistance is being afforded and to specific cases as they occur. In the light of current public comment on this scene, I have no doubt that the House will expect this promptness of the Committee which the House has just reappointed.

A study of the contents table shows how wide a range of subjects was examined. There were 27 in all. To enable the House better to follow the broadest aspects of our work of surveillance, I have grouped them under five separate heads.

First, we looked at the arrangements for control of large projects such as the RB211 aero engine, where about £170 million of public money is involved. Also under this head is the multi-rôle combat aircraft, where sums amounting to many times that amount will be spent on research, on development and presumably on production.

Under a second chapter head, we considered the various systems of financial control exercised by the Government. There was the Industry Act 1972, to which I have referred, and I do so again deliberately as it is so important. Then there were other matters such as the Farm Capital Grant Scheme.

As my third example, I select the Forestry Commission, which has now produced a new form of accounts. We thought it proper to examine these in some depth, and what we had to say about the subject is recorded. To express a personal view, although I believe that the Forestry Commission does much good work, I feel that it is time that this House looked carefully at what I regard as the open-ended commitment which the Forestry Commission is allowed for the continuous acquisition of land for forestry in the United Kingdom.

We come, fourth, to cases where proper financial control and methods should be reaffirmed. We looked, for instance, at inventory control in museums and for stocktaking of Government stores. It is surprising how much money is represented in the aggregate.

Then there were cases where matters had gone wrong. One which struck the Committee was where some ocean tugs were to be constructed by the Royal Navy. Instead of the project taking two years, it took four, and the amount of additional money required, due to poor systems of control, which I am pleased to say that the Admiralty now proposes to revise, amounted to £700,000.

Those are the chapter five heads covering the chief matters into which we inquired. There were many others of importance on some of which we had no need to report.

I move to some of the subjects of inquiry into which I wish to go in detail, where there are significant lessons to be learned in the modern context. First, I take one under the head of major projects. Looking into major projects in which the Government engage is an important aspect of the Committee's work. Last year, we took evidence for the first time on the proposals for the construction of a Thames barrier as a protection against tidal flooding. We were concerned to learn that this showed a pattern of large escalating estimates of costs. The first estimate was £100 million. That became £168 million. The latest estimate was no less than £250 million, at December 1973 prices. So often in the past Committees have seen this sort of situation and how important decisions on the type and siting of the barrier, in this case, have been made on too tentative a cost estimate in the first instance. That was why, in paragraph 107, we said:
"We do not underestimate the difficulties of estimating for a project of this nature, but we consider that realistic estimates of costs should be available when such important decisions are taken."
I am sure that all my colleagues on the PAC will agree about the imperative need for realistic estimates of costs before decisions involving hundred of millions of pounds are taken. It is surely all the more necessary in present conditions where unjustified increases in costs through lack of control can be masked by those flowing inevitably from inflation. In an inflationary situation it is all the more important that Government Departments, Ministers, and this House do not approve projects unless they are certain that realistic estimates of costs have been made in the first instance.

Another important review by the Committee was its study in depth of projects for the manufacture of the MRCA, to which I have already referred, in collaboration with the Governments of Italy and the Federal Republic of Germany, and for the manufacture of three types of helicopter in collaboration with the French Government. The House will be aware of my particular if non-commercial interest in the helicopter industry. Estimates of the cost of United Kingdom participation in both projects have substantially increased for a variety of reasons. Among them were reductions in the orders of the participating countries and changes in exchange rates.

I am raising and bringing this matter especially to the notice of the House of Commons because I think it is of significance in the context of our membership of the EEC. We saw the undoubted political and defence advantages springing from the collaboration that I have described and the financial advantages to be gained from sharing development costs with others and increasing production runs. But we drew attention to the problems that can arise when one partner changes his requirements during the course of expensive development and to the administrative problems raised by cost and work-sharing arrangements against a background of differing national levels of cost and industrial productivity.

According to the Treasury Minute, both the Treasury and the Ministry of Defence are alert to these problems, but I have little doubt that a future Public Accounts Committee will wish to examine further the procedure to deal with them. Collaboration with other countries may be important—some may argue that it is vital—but I suggest that in no case will it ever be more vital than good financial common sense and control. It is easy to visualise situations where, for idealistic reasons thought to be practical, this country, in collaboration with others, embarks upon a project the nature of which, in the natural order of time, changes, involving vast increases in cost, but, because the project has been begun, people feel that, for political reasons, it is impossible to vary it. I sound a note of warning in this regard.

Last summer some of us went to Panavia in Munich. We were given a categorical assurance by Mr. Madelung and his Panavia colleagues that the collaboration did not in itself raise the unit cost of the MRCA but that a reduction in orders certainly did. Is the right hon. Gentleman denying that?

There is no "Yes" or "No" answer to that question. We can strike a balance sheet of advantage and disadvantage. Clearly it is easy to begin these projects for reasons of good will, reasons which are wholly political, and to continue them irrespective of changes which occur in partnership, design, and so on, en route and to pay too little attention to the cost as a result. The answer to the hon. Gentleman's question may be "Yes", but I should not like to be categorical, because something can be said on the other side. It is possible to argue that with a long run, for example, production costs are less, though it must be admitted that there are now fewer partners in the arrangement than was originally envisaged.

The Expenditure Committee had inquired into a number of aspects of the MRCA project in December 1973—in fact, while the report of the Comptroller and Auditor General to the PAC was being prepared—and the Committee reported to the House last February. We took that report into account while taking evidence on the Comptroller and Auditor General's Report. I think that those who had the patience to read both reports will have seen that the work of the Expenditure Committee and the PAC were, in effect, complementary to each other. As the first chairman of the Expenditure Committee it gives me much pleasure to record that fact, and I suggest that that matter is significant for a reason to which I will return later.

I come now to two particular criticisms. Another subject on which the Committee made detailed inquiries was the settlement with the receiver of Rolls-Royce Ltd for assets transferred to Rolls-Royce (1971) Ltd. We were concerned that the receiver of an apparently bankrupt firm, with substantial potential liabilities to customers for breach of contract, was subsequently able to pay all creditors in full and to distribute no less than the staggering sum of £26·9 million to stockholders. Indeed, I believe that a further sum is available for distribution.

What I have to say is analogous to the reply that I gave to the hon. Member for West Lothian (Mr. Dalyell). One cannot always have certainty in some of these matters involving judgment. We may never know whether the bargain struck by the Government was a good one, but it seems that the outcome for the creditors and stockholders has been vastly better than they could reasonably have expected. I am still of the opinion that public money was spent to excess in that matter.

Another point arises on the subject of Rolls-Royce. The Committee was concerned to learn that the flow of information from Rolls-Royce (1971) Limited to the Department of Industry had not been satisfactory and that the Department was not satisfied with the monitoring arrangements designed to safeguard the Government's considerable investment in that company. I am glad to see from the Treasury Minute that one of the items of information—the company's preliminary five-year forecast for 1975 to 1979—has been received by the Department and is being discussed with the company. But I note with regret that the Treasury Minute makes no comment on the monitoring arrangements. This simply will not do. I hope to be assured by the Financial Secretary, whom it is a pleasure to see here, that these arrangements are in good shape.

There is another matter of principle which I ought to mention which arose from another case which we examined—namely, the leasing arrangements by British Rail for the purchase of rolling stock and equipment. In paragraph 131 of our report we expressed considerable surprise at and general disapproval of the manner in which the arrangements had been introduced and operated. We thought that a point of general principle emerged. These arrangements were made privately. They were not reported to the House. In paragraph 136 we expressed ourselves as follows:
"We trust that any future government financial assistance to the Nationalised Industries will be provided by more orthodox and overt means so that Parliament are aware of the true position."
Hon. Gentlemen who were members of the Committee will recall that we felt strongly on the matter, for it seemed that the truth was being withheld from Parliament. We thought that to be serious and wrong. But I am glad to observe from the Treasury Minute:
"It is agreed that any specific Government financial assistance to nationalised industries should be provided overtly."
We also considered some of the more traditional areas of financial control on which past committees have long ago established the basic rules. Without retailing any of those, I would just comment that I am pleased to see from the Treasury minute that the Treasury and the Department of Employment accept the principle, for instance, that full account should normally be taken, in grant-in-aid negotiations, of all realisable assets held by grantees and that grants in aid should not be issued in advance of need.

I could continue to comment on many more similar matters, but I know that some of my colleagues on the Committee will wish to comment. However, I feel that I have said enough to illustrate the scope and, I hope, the value of work done.

I said that I would say something further on the work of the Committee on Northern Ireland accounts, in respect of which perhaps my right hon. Friend the Member for Down, South (Mr. Powell) will wish to comment later. For two years the committee has had the responsibility for examining Northern Ireland accounts on the basis of the reports of the Comptroller and Auditor General for Northern Ireland, and we examined Northern Ireland accounting officers in the normal way. I was always pleased during last year that this was the case; it seemed to me to emphasise, better than anything else probably could, the unity of the United Kingdom.

The Committee of 1972–73 had most valuable assistance from the Comptroller and Auditor General for Northern Ireland, Mr. Lowry, who has now retired. I should like, on behalf of the Committee, and, I am sure, of the House, to thank him for the work that he did and for all his years of service, and to wish him a happy retirement.

Our Second Report was on two cases of excess expenditure in Northern Ireland, which raised no difficulties, but in the Fourth Report we were particularly interested in a case in which the Department of Commerce set up a Northern Ireland company to take over the assets of a factory which would otherwise have closed down and later disposed of part of the shareholding to a foreign company. I regret to say, but I say plainly, that we were not satisfied that the Department made adequate inquiries or took adequate advice before disposing of part of its shareholding.

I am glad to see from the memorandum of the Northern Ireland Department of Finance on our Fourth Report that it is recognised that a greater degree of investigation may be necessary in such cases. I do not want to dwell on the matter, except to say that in my opinion much more investigation is required in matters of that sort.

So much for our work. I come back to what one can regard as matters of principle about the Committee itself. Parliament is not, nor should it seek to be, an executive authority, but it must surely have the will and the machinery to exercise, as need may require, a control over the executive of the day—and, old-fashioned people like me who believe very much in the power of the back benches would argue, to dominate it.

It is not our business, therefore, on the back benches to do the business of Government. It is our business to criticise, to check and to call to account those who act in the name of the State. I question, as I did at the beginning, whether we set about this affair as skilfully and competently as we might in the modern context. It is said that good government invariably depends on good opposition. That may be. I would say with as much emphasis that governments will always mismanage their expenditure to a greater or less degree unless the House as a whole—I underline and emphasise the words "as a whole"—is prepared to examine and scrutinise the administration in some depth and on a continuing basis. Question times and debates are of immense importance but today this other process of detailed examination has a new importance, to which I am not sure we give sufficient attention.

Any consideration of these matters invokes the history of this place. The fight for parliamentary supremacy in this country is a record of the importance of financial control, as we all know. Yet we all know, too, that in 1975 Estimates laid before this House are never reduced and that control over finance, over spending, is largely non-existent. We vote millions of pounds on the nod and our debates on Supply are excuses for topicality. These debates are important, certainly; I just say that they do not do the job and that we are not doing the job. So expenditure increases, relatively and absolutely, and economies are never made. We do not have control of the total and we have almost no control over the particular. I would even go further and say that Government expenditure now is wholly out of control.

That would be bad enough if it were not for the fact that I have the feeling—I do not know whether other hon. Members share it—that the real tragedy is that so much of our expenditure is not fully effective. If I felt that we always gave aid from the generality of the taxpayers to those who needed it most, I should have no complaints. I do not feel that. I do not feel it in my own constituency even, in which I watch thousands, ten of thousands, even hundreds of thousands of pounds spent on patching up old hospitals which smaller sums would have rebuilt just a year or two ago.

I repeat: our expenditure of the taxpayers' money is not fully effective, and that is the tragedy. If our control is to be effective, hon. Members must be well informed. That means the facility for research and, I am convinced, it means the reports of specialist committees—perhaps published more frequently than we were able to publish this document last year, for the reasons that I have explained —and it means that they must be comprehensive.

I think that we have made some progress. There is this work of the PAC—more of the category of an inquest, of course, into past affairs as a general rule—and, as I have said, if I am re-elected chairman, I hope that we shall be able to speed up its work a little. Now we have the Expenditure Committee, some attempt to look ahead, to compare actual expenditure with forecasts and to consider policy alternatives. But in spite of the devoteed work of members of that Committee and of my distinguished successors as chairman, it still has no staff worth speaking of, at any rate in terms of numbers—I do not speak of quality—and its work has not yet come fully to fruition.

It is not for me, in this speech, to point to remedies, but I say clearly that I believe that we must consider further advances in our techniques. As the right hon. Member for Birkenhead (Mr. Dell) said some time ago, perhaps we should now consider amalgamating the PAC and the Expenditure Committee; perhaps we should take lessons from the Ways and Means Committee in the United States. I am sure, too, that we should examine revenue alternatives.

All that is perhaps for the future. Meanwhile, I hope that the House will maintain the impact of the recommendations of its pre-eminent Select Committee upon the executive of the day and to this end give a non-partisan and unanimous blessing to the Committee's work in the last Parliament.

4.59 p.m.

This debate allows us to consider not only the reports themselves but the wider and more important question of the scope, authority and responsibility of our system of State audit as discharged by the Public Accounts Committee and the Comptroller and Auditor General. These questions are illustrated by the Third Report.

As the right hon. Member for Taunton (Mr. du Cann) has just said, since its foundation in the 1860s the scope of our system of State audit has expanded from simply an examination of the regularity of expenditure—that is, whether the expenditure was properly authorised—into examinations of evidence of waste, of extravagance or inadequate control of spending. But the central purpose is still to ensure that funds are spent on purposes for which they are authorised and that financial procedures are generally effective. The question now is whether, given the enormous increase in public expenditures post-war, much of it in technically complex areas of construction, aerospace and industrial development, our system of State audit is adequate to cope with new demands.

I and others who have written on this subject have expressed some fairly fundamental criticisms of the system, particularly in comparison with the scope and powers of State auditors in comparable countries. I think that these criticisms are borne out by the Third Report.

These criticisms fall under three main headings. First, we who have written about and discussed the subject have been concerned about the limited powers of the Comptroller and Auditor General compared with those of other State auditors. For example, our State auditor has no power to prescribe the form of the accounts he is auditing. This represents a limitation on his investigations. It is my belief that we have singularly uninformative public accounting routines in this country. Increasingly, in other countries the arrangement of Votes and Vote sub-headings is being replaced by the analysis of public spending on a programme basis, which enables the legislature to examine the objectives of items of expenditure and their results in terms of effectiveness and efficiency. Although in this country there has been some move by the Treasury to organise the Estimates into programme categories, this has only marginally improved the situation and we are still a long way from being able to inquire into the results of public spending programmes compared with what they were intended to achieve.

It seems to me, from the Third Report of the Public Accounts Committee, that the public interest would have been better served if, in the case of the hospital contruction reports and the report on the Thames tidal defences, the Comptroller and Auditor General had had the authority to design and oversee the implementation of effective preconstruction cost control systems, rather than complain afterwards that they were inadequate.

In several of these reports the recommendation is that the sponsoring central Government Department should see to it that proper management information and cost control routines should be applied. I am not sure that these recommendations are particularly useful, given that British Government Departments themselves rarely operate any recognisable forms of budgetary control or costing, nor do they have the necessary expertise in systems design. It seems to me that it should be the responsibility of the Comptroller and Auditor General to design, for example, a system to evaluate the cost effectiveness of job creation in the regions rather than the responsibility of the Department of Industry.

Our arrangements compare unfavourably in this regard with those of the Comptroller General in the United States, who heads the General Accounting Office and has statutory powers to direct principles, standards, forms and systems on accounting and has installed management accounting, cost and project control and planning systems in American Government departments and agencies.

An audit is as effective as the information with which it is presented. We need far better management information on Government spending programmes in this country, and only an independent body such as the PAC, served by the Comptroller and Auditor General, is likely to introduce it.

Secondly, the field of activity and the scope of our State auditor is less than that of those in other countries and less than is required by today's conditions. Our State audit is excluded from large areas of public spending—from the nationalised industries and local authorities, for example. Some 66 per cent. of local authority spending is provided by central Government, yet there is no specific accountability to the House for what happens to that money. The British Museum, as we can see from paragraph 169 of the Third Report, can remove spending from public accountability by setting up a limited company for its publications. It may well be that the growing tendency to set up trading funds in Departments in order to serve managerial accountability will similarly remove more public expenditure from oversight by the PAC.

Equally important, the PAC is still primarily concerned with the regularity and propriety of expenditure and not with its efficiency or effectiveness. The Government pour money into private industry and other bodies without ever inquiring into the managerial efficiency of the spender. This is exemplified by the Rolls-Royce case. Here, the Government, in the words of the report, are
"sole shareholder, banker, principal customer for military aero-engines and provider of launching aid for civil projects."
But the Government find out, only long after the event, that the company's inventory control procedures are quite unsatisfactory. Not only that. There is still an inadequate means of monitoring the company's performance to safeguard the considerable sums of public money invested in it. It is surely not good enough to
"trust that it will not be long before arrangements are satisfactory in every respect."
The State auditors in France, Germany and the United States have powers to inquire into and improve the operating systems and management efficiency not only of Government Departments but of private companies which benefit from subsidies or other payments of public funds. The American General Accounting Office has carried out many assignments leading to major reorganisations of departments and agencies. The French Central Committee of Inquiry into the Cost and Efficiency of the Public Services has made recommendations on the organisations, structure and procedures of nationalised industries and universities. The German Federal Commissioner for Efficiency has simplified administration and paperwork and carried out cost reduction exercises and reorganisations throughout public administration.

Our State auditor should become what they are—top-level management consultants to the legislature, empowered to seek out and report on managerial malfunction wherever it exists among spenders of public funds.

It was interesting to me to read in the Third Report about the inquiry into the Forestry Commission. The discussion revolved largely around the figure of 3 per cent. as a satisfactory return on capital for a forestry enterprise, and not whether or not the Forestry Commission was properly organised or managed. This, I think, illustrates the unsatisfactory narrowness of our system of State audit. It identifies major defects in costing, project control, management information, reporting, and accounting after the event, and it does not set these in the context of the management of the bodies which are supposed to be operating these systems.

Finally, I doubt whether the Exchequer and Audit Department is sufficiently expert. It takes in school leavers and puts them through a three-year course. Unlike other State audit bodies, it does not employ qualified cost accountants, engineers, economists and management analysts. Ours is the only State audit in which the auditors are of a status inferior to that of those whose decisions are being audited. Three-quarters of the staff of the United States General Accounting Office have professional qualifications. State auditors in France have to be qualified at postgraduate level in public finance and their average age of entry into auditing is 27 compared with our auditors, whose age of entry is 18. The investigating staff of the Federal Commissioner in Germany are often postgraduates with an average entry age of 30.

The Comptroller and Auditor General's independence of the executive is frequently held up as an example of how well we do things here. Yet the Treasury prescribes the form of the accounts and the Civil Service Department decides the number, grading and status of the audit staff. Other State auditors have far more independence in these matters.

In sum, I believe that our system of State audit has not moved with the times or the requirements of the task. This is no reflection on the Public Accounts Committee or the Comptroller or his staff. It is simply that the technical environment has developed faster than our constitutional procedures. In my view, we now need a State auditor empowered to examine and report on the financial management, administrative efficiency, procedures and organisation of Government, public bodies, quasi-governmental bodies and all recipients of substantial public funds. This would give much more force to public accountability in this country, which I consider is now superficial, and would also be a powerful and positive influence on the improvement of the management of our public institutions.

5.9 p.m.

I intend to refer only to the Fourth Report from the Committee of Public Accounts and shall not, therefore, enter upon the wider ground covered by the right hon. Member for Taunton (Mr. du Cann) and the hon. Member for Norwich, South (Mr. Garrett) concerned with the scope and efficiency of our Public Accounts Committee and the material which is submitted to it.

Nevertheless, the two matters on which the Committee concentrated its Northern Ireland findings in the Fourth Report are each of considerably wider bearing than might appear at first sight. The first of those was the brucellosis control scheme and the story of "so near and yet so far" which it illustrated. Beginning with high hopes, based, as the Department itself said, upon being "able to operate in a comparatively small and well-defined area", it was found at the end of the period that not only had far more expenditure been incurred than had been expected but that the result was scarcely an improvement upon the starting point.

The cautious wording of the report and of the Department does not conceal the principal reason for that, which indeed was spelt out in the reply by the departmental witness to Question 465 He said:
"Looking at the picture, when we plot a map showing the outbreaks, which tend to be concentrated almost entirely, but not quite, around the border areas, this does indicate, I think, that a good deal of our trouble is importation. Certainly some of it, indeed a good deal of it, is illegal."
The brucellosis control scheme is to a considerable extent in the position of a Danaid engaged in filling the celebrated jar of the Danaids, and the hole in it is the readiness with which, legally or illegally but without sufficient control, the international frontier is crossed not only by persons but also by animals and goods.

There has in this respect been in recent months, not to say recent weeks, the beginning of a change of attitude. I think it is likely that from now onwards the frontier between the United Kingdom and the Irish Republic will be progressively organised as an international frontier between friendly States ought to be organised—for the mutual benefit of both States; for let there be no misunderstanding: the State on each side of a frontier has an equal vested interest in the proper and lawful control of the use and passage of that frontier.

As I say, we are still in the rudimentary stages of the proper organisation of control. The initial steps taken in recent weeks, which arose, as such long-term policies often do, out of some immediate emergency—in this case, the occasion of the passing of the Prevention of Terrorism (Temporary Provisions) Act in November—are simply a start upon a process which will be continuous and constructive.

The only point in this context which I would like to emphasise is that this organisation of the frontier should not be regarded as a temporary measure related to the current dangers and difficulties in the Province. It is a measure which in many respects is justified in its own right and will continue to be fully justified after peace and normal conditions return to Northern Ireland. Perhaps we could not have a better reminder of the lasting importance of proper control of that international frontier than the comments of the Public Accounts Committee upon the brucellosis control scheme.

I pass now to what is perhaps the major matter; that is, the industrial development project with a computer firm in Belfast to which there is already a commitment of £7½ million of public money. I think that £7½ million will shortly be proved an underestimate; but at any rate that was the sum definitely committed at the time when the Northern Ireland Comptroller and Auditor General made his report.

The first thing which I find absurd—it is quite clear that the Committee too found it absurd—is the pretence of anonymity surrounding the company to which this relatively huge subvention is made. It is not acceptable that a company which receives public money on this scale should be even formally anonymous in reports tendered to the House. In any case, no person with knowledge of the circumstances or knowledge of the industry, reading the evidence tendered to the Committee, reading for example the lengthy question posed to the witness by the hon. Member for Eastleigh (Mr. Price), would have any difficulty in identifying the firm.

Nor was there any substance in the allegation at first put forward that the Department of Commerce was under some obligation to conceal the identity of the firm. In fact, the covenant was a covenant that the company itself should not disclose the terms of the offer. There was nothing, and rightly nothing, which bound the Department to conceal from the Public Accounts Committee—which it did not—nor from the House nor from the public the identity of the firm which was receiving the subvention.

The second unsatisfactory aspect was the rôle of the advisory committee. Statutory advisory committees in the context of public money made available to private firms are today very much in the news. Therefore, I think it is relevant that the report should have informed the House that the advisory mechanism clearly did not work properly in this case. What happened was—the House will find this set out on page 21 of the Fourth Report—that a mass of papers was thrown at the advisory committee before the weekend and an answer was demanded from it immediately after the weekend.

It is not good enough for an advisory committee to be made part of a statutory machinery of subvention and then for the advice to be asked and secured in so cursory and ineffective a manner. It is quite true that the chairman of the advisory committee evidently did his best—he did his best to master the facts, which were complicated enough, and to brief his committee when the members turned up and met; but I am sure that this was not the intention of the House in constituting an advisory machinery.

The intention must be that advisory bodies have adequate time and opportunity to brief themselves independently of the Department before they come to tender their advice. I do not know whether in the present case, had those conditions been fulfilled, the advisory committee would have given its assent to what the Department was proposing; but certainly an unsatisfactory aspect has been shown up by this investigation, and I trust that the lesson will have been noted for further cases and that the advisory committee will always be given adequate time and opportunity.

A third administrative aspect, which was raised by the Comptroller and the Auditor General for Northern Ireland, was the appointment of one of the Department's own civil servants as head of the joint company which was formed by the Department. I do not think the fact that the civil servant was one who was not a career civil servant alters the principle of the matter. The Comptroller and Auditor General for Northern Ireland observed in paragraph 113 of his report—he was stating an important principle—that
"… where a 'dialogue' is continuing between the Ministry and the company bargaining for the use of public funds, the question of a person acting in a dual capacity with a potential risk of conflict of interest is, I suggest, worthy of examination."
He was putting it there very mildly. It is psychologically virtually impossible—indeed, I am not sure that it is desirable—for the person who is appointed to head a company to separate his duty towards that company from his position as the official of the Ministry from which the subvention is proceeding. It is therefore right, I would have thought, as a matter of principle, that the arm's length relationship between companies receiving subsidies and the Department giving them should be carried to the point of a separation of personnel between the top management of the company and the Department's own civil servants.

Coming from those matters of administration to the economics of the individual case, there are three questions that I should like to put to the Minister, who I see is very properly in attendance this afternoon. The first is: can he give the House any further information on the financial prospects? Already the Committee was able to ascertain that the estimate of a maximum of £3 million loss had been exceeded, on the information which was before it at the time. What I should like to ask is whether he can add to the information which was given to the Committee.

For example, it turned out that the estimated loss for the year 1973, which was only £1½ million at the time of the report of the Comptroller and Auditor General, is now known to be virtually £2 million—Question 526. Yet, curiously enough, the estimate for the year 1974–75 was that it would be down from £2 million in 1973–74 to £1·3 million only.

Any indication of a lurch toward, solvency on the part of a company with this kind of history must attract the liveliest interest, and as one-third of the firm's financial year October-September—at any rate, a quarter of that financial year—is already past, I am eager to know whether the Minister has any information which would suggest that the rate of loss making is falling, and, in particular, whether it is at all realistic to suggest that in this calendar year this company will move over into profitability.

Connected with that, there is a second question which goes back to the point about the total public commitment. That public commitment of £7· million is a past commitment. It was a commitment which took account indirectly of expected total losses of £3 million over three years, but it is not a commitment which includes a prospective loss. I should therefore like the Minister to make it clear to the House, supposing losses are continuing, upon whom the liability for meeting those losses would fall. Are they not due to be added to the existing commitment of £7½ million?

The third financial question that I should like to put relates to the commitment of the American concern to take up the further 35 per cent. of shares in the joint company. Page 22 of the Fourth Report states that the transfer rights of that company have to be exercised by February 1975—that is, by next month, whether the beginning or the end of the month is not clear. Very great anxiety was rightly expressed both by the Comptroller and Auditor General in Northern Ireland and by the Committee about the circumstances in which the American company, instead of taking a 50 per cent. share as was the intention—and incidentally was the intention which was submitted to the advisory committee—was going to take up only 15 per cent. of the shares. Incidentally, the Department did not come back to the advisory committee and ask if it wished to alter its information when it heard that the American firm was going to take up only 15 per cent. of the shares.

In view of the anxiety which this change stimulated, it would surely be interesting to know whether the American company is, in fact, going to take up the remaining 35 per cent. of its 50 per cent. share in this joint company. I cannot imagine that, if it intends to do so and has to do so by next month, the Department will be unaware of the intention. I hope, therefore, that the Minister will be able to tell the House—it will be some relief at any rate—that the arrangements for the transfer are going ahead and that they will be implemented next month by the due date.

Looking back upon this whole scheme so far, this involvement of £7½ million plus of public money in this firm, what are the lessons which can already be drawn from it? It was, one knows, an extra-statutory scheme—Question 550—so that while this House in legislation and the former Northern Ireland legislature laid down in statutory form the conditions which it thought appropriate when public funds were to be infused into undertakings for the purposes of industrial development, the Department in this case went beyond its statutory entitlement. It did so, we are told, because of what was considered to be the urgency and the importance of avoiding the imminent unemployment of some 1,500 employees in the firm as it stood in 1971. The House ought to mark its keen interest in such an extra-statutory proceeding. The procedure of this House has always made arrangements for circumstances in which a Government may be called upon to act in ways not covered by statutory authority; but it is really a cause for unease if, in circumstances of the precise kind which have been envisaged in the basic legislation, a Department is found to have acted extra-statutorily. Perhaps that, too, is a point to which the Minister will refer if he intends to intervene in the debate.

I come to the fundamental fact about the whole operation. As was stated by the Department in answer to Question 525,
"there was no commercial justification"
for keeping the firm in operation at the end of 1971. Those were the words. Hon. Members who have studied the work of the Committee and the report of the Comptroller and Auditor General will have great difficulty in ascertaining that there is today any more commercial justification than there was in 1971.

So we are brought face to face with a balance, one of those balance sheets to which the right hon. Member for Taunton was referring: on the one hand, the expenditure of £7½ million plus of public money in what, on the face of it, is an operation originally without commercial justification, and highly doubtful upon the material submitted to the Committee and to the House; on the other hand, the continued employment of some 1,500 persons. But that balance sheet, thus presented, is not complete. It omits a vital fact. Paradoxically, at the same time as there are high unemployment figures in Northern Ireland there is a shortage of labour there for a large number of profitable jobs ready and waiting to be done. The movement of labour, as well as the creation of additional demand for labour, is vital for the success of the economy of Northern Ireland. There is no future for Northern Ireland, any more than there is for the economy of this country as a whole, in loss-making activities. There are circumstances in which such activities may have to be maintained, but it is not upon them—this is a truism—that the prosperity of the part or of the whole depends.

I suggest that the Department, at any rate at the time when this scheme was entered upon, too readily assumed that the continued employment, in an operation for which there was no foreseeable commercial justification, of 1,500 persons was a sufficient reason for going ahead.

Of course, the difficulty in casting up this kind of balance sheet is that one is comparing the known with the unknown. One is comparing the employment of these people, here and now, visibly at work in this factory, with what we cannot in the nature of things know; that is, what they would be doing, the use to which their knowledge, their effort and their experience would be put, if, owing to the factory's closure, they found their way, or a way was found for them, into other applications.

But if we always use the power of the State, if we always use public money, to secure continued employment in directions for which there is no commercial justification, the transfer to profit making, to creative application, will not take place. Therefore, we have to take the responsibility—the Government have to take the responsibility, and the House and individual Members have to take the responsibility of supporting them—of making commercial viability the standard from which we are determined not to depart. Thus, in my view, the considerations which the Committee in its study of this one quasi-anonymous instance put before the House have a very much wider bearing.

5.32 p.m.

I shall not comment on what has been said by the right hon. Member for Down, South (Mr. Powell) because he has plainly made a deeper study of the particular instance of the 1,500 jobs in Northern Ireland than I have, although I was a member of the Committee and I remember the witnesses giving evidence. However, I think it possible that the right hon. Gentleman did not give sufficient weight to the special situation in Northern Ireland, the civil unrest there, and the feat that 1,500 people would become unemployed, would not quickly be re-employed, and would in the event be turned out on to the streets of Northern Ireland—or at least many of them would—thus possibly causing even greater civil unrest than there is at the moment. I think that that was a factor taken into account by the Committee, and pressed upon the Committee by the witnesses who gave evidence.

As the first member of the Committee to speak from this side I wish at the outset to pay a sincere tribute to our Chairman, the right hon. Member for Taunton (Mr. du Cann). I pay my tribute to him for the sincere, efficient and courteous way in which he conducted his chairmanship during the year. It was a great pleasure to serve under him. It was an excellent experience for me to do so, and I look forward to serving under him again in the coming Session.

The right hon. Member for Taunton referred briefly to the Rolls-Royce settlement, the settlement arrived at between the liquidator of the old Rolls-Royce company, the Government and the new Rolls-Royce company, and I wish to elaborate a little upon that matter because I believe that one or two lessons may be drawn from it.

As the House will recall, the receiver of the old Rolls-Royce company eventually transferred to the new Rolls-Royce company, which was under the control of the Government, the aero-engine assets and certain other assets, including the RB211 assets, of the old Rolls-Royce company. The negotiations for that transfer were conducted in the first few months of 1971, and the assets were transferred in May 1971. The whole matter is dealt with in the Committee's Third Report, paragraphs 11 to 32. As a result of that settlement the new Rolls-Royce company, the Government-controlled company, took over all the liabilities and obligations arising from the RB211 contract, and it also paid the liquidator—the Chairman of the Committee referred to this—£87½ million for certain other assets, including aero-engine assets, of the old Rolls-Royce company which were considered to be of national importance.

In consequence of that settlement the liquidator of the bankrupt company was able to pay the creditors in full, and I understand that the shareholders of the old, insolvent company were able to receive interim dividends equivalent to about 40p per share. I understand also that there may be a further final dividend, so that at the end of the day the shareholders of the bankrupt company will have received from the liquidator something equivalent to 50p per ordinary share.

To put those figures in context one should remember that on 2nd and 3rd February 1971, a few days before the storm broke and before the public realised that Rolls-Royce was in great difficulty, the shares of the old company were fluctuating on the Stock Exchange at prices between 45p and 35p a share. One can thus say that the shareholders of the old company got back all their money in the sense that they have received, or will receive, sums equivalent to the quoted value of their shares on the Stock Exchange before Rolls-Royce was pronounced insolvent.

What I find especially disturbing in that situation is that many of the shareholders, many of the persons who have been compensated, bought their shares after the news that Rolls-Royce was in great difficulty and when the shares were valued at an extremely low level on the Stock Exchange. They have thus made enormous profits from the liquidation, and many of those shareholders, I understand, are foreign companies or nonresident banks.

Commentators in the financial Press and elsewhere have sought to explain away what must be a rather embarrassing situation by attributing the result to some extent to the financial skill and negotiating prowess of the liquidator. We are told in the papers that he secured a splendid deal on behalf of the creditors and shareholders of the old company. No doubt the liquidator is a man of great skill, but I suggest that he obtained the £87½ million not only as a result of his skill but as a result of wrong and uncommercial decisions made by the British Government in the days immediately following the collapse of the old Rolls-Royce company.

If the Government had approached the matter—this is a personal view; the Committee did not find it—in a commercial way the liquidator, in my opinion, would have received far less than he did for the non-RB211 assets, and the shareholders of a bankrupt company would not have been put back into the position they held before the company was declared bankrupt. The House will wish to know how it came about that the liquidator was able to extract £87½ million from the Government.

The root cause of the difficulty—the Committee found this—lay in the heads of agreement drawn up between the liquidator, the Government and the new company right at the beginning, immediately after the Rolls-Royce collapse. Under that agreement, the Government agreed that if they were able to renegotiate the RB211 contract—the House will recall that they were able eventually to do that and to arrive at a new modified contract—the RB211 assets would be taken over by the Government from the liquidator at the nominal sum of El, ignoring any potential profits, or, more probably, ignoring any losses which might still arise for the new Rolls-Royce company; but as part of that agreement the other aero-engine assets and other profitable assets of the old company were to be transferred to the Government and the new company at full market value and no account was to be taken of any potential RB211 losses in arriving at that market value.

Therefore the receiver got a very good deal from the outset. He was relieved of the onerous RB211 contract with its possibility of heavy losses and substantial payments to be made by way of indemnity, and at the same time he was to receive full market value for the other aero-engine assets. A prudent commercial buyer would hardly have entered into negotiations on these terms and of that kind.

The prospects for the RB211 were uncertain, but the Government agreed with the liquidator to ignore that uncertainty. Any commercial buyer, instead of ignoring it, would have taken it into account in discounting the price to be paid for the profitable assets. That uncertainty should have been a factor in determining the money which the Government were to pay the liquidator for the part of the Rolls-Royce business which was profitable and which would be transferred.

Bearing in mind the constraints which the Government imposed upon themselves as a result of the heads of agreement it would not be fair to say that the figure of £87½ million, which was eventually paid, was not fair and reasonable. I do not have the information on which to base an assessment, but the Committee received a paper, which was not printed, which set out the profits of the profitable assets for 1972. It seems to me, although I am no expert in these matters, that taking one year's profits, it could be said fairly that possibly the Government did not pay too much when they paid £,87½ million. However, the damage was done previously under the heads of agreement, because these should never have provided for the RB211 to be separated from the rest of the business for the purposes of valuation.

As a secondary matter the Committee also found that the Government had paid too much attention when negotiating with the receiver to his claim that there were possibly foreign buyers who might wish to purchase the profitable assets of the Rolls-Royce company. It surprised me to discover, after we had inquired of the Treasury witness and after a paper had been submitted, that the Government do not seem to have any power to prevent non-resident persons from purchasing for cash the assets and businesses of British companies. One always assumes that under the exchange control regulations or under some section of the Income Tax Acts the Government have reserve powers to prevent such purchase if it were considered in the national interest to do so. Apparently that is not the case.

So the receiver was able to use the argument that a foreign buyer might want to buy certain assets in order to push up the price the Government had to pay him. If the heads of agreement had not separated the RB211 from the other assets such an argument would not have been open to the receiver because no foreign buyers would have wanted to buy the RB211 contract with all the complications that involved.

What lessons, therefore, can be drawn for the future from the Committee's post mortem on the purchase of the business and assets of Rolls-Royce by the last Conservative Government? It seems to me that the valuation of assets and the complex business of conducting these negotiations should not be left to hard-pressed Ministers and their civil servants—and I say that with the greatest of respect—but should be entrusted to a body which could build up an expertise in these matters. It may be that the IRC, if it had been in existence at the time, could have conducted the matter in a more satisfactory way, but I do not know because I have no experience of the IRC or of how it works. If we are to set up a National Enterprise Board I hope that it will be given power to conduct negotiations of this kind, to acquire shares and assets and to build up the necessary expertise.

Decisions on whether a company should be acquired in the national interest will always be political decisions and will always have to be taken by Ministers accountable to this House. Once that decision has been taken, however, the only way to deal with the matter is to have a body capable and equipped to purchase the assets on a sound commercial basis. I see no other way in which it can be done.

Finally, I refer to the fact that the Treasury does not seem to have the power to prevent acquisition of assets in this country for cash by foreign purchasers. The Government must look at this matter again. We are now in a world where a few countries, certainly the oil producing countries, seem to have limitless supplies of cash. May be one of these days one of these interests will want to buy in Britain assets which we consider in the national interest should be retained here. The purchaser would not have to borrow money or mortgage shares or come within the exchange control regulations. We all want to encourage investment, but there must be a point at which it would be prudent for the Government to make sure that they have the necessary reserve powers to prevent such an acquisition if that were in the national interest. The Americans seem to have these powers. Therefore I ask the Government to consider whether it would be possible to tighten up the rules to prevent such purchases.

The collapse of Rolls-Royce produced a most complex and difficult situation. It is easy to be wise after the event, but it can be fairly said that the last Conservative Government were not properly equipped to deal with the immediate situation which followed the collapse of Rolls-Royce. Wrong decisions were made at the beginning, and they cost the British taxpayer substantial sums of money, although it is difficult to come to the exact figure of how much was lost.

5.47 p.m.

I wish to echo the sentiments of the hon. Member for Llanelli (Mr. Davies) in thanking the right hon. Member for Taunton (Mr. du Cann) for his chairmanship of the Public Accounts Committee on which I was honoured and privileged to serve on this occasion, and to congratulate the right hon. Gentleman on the report he has produced. My absence from the Committee in future will not be because I regard it as work which is not of great importance. I regard it as work of pre-eminent importance, but it looks as though two Finance Bills will be separated only by the Easter Recess and there therefore does not seem to be much time to fit the Public Accounts Committee between them.

We are here discussing an important part of Parliament's most important function which is, I have always been led to believe, the control of the executive. If we were to ask ourselves whether Parliament had successfully controlled the executive in recent years I do not think that in all honesty the answer would be a resounding "Yes". I doubt whether Parliament in its present form is capable of doing so. In our modern parliamentary system the executive is too free—too free to legislate and too free to spend. A by-product of this is that in recent years both Conservative and Labour Governments have found it all too easy to get their legislation accepted by Parliament but have then been unable to get it accepted by the country. I know that controlling the executive is not just a question of controlling money, but I suggest that if we control money and if we control public expenditure effectively success in everything else we have to do in this House might come very much easier. It is true that if we cannot control public expenditure no one—our constituents, the public at large, the Press or the rest of the media—will believe that we are likely to be successful in much else.

This was the first occasion on which I have sat on the Public Accounts Committee. The Committee has, over a great many years, done very good work in ferreting out the odd scandal and those things that fall far short of the scandalous. It is probably a judgment that will be counfounded by events, but I do not think that any of the reports which we are debating today contain any element of the scandalous in public expenditure—wasteful, perhaps, but not scandalous.

No matter how efficiently the Committee does its task, it is inevitably shutting the stable door after the horse has bolted. Lessons can be learned, and I hope that they will be learned. The Treasury Minute indicates that some at least have been learned already. Nevertheless, the power of the Committee to ensure that the enormously increased level of public expenditure is good and necessary, and that the spending is efficiently done, is inevitably limited. However good the Committee or the Exchequer and Audit Department may be, public money will be spent and will be wasted as long as the House meekly assents too easily to almost any tom-fool level of expenditure one cares to put forward. The problem is bound to increase.

The hon. Member for Llanelli spoke in some detail about Rolls-Royce and the RB211, with which we dealt in great detail in the Committee. The pages of the report dealing with the situation after the collapse of Rolls-Royce are an example of what a Government do in an emergency. The right hon. Member for Down, South (Mr. Powell) spoke of what had happened on items of expenditure in Northern Ireland. It is true that the Committee had to look at the items to which he referred—certainly to the last to which he referred. We all came tacitly to the conclusion that what had been done might not have been exactly right but that if we had been in the position of those concerned we would have found that there was no alternative, because there was a gun at their heads. In other words, it was almost blood money. It was certainly civil order money to keep the streets from flowing. Therefore, we had great sympathy with those civil servants who might have stepped outside the normal bounds of financial prudence in these matters.

But it is all very well to use the excuse of an emergency, whether in Northern Ireland or an industrial emergency in Rolls-Royce, for not ensuring that money is properly spent, according to the standards one would normally apply. We are confronted at the moment, in the Press anyway, with the case of a civil servant in the Department of Industry who has filed a memorandum with an eye to a future Public Accounts Committee investigation. I do not want to go into that matter in detail. Whether that civil servant is right, whether the board set up by Parliament to advise the Minister on matters of money and industry is right, or whether the Minister is right, is not the point at present. The Minister may well be right. Hon. Members would be wrong to set their faces against new types of industrial enterprise just because they were new, and to say that no public money should be put into them.

What is wrong is that a Minister, having been advised by the board set up by Parliament to examine industrial grants that a certain enterprise does not merit the expenditure of public money, and having been opposed by his own accounting officer, should still not have to return to the House on the matter. Any measure that allows a Minister to make such a decision without returning to Parliament for a by-your-leave, as the Industry Act does, should never have been passed by the House.

In theory, our control of nationalised industries, of expenditure in industry, or Government participation or intervention in industry, is all quite simple. We do not have the right to question Ministers about the detailed day-to-day management of the industries into which the Government put our money, or of fully nationalised industries. The trouble is that the day-by-day management may well be running up huge debts, and we shall then be asked at some time in the future to write off those debts. That is when public money is spent. We shall be faced with a fait accompli, never having been asked in advance. We shall be in the situation that we were in over Rolls-Royce, and perhaps almost in the situation that we were in in Northern Ireland. We shall have a gun at our head, and shall be told that there is no alternative but to write off the debts of British Rail or the coal industry.

We have no satisfactory control over the use of public money in industry. It is towards achieving such control that we must look when we think about the Rolls-Royce case and much else in the Committee's reports. How can we make sure of public accountability? Labour Members will say that it is easy that we just make sure that wherever the Government put public money we take a share of equity for the nation. But that does not solve the problem. It is right that we should take a share of the equity. My party and I have long advocated that, and I am delighted that the Government are determined to do it. But we should be fools if we thought that it would solve the problem. We have only to see how far the big institutional shareholders have exercised any control over the expenditure of what is, after all, their money in some of the major industrial enterprises in which they have invested, to realise that. The majority of civil servants and politicians have no experience of business practice. There should be far more interchange between the two if we are to go on intervening in industry.

There must be efficiency audits for all nationalised industries and for all Government participation in industry, whether or not fully nationalised. It is not good enough to have a debate once a year on the Committee's reports and to say that certain money was spent wrongly. It is not just a question of how the money was spent. That may not be all that is wrong. Certainly in our deliberations it was often difficult to say not only whether public money had been wasted or should not have been spent but whether it had been spent to its optimum effect.

There are two issues on the control of public expenditure. The first is how much we spend in total, and the second is whether each bit is spent well. The Committee under its present chairman and with the present Comptroller and Auditor General, is well-equipped to carry out the second of those tasks. It is well staffed through the staff of the Comptroller and Auditor General—far better staffed than any other Committee of the House.

The Committee might benefit greatly from more publicity for its proceedings. I do not want to short-circuit the argument about whether we should allow our proceedings in the House to be televised, but it occurs to me that, although some people may think them very dry, some of the exchanges in the Committee and some of the issues we investigated not only merited the probe of the television cameras but would have made good television—although I say it as perhaps one who should not, having been a member of the Committee. It would have enormously concentrated public attention. Of course, that is entirely outside the question of whether we televise the proceedings of the Chamber. There seems no reason for us not televising some of the proceedings of Committees such as the Public Accounts Committee.

In my view, the overall level of expenditure is outside the control of the House. We cannot any longer make any pretence to be controlling public expenditure. The Expenditure Committee is largely ineffectual. That may not be the fault of the members of the Committee. We have an annual debate which is a rather desultory affair. Moreover, unless the Committee is debating, discussing and investigating expenditure in the context of forecasts of likely revenue for at least the same period ahead as it is considering expenditure the whole exercise is futile.

Expenditure and the forecasts of likely revenue have to be examined in the same money terms. There should not be one sort of funny money for expenditure and another sort of money for revenue. There is much merit in the idea—I understand that the Chairman of the PAC accepts this—that we should amalgamate the PAC and the Expenditure Committee. But we need to bring a strongly reinforced forecasting of revenue into our deliberations.

No one ever set out to produce a Government borrowing requirement of £6,000 million but we have it all the same. If we examine the record—

Perhaps the right hon. Member for Down, South would like to make his point.

I was moved to recall that Mr. Anthony Barber set out to produce a net borrowing requirement of £4,000 million.

I am grateful to the right hon. Gentleman for that remark. I would not have expected him to pass it by.

If we examine the record of the public sector deficit or the borrowing requirement over the past six years it cannot be suggested that it has been determined by logic, reason or economic good sense. It has been determined by too many Chancellors trying to win too many elections in too few years. It is an inherent and natural characteristic of political parties to invent new methods of spending public money. Once the promise has been made in an election campaign or inserted in a manifesto our parliamentary system—this is the nub of the matter—makes it a darned sight too easy to push it through. Once the matter has found its way into a manifesto it is as good as enacted in terms of public expenditure.

Far too little research is done into the items which find their way into party manifestos. That applies to all political parties. Even if we increase the research facilities available to political parties, anyone who has experience—and many of us have—of the problem of trying to stop party conferences voting to spend vast sums of public money by reason, statistics or any other such criteria, will know that if the party gets into power no amount of research will control expenditure.

There is a need for an independent research institute to cost party promises before elections. If that were done we should not be subjected to the charges and counter-charges of Chancellors and Shadow Chancellors about how much each proposal will cost.

This House will never control public expenditure in any meaningful way until the tax system is indexed. "No taxation without indexation" should be the slogan of parliamentarians in 1975. Large sums of public expenditure have been undertaken by Government without the necessity to go back to the House. That is because inflation has whipped up the revenue that the Government receive. It may be that now the Government are suffering what can only be called taxation starvation through almost negative indexation they will be more receptive to indexation.

How can the House control expenditure when the parliamentary and party systems, and the Whip system, make it so easy for Governments to get away with murder? If we wanted to do the job properly perhaps the real answer would be a separation of powers such as the Founding Fathers established in America. Short of that, the only way in which Parliament will be able to control a Government's expenditure in future is by changing the electoral system and ensuring that Governments cannot carry every item of expenditure that they wish.

6.6 p.m.

So far the debate has consisted of what is so often the practice on similar occasions—namely, one compliment after another being paid to the Public Accounts Committee. It seems that Select Committees are treated with greater respect than perhaps they deserve and that administrations are treated with less respect.

I was particularly disappointed with the PAC's approach towards Giro cheques. I was disappointed by the spirit of the questioning and by the tenor of the report. I do not like the Treasury evidence either and am critical of the tone of the Treasury Minute which replies to the PAC's report. It is understandable that Conservative right hon. and hon. Members are unsympathetic towards the Giro system. Perhaps that applies particularly to the right hon. Member for Taunton (Mr. du Cann), who refers to himself as a banker when putting questions during the cross-examination of witnesses.

It might be of assistance if I explained that I have never been opposed to Giro cheques. As a believer in the expansion of the banking habit and a believer in savings, I welcome any improvement in the facilities for money transfer. I am exactly the antithesis of what the hon. Member for Newcastle-under-Lyme (Mr. Golding) describes. I am a supporter of the Giro system.

I am pleased to have heard that assurance. I am sure that at a later stage in the Session we shall be glad to hear it repeated. I would have hoped that the questioning would have been more sympathetic. As the right hon. Member for Taunton has made clear, the Post Office Giro is a publicly-owned bank. One would have expected the Government and Labour Members to support the extension of the Giro system and its facilities. I hope that the Government will quickly come to the House to ask it to extend its powers so that it can become even more competitive towards the joint stock banks.

To an extent I believe that the inquiry was nit-picking. What does not emerge from the questioning and from the report is that the money that is under examination is all public money. It is not a case, for example, of the Department of Employment or the Department of Health and Social Security dealing with an external, private bank. This is a matter of transfer payments within the publicly-owned sector. All of it is public money. Therefore, to a great extent the work of the Committee would have been better directed towards examining the accounting procedures when public bodies, including the nationalised industries perhaps, are dealing with privately-owned companies. That would have been more to the point than dealing with the question of transfer payments.

We on this side, particularly the Government, should be more aware of the Labour Party's policy expressed in 1973. The policy statement then declared specifically:
"Labour's Giro is now a major public banking facility. We would ensure that Government Departments and nationalised industries use Giro as extensively as possible for their money transfer business."
It is for this reason that I am disappointed that it emerges, from the questioning, the Committee's report and the Treasury Minute, that no directive has yet been given by the Treasury to Government Departments to use Giro more extensively. Indeed, the Treasury witness, in reply to Question No. 1662, said:
"… it is the intention that there should be fair competition between Giro and other means of making payments, the joint stock banks, the Paymaster Geneal's office, and so on."
I would have hoped that a different policy would have been adopted by the present Government. I would have preferred them to have said, as the Labour Party said in 1973, that Government business should be conducted where possible through. Giro.

I believe that this should be done not only because it is Labour Party policy but because the profits of Giro go into the public purse—that public purse which the Public Accounts Committee is supposed to be protecting. The money that goes through Giro is finance available to the State, and is again a saving to the public purse.

Perhaps most important of all, Giro offers better facilities for many of its customers than the joint stock banks do. One witness, Mr. Errington, stated in paragraph 1681:
"I think that the facilities provided by the Post Office in the way of spread of points of payment, hours of opening, accessibility and so on, probably meet the needs of the majority of our clients very much better than any bank would do."
The Government should quickly decide to implement Labour Party policy on this point.

As the hon. Gentleman has seen fit to suggest that the questioning in the Public Accounts Committee might have been influenced by the fact that the chairman is a banker, would he tell us what his own interest is? I am not at all certain, but I have a feeling that it might be to do with those who work in Giro.

I have declared my interest in the House on very many occasions. On this occasion, I do not speak for the members of the Post Office Engineering Union. Usually I do, and when I do so I declare my interest.

I have declared my interest on every occasion when I have spoken for members of the Post Office Engineering Union. Once again the hon. Member for Cornwall, North (Mr. Pardoe) is nit-picking. The bulk of those who work in Giro are members of the Union of Post Office Workers, and I have no financial or direct interest in putting their point of view. No union has asked me to raise this matter. I am not a member of the Union of Post Office Workers and do not represent its point of view. But if the hon. Gentleman wants me to declare that I am an officer of another union, I do so, as I have done many times before in this House. The hon. Gentleman's intervention is typical of him.

Thank you, Mr. Deputy Speaker. These interventions from a sedentary position call for rebuke.

I would have been much happier had the Government, in reply to the Committee, said that the Treasury wants to see as much business as possible being conducted through the National Giro because it is a publicly-owned bank which provides a better service to the public than do the joint stock banks.

6.16 p.m.

I am a member of the Public Accounts Committee, having returned to it after an absence of some years. I was a member of it some 10 years ago. Returning to membership of such a committee is like going back to a town one has not visited for years. One probably sees the thing in a clearer light and gets a sharper appreciation of its work.

It is no mere complimentary gesture when I say that my experience leads me to pay particular tribute to the Chairman of the Public Accounts Committee, my right hon. Friend the Member for Taunton (Mr du Cann). I have served on a large number of committees and know how much their proceedings depend on the way their chairmen work. For example, one chairman will decide that his committee is his own prerogative; another will decide to delegate, and thus draw the best from his members. That is the ability of my right hon. Friend as Chairman of the Public Accounts Committee. He has the ability to put witnesses at their ease and, having done so, to get them to talk freely. He gives his colleagues on the Committee the opportunity to question witnesses. The effectiveness of the Committee is also largely in the fact that its members have specialist knowledge of so many subjects.

The hon. Member for Norwich, South (Mr. Garrett) looked at the subject in a rather theoretical way—in the way in which he would if he were a lecturer. I do not know the hon. Gentleman's profession, but I suspect that he was a lecturer and researcher in Government procedures. His arguments were impracticable. He advocated that every Government Department should be controlled by some sort of efficiency firm and that the Comptroller and Auditor General should be an almighty controller of all things, telling every Government Department how to run itself. We have seen how administration of nationalised industries has fallen down in this respect.

I was fascinated to hear the hon. Member for Cornwall, North (Mr. Pardoe) suggest that the proceedings of the PAC should be televised. That was a most remarkable statement. The hon. Gentleman has attended some of its meetings and I think he must have his mind on the Finance Bill rather than on the meetings of the PAC. Does he not realise that of all Committees the PAC is the one in which we expect witnesses to give evidence bearing in mind that, if their evidence is thought to be against the national interest in terms of secrecy, it can be sidelined? If the Committee had not enjoyed that facility in the past, I believe that its reports would not have been so effective.

The hon. Member for Newcastle-under-Lyme (Mr. Golding) at one moment agreed with the hon. Member for Cornwall, North that Parliament must control matters on a basis of efficiency, but in the very next moment the hon. Member for Newcastle-under-Lyme took the view "The dickens to efficiency. I have a constituency problem and believe that we should advocate the use of the Giro regardless of whether it be economic or efficient. It is in our manifesto, so we must support it." When it is suggested that the PAC has a bias against the Giro, we should for the sake of accuracy read its conclusions. In the final recommendation, in paragraph 70, the Committee said:
"Your Committee welcome the action by DE and DHSS to examine whether DE Giro-cheques can be merged into the DHSS system and we hope that the investigation will lead to an efficient and economical arrangement. If a satisfactory solution is reached we suggest that an extension to include girocheques issued by other Government departments might be explored. As regards charges for the use of girocheques we are surprised to learn that the Treasury have left each department to negotiate separately with Giro. We suggest that economies might be effected if the Treasury undertook central negotiations with the National Giro Service to cover all departments."
Is that nit-picking? Does not the hon. Member for Newcastle-upon-Lyme want the PAC to go for efficiency?

Let us look at the benefits of the PAC, whose work I have seen from the inside and whose efforts I also appreciate through my work as a "junior fag" in four or five Government Departments over the years. First, the PAC is one of the most senior Committees of the House—although, looking round the Chamber at the moment, one would hardly think so. The Committee has the advantage of being a long stop for the Comptroller and Auditor General and it provides a means of communication between Government Departments and this House. The Committee's work has the effect that the Permanent Secretary of a Department is in most cases the accounting officer: he is ultimately responsible to the Comptroller and Auditor General.

One of the effects of the work of the PAC is that, if any Minister should decide that he wants to pursue a policy that is contrary to the will of Parliament, for doctrinal reasons or otherwise, the accounting officer has the ability to say "Minister, if you take this action I shall have to report it to the PAC." No Minister has ever appeared before the PAC.

The Committee is also a vehicle through which back benchers can raise questions for investigation. The Committee can investigate virtually anything and has the right to call for papers and persons. It has been a custom of the PAC generally only to call for civil servants and those who are directly in the Government's employment. As we develop these procedures, should we not also consider including other people to give evidence, particularly consultants employed by the Government?

The Committee considered, among other subjects, the Taff Vale scheme, ocean tugs and the development of hospitals, and in all three cases there was direct criticism of the fact that the consulting engineers had not contacted those who were carrying out the practical work. There was a recent Adjournment debate on the subject, and I am glad to see present in the Chamber one of the participants, the hon. Member for Derby, North (Mr. Whitehead). The opportunity was taken in that debate to find fault with a leading firm of consulting engineers. I very much regret the fact that the matter was not referred to the PAC before that debate took place. In fairness to all concerned, it would have been far better had the Committee investigated the matter in detail and taken evidence from both sides before the matter was debated in the House.

I am one of the Members to whom the hon. Gentleman has referred. I am sure he will accept that in the case of the hon. Member for Gloucester (Mrs. Oppenheim) and myself, we raised the matter only after a year had elapsed since the measurement engineer complained to the SWRCU.

It would be unfair for me to use this opportunity to debate that case. All I am saying is that when great names and reputations are at stake, as in that instance, it might be better if the PAC were to hear all sides of the question before it is ventilated in the House. We do not know the eventual outcome of the matter since an independent inquiry is taking place, but I believe that it should have been dealt with initially by the PAC.

If we are to control expenditure and are to be able to give a better account of Government expenditure in our custody of public money, there is always need—I said this eight years ago in a similar debate—for a better yardstick to govern the efficiency of each Government Department. Many of the matters raised in the report have been caused by a panic situation. I refer to Rolls-Royce and also to Northern Ireland. It is easy for a Committee with hindsight to criticise a decision made in the heat of the moment. A Committee must criticise, and I hope that it does so constructively, but what we seek to do by our reports is to ensure that mistakes do not recur. I repeat that we still lack some efficient yardstick. I hope that the Financial Secretary will do all he can to give the House a better yardstick to control and evaluate efficiency.

6.30 p.m.

This is a non-partisan parliamentary occasion, and I am very honoured to have the opportunity of taking a brief part in it. I must confess that to talk about public expenditure at this juncture in our affairs in a non-combative way is a bit like standing at the top of an avalanche discussing the beauties of the sunset. However, I shall try my best.

May I begin by associating myself with the remarks of my right hon. Friend the Member for Taunton (Mr. du Cann), the Chairman of the Public Accounts Committee, about the work of the Comptroller and Auditor General and his staff. Like my right hon. Friend, I had the privilege of working with the Comptroller and Auditor General when he was in a previous incarnation. I greatly admired him then. I think that he has filled this office, as a servant of the House, in a way which is a great encouragement to those who want to see Parliament strengthened.

I believe that there have been important developments, on which I shall comment presently, in the work of the Comptroller and Auditor General and the operations of the Public Accounts Committee of a kind which most people would welcome as we stir out of the enormous and ever-growing, ever more complicated executive machine.

I also share in the comments made by the hon. Member for Llanelli (Mr. Davies) when complimenting the chairman of the Committee. If I may speak as an outsider, he seems to have guided the Committee through a very disruptive political period, the summer months of last year, with remarkable skill and has produced a varied and valuable report. Of course those remarks extend to the whole Committee, which did so much work.

May I also put in a word for the Northern Ireland administration? I could not compete with the eloquence of the right hon. Member for Down, South (Mr. Powell) in dealing with the items in the Fourth Report, but, having had a little to do with it, I should like to say in passing that I have nothing but admiration for the remarkable way in which the wheels of administration are kept going in Northern Ireland, whether we are talking about the Comptroller and Auditor General's Department, or the Departments themselves and the senior civil servants. One forgets the appallingly difficult set of circumstances under which these men and women are operating. I have nothing but admiration for the work they do. That is, of course, quite aside from the merits and the content of the matters contained in the Fourth Report.

I was also very pleased to hear the remarks made by my right hon. Friend the Member for Taunton about his ideas of reappraisal. There was a time when the Public Accounts Committee used to be criticised as rather old hat and concerned with candle ends, although those can be very important. The Fulton Committee had some rather dampening remarks to make about the Public Accounts Committee. A number of other comments were made about the Committee's adherence to outdated procedures which in some cases might increase costs rather than reduce them. I think that all that is changing.

The Paymaster-General of two years ago wrote a book in which he said that the Public Accounts Committee should be developed and strengthened so that it could bring to bear its attentions nearer the time at which major investment decisions were being made. He also urged the Public Accounts Committee to grow sub-committees. He also mentioned, as did my right hon. Friend the Member for Taunton, the idea of merging it with the Expenditure Committee.

I would not judge at this stage whether we shall go on to those subjects. I believe, however, if I may say so as an observer, that the Public Accounts Committee has advanced into an area where it is able to comment on and force explanations of on-going situations and the methods by which programmes are being carried out. I think that that is a valuable and a right development and one which is greatly to be welcomed.

Those who always say that Committees of Parliament can probe and demand but can never be responsible are absolutely right. The executive is the body that is responsible. Committees of Parliament, however powerful, are the bodies which force explanations to see that decisions being taken are both defensible and defended if they are claimed to be in the public interest. On that point I part slightly from the views very interestingly put by the hon. Member for Norwich, South (Mr. Garrett), who speaks with authority on these matters and who has written with great lucidity on them from time to time. He seemed to be implying that he thought there was some kind of rôle for Parliament or for a servant of Parliament—I think I understand him aright—who would lay down the actual mechanisms inside the executive by which audit and official management control would be exercised.

I suggest that if we cross that barrier and mix the two parties—those who are in a position to call to account, those who are in a position to demand an explanation on behalf of Parliament, and the public—with those in the executive who have to carry out the management and put in the management structures and organise the control mechanisms, we shall find ourselves in a very difficult situation. Those inside the Government will say "You told us to put in a certain management structure. We were forced to adopt methods with which we do not agree, and we cannot be held responsible for the outcome.

I was trying to make the point that it is impossible, with the present flow of information from the recipients of public funds to the Comptroller and Auditor General, to monitor the efficiency and effectiveness with which that money is being spent. That requires much more sophisticated accounting and reporting systems.

I do not disagree with that. There is obviously the dilemma, which I know the hon. Gentleman recognises as he has studied these points, about how far that monitoring mechanism should operate inside the executive and how far it should be part of the mechanism of Parliament—how far the pressure should be upon the executive from outside to do things differently from the way in which they would otherwise be done by the executive.

All these developments are valuable and I am greatly encouraged by everything I hear. I strongly support my right hon. Friend the Member for Taunton in the way I think his mind is working on these matters.

There are those who say that parliamentary Committees cannot do much more of a job because the great issues must be debated in this Chamber, and voices are raised here on matters of principle. That, of course, is undeniable. However, beneath the great issues there are layers of issues which involve millions and millions of pounds where the lay voice of Parliament is not heard and where it is increasingly essential that it should be heard.

If one is looking for encouragement in the gloom of recent times, one thing that has emerged is that this is no longer the age when everyone is ready to defer to the Government expert, certainly not in the economic field and possibly not in the industrial field. At such a time as this, the contribution which lay parliamentary Committees of political men, and party men, can make in forcing the Government to explain, in language which people understand and comprehend, what on earth they are up to, and possibly making Ministers and officials think again before they plunge on into ever more irreversible commitments, is of vast and growing importance.

I should like comment on one or two of the items in the Third Report before we hear the reply of the Financial Secretary to the points raised this afternoon First, as regards the RB211, this is a famous story which has threaded its way through successive administrations and successive parliamentary reports. I have no doubt that there is much more of this story to come. It was in a way a project which at its birth or christening was attended by a wicked fairy godmother and was cursed by the undertaking that it was in the national interest. In effect, it was declared from the start to be of such importance that commercial considerations, the normal disciplines of cost, should be secondary and that it was the national interest which was paramount. From that moment the poor child was in a situation where it would be denied the normal restraints, disciplines and controls which should attend a vast commercial project.

I make no comment on the technical excellence or the workmanship or craftsmanship or anything else in this complicated piece of equipment. However, once it was declared by the Government of the day—and for that matter by successive Governments—that it was in the national interest, we were immediately facing all the problems and questions not of its commercial worth and whether it would sell but of how to monitor the incredible complexity, how to check what was happening to the costs and who would pay when inevitably it emerged, as the checks began to be made, that the cost and the liabilities vastly exceeded any possible remuneration. All these matters were inevitable from the start, and they were implicit in the worries of the Public Accounts Committee when it was concerned with the setting up of Rolls-Royce 1971 and with the prospect of the liabilities, present and future, of the RB211 once again landing on the taxpayer.

Among the lessons to be learned from this is that we cannot have enough scepticism on these questions—and here I echo that thought of the Paymaster-General, the right hon. Member for Birkenhead (Mr. Dell), in his excellent book about the general arguments surrounding great public projects of this kind. We should, so to speak, reach for our holster when we hear such expressions as "high technology", "national interet", "keeping national teams together" and so on. It may be that they have validity, but the scepticism should be very great. In this case, as the Committee seems to suggest, we should like a very strong reassurance that we are not in for another massive run of expenditure with the RB211–524 and that the methods of cost control will be as tight as possible, constant and regular.

Similar problems are raised on a more domestic scale by the Industry Act. The Public Accounts Committee says that it appears that considerable efforts have been made to establish a sound framework of financial control. Without discussing the merits and operations of the Act, there is no doubt that the Industrial Development Executive was an attempt to balance the need for parliamentary control and proper financial accountability for public moneys with the need, if there is to be intervention, for expertise and for getting to grips locally and regionally with the industries concerned. Again, we want to see in further developments about which we are daily warned in matters like the National Enterprise Board and so on that the balance is not tipped too far the way of the technocrat and that we do not grapple with complexities at the cost of taking the project even further out of public accountability.

I turn now to the Thames tidal barrier, to which my right hon. Friend the Member for Taunton referred and about which the Committee rightly commented in relation to the vast increase in costs. This is an example of the case which I tried to make earlier about the Public Accounts Committee moving into areas where it could comment before the stable door was closed. This is a good example of "a stitch in time". The project is not yet under way. Already, estimated costs have risen from £115 million to between £230 million and £250 million at December 1973 prices. Today the figure is probably about £370 million. It has the look about it of a monster piece of expenditure. It is an enormous enterprise, with costs escalating under a wide variety of central and dispersed authorities. There is a need for very strict measures of financial control. There is a case for the Treasury moving on from the formula that "it will be kept under close review" to one which is more positive while the project is merely in its present form of vastly inflating costs, most of them still on paper.

I say a word now about pre-contract hospital costs. This is a familiar story, and successive Governments have tried to grapple with the need to keep down costs and to increase the standardisation element. I share the surprise of the Public Accounts Committee that we have reached only a 16 or 17 per cent. standardisation element so far. We are told in evidence given by Sir Philip Rogers and Mr. D. Somerville that:
"… the maximum potential usage will be of the order of 16 to 17 per cent."
I should have thought that standardisation could go further, and I sympathise with what was said by my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) when the Committee was taking evidence and he suggested that the medical profession might be slightly prima donna about coming to a hospital design late in the day and saying that all the equipment had been superseded by more advanced equipment which it must have. It may not be a matter affecting only the medical profession. But if we are in an age when we seek greater economies in the public services, such matters will have to give way to greater standardisation and less tendency to insist on the latest equipment at a very late stage in the design. I hope that the pressure for more standardisation will be developed.

The MRCA story is again an enormous undertaking. Fascinating issues are raised. My right hon. Friend the Member for Taunton reminded us of the need to ensure that when the requirements for such an international project are changed after the formula has been agreed and this raises unit costs, it may mean a change in the costs to the various partners. We should like to hear more of the studies which the Ministry is undertaking about the need to control these matters.

I query the point made in paragraph 192 of the report about modifications and equipments not required by all three countries and about the additional development which will be necessary for the air defence version for the RAF. I hope that this is not an example of our own forces requiring special versions, possibly to meet the niceties and perfections of their operational requirements, forgetting about the export and international saleability implications of the project. I hope that there is none of that in these special requirements of the RAF.

Like my right hon. Friend the Member for Taunton, I have some thoughts on the open-ended subsidy element referred to in that part of the report dealing with the Forestry Commission. I hope that the open-endedness will shortly be ended. The Treasury Minute says that arrangements are in hand to give the Commission freedom to negotiate for the land it needs without allowing an open-ended subsidy situation to arise. I hope that is so and that we are at the end of open-endedness, especially in view of the upheaval which could take place in private forestry in the near future as a result of proposals with which the Financial Secretary is familiar. We need to be watchful that the Forestry Commission is not in a position to commit public moneys on an open-ended basis through its land acquisition programme.

Reports of the Public Accounts Committee take us into matters which are out of the limelight. We are in the hinterland of Government administration. However, this is where precedents are set. This is where the big millions are paid out, and it is where inescapable commitments are launched long before they come into the political arena proper and we are told "It is too late. The decisions have been made." The more that this Parliament and its Committees can be reinforced and strengthened to prevent this situation from arising, the better.

It is a counsel of despair to say that we can only shut the stable door after the horse has bolted, because what the Committee is doing proves that that is not so. Policies can be monitored before it is too late and brought to the surface and the light of day, blinking and perhaps protesting and unready to be examined but to be examined all the same. We need more parliamentary endeavour of this kind, and the Public Accounts Committee under its present chairman has made a massive contribution to that effort.

6.50 p.m.

I should like at the beginning to echo the tribute paid by the distinguished Chairman of the Public Accounts Committee, the right hon. Member for Taunton (Mr. du Cann), to the officials who have been servicing his Committee.

I should like also to congratulate the right hon. Gentleman on his chairmanship not only of the PAC but of the Expenditure Committee, where I was happy and honoured to serve under him for the first couple of sessions of the life of that Committee. It was so enjoyable an experience that I often wish I could be in attendance at the third powerful and distinguished committee, not of this House but of his party, which I am sure the right hon. Gentleman chairs with equal grace and distinction.

It is only proper that I should congratulate the PAC on its wisdom and good fortune in having the right hon. Gentleman as its chairman. I am not quite through with my congratulations. The Committee ought to be congratulated also on the width and depth of the work it has done in a quite short period of time under the right hon. Gentleman's chairmanship.

It is an odd experience to be Financial Secretary and attend the PAC. One arrives there for the first session, and everyone is glad. One then disappears, and the members of the Committee are pleased not to see one again until the next Session of Parliament. One has a slight feeling of being something of a cad in keeping off the Committee another Member who might be doing a useful job of work. But so be it. This place moves in mysterious ways, and I am happy to make that minuscule attendance and genuflexion in the nature of the way we do our business here.

This has been a wide-ranging debate, and the right hon. Member for Taunton drew attention to that. I think it may be for the convenience of the House if I follow the course taken by individual Members this afternoon rather than try to deal with the various subjects together.

I should have no difficulty in agreeing with the right hon. Member for Taunton that it is important that the Government do not approve projects unless they are based on realistic estimates of costs, but this is easier said than done. Whichever Government are in power, we all hope that our estimates of costs are realistic, but how can we ever know until we see ex post, many months or years later, how much our prophesies have been falsified? And in the nature of things they will have been disproved in some degree or other.

The right hon. Gentleman drew attention in particular to the MRCA and helicopters and said how easy it was to begin a collaborative enterprise, and how dangerously easy it was to continue with it once it had been started because it was a collaborative enterprise. I am not sure that it is all that easy to begin a collaborative enterprise. In my view there are far too few of them. This country and its allies in NATO could benefit greatly, both economically and militarily, if there were more such enterprises and many procurement arrangements were more standardised among the members of the alliance.

The right hon. Gentleman talked about Rolls-Royce and referred to the Treasury Minute on the subject. He regretted that the Treasury had not commented on the monitoring arrangements that were being proposed and he wanted to know whether they were satisfactory. I am happy to be able to say to the right hon. Gentleman that we believe—I can put it no stronger than that—that the detailed monitoring arrangements for Rolls-Royce are generally satisfactory.

The Department receives monthly divisional reports covering all the major aspects of the business of Rolls-Royce and comparing the achieved results with the budget that has been agreed with the company. There are regular discussions with senior executives of Rolls-Royce. In the longer term, the company's five-year plan is being discussed and there are proposals for looking further into the future. However optimistic it may be, there is a 15-year plan. I hope that these arrangements will commend themselves to the right hon. Gentleman.

The right hon. Gentleman raised specific questions about the leasing arrangements of British Railways. He referred to paragraph 131 of the report and said emphatically that these things should be done in the open. I understand what the right hon. Gentleman is getting at. Where there is a question of Government assistance being made available to a nationalised industry or to private industry it is imperative that this is done in an open and proper manner, but I am sure I carry all hon. Members with me when I say, and I feel certain the right hon. Gentleman will accept, that before one gets to that stage there are often times when it is appropriate for commercial confidentiality to be preserved and that nationalised industries have to be allowed a certain flexibility in making the commercial arrangements that will give them and their customers the best possible advantage.

The right hon. Gentleman spoke about spending on hospitals in his constituency in terms of getting value for money. I am seized of the point. It is often the case that we are afraid to spend enough. Spending less now than we need to is often a false economy, which is the point that the right hon. Gentleman made. It is difficult to know, because all the pressures in terms of House of Commons scrutiny and executive scrutiny are to retrench and to spend as little as possible. However much the results may appear to falsify that impression, all the pressures are there. The right hon. Gentleman has great experience of government and he will know that it is difficult to decide whether the economies that are made will prove to be false in the long run.

I am conscious of the fact, and have been since I came to the House, that hon. Members need to be well informed and have more research facilities at their disposal. I hope that the proposals which the Government have made recently will commend themselves to the right hon. Gentleman.

I thought that my hon. Friend the Member for Norwich, South (Mr. Garrett) made an extremely thoughtful speech. He stirred a certain controversy with the hon. Members for Guildford (Mr. Howell) and Folkestone and Hythe (Mr. Costain). I do not have the experience that the hon. Member for Guildford has in affairs of the Civil Service Department to be able to produce a critique as reasoned as he did, but I can say that a lot of what my hon. Friend said struck a sympathetic chord with me. I think that we in this House should always be alert to see what lessons the experience of other administrations and other ways of doing things have for us in the control of public expenditure and in the way in which we do our business.

My hon. Friend referred to the powers of State auditors in France, Germany and the United States. I am sure that these have been studied by previous Governments and will be studied again by the present Government. I think I am right in saying that though the Treasury has a great interest in these matters they are more the concern of the Civil Service Department than of the Treasury, and I shall see to it that my hon. Friend's remarks are conveyed to the right quarter. Being something of an accountant and an economist myself, I may say that his encomium for the employment of accountants, cost accountants, economists and engineers fell on very fertile ears.

The right hon. Member for Down, South (Mr. Powell) asked various questions on the brucellosis control scheme and discussed the implications for the efficacy of the organisation of that scheme on the present arrangements on the frontier between the Republic of Ireland and that part of the United Kingdom that he represents. I am sure he will appreciate that it is not for me to deal with frontier arrangements. They range far wider than a junior Treasury Minister dare venture in a debate of this kind. However, I shall ensure that his remarks are brought to the attention of my appropriate right hon. Friends.

The right hon. Gentleman asked various questions about the subscription of funds to a certain computer company in Northern Ireland and mocked at the non-disclosure of the name of the recipient company, saying that any intelligent observer could identify the company from the evidence contained in the entrails of the proceedings of the Committee. I have a great deal of sympathy with the right hon. Gentleman, but I am informed that this is not only the normal practice—I should be the last to rest on "normal practice" as an excuse for procedures of this kind—but that it was upheld by the Public Accounts Committee. Of course, all matters should be reviewed from time to time. Being as forthcoming as I can, which is not very much, I hope the right hon. Gentleman will accept that I shall try to get these matters looked at to ascertain whether we can make some progress in future.

The right hon. Gentleman criticised the inadequate time for briefing allowed to the advisory committee regarding the subscription of funds. I am sure he will have noted from the memorandum published by the Northern Ireland Department of Finance that these criticisms were fully accepted. I hope that the right hon. Gentleman will have nothing to complain about in future in this respect.

The right hon. Gentleman asked three specific questions arising from the affairs of the company. I have tried to get answers for him in the short time at my disposal. I will give him the answers that I have. I do not expect him to find them complete or totally satisfying, but my hon. Friend the Under-Secretary of State for Northern Ireland, who has been present on the Treasury Bench throughout the debate, has taken a careful note of the right hon. Gentleman's questions and will no doubt get in touch with him when any further information is available.

The right hon. Gentleman in his first question asked whether the company was moving into a position of profitability and when it could be expected to become profitable. So far as I know, the company is not yet profitable, but we are hoping that the progress that has been recorded will continue along the lines with which he is familiar.

The right hon. Gentleman asked about the American company taking up the option. The Americans have asked to be allowed to defer for a further year the taking up of the option. I have at present no information whether they will be allowed to do so.

The right hon. Gentleman asked about the total public commitment to assisting the company, amounting to £7½ million, and wanted to know on whom the liability for meeting these losses would fall and whether they would be added to the £7½ million commitment. The £7½ million represents the total commitment made to May last year, including the amounts that had already been expended some time before. Part of the £7½ million is still to be made over to the company. There have been and are likely to be adjustments to this arrangement.

I apologise to the right hon. Gentleman that I can be no more forthcoming on this occasion, but I assure him that I shall endeavour to see that he gets a better answer as soon as possible.

I am obliged to the hon. Gentleman. I understand that it is necessary that the Northern Ireland Office should in due course deal with the details.

I am obliged to the right hon. Gentleman for his comment.

The right hon. Gentleman, who was extremely eloquent about the extra-statutory nature of the scheme referred to in Question 550 of the evidence on page 8, asked whether the balance of consideration could possibly have been got right and implied, as it were, that all kinds of considerations might have lain in the balance on the other side. I am sure that it is not necessary for me to take the right hon. Gentleman through the report—he will have read it in great detail—but I think it right to put on record what is in the report in the answer to Question 553:
"When Ministers decided in April 1972 to take this on, they decided, because of the employment and security situation, that the factory could not be allowed to close".
I am advised that that is the nub of the matter. It was not only the security but the economic situation which determined the decision that was made. It is not for me to say whether that decision was right. It was not taken by the Government of which I am a member. Indeed, as the right hon. Gentleman said, how can we ever know what the balance of events might have turned out to be had a different decision been taken? That is often the case with decisions but particularly in the delicate situation referred to in this passage in the evidence before the Committee.

My hon. Friend the Member for Llanelli (Mr. Davies) asked several questions about the handling of the Rolls-Royce affair. I have a great deal of sympathy with much of what he said. Indeed, my hon. Friend made an extremely acute analysis of how the liquidator was able to get £87½ million out of the Government of the day.

My hon. Friend's question about whether it was advisable for the liquidator to be relieved of the uncertainty of the prospects for the RB211 engine was particularly acute. These are not questions for me to answer, but I am extremely well seized of the further point of general principle raised by my hon. Friend about the ability of Her Majesty's Government to prevent foreign acquisitions of United Kingdom industrial assets where the consideration of those assets comes in the form of cash. It may be that we should take a quick and close look at what might appear to be a gap in the armoury of the defences that we have sought to erect for ourselves in this sphere. I undertake to do just that, at my hon. Friend's suggestion.

The hon. Member for Cornwall, North (Mr. Pardoe) started with certain remarks which I thought might be more appropriate to a future debate on a possible future report of the Public Accounts Committee than the report we are considering today. I accept what the hon. Gentleman said about public equity holding of itself not being enough, or not having been enough until now, to make sure that money is used wisely and profitably in the public interest.

However, although I would accept what the hon. Member said on those lines, I suspect that we flagellate ourselves too much about public supervision. It is right to be concerned and alert, but the record of private institutions investing public money often leaves a good deal of room for concern. If private institutions which were investing private savings had been more alert to their responsibilities in the Rolls-Royce case or many others, in my view matters might not in the end have required public money to save a crumbling industrial situation.

My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) made some perceptive remarks about the standing of Committees and Governments. Far be it from me to echo them, because he then passed to criticism of the present Government and of the PAC, whose members are quite capable of taking care of themselves. But I was grateful to the hon. Member for Folkestone and Hythe for pointing out to my hon. Friend that, although we might not have been moving as fast as he wished, it is not right to say that the Government have been totally inactive in this field.

As my hon. Friend will know, the Department of Employment and the Department of Health and Social Security are still considering whether Giro cheques issued by the former Department, including those issued by the Employment Services Agency and the Training Services Agency, can be brought into the special DHSS arrangements and processed on its computer. Examination has confirmed the oral evidence of officials to the Committee that there are no fundamental technical difficulties, but there are, unfortunately, a number of procedural and financial difficulties. We are looking at these at the moment. If the results are as encouraging as my hon. Friend and I hope, we will be hoping to extend the facility to other Departments.

The Treasury is always discussing with other Departments the possibility of more systematic exchange of information about the use of Giro cheques and their extension to other Departments. It is the individual Department's duty to defend its means of money transmission and it has to take account of its own special needs. Giro is not always the sole or even the best appropriate method, although my hon. Friend and I would share a fundamental bias towards it because it is a public bank. I am glad to note that it has had support, at least in some respects, on both sides of the House. I should always be happy to discuss any detailed suggestions that my hon. Friend might have about any opportunities in this respect which are immediately or quickly available.

In one way, the speech of the hon. Member for Folkestone and Hythe was one of the most refreshing of the debate in so far as he disagreed with everybody else he quoted. After such a Niagara of unanimity and self-congratulation, the robust way in which the hon. Member laid about my hon. Friend the Member for Norwich, South on the subject of management efficiency, the hon. Member for Cornwall, North on the subject of televising the Committe and my hon. Friend the Member for Newcastle-under-Lyme about the arrangements already being made for the use of Giro showed how closely he had been following the debate.

The hon. Member asked me whether we could find a better yardstick for measuring the efficiency of control of various projects in which the Government are involved. I do not know that I can give any assurance tonight. It sounded as though the hon. Member were seeking a simple panacea, but he knows the difficulties, having served two distinguished spells of office on the Committee.

The hon. Member for Guildford, in his usual thoughtful way, paid tribute to the Northern Ireland officials who have to work in the most difficult conditions. I echo what he said. His own experience in Northern Ireland and at the Civil Service Department gives him an invaluable background for evaluating the reports.

The hon. Member talked about the Industry Act and the balance provided by the Industrial Development Executive and cast his eyes ahead to the National Enterprise Board, touching on the subject of public accountability. The object of the NEB is precisely to achieve public accountability where public money is made available to private industry. I am sure the hon. Member appreciates that this applies not only in the narrowest accountancy sense of the word but in the sense of accountability to society as a whole for the use to which that money is put and the investment policies of the firms which are fortunate enough to have access to public funds through the NEB.

We shall see. There has been no shortage of companies seeking funds from the public purse in recent months. I think that most of them, rightly or wrongly, consider themselves very fortunate when their request for Government assistance succeeds.

The hon. Member for Guildford, citing the Thames tidal defence in particular, argued that it was surely possible to shut the stable door before the horse bolted in some of these huge projects. Doors can always be closed early if the will is there. We are discussing situations in which things have gone wrong, but Maplin is a perfect example of the door being shut before expenditure had taken place. The London ringways are another example of a huge expenditure of public funds in which the decision to draw back was taken at the right time.

The hon. Gentleman talked of the difficulties which arise when changes are made in initial formulae, as in the MRCA project. It is self-evident that changes of this sort are or can be endemic in multinational procurement arrangements, particularly with so sophisticated a piece of equipment with such a long lead time. Startling though some of the figures are, however, the cost control of MRCA—I speak as one who served on the Defence Sub-Committee of the Expenditure Committee—has been extremely good and probably much better than quite a few procurement projects which have been solely the responsibility of Her Majesty's Government. I do not seek to make a party-political point. This is true under both Labour and Conservative Governments. As I said earlier to the right hon. Member for Taunton, I do not think that one needs to take too pessimistic a view of multinational projects in terms of their cost control implications.

The hon. Member for Guildford made some further remarks about the Forestry Commission and about hospital contracts. I was not to clear about whether there was a specific point rather than a general point to his remarks. I think that it would be best if I were to study what he said and possibly write to him if there was anything specific in his remarks.

I am grateful to the House for not pressing me on matters of detail in so wide-ranging a debate. There are lessons for all of us in every debate on a Public Accounts Committee report. The scrutiny involved in producing these reports involves a process of education—education of Members, officials, Ministers and the public. This is a process from which only good can come. I revert again to the remarks of my hon. Friend the Member for Norwich, South. Most of what he had to say was directed to the desirability of getting greater and more detailed scrutiny of every possible way in which public money is spent, whether it is spent by public institutions or by private institutions which have advocated such expenditure.

I am grateful for the absence of partisanship which has characterised the debate. That is to some extent a result of the fact that we are discussing the 1972–73 accounts of the previous administration. I do not delude myself that the debate on every report of the Public Accounts Committee will be conducted in quite so non-controversial a manner. However, having said that, I am happy to advise the House to accept the motion.

Question put and agreed to.


That this House takes note of the First, Second, Third and Fourth Reports from the Committee of Public Accounts in the last Session of the last Parliament and of the Treasury Minutes and Northern Ireland Memorandum on those Reports (Command Papers Nos. 5786 and 5823).

Butter (Proces)

7.22 p.m.

I beg to move,

That an humble Address be presented to Her Majesty, praying that the Butter Prices Order 1974 (S.I., 1974, No. 1984), dated 29th November 1974, a copy of which was laid before this House on 6th December, be annulled.
I should like to make it clear right from the outset that the Opposition have always accepted the principle that statutory maximum prices should be imposed in the case of subsidised foods, although we have consistently pointed out that there are very considerable technical difficulties involved. We have, with equal consistency, been opposed to the Government's ridiculous proposals for the display of maximum price notices, as represented in Articles 5 and 6 of this statutory instrument, and opposed to the display of price range notices because we think that they are impractical, will be largely unenforceable, and will place an intolerable burden on small shopkeepers and an only slightly more tolerable burden on larger shopkeepers. We think that at best they will provide very little relevant information for consumers and that at worst they will be positively confusing.

Although we found the regulations in Articles 5 and 6 of the Bread Prices Order similarly unacceptable, and although any subsequent such orders will exacerbate any difficulties which will arise from this order, we have chosen to pray against this Butter Prices Order because, in doing so, if we should happen to delay the order we should not be depriving consumers of the benefit of the imposition of statutory maximum prices because the prices in the order are considerably higher than the prices at which these categories of butter are currently being sold.

I should like to deal first with some of the impracticalities involved and inherent in the regulations with regard to display notices. In addition to the two prominent notices which are required to be displayed by shopkeepers with regard to the Bread Prices Order—in which there are eight categories of bread and, in the case of each category, sometimes three different prices to be displayed—when these regulations are enacted retailers will have to display another two notices giving similar information about butter prices. By the time all the statutory maximum price orders have been imposed, retailers will have to display no fewer than 10 conspicuous notices, with over 100 prices. That is a conservative estimate. The Grocer magazine has estimated that it could be as many as 20 notices. We submit that the impracticalities involved make the whole exercise one of bureaucratic lunacy for shopkeepers and consumers.

During the passage of the Prices Act we made several attempts to get small shopkeepers exempted from the regulations, without success. However, at a later stage and in another place, Lord Jacques gave an undertaking that smaller shopkeepers would not be required to display price range notices. But smaller shopkeepers were defined as those having shops with a selling space of 250 sq. ft. or less—which is a very small shop indeed by any standards. Therefore, this concession will not be of very much help to small shops.

Whereas larger shops and supermarkets will encounter considerable difficulties in making a space available for these 10 conspicuous notices and will be able to do so only at the cost of very expensive shelf and display space—as far as they are concerned—for small shopkeepers this will be a sheer impossibility. My own corner shop is a sub-post office. Most of the sales transactions take place across the counter on and behind which goods are displayed. Perhaps the Minister will tell the House where such a shop is to display 10 conspicuous notices.

The Under-Secretary of State for Prices and Consumer Protection
(Mr. Robert Maclennan)

Will the hon. Lady clarify my mind on this matter? When she speaks of 10 notices, is she speaking of price range notices or of the notices required under this order?

I am speaking of the notices required to display maximum prices under this order and under subsequent orders with regard to maximum prices for other subsidised foods. There could be at least 10 such notices, in view of the foods which have been subsidised. With the bread price notices, three notices are required to be displayed. In the case of the Butter Prices Order two notices are required, but in other cases it could be more. We have estimated that there could be at least 10 notices.

I hope that the Minister will be able to tell the House where such a small shop is to find the space to display 10 such conspicuous notices. Do the Government expect these shops to clear their stock and display only notices? Do they expect such shops to employ sandwich-board men to walk up and down outside them displaying notices because the shops have no space inside? That is the sort of ludicrous outcome of regulations of this type which could possibly result, and these are only some of the practical difficulties involved.

I turn now to some of the costs involved for both large and small shops. I am told that even for the large supermarket chains it will not be possible for these notices to be produced centrally. Because of the wide area covered by such chains, there are regional differences in prices and variations in the dates on which special offers start and finish in shops within the same chain. But, however great the costs will be for a large chain, proportionately the cost for the small shopkeeper will be very much higher. Indeed, it looks as though the only prosperous trade in the coming year will be that of the signwriter. In addition to the cost of production of the notices, which are also likely to be changed from time to time, many small shops which are run by pensioners or are husband-and-wife operations will have to pay for professional advice to help them to interpret these regulations. I defy anyone to interpret them without professional advice.

In all cases the additional costs will be passed on to the consumer in one way or another. The Grocer in its edition of 7th December following the introduction of the Bread Prices, Order said—I paraphrase—that it was simplicity submerged by bureaucracy, that it was a nightmare for shopkeepers, and that it would inevitably lead to confusion.

Having dealt with some of the difficulties of administration, the impracticalities and the costs involved, I turn to the very important question of what these notices are likely to be worth to consumers. We have always accepted that it is important to provide consumers with as much useful information as necessary, especially at a time of hyperinflation. Equally, successive Governments have accepted that where the information to be provided is of an essential nature or is of very great value, as in the case of unit pricing or open date stamping, there must be prominent display, but this is manifestly not the case with this order, because the plastering of walls with scores of notices and hundreds of prices will provide consumers not with information but with confusion.

I believe that the British housewife is among the most acute and keenest of shoppers in the world. Indeed, she must balance her weekly budget with a great deal more difficulty and often with greater success than many Chancellors of the Exchequer. However keen and astute a shopper she may be, I do not believe that a housewife shopping, as she often is, under pressure with a heavy shopping basket and with three children will start wading through hundreds of prices upon a wall until she finds, first, the right food, then the right category, and then the relevant price, and that she will then embark upon the whole procedure all over again when she chooses the next subsidised food.

Nor do I think that many pensioners will feel equal to this challenge. Indeed, when I was conducting a small investigation of my own last week with regard to the display of maximum price notices for bread I noted in one supermarket that only one person in five had even noticed the notices and that of those who had noticed them only one in three had referred to the price.

To make matters worse, I am not at all sure that the information which is required to be given under Article 5 is relevant information for consumers because, unlike the requirement in the Bread Prices Order, Article 5 would seem to require a retailer to display a notice of maximum prices only in relation to those butters caught by Article 4 and that those prices are those specified in the table, regardless of whether they are the prices charged in the shop or whether they are the statutory maximum price for that shop.

Even the most intrepid consumer may not be able to discover whether he is being charged more than the statutory maximum price in that shop, nor will enforcement officers, with all their expertise, be able easily to ascertain this, if indeed it will be possible for them to ascertain it at all. So perhaps Opposition Members will be forgiven if the thought crosses their minds momentarily that the purpose of these notices is not to inform consumer at all but is purely for party political propaganda.

Having dealt with some of the impractical and costly aspects of the display of prices notices, I turn to the serious difficulties of enforcement. Even if trading standards offices throughout the country, most of which are short staffed, were to suspend all their other consumer protection activities under the Fair Trading Act, the Consumer Credit Act, the Supply of Goods Act and the Weights and Measures Act, and were to concentrate on enforcing the requirements of this order they would not be able to do more than carry out spot checks here and there to discover whether the requirements were being observed at all, and I doubt very much whether they would be able to do even this.

When I was carrying out the investigation to which I referred earlier I noted also that only about one in 10 amongst smaller shops were displaying notices. So I checked up with a number of chief trading standards officers. One chief trading standards officer told me "I am in no position to check up on retailers. I am grossly understaffed. What is more, this whole question has been deferred by my council pending the receipt of the Government circular on rate expenditure." So much, then, for widespread enforcement of the order.

As to the second point, there are some very serious loopholes and defects in the drafting. In Article 4 there seems to be the greatest loophole of all, because it requires that the statutory maximum price will be imposed only in respect of those butters packed for sale by retail—not actually sold by retail, it will be noted, but that is perhaps a minor loophole compared with some of the others—in rectangular packs of not less than 8 oz. and not more than 1 lb.

Are not the Government aware that many varieties of butter are sold in curls and in rounds? One of the most popular varieties of butter sold by one of the biggest dairies in London is in the form of a round pack in a square box. Under Article 4, is a round pack of butter in a square box not eligible? Is a square pack of butter in a round box not eligible? Is a rectangular pack of butter in a round box not eligible? Is a round pack of butter in a rectangular box not eligible? It seems that the possibilities for evading the requirements are endless. One envisages shelf upon shelf groaning with square packs, round packs, triangular packs, all manner of packs of butter none of which is subject to the maximum price legislation but all of which are in receipt of subsidy moneys.

What about the 4 oz. packs that many supermarkets sell in response to the requests by and needs of pensioners? Are pensioners to be advised by the right hon. Lady the Secretary of State, in the same silly way as she advised them about bread, to ask retailers to cut the pack in half? If they are, such packs will almost certainly be exempt from the requirement, because a rectangular pack cut in half often becomes a square.

But this is by no means the only loop-hole in the order. Some very important representations have been made to me by experts in the field that it will be virtually impossible to enforce the provisions of Article 3. Because the base period is a retrospective date in relation to the making of the order, it is practically impossible for enforcement authorities to obtain evidence of actual retail prices on or about that date, or that will be so in many cases. In some cases national companies can produce documentary evidence of retail prices, otherwise the retailer's word must be accepted.

However, paragraph 9(5) of the schedule to the Prices Act clearly states that nothing in that paragraph shall be taken as requiring a person to answer any questions, or to give any information, if to do so might incriminate him.

Although some firms may keep records of weekly sales, the base period is any seven-day period and comparisons have to be made within a seven-day period commencing on the same day of the week as the base period. However, it is extremely unlikely that traders will be able to produce records showing the quantities and prices of butter purchased or sold during the base period as defined during the relevant seven-day cycle.

Further, Article 3 provides that special offer prices are to be ignored in base period calculations. But by virtue of Article 1(3)(b), if all the butter sold in the base period was a "special offer" a new base period applies. In this case references to 13th August are to be taken to be references to the first date thereafter at which butter was sold at a price which is not a "special offer". It is therefore practically impossible to calculate a base price if all the prices up to 13th August are "special offers".

It can be seen that it will be very difficult, in fact almost impossible, especially in the latter circumstances, for enforcement officers to arrive at the price referred to in Article 3 and, therefore, equally impossible to know whether the price which is being charged is according to the price in Article 4 or Article 3 and which in fact is the lower of these two prices for the retailer.

Furthermore, and just as important, it is absurd to exclude butter sold at a "special offer" price from the calculation of profit in the base period but not from the calculation of profits which are made after the order comes into operation and which are not to exceed the level of the base period. I hope that the Minister will tell us whether this situation could arise. This is a very complex situation, and, if it is so, it would mean that intolerable restrictions would be placed on some retailers and their overall profits on butter could be reduced to as little as 5 per cent.

It appears, therefore, that, in addition to the impracticability involved and all the difficulties which will accumulate and intensify with each new regulation which is introduced, there exists in this order a conflicting and tangled web of enforcement anomalies and restrictions which will confuse enforcement officers and retailers alike, while any protection which consumers may have had from the order in the imposition of maximum prices will be very much diluted by the loopholes in Article 4 and by the real enforcement difficulties which have been brought to our attention.

All too often the Government tend to dismiss legislation which has shortcomings or which is inadequate in some way by saying that it is better than nothing. But to make regulations which can be blatantly disregarded because they are unenforceable is to bring the law into disrepuate. This order for the most part represents an exercise which appears to be a combination of bureaucratic lunacy and a party political public relations exercise. It is a nightmare for shopkeepers. It is another step on the road to confusion for consumers, and I hope the Government will replace it with a measure which is more adequate, more enforceable and more realistic than this.

7.43 p.m.

I think I should declare an interest in that I am a farmer and, therefore, have produced many gallons of milk, which of course makes butter. Therefore, perhaps I have a vested interest in this matter, and it is important to get that quite clear from the start.

I am grateful to my hon. Friend the Member for Gloucester (Mrs. Oppenheim) for what she has said. She is a housewife and a Member of Parliament of considerable experience in these matters, visiting supermarkets and shops where these problems are to be found, and it was interesting to me, as a rural man who normally goes to the village shop only, to listen to all the problems and difficulties experienced by shoppers in the towns.

I must confess that I am opposed to the principle of subsidising butter, and, therefore, I am opposed to this order. I believe that this sort of subsidy and control brings considerable distortion to the whole industry. It certainly does to the milk industry. It presents many difficulties to the Milk Marketing Board. I notice the problems which Article 5 will produce. It requires in shops the display of information about maximum prices. Certainly it places a much greater burden on small shopkeepers who probably already have many problems to deal with and not the staff to cope with these problems.

I was interested, too, when my hon. Friend referred to the problems of the housewife in view of the large number of prices with which she has to deal. Not many housewives and busy mothers have the time to look at these long lists. I believe the housewife trusts the shopkeeper to look after these matters for her.

It is a pity that the Government have to make things so complicated for the small shopkeeper, particularly in the rural areas where there are not many staff and where there are probably many other matters to deal with. I therefore welcome what my hon. Friend has said. I think she is absolutely right in highlighting the problem and the burden experienced by the small shopkeeper and the housewife.

We need price control if we subsidise butter.

Well, I would have thought so. Otherwise, conditions could be distorted even more.

Does not my hon. Friend acknowledge that there is any merit in competition at all? Why does he suddenly believe in price control and subsidies? Surely, competition can look after this situation whether there is a subsidy or not.

I do not think so. If my hon. Friend had listened carefully to what I said he would have known that I am opposed to butter subsidies—and that there is no need for price control.

I should have thought that there is a principle at stake here, certainly from the point of view of British agriculture. If we have to import and pay the world price for butter, a price much higher than the price for home-produced butter, the Government of the day, in their desire to keep down the cost of living, are forced to bring in price controls and subsidies. I think it would be far better to turn to the home farmer to produce the butter that is required.

The interesting point is that most of the butter that will be controlled under this order will be imported. The British housewife at the moment does not have much of a chance to buy, let alone taste, United Kingdom butter. I wonder whether the Minister has considered that fact. It is surely better to rely on the home farmer to produce the butter that is required.

It is interesting to note that the Government have seen fit to put in column I of the table in the order
"Butter produced in the United Kindom (other than blended)"
and in column 2 its price is given as 17p per 8 oz weight.

This is a sick joke. At the moment there is virtually no butter being produced in this country. I believe that this is due once again to the distortion which the Government have brought about in the milk industry. If we subsidise liquid milk we distort the whole pattern of milk distribution and sales, and in the end we get a shortage of milk for manufacturing purposes.

The situation is going to look even bleaker. The number of inseminations which are taking place in the dairy herds is declining. The number of dairy cows slaughtered is increasing. Therefore, the future looks bleak for butter production. We shall have to rely more and more on imported butter. The Minister ought to speak strongly and pointedly to his right hon. Friend the Minister of Agriculture, Fisheries and Food to seek a new impetus and to ensure that we get the milk that is required to produce the butter.

We also find in column 1 of the table the following words:
"Any other variety of butter (other than blended)".
What does this mean? What other butter is there? Can the Minister tell me? Does he have in mind unsalted butter? Is he thinking about farmhouse butter? We should like an explanation. We can understand what
"Blended butter of any variety and of any origin"
is, just as we can understand what is meant by New Zealand butter and butter produced in the European Economic Community, but what on earth is
"Any other variety of butter (other than blended)"?
Finally—I wonder why my hon. Friend did not spot this; perhaps I have it wrong—Article 8 provides:
"A person shall not, in connection with the sale of any butter, enter, or offer to enter, into any artificial transaction or make or demand any unreasonable charge."
Does that mean that the Government would prosecute a supermarket which put a condition on the purchase of butter? When there was a shortage of sugar—this certainly happened in one or two cases in my constituency—conditions were put on the buying of sugar so that, if a person wanted a pound or two, he or she had to buy some other commodities.

This is a serious matter, and it would be even more serious if applied to butter, especially for elderly people and pensioners who would be put in difficulty if they were required to buy some other commodity at the same time as buying a little subsidised butter. If that is the meaning of the article, I welcome it, because I believe that in some places there tends to creep in the idea that such conditions can be applied as a means of encouraging the sale of other goods.

I repeat that I am not happy about the order. I do not like the subsidising of butter, and I do not, therefore, agree with the order. I hope that the Minister will turn his attention to the real problem here, which is the problem of supply from United Kingdom sources. It is vital that we get back to producing our own butter. It is very sad that Britain, with all its opportunities, its climate, its quality of grassland and the ability and knowledge of its farmers, should not be supplying all the home-produced butter that we need. What point is there in putting before the House an order which refers to
"Butter produced in the United Kingdom"
if we jolly well do not produce that butter?

7.52 p.m.

It was not my intention to intervene in the debate, but I felt that someone from this side should break into the Opposition's moanings and groanings about the order. I wish to make clear that although on this occasion I speak in solitary majesty on these benches the view which I express is generally shared among my hon. Friends. Many of us—indeed, almost all of us, I believe—welcome the use by the Secretary of State of her powers to control prices. Many of us have, in fact, advocated a far wider use of her powers of price control.

Will the Opposition come clean about their attitude? I hope that we shall be told what their opposition to the order is really about. The truth is that they are afraid of the profit factor involved. That can be the only reason for their objection. They may criticise the detail of the order and point to small defects in its terms. The hon. Lady the Member for Gloucester (Mrs. Oppenheim) bandied about all sorts of subtle intricacies, but she had no alternative to offer. She was prepared to criticise, but there came from her no word of practical alternative to help the consumer.

In my view—I am sure that this view is generally shared among my hon. Friends—if we are seriously to get down to tackling the problem of inflation, there must be early and much greater use of price control by the Government.

I shall not give way. I shall only be a minutes or two.

We welcome the use of price control over the whole range of subsidised commodities to start with, and, more than that, we should like to see the Secretary of State use her powers of price control in respect of commodities which are not subsidised because, as I have said, that is the only way we can tackle the inflation problems now confronting us.

In contrast to hon. Members opposite, many of my hon. Friends and I wish to see much greater use of subsidy, and we look forward to the day when the Secretary of State applies her powers to a far wider range of foodstuffs. Perhaps she will use her well known powers to convince her right hon. Friends at the Treasury that many of us feel that there may be something fundamentally fallacious in the Government's present philosophy, believing, as we do, that the best way to tackle the various problems facing us now could be through the broad use of subsidy accompanied by increases in direct taxation. That would be much more egalitarian and a far more effective way to tackle many of the problems of inflation and unemployment which now trouble us.

However, without drifting further into those other matters, I welcome this limited measure of price control. We look forward to a wider use of price control over far more commodities, and further advance in the general subsidy policy.

Again, I ask the Opposition why they object to the order. Their only reason can be the question of profit.

I will not give way.

I am sure that that is the reason. We all know that the Tories have opposed food subsidies, some of them expressing their opposition very strongly. The hon. Lady would not tell us, but the Opposition as a whole oppose food subsidies because they are one of the most effective redistributive techniques used by this Government, distributing in order very largely to help the poorer sections of the community money that comes in taxation from the wealthier sections. That is the basis of the opposition to subsidies in general, and one can only imagine that the objections raised tonight are part and parcel of that same attitude, that unholy and negative attitude, which the Opposition display to the problem of inflation as a whole.

I remind the House that the order is fairly narrowly drawn. It refers to butter subsidies, not to subsidies in general.

7.59 p.m.

I welcome the opportunity to set at rest the imagination of the hon. Member for Cannock (Mr. Roberts), who conjured up the most lurid reasons for our opposition to the order. I oppose it for three reasons: first, because it imposes a painful addition to the burdens already borne by the small shopkeeper; second, because it is unnecessary; and third, because it is harmful.

There was a time when the shopkeeper's function was to keep his shop and nothing else. Those were happy days for the shopkeeper and the housewife, but these days the small shopkeeper spends as much time collecting revenue for the Government, or otherwise acting as the Government's agent, as he does in earning his living. These are bad days for the shopkeeper and for the housewife in consequence. VAT, pay-as-you-earn, national insurance, graduated pensions and butter and beef coupons are all examples of where the Government rely upon the small shopkeeper to act as their agent for collection. He does it for no pay and at great cost to himself, because the time that it takes him represents a loss of earnings. He does this at the same time as he is penalised by the Government as a self-employed man, under the impost of an 8 per cent. increase on his national insurance contributions. He does it when he is further mulcted by the increases in his rates, which hit him harder than they hit the chain store, and he has to face the housewife, who complains about rising prices which are not his fault.

It is in this context that the Secretary of State has brought forward her order. I want to speak tonight particularly on behalf of the small general grocer in the country village or back streets of towns. I do not suppose that anyone here would deny that these people render a great service to the community. They are open at all hours and they stock a huge variety of goods. They provide a personal service of the kind that the planners are now all too belatedly regretting having swept away in so many urban areas.

It ill becomes a Government who rely so heavily on the sacrifice and co-operation of shopkeepers to treat them publicly, as the order does, by obliging them to display these notices, as though they are likely to cheat and break the law given half a chance. It is unnecessary to take that attitude, because the inspectors who are employed to check these notices, and the prices which are entered upon them, could perfectly well check on maximum prices enforcement in the shops. If the task was worth while the inspectors could be employed to do that, but that is not necessary, because the shopkeeper, upon whom the Government rely to such a great extent, is a law-abiding member of the community, and if a maximum price is imposed he can be relied upon in the vast majority of cases to abide by that decision.

I oppose the order because it is harmful. With each additional obligation which is heaped upon these shopkepers more of them will give up. That would mean that more country people would lose their local shops, more petrol would be used by customers driving to the big towns to get their provisions, and more monopolies would be created among the big chain stores. I wonder if that is what the hon. Member for Cannock wants. I am greatly tempted to follow up what he said and explain why we believe price control to be bad, why it always operates in the long run against weaker members of the community, but I am not allowed to do so since that would be out of order.

Last week I attended a meeting of more than a hundred small grocers from South-East Kent. That week one of them had decided to give up because the burden of administrative obligations meant that it was no longer worth while for him to continue. Very many others that night were near breaking point. If they went it would be great injustice to them, and a great loss to the housewife.

Whenever prices are controlled non-senses are created, but the nonsenses need not be as damaging or as absurd as the nonsenses that this order will create.

8.6 p.m.

I wish to add one comment to what my hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew) said about the speech by the hon. Member for Cannock (Mr. Roberts). The hon. Member might well have done better to preserve what he called his solitary majesty in silence, because the implication of what he said was that the money to finance food subsidies would be coming from taxation. I refer him to the Chancellor's Budget, in which the right hon. Gentleman admitted that he was £6,300 million short. Surely, therefore, the hon. Member realises that the money to pay for the subsidies is being printed, which causes further inflation, and, therefore, the subsidy policy is directly contrary to the control of inflation. If the hon. Member intends to intervene in these debates, it would be wise for him to brush up a little on his economics before he does so.

My hon. Friend the Member for Gloucester (Mrs. Oppenheim) made a magnificent speech, and I agreed with every word of it except for the first sentence. I congratulate her on her expertise and on the research she has done into the order. However, her first sentence was that the Opposition were in favour of price control where subsidy was involved. I disagree with her. She must not speak on behalf of the Opposition, because I am a member of the Opposition and I am violently opposed to price control in all its forms. Why should our attitude towards price control vary according to whether subsidy is involved or not? I can think of no conceivable reason why the desirability or otherwise of price control should depend on whether the commodity in question is subject to a subsidy or a tax.

If there were no price control on butter and a grocer sold the butter at a high price, putting the subsidy in his pocket, all the shoppers would go to another grocer who sold the butter at a lower price. Competition would be the determining factor, and competition in our retailing industry is very strong and effective. It works just as well be there a tax or subsidy on any commodity. My hon. Friend the Member for Gloucester must think again about the extraordinary doctrine that where there is subsidy there must be price control. Many items produced directly on the farm have been subsidised since the 1947 Act but there was never price control.

I therefore advise my hon. Friend to follow some of my other hon. Friends into the Lobby against the order, which is most un-Conservative and not one that I can support. I commend her speech to herself, because if she did not convince herself by her speech I should be very surprised. It was so effective in dealing with the nonsenses of the labels, the technical difficulties and the enforcement officers' problems that I cannot believe she was left with any doubts that she was on a winner and that she should press forward with her argument.

I echo what my hon. and learned Friend the Member for Royal Tunbridge Wells said about the small shopkeeper. My constituency contains a large number of villages and most of them have a small shop. The effect of price control on the economics of these shops is disastrous. Their economic advantage is that they save people having to travel to town, which in many cases involves an eight or 10-mile journey. The customers would willingly pay higher prices for their groceries because of the saving in petrol and bus fares to the supermarket. This service is respected by the villagers and provides a living for the shopkeepers, who can charge higher prices to compensate for the lower turnover.

That system has worked perfectly and there has hitherto been little or no threat to the tiny village shops in the Cotswolds. However, the effect of the bread order or the butter order is to limit those items on which the shopkeepers may charge extra. The economics of those rural shops will be severely damaged. People will have to travel, using fuel and money that they need not have used but for the extraordinary bureaucratic lunacy that the Government are imposing tonight.

I do not think that the Government understand how much their action is resented. They do not understand how much hatred and bitterness they are storing up for themselves among those who seek to promote small enterprises as a result of the increased self-employed insurance contribution, the swingeing increases in rates and the bureaucratic interference through price control—all the endless difficulties heaped upon people who are useful members of society. They are people who have done no harm and who are not on the commanding heights of the economy. They are not even fit for the National Enterprise Board. If the Government will not desist from petty regulations and price control of this sort, they will find that they have serious trouble on their hands.

The order is a mistake. Price control is unnecessary. Butter prices are below the permitted maxima in the order. The likely effect of the order is, therefore, that some shops will increase their prices to the maxima. If costs rise to the point where the order restrains prices, many small shops will be put out of business. The infinite variety of quality, quantity and service involved in retailing, even with a fairly standard commodity like butter, is such that butter is not conducive to price control.

I shall be happy to divide the House if my hon. Friends will support me in registering a protest against legislation of this kind, which is totally out of keeping and unnecessary.

8.2 p.m.

When we discussed in Committee the part of the Prices Bill, now the Act, which enables the order to be brought before the House we tried to make a distinction whatever my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) says, between the possibility of having to control prices which are the subject of a subsidy and those which are not, and the way in which that might be done. I shall not enter the wider debate with my hon. Friend, because I do not think that you would approve, Mr. Deputy Speaker.

I wish to concern myself with the opposition in Committee, continued tonight, to the way in which the Government seek to control the price of subsidised goods. We had a long argument in Committee in which we sought to persuade the Minister that he should make clear to us exactly what he proposed. Time and again we pressed him to say what kind of notices there would be. We pressed him to give us an example, to describe his consultations with the trade, to assure us that the system would be satisfactory, to tell us just how much support he had. Time and again he rebuffed us, and we left the Committee no wiser, but with our doubts greatly increased.

As a result of the bread order we already have examples of the beginnings of the bureaucratic nightmare we foresaw. The order we are debating will continue that nightmare. On both sides of the House, perhaps more on the Opposition benches than on the Government benches, there have been continuing doubts about the wisdom of a subsidy policy. Various kinds of subsidy, both producer and consumer, have been suggested. As we come nearer and nearer to the nitty gritty, as it affects the retailer and the housewife, we begin to see why the doubts have been accumulating. With an order such as the one before us the dangers of such a policy are beginning to be more and more exposed.

Is it not time for us to question the policy and to call a halt to it? The Secretary of State is already foreseeing a situation in which she may have to say of the bread subsidy "Enough of that." In the context of the order, is it not time for us to say "Enough of this"?

In the bread shops we can already see notices under the bread order. I recently went into a little bakery where the shopkeeper had had a plastic container produced to contain the little bits of paper necessary under the order, which requires clear writing—or printing. He had done his best, but nobody was looking at the notice. It was irrelevant to those who were buying the rolls and cream cakes.

The hon. Member for Cannock (Mr. Roberts), who has popped in and out of the debate like a jack-in-the-box, contributing most weightily, said that the present order is the Government's contribution to keeping prices to the housewife under control. In fact, the order will permit a shop to display a price above that currently being paid in it, and above the maximum price that can be paid in that shop. How is it supposed to help a housewife to see displayed in a shop a price totally irrelevant to any price she could pay in that shop? She may find a shop which is being very villainous and seeking to increase the price of butter above the statutory price, but nobody has produced any evidence of that. Nobody has suggested that it is likely. My hon. Friend the Member for Devon, West (Mr. Mills) said that competition will bring that under control. I am sure that the Government are not suggesting that many retailers will seek to make a quick killing on butter. Of course, they are not.

The enormous rigmarole in the order imposes great burdens on small and large retailers. Under the order shopkeepers will have to put up pieces of paper, parts of which will be in blacker type than others. The price of the butter which happens to be the most popular variety in the shop or chain in question must be printed in darker type. It is possible that in the Wandsworth branch of a chain of supermarkets a variety that is very popular will not have its price printed in darker type because that chain as a whole has another variety of butter which is its most popular except at Wandsworth. Therefore, we have a further confusion.

My hon. Friend the Member for Gloucester (Mrs. Oppenheim) has spoken about the shapes and sizes of butter packs. We had similar confusions over bread, and there were similar examples of absurdities with purchase tax; people were able to point them out over many years. There are always peculiarities at the fringe of such a matter. I am sure that the Minister will not tell us that there will not be orders on other subsidised foods. If there are such orders there will be a series of notices displayed in shops, notices which may be wholly irrelevant to the purchases by the housewife.

I cannot understand how the hon. Member for Cannock or anyone else can suppose that that is offering one jot of assistance to housewives. They are finding shopping more and more of a nightmare. If we talk to housewives, or consider the research that has taken place on shopping habits, it seems that there was a time when shopping was a pleasure. British housewives always went shopping more often than was necessary because they found it enjoyable to do so, but nowadays it seems that shopping is becoming a dismal nightmare and that the housewives dread doing it. All the complications that we are introducing do not help the housewives. Some consumer legislation offers them help, but measures such as this make life more difficult for the sake of a political charade. The housewife is the person who will bear the burden of this measure most.

My hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew) mentioned the grocers. I am aware of the views of the North-West branch of the Grocers' Federation. It is clear that the grocers are suffering. They have rallied and they have dealt with a whole series of matters ranging from national insurance contributions, which we have mentioned in passing, to the effect of measures such as the one we are now discussing. There is growing concern about the added paraphernalia and bureaucracy with which they are having to deal. The Minister should not under-estimate their concern.

This is not a debating point. There is real concern throughout the country. Retailers and other groups are finding more and more paraphernalia landing on their doorsteps. We must call a halt.

It is up to the Minister not to give us the usual flummery answers that we have had before but to justify in specific terms the additional job which he is asking so many people to carry out. He must justify it as necessary. Will it help him? Will it help the law enforcement officers and the housewife?

Yes, and the producer. But let us concern ourselves with those who deal with the shops. The Minister must justify this measure in specific terms, and I beg him to do so.

8.23 p.m.

Sufficient points have already been raised by my hon. Friends to indicate the paucity of thought and the illusion of effectiveness contained in this measure. My hon. Friend the Member for Gloucester (Mrs. Oppenheim) indicated its complexity. Those of us who have studied it and tried to make sense of it must agree that it is extremely complicated. We have shown that almost certainly it cannot be enforced effectively unless a large increase in resources is available to law enforcement officers. We have indicated that the consumer is likely to be confused. We have also laid stress on the point that shopkeepers will have to bear the brunt of the difficulties which this measure will most assuredly bring.

I shall amplify two or three points. I begin with the situation of shopkeepers. My hon. Friend the Member for Manchester, Withington (Mr. Silvester) said that he does not believe that the feeling of shopkeepers throughout the country should be ignored by the Government. I go further than that. I say that there is a movement amongst traders throughout the country to ensure that they make the Government fully aware of their disenchantment with the onerous burden that they have to undertake.

I attended Leeds Town Hall at three o'clock on Sunday afternoon. A meeting had been called by a federation representing the self-employed. Over 1,000 people attended with a view to deciding whether a branch could be formed in Leeds. The feeling of the meeting was militant. A number of those present were retailers. They were extremely angry because of the burdens—for example, rates, VAT, electricity charges, postage and the general administration of their businesses—which have fallen upon them in recent months. I suspect that they would be equally angry if we were to explain to them in full what those of them who are grocers will have to undertake in relation to this measure.

Article 3 of the order seems to mean that whereas those who are trading in the supermarket style or in multiples will have the special offer prices excluded from the base price calculation, those who are smaller shopkeepers and are less inclined to be able to make special offers will not have it excluded. If special offer prices are excluded from the base price calculation, the maximum price available to the multiple will be significantly higher. It will allow the multiples most assuredly to move up their margins because they will be able to tender a special offer at a less reduced price than before. It will enable them by law to increase their profitability and to sell their butter to the consumer at a higher price.

At the same time, because the smaller shopkeeper does not in general provide the special offer, he is being asked to display maximum price notices which are very much closer to the average price that the consumer pays when buying from the smaller store. Therefore, the smaller shopkeeper will have much less room within which to try to meet the increased costs which he has to pay.

There will be one possible course of action. The smaller shopkeeper may offset some of the increased costs that he will incur not on subsidised prices but on the prices of other goods he may stock. He may increase the price of goods which are not subject to this type of order. In that way the consumer will find himself faced with increased prices at all kinds of shops. The special offer prices for butter will be allowed to be increased towards the maximum. A reasonable margin will be maintained for the multiple and the smaller shopkeeper will be able to increase his prices, thus passing on his increased costs. He will be able to do so by increasing the price of other goods.

I do not follow the hon. Member's logic. For some strange reason he suggests that shopkeepers will take advantage of the maximum price so as to offer reduced prices at effectively higher prices. His hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew), however, has told us what honourable men the shopkeepers are. As they are such honourable men as the hon. and learned Gentleman describes, surely they would offer the consumer their butter at the minimum price in the same way as previously. Conservative Members cannot have it both ways.

It is refreshing once again to have the attendance and the assistance of the hon. Member for Cannock (Mr. Roberts). Does he expect the trade to take no notice of an order that specifies maximum prices? If he expects the Government to introduce an order which permits maximum prices, he must expect the retailers in question to realise that such prices are permitted maximum prices. We may now see in the shops not a higher price but the Government's price followed by the words "Our price is X". There will be a narrower differential and a narrower choice of goods available to the housewife.

Another matter which must be considered is whether the consumer receives real protection. My hon. Friend the Member for Gloucester has given an indication of the confusion with which the consumer will be faced. But that will be as nothing when eventually orders are introduced for all subsidised goods. We must expect that the traders will do their best to co-operate with what the Government seek to do, but there will be the bold type and also the lesser type on the price range notices, which come under another part of the Department's activities.

Over the next six or nine months, if this kind of government proceeds, we shall see shops papered from floor to ceiling with prices orders and notices of ranges of price. It cannot be argued seriously that this sort of thing is in the best interests of simple shopping or of consumer protection.

In Committee on the Prices Act we took the view, in considering the question of subsidy, that maximum prices might have to be notified in relation to subsidised goods, but we did not expect that it would be necessary to have a complicated machinery to do it. We understood that these prices could be announced and advertised by the Government and would be available at the consumer advice centres about which we hear so much and so many of which are being instituted by the Department. There is really no need for the maximum prices to be transmitted in the complicated way involved in the order.

The retail trades are now organised in bodies in order to discuss with the Secretary of State matters such as the transmission of prices. Those bodies could well be advised on how to handle such matters and they could, as is their wont, carry out what the Government wish without being cluttered up by burdensome red tape.

We can say with a great deal of vehemence that this is a highly complex matter set out in a way which will be confusing and difficult to maintain. The order will create new difficulties in the already narrow margin between the smaller shops and survival. They already carry great burdens, and the order will increase them still further. There are ways of informing the people of maximum prices. It is unnecessary to do it in this way. I hope that the Government will have second thoughts and come back with something simple, sensible and, above all, comprehensible.

8.32 p.m.

The Under-Secretary of State for Prices and Consumer Protection
(Mr. Robert Maclennan)

I welcome this opportunity to discuss the order and to reply to points which hon. Members have made. During the passage of the Prices Act, my right hon. Friend the Secretary of State made it clear that she would use her price-fixing powers to regulate the prices of subsidised foods. With the exception of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), it has been generally recognised in the debate that she was right to do so. The Bread Prices Order was the first to be made under the powers of Section 2 of the Act. The Butter Prices Order is the second. The order has three purposes.

The first purpose is to ensure through margin controls that the full amount of the subsidy on butter is passed through to the consumer. This is the difference between the producer subsidies referred to by the hon. Member for Cirencester and Tewkesbury and the subsidies we are discussing. The producer subsidies were rigorously enforced in their day, and still are but by different techniques. The second purpose of the order is to prescribe the maximum prices to be set for the bulk of butter sold by retail. Thirdly, it provides that the maximum prices must be displayed in shops.

The subsidy on butter is now equivalent to 9p per pound at the retail level. While there is no evidence that traders have been absorbing part of the subsidy in higher margins, I hope that the House will agree that it is right to put on a formal legislative basis the requirement for the subsidy to be passed through to the consumer, for whom, after all, it is intended.

The hon. Gentleman said that there was no evidence that the order was necessary and went on to say that the whole of the subsidy had been passed on. What, then, is the point in bringing in the order?

The hon. Gentleman will reflect that the House a little earlier debated the reports of the Public Accounts Committee. If the House were to permit the payment of subsidy without introducing careful control, we should be subject to the censure of that Committee.

Article 3 of the order gives legislative form to our intentions by controlling the margins of distributors at all stages beyond the packing stage, which is the point at which subsidy is paid. Wholesalers and retailers are required to limit their margins over subsidised butter as a whole to the levels they took during a mid-August reference period. The maximum prices specified in the table in Article 4 offer an assurance to shoppers about the top price they can be asked to pay for their butter. This is a particularly valuable assurance to consumers in more remote areas, such as my constituency. The specific prices set out in the order cover salted butter sold in rectangular packs weighing 8 ozs. to 1 lb.

The hon. Member for Gloucester (Mrs. Oppenheim) made some amusing remarks on this point, but what she did not sufficiently recognise was that about 90 per cent. of the butter sold to housewives comes within the description in the order. The remaining 10 per cent. or so consists mainly of unsalted butter, butter in cylindrical packs and packets of less than 8 ozs. The maximum prices are intended to reflect the levels at which the efficient small shopkeeper can sell the butter concerned and make an adequate level of profit. They are, therefore, naturally above the prices at which most housewives will be able to buy their butter.

The prices in the order were arrived at after the most extensive consultations with the interests concerned.

Before the Minister leaves the point about shape, it may be that most butter is packed for sale in rectangles but, following the passing of the order, what is to stop packets of butter and retailers selling it in shapes other than rectangular and, therefore, evading the order and making it a joke?

The hon. Lady was at great pains, as were a number of her hon. Friends, to ensure the greatest possible simplicity in the system. It was very much with that aim in mind that the order was framed.

I wish to turn to the question of the burden on the shopkeeper and retailer and whether there might be an incentive of the kind suggested by the hon. Lady. I suggest that there would be no incentive to evade the provisions of the order. We carried out extensive consultations with all the interests concerned before bringing forward the order, and to some extent that explains the passage of time in bringing forward the provisions. We wanted to ensure that we met as fully as possible the genuine points made to us in these discussions. Our judgment was based on the most objective information available to the Department.

Will my hon. Friend pay due heed to what was said by the hon. Member for Pudsey (Mr. Shaw) about the possibility of the maximum price being too high, because he seemed concerned that that might happen.

I shall have something to say about maximum price, and I am grateful for that intervention.

When we are controlling prices in the shops, it is right that we should let the public know what we are doing. This was recognised on a number of occasions during the passage of the Prices Bill and was a point made by the hon. Member for Aylesbury (Mr. Raison) in the Second Reading debate on that legislation.

I am touched by the hon. Gentleman's reference to me, but I did not take part in the debate on Second Reading on that legislation, nor was I a member of that Committee, nor have I ever spoken on the subject.

I apologise to the hon. Gentleman for attributing to him remarks which, clearly, were made by one of his hon. Friends.

The order requires retailers, therefore, to display information about the maximum prices for the butter they sell. However, we have not required the display provisions to be applied to mobile shops, such as milk floats and the vans of grocery roundsmen.

The order will expire on 31st March unless the availability of powers in Section 2 of the Act is extended. However, it is our intention to seek such an extension.

Hon. Members opposite have said that the maximum prices are too high. I have already explained that these prices are intended to be those at which the reasonably efficient small shopkeeper can continue to supply butter. They are, therefore, bound to be nearer the levels charged in the more remote areas than in the cities. Information on retail prices—

If the hon. Gentleman will allow me, I shall continue since I have already given way four times. This issue can be debated for as long as he wishes.

Information on retail prices available to the Department in October and November showed that prices for butter ranged up to 17½p per half pound, and 17p was clearly, therefore, a not unrepresentative price for a number of shopkeepers at that time.

I must point out to hon. Members opposite that if the prices had been set at a lower level there would have been a real risk that a number of retailers would have ceased to sell subsidised butter. This could have led to shortages developing in some areas. It is already apparent from the Department's close contacts with enforcement bodies that some retailers are in any case having to reduce their prices because of the order. For example, prices of 19½p and 20p per half pound were noted in mid-December in shops in Gloucestershire, in the constituency of the hon. Member for Cirencester and Tewkesbury, who participated in the debate. I cannot, therefore, accept the allegation that the maximum prices have been set too high.

Before the hon. Gentleman leaves that point, how does he reconcile the statement he has just made, about the average prices for butter, with that made by the Department of Employment's own monitoring service on prices, which was quoted in The Guardian shopping basket for November at 11½p?

The hon. Gentleman will appreciate that I was speaking not of average prices but of maximum prices and the need not to set these maxima so low as to force the small shopkeeper, about whom hon. Members opposite have expressed interest during this debate, out of business. Any decision of that kind must be a matter of judgment in the light of particular market circumstances. There can be no question of any specific levels being right or wrong. Nor indeed can they be an incentive to increase prices, which was a view expressed by the hon. Member for Manchester, Withington (Mr. Silvester). This view ignores the margin controls in the order which ensure that prices must be held broadly at the levels existing when we formally issued our proposals for the order. This is not to say that we think that these prices will necessarily continue to be appropriate indefinitely. They are being kept under close review and will be amended whenever developments in the market seem to make this necessary.

In opening the debate, the hon. Lady the Member for Gloucester made a number of points of importance about the display provisions and other points and criticisms. I think it right that I should dwell a little on what she had to say. It has been suggested, and she said specifically, that there would be a requirement, by the time we had completed this exercise of introducing maximum price orders for subsidised products, for up to 10 such notices. However, I should like to assure the hon. Lady that this is simply not so. Indeed, during the course of our consultations we have made it plain to the trade that we do not envisage that there will be two display notices in respect of each food subsidised. There has been some misrepresentation of the position, and I suggest that on the whole it is more helpful to the trade not to misrepresent these positions nor to create unnecessary or exaggerated fears of what is involved.

We have had careful and detailed discussions over a considerable period with the trade about this mattter, and we made a number of changes to our original proposals for the display notices to minimise any additional burden on retailers. It may be that hon. Members who have participated in the debate are not as aware of the changes as are some of the people involved in the trade. This is perfectly understandable.

First, we enabled the number of separate notices to be reduced drastically to ensure that there need not be a proliferation of notices in shops. The two notices may each be combined with the corresponding notices for any other subsidised food and with any of the price range orders to be made later under Section 5 of the Prices Act.

Secondly, we enabled the notices to be kept to what is most appropriate for the individual retailer by avoiding detailed requirements about siting, lettering or colouring.

Thirdly, we made it clear that the notices did not need to be printed to conform with the provisions of the order. It is acceptable, for instance, for the more prominent display to be handwritten or for the detailed list to be in typescript.

Fourthly, we undertook to allow a minimum of six weeks for the preparation of notices and to synchronise the production date for all remaining maximum price notices.

It follows that there may not be a need for a proliferation of notices of the kind that the hon. Lady suggested and that no shopkeeper need provide on display more than two notices—one which will display most prominently the maximum prices or, in the case of butter, the three lines which have been most sold in the previous three months and which are the prices of greatest interest to the housewife who is looking to see what is the best buy.

I am grateful for that half-explanation and for the intimation that on future orders on other subsidised foods it may not be necessary to display more than one notice. However, according to the Bread Prices Order it is necessary to display three different prices in respect of each category of bread: the maximum price in that shop, the statutory national price, and the price which the shop is charging. Then there has to be another notice showing the three most popular brands. That is only partly true of the Butter Prices Order, where only two such notices are to be displayed. But I remind the hon. Gentleman that in the Cheese Order there are 27 different kinds of cheeses subsidised. If this is to be presented in typescript, how will the housewife gain any benefit from the display of these notices?

The hon. Lady has shifted her ground from criticism of the fact, as she alleged, that we would have proliferation of different notices to criticism of the extent of the information provided in the two notices that we are requiring. That is a wholly separate point, and it is not the point with which I was dealing.

The hon. Lady and some of her hon. Friends passed a number of strictures on the enforcement provisions of the order. I should perhaps explain to the House that in drawing up the order we sought the views of the enforcement authorities, and when the order was made we issued detailed notes for the guidance of enforcement staff. These notes have been welcomed by local authorities, which, I understand, have found them helpful.

Earlier this year we met representatives of the enforcement authorities to discuss the progress made with enforcement, and a series of similar meetings is being arranged to ensure that we are fully aware of how enforcement is proceeding. I want to emphasise, however, that it is essential to look at enforcement as a whole. We expect no difficulties in checking on the maximum prices or the display provisions which come into effect on 17th February.

The enforcement of margin control will, inevitably, be less straightforward, in part for the reasons to which the hon. Lady and some of her hon. Friends drew attention in respect of the base date, involving as it does an examination of the distributor's records. Experience will show whether this presents special problems for any particular type of shop, but I think the hon. Lady is correct in saying that it will probably be with the smaller shops that the problem will arise most acutely. However, we believe that the arrangements we have devised will enable a satisfactory level of enforcement to be achieved, taking the trade as a whole. Though there might be problems—and again the hon. Lady drew attention to them—in respect of the smaller shops, it is the small corner shops that will find themselves most effectively controlled by the maximum price regulation of the order.

I know of no major criticisms that have been made by consumers so far of the proposals, nor have our discussions with enforcement officers revealed that the whole procedure of enforcement will be seriously vitiated by the kind of difficulties to which the hon. Lady properly drew attention.

The hon. Member for Cirencester and Tewkesbury has left the Chamber, so perhaps it is not necessary to deal at great length with the points that he made. However, as usual the hon. Gentleman found himself in broad disagreement with other members of his party about the need for the control of prices of subsidised foods. He was effectively answered by his hon. Friends, and, therefore, I do not need to dwell any further on that.

The hon. Member for Devon, West (Mr. Mills) spoke about the burden on small shopkeepers if our requirements about display are accepted. I hope the hon. Gentleman will feel considerably reassured by what I have said about the relative simplicity of complying with these provisions. Like the hon. Gentleman and many others, I am aware of the burdens that are placed on the small shopkeeper by some of our requirements, most notably the taxation requirements, but these are not new, nor were they imposed initially by the present Government. What is more, when Tory Members introduced these provisions they did not show quite the enthusiastic support for the case which some of them have made from the Opposition benches tonight.

I should stray out of order if I were to deal with the other burdens placed on small shopkeepers. Suffice it to say that I am sensitive to their problems, and it is with that in mind that we have reduced this requirement to the most simple necessary to ensure that public money is properly directed to the benefit of the consumers for whom it has been voted by Parliament.

When I addressed the House I asked the hon. Gentleman to say specifically how the order would help the housewife in the matter of price control. He has said that the main purpose of the order is to make sure that the full effect of the subsidy reaches the housewife. The complicated part of the order concerns notices in shops. Will the Minister address himself specifically to this point? How will the multiplicity of notices and the bureaucracy that goes with it ensure that the subsidy gets to the housewife?

The hon. Gentleman is confusing two quite disparate things. The margin control provisions are intended to ensure that the money goes to the benefit of the consumer. In the more prominent notice which, under the Butter Prices Order, will list the prices of the three most sold butters in the previous months, the display provisions are required to demonstrate to the housewife the consequence of the consumer subsidy. There would seem to be no complication at all. It is a simple piece of information which will be required to be displayed in the informal manner that I have described. Therefore, there will be no difficulty of the kind envisaged by the hon. Gentleman.

My hon. Friend the Member for Cannock (Mr. Roberts) was right to point out that there has been criticism that the powers contained in the Prices Act 1974 have not yet been widely invoked and that there is at least as much criticism of this factor as there is of the limited number of cases in which we have invoked these powers. I shall certainly bear in mind what my hon. Friend said. I know that it represents the view of a substantial number of people outside this House and of a great number of my hon. Friends.

The hon. and learned Member for Royal Tunbridge Wells (Mr. Mayhew) opposed the order for the same reason as other hon. Gentlemen opposite, in that he considers that it would add to the burdens of small shopkeepers. I hope that I have now reassured him on this matter. The hon. and learned Gentleman will realise that the cost will be absolutely minimal in view of the informality of the requirement.

Does the hon. Gentleman realise that the cost is not simply that of purchasing and replacing these notices, but of lost shell space to the shopkeeper. If these and other measures are passed, the shopkeeper will be required to have notices for cheese, tea, flour, butter and bread. For each shelf foot he reckons to make £1 to £1·50 profit per week. He will lose about 50p a week for each shelf foot taken up by these wretched notices.

I wish that the hon. Gentleman had heard the earlier part of my speech. I made it plain that there would be a requirement for only two notices under these maximum price orders and that all subsequent information could be attached to the same two notices. Therefore, the problem of extra shelf space does not arise.

I hope that it will be appreciated and agreed generally that the order ensures that the subsidy will reach the consumer through the margin control provisions and that it is, therefore, an important measure of financial control. I think that the order provides a welcome assurance to shoppers that they need not pay more for butter than the maximum prices. It will enable shoppers everywhere to know what the Government are doing to control the prices of subsidised food and will provide them with information about maximum prices. I think that it takes fully into account the views expressed to us during the consultations that we have had and that it has regard to the circumstances of the trade and its profitability. This is a fair, useful and necessary measure. I therefore ask the House to reject the Prayer.

9.0 p.m.

We have had a useful debate and a lamentable reply from the Minister. He has completely failed to meet a substantial number of the points raised. He has derived very little succour from his own side. Except for a genial piece of knockabout by the hon. Member for Cannock (Mr. Roberts), there was a total lack of interest on the Government side. The Government should go away and think very hard about these issues.

My hon. Friend the Member for Gloucester (Mrs. Oppenheim) made a speech of brilliance and authority. I know that she played a dominant part in the Committee debates which lie behind the order, whereas, as I said, I was not on the Committee. My hon. Friend's points and those made by others deserved a much better answer than we have heard tonight.

What we have been talking about essentially was the sheer nonsense of the whole thing, and this has come through in what we have heard. Whether or not this mass of information can be displayed in two or three notices is highly questionable. It is difficult to imagine how one keeps the large type and the conspicuous display of notices which are liable constantly to have additions made to them. It is not as if there will be one fixed notice which stands for all time. We shall find, I think, that the picture that the Minister has drawn is thoroughly complacent.

The hon. Gentleman showed a different sort of complacency when he talked about the difficulty of producing records. He at least acknowledged that this difficulty existed, but he said airily that we should have to wait and see what happened. That will be no consolation to the shopkeepers who have to go through the difficulty, and perhaps even the anguish, of trying to track down records, many of which they will not have. They are likely to become very worried by the order, which serves no purpose.

Division No. 42.]


[9.4 p.m.

Budgen, NickLawrence, IvanPage, Rt Hon R. Graham (Crosby)
Cormack, PatrickMarten, NeilPowell, Rt Hon J. Enoch
Crowder, F. P.Mates, MichaelShepherd, Colin
Douglas-Hamilton, Lord JamesMawby, RaySkeet, T. H. H.
Howells, Geraint (Cardigan)Mayhew, Patrick
Hurd, DouglasMeyer, Sir AnthonyTELLERS FOR THE AYES:
Jessel, TobyMiller, Hal (Bromsgrove)Mr. Peter Mills and
Kaberry, Sir DonaldNeave, AireyMr. R. J. Maxwell-Hyslop.
Knight, Mrs JillPage, John (Harrow West)


Allaun, FrankDavis, Clinton (Hackney C)Hoyle, Douglas (Nelson)
Armstrong, ErnestDempsey, JamesHughes, Rt Hon C. (Anglesey)
Atkins, Ronald (Preston N)Doig, PeterHughes, Mark (Durham)
Barnett, Joel (Heywood)Dormand, J. D.Irvine, Rt Hon Sir A. (Edge Hill)
Bates, AlfDuffy, A. E. P.Jenkins, Hugh (Putney)
Bennett, Andrew (Stockport N)Dunlop, JohnJohn, Brynmor
Bidwell, SydneyDunn, James A.Johnson, Walter (Derby S)
Blenkinsop, ArthurDunnett, JackJones, Alec (Rhondda)
Booth, AlbertEadie, AlexJones, Barry (East Flint)
Boothroyd, Miss BettyEllis, John (Brigg & Scun)Judd, Frank
Bray, Dr JeremyEllis, Tom (Wrexham)Kinnock Neil
Brown, Hugh D. (Provan)Evans, John (Newton)Lambie, David
Brown, Robert C. (Newcastle W)Ewing, Harry (Stirling)Lamond, James
Buchanan, RichardFaulds, AndrewLatham, Arthur (Paddington)
Callaghan, Jim (Middleton & P)Flannery, MartinLeadbitter, Ted
Campbell, IanFletcher, Raymond (Ilkeston)Lestor, Miss Joan (Eton & Slough)
Carmichael, NeilFletcher, Ted (Darlington)Loyden, Eddie
Castle, Rt Hon BarbaraGeorge, BruceLuard, Evan
Clemitson, IvorGolding, JohnMcElhone, Frank
Cocks, Michael (Bristol S)Graham, TedMacFarquhar, Roderick
Coleman, DonaldGrocott, BruceMcGuire, Michael (Ince)
Concannon, J. D.Hamilton, James (Bothwell)Mackenzie, Gregor
Cook, Robin F. (Edin C)Hamilton, W. W. (Central Fife)Maclennan, Robert
Craigen, J. M. (Maryhill)Harper, JosephMcMillan, Tom (Glasgow C)
Cryer, BobHarrison, Walter (Wakefield)McNamara, Kevin
Cunningham, G. (Islington S)Hatton, FrankMadden, Max
Dalyell, TamHooley, FrankMagee, Bryan

Meaningful enforcement is likely to be a much greater problem than the Minister has acknowledged. The order shows that the Government are totally out of touch with what goes on in the ordinary shops. It would be hard to imagine a purer piece of 1984-ism, of bureaucracy gone mad, than this provision.

As my hon. Friend said, we accept that with subsidies there must be price controls. Not all my hon. Friends agree, but we believe that when one is trying to keep prices down it is not unreasonable to provide the controls to make that possible. There is, however, an element of farce in the provisions about putting up the notices.

For reasons which the Minister knows, I shall not advise my hon. Friends to support the Prayer in the Division Lobby, but I earnestly say to the Government that they must rethink this policy and not bring forward this sort of nonsense in future.

Question put:

The House divided: Ayes 22, Noes 136.

Marshall, Dr Edmund (Goole)Roberts, Gwilym (Cannock)Tierney, Sydney
Mason, Rt Hon RoyRoderick, CaerwynTomlinson, John
Mallish, Rt Hon RobertRodgers, George (Chorley)Torney, Tom
Mendelson, JohnRooker, J. W.Wainwright, Edwin (Dearne V)
Mikardo, IanRoss, Rt Hon W. (Kilmarnock)Walker, Terry (Kingswood)
Millan, BruceRowlands, TedWard, Michael
Miller, Dr M. S. (E Kilbride)Sandelson, NevilleWatkins, David
Mitchell, R. C. (Soton, Itchen)Sheldon, Robert (Ashton-u-Lyne)Weetch, Ken
Morris, Charles R. (Openshaw)Short, Rt Hon E. (Newcastle C)White, Frank R. (Bury)
Murray, Ronald KingSillars, JamesWhite, James (Pollok)
Noble, MikeSkinner, DennisWilson, Alexander (Hamilton)
Oakes, GordonSmall, WilliamWise, Mrs Audrey
Ovenden, JohnSmith, John (N Lanarkshire)Woodall, Alec
Owen, Dr DavidSnaps, PeterWoof, Robert
Parker, JohnSpearing, NigelWrigglesworth, Ian
Perry, ErnestSpriggs, Leslie
Price, William (Rugby)Stott, RogerTELLERS FOR THE NOES:
Radice, GilesTaylor, Mrs Ann (Bolton W)Mr. Laurie Pavitt and
Reid, GeorgeThomas, Ron (Bristol NW)Mr. Thomas Cox.
Richardson, Miss JoThorne, Stan (Preston South)

Question accordingly negatived.



That Mr. J. Enoch Powell be discharged from the Select Committee on Procedure.—[Mr. Walter Harrison.]


Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Walter Harrison.]

Student Grants

9.14 p.m.

The issue I want to discuss tonight could not be a more appropriate one for a debate on the Adjournment. The case is one which bears particularly harshly on individuals and at the same time raises general issues of fundamental importance in our society. I shall first discuss the individual case, and then the matters of principle to which it gives rise.

I have living in my constituency a Mr. and Mrs. Mann who have been married for 15 years and who have a 5-year-old daughter. Cyril Mann is a painter: and perhaps in view of what I shall be saying later I should say a little now about what sort of painter he is. He has a name which is widely known in professional art circles in this capital city which is, as I am sure hon. Members are aware, probably the world's centre for dealing in works of art. He is a hard-working and prolific painter and, most important of all—I have seen some of his work—he is an unquestionably talented painter. So he has both name and reputation, and there is no doubt whatever of the talent which supports that reputation.

Nevertheless, in our society it is only too easy for a creative artist, whether he be a painter, poet or composer, to have an established reputation and still earn scarcely anything at all from his creative work. So it is in the case of Cyril Mann. He works hard. He works all the time. He delivers the goods. But the goods do not—as yet—sell. I hope—indeed, I am sure—that one day his ship will come in.

Mr. Mann is fortunate enough to have a wife who believes in his talent. When they married he was earning some money as a teacher of art, but after their marriage Mrs. Mann urged her husband to give up teaching and devote himself entirely to his creative work. I emphasise that this was done at her request. Paradoxically she herself wanted to teach, but there was not time for her to qualify as a teacher since money was needed immediately to support the family, so she went into a different walk of life. She was very successful, and is now earning a comfortable living for herself and her family.

However, she still felt this unfulfilled desire to be a teacher; and finally, last year, she decided to take the plunge that she had always wanted to take. She and her husband had been married for 15 years. They had paid off the mortgage on their house. The years were going by. She was beginning to see the age of 40 looming ahead, and she thought that it was time for her to qualify as a teacher if she was to follow that qualification with a worthwhile teaching career. Like her husband, Mrs. Mann is a person of unusual energy and industry. Although she left school at the age of 15, she went to evening classes, got two A levels, then two credits at the Open University, and these qualifications exempted her from one of the three years which, as hon. Members know, is the normal period of training at a teacher training college. She applied for a place in a teacher training college and was accepted.

Then she applied for a grant—and it was at this point that the gross anomaly which I want to discuss arose. She discovered that the maximum grant she could be given was £695 a year, this to be made up of the married woman's grant—that is to say, a married student living in her husband's home—of £475 a year, plus a mature student's grant of £220 a year.

If all the family circumstances that I have outlined in detail had been identical but only the sexes had been different—that is to say, if it had been the wife who painted and the husband who wanted to teach—the husband would have been eligible for a grant of £1,335. That is almost twice what Mrs. Mann is eligible for. It would have been made up of the fully basic grant for a student living in London, £665; a grant for his dependent spouse—she gets none—of £315; a grant for their dependent child—which again, because she is a woman, she does not get—of £135; and, as in her case, the mature student's grant of £220, making a total of £1,335.

My first response to these facts, as would have been the first response of most hon. Members, I believe, was to see whether I could find in the regulations a loophole through which it would be legitimate to enable Mrs. Mann to achieve her aim. My first thought was that the husband might be described as being dependent upon her, but the regulations say only that an incapacitated husband who is dependent on his wife will entitle her to the additional grant—and Mr. Mann could in no sense be said to be incapacitated.

I then thought of the possibility of Mr. Mann drawing supplementary benefit. But as a painter he is categorised as self-employed. Moreover, as a painter who has earned little money for several years he has not been buying stamps and, therefore, is not entitled to benefit.

I approached the local education officer in the borough of Waltham Forest, the redoubtable Dr. Stephens, one of the comparatively few local education officers in the country who have a nation-wide reputation. Dr. Stephens confirmed that the position was precisely as I had found it to be. In a letter to me of 30th July he said:
"Mrs. Mann is right: a man would get £1,335, whereas we cannot give her more than £695."
Dr. Stephens made no secret of his own views in the matter. As the local education officer he had no choice but to apply the regulations as they exist, but he does not regard those regulations as justified. Indeed, later in that same letter—I quote this with his permission—Dr. Stephens made the simple statement:
"It certainly is unjust."
I discussed the matter with my right hon. Friend the Secretary of State, and on 29th July I wrote him a letter about it. I received a reply from my hon. Friend the Member for The Wrekin (Mr. Fowler), then Minister of State though no longer at the Department, in which, to my utter astonishment, I read the phrase:
"No question of sex discrimination in this case."
That is simply astounding, because the facts cannot be denied. It has been admitted by the Department under another hat, and it has been forcefully stated by the local education officer, that a man would get £1,335 and a woman £695, if all other circumstances are the same and only the sexes different. I cannot see how the Department of Education and Science can maintain, or how any Minister can maintain, that there is no question of sex discrimination in this case. I challenge my hon. Friend the Member for Durham, North-West (Mr. Armstrong), the Under-Secretary of State who is to reply to this debate, to acknowledge that sex discrimination does exist in this case, and to say what the Government propose to do to eliminate it.

In parenthesis I may add that this is not the only example of sex discrimination in the awarding of education grants. An equally odious one springs instantly to mind. If a male student whose grant before his marriage is assessed on the basis of his parents' income gets married, he is then automatically entitled to receive the full grant as a married man. On the other hand, if a female student marries and continues to be a student her grant remains assessed on the basis of her parents' income—not on the basis of her husband's income, be it noted, but on the basis of her parents' income.

It is peculiarly ignominious for many married women to have the grant which they receive determined by their parents' income after they are married. Moreover, in many unhappy family circumstances—as has been said, every unhappy family is unhappy in its own way—that position can be especially humiliating, and the financial help which should be received by the student is quite commonly not received.

I then finally, to conclude my account of this unhappy battle that I fought on behalf of this constituent, put down a Question for Written Answer and received an entirely stonewalling reply on 29th November. Why the stone-walling? Why the denying of the undeniable by the Department? It seems clear that the Department will do and say almost anything rather than admit that sexual discrimination exists in this case, because it does not see how it can admit that discrimination exists and yet refuse to take action. Action in this matter will cost money, and in the present circumstances of the country anything which is likely to cost money is likely to be resisted by Government Departments—

I have said before in this House in a different context: if a genuine problem exists it is entirely wrong, especially in the present climate of opinion and feeling in our society, to use sexual discrimination as a way of solving it. If a problem exists, only defensible means should be taken to deal with it.

I remind my colleagues in the Government of the first sentence in the Labour Party's election manifesto in the section concerned with women:
"Changes in our society over recent years have emphasised the importance of providing practical equal opportunities for women rather than making polite noises about equality."
The case of students' grants seems to be an outstanding example of the need for the practical application of equality between the sexes. It is only in the case of married students that the inequities apply. The number of students involved is not very great. The sums of money involved in putting the injustice right would not be great. There are these injustices, and I have given examples of two separate kinds which occur in the case of married students. I now ask my hon. Friend the Minister of State what the Government plan to do to remove them.

I realise the practical difficulties of putting into effect the ideal of equality between the sexes. It will not only cost society money. The difficulties extend beyond that. Inequality between men and women is built into the fabric of our society in multitudinous ways. It is built into the fabric of institutions, and into the small print of legislation. The education regulations are an outstanding example of the way in which quite detailed regulations in a specific area embody these inqualities. I realise that they are so closely woven into the warp and woof of our legislation that there will be a lot of fine work involved in picking out the threads. But that is one of the things we are here for. In this case it is not a job which would take up the time of the House. It is a job which our colleagues in Government must be called upon to do.

I come, therefore, to the request that I wish to make to my colleagues in the Government. I ask my hon. Friend the Minister of State whether he will be willing to have a close look at the education regulations to see how—not if—sexually discriminatory elements can be removed. I am not a parliamentary draftsman, nor a lawyer, but I can imagine one possible way in which they might be removed. In addition to words like "husband", "wife", "male", and "female",—words indicating the sex of the person being referred to, other words like "spouse" and "breadwinner" also occur throughout the legislation. The important thing is that words such as "spouse" and "breadwinner" refer specifically to the rôle of the individual without regard to sex. Students' grants and similar matters should be dealt with by the appropriate authorities—whether national or local—solely with regard to the real life situation of the student concerned, a situation with which the sex as such of the student has nothing to do.

If many people were involved the new regulations would have to be vetted at the local level to see that they were not abused. I have consulted my local education officer as to whether that is practicable, and he assures me that it is. It is a task in which he for one would willingly and happily co-operate. If the number is smaller, the task might even be carried out effectively by the Department. But it is a task that must be carried out, because one of the things this House must do over the coming very few years is to make equality between the sexes a practical reality in our society. The task I have outlined, the request I have made, is a concrete example of how that can be done.

9.31 p.m.

I pay tribute to my hon. Friend the Member for Leyton (Mr. Magee) for the reasonable way in which he has put to the House a genuine hardship case. I listened carefully to what my hon. Friend said, and congratulate him on having brought out the circumstances of the case which concerns his constituents. I welcome the opportunity to speak on the subject, which, as is clear from the letters and representations we have received from students, parents and others throughout the country, is causing great concern.

There is no dispute over the facts of the case as my hon. Friend put them, except that when he accused the Department's regulations of containing sex discrimination he said something about the difference between a man student and a woman student who undertook marriage. As I understand it, if a man student's grant is subject to parental contribution a marriage during the course will not affect that contribution. There is no sex discrimination there. Men and women are treated the same. The parental contribution is still required. It is only on that matter that I wanted to correct my hon. Friend, who I know will forgive me for putting the record straight. On all other matters there is no dispute about the facts as he presented them.

A fundamental principle of the student support system is that grant levels should be determined on the basis that, as far as possible, they relate to the students' requirements, income and responsibilities, and reflect the costs incurred in attending a course of study. The House will agree that last year's grant settlement was a step forward. I give the assurance that we intend to go on reviewing the application of the regulations to achieve an equitable and just system.

We want to deter no student. On the contrary, Government policy is to encourage those capable of pursuing courses in higher education to undertake such courses. As my hon. Friend reminded the House, our manifesto committed us to that, and my Department is willingly committed to ending sex discrimination in opportunities offered in the education service. We welcome the mature students, and particularly those who are determined to enter the teaching profession. For a long time they have played a significant part in our schools and we look forward to their continued support.

I am sure hon. Members will appreciate that generalisations about the needs of certain categories of students have to be borne in mind when framing the regulations if the scheme as a whole is to be administratively feasible. Even with some built-in allowance for flexibility, it is not always possible to ensure absolute evenness of treatment in individual circumstances.

Will the Minister admit that the case argued by the hon. Member for Leyton (Mr. Magee) is not an isolated matter but a general case? I wish that I could say "We on this side of the House", but I, who have the humility not to stand at the Dispatch Box representing the Opposition, am saying that the argument is being dealt with on the basis that this appears to be an isolated incident and an isolated example.

We have had a great many representations about various aspects of the regulations. I would not say that this is a general case. That does not diminish its importance in any way. I assure the hon. Member for Isle of Ely (Mr. Freud) and my hon. Friend the Member for Leyton that, if they will be patient and allow me to deal with the case, I shall indicate that we intend to review the matter and similar cases—of course, there are other cases—in the light of the assurances which my right hon. Friend gave when we presented the grant settlement.

I wish to explain the background to the regulations. We have found generally that the financial requirements of single men and single women students appear to be much the same. There is no difference in the way they are treated for awards purposes. However, when we come to deal with the family situation we have regard to a basic principle underlying the grants system—namely, that the husband is generally responsible for the maintenance of his wife and family. That principle has applied for a long time.

I am well aware that every Member could give me examples where that principle does not apply, but generally the husband is responsible for the maintenance of his wife and family. That means that we have different rates of grant for husbands and wives living in the marital home unless both are students. Normally only student husbands have the right to claim for dependants. That is no more than a recognition of one of the fundamental principles that has governed our society for a considerable number of years. It is now being questioned by many folk, and we are bearing that in mind.

The grant system is not by any means inflexible. We gave some regard to the need for flexibility when drawing up the regulations. Where a student wife has to live away from home to pursue her studies, she receives the same rate of grant as a man. Where they live together, a student wife can receive the same benefits if her husband is incapacitated and dependent upon her.

I am not pursuing the merits or demerits. I am trying to give the House the background to the regulations. A student wife in the circumstances that I have outlined would receive the same rate of grant on the basis that she would have no choice but to carry the burden of maintaining the family.

In respect of the constituency case which my hon. Friend has properly and forcefully raised tonight after pursuing it forcefully with the Department, the issues are somewhat different. Mr. Mann has pursued a career which carries little financial reward. The burden of family maintenance has clearly fallen upon his wife. That is the choice that the family has taken. It must inevitably have affected their freedom of action in a number of ways. In particular, it makes it difficult for Mrs. Mann, under the present grant arrangements, to fulfil her ambition to qualify as a teacher.

The current regulations do not permit us to recognise Mrs. Mann as the breadwinner and, therefore, I cannot intervene at this stage and award a larger grant. Nevertheless we are considering the representations we have received indicating various anomalies and grievances. In this case, where inability to maintain the family arises from factors other than disability, we will certainly have another look at the regulations. I give the House that assurance.

There is considerable difficulty in defining the precise circumstances to meet all special cases, and I assure the House that these matters will be carefully considered in our on-going review. Cases such as Mrs. Mann's, which may be seen as exceptions to the existing general rules, give rise to very strong feelings. We are in no doubt about that from the representations we have received and from the way in which my hon. Friend has put his case tonight. I give the assurance that we will bear in mind the points he has made when we consider any possible amendments to the rules for the year 1975–76.

A38 Burton

9.41 p.m.

I offer my sincere thanks to the Under-Secretary of State for the Environment for allowing me the opportunity to raise the question of safety of that part of the A38 which passes through the Burton constituency. I was only given the opportunity of raising the matter in this debate at 7.30 this evening, and the hon. Gentleman cannot have heard about it until about an hour after that.

It says much for the efficiency of the Department and the Minister's desire to be helpful that I am able to raise the subject now at such short notice. I know much about the hon. Gentleman's kindness and diligence in this House in relation to the question of rates.

If one wished to drive south from Derby towards Birmingham, one would be tempted by the road map to take the A38. For much of its length it is a good enough road. Some part of it has recently been improved to almost motorway standard. As one enters the Burton division, however, and certainly as far as the Lichfield turn-off, one is in a zone of considerable danger. That part of the road which runs through Burton is a potential and, I am afraid, too frequently for tolerance, an actual death trap.

Dual carriageway it is, but the carriageways are narrow, the road surface is ever altering and is almost entirely bumpy, being witness to frequent, almost continuous road works of one form or another. It is, as I can vouch from personal experience on many occasions, absolute hell to drive over this stretch of road at night if the road is wet or damp.

The carriageways are separated by a few feet of grass reservation with no safety barrier at all, unless it be at one part by a short, wooden type of fence which could well impale one if one catches it on a motor bike at an angle. The iniquity of this stretch of the road is that it is fast and derestricted, and it seems almost incredible that we should still have such roads with the weight, speed and size of modern traffic, without any central safety barrier along the middle.

There is an extremely tight turn on the flyover at Branston, which brings traffic out of Burton, and a mile or two in the direction of Birmingham there is a right-hand turn-off to a large, prospering and lovely suburban village called Barton-under-Needwood.

The inhabitants of Barton-under-Needwood work to some considerable extent in Burton, so the journey from Branston flyover on to the A38, two miles to the turn-off to the right, takes place once or twice a day. Here the left-hand turn takes one to Walton-on-Trent, which, because it is outside my constituency though beautiful, is not quite as beautiful as Barton-under-Needwood.

Further down the A38 there is a right-hand turn to the small hamlet of Wychmor and further still there is a turning to Alrewas which has also been the scene of accidents, although the details I have not seen since I confined my parliamentary Question at an earlier stage to the Burton division.

That junction of the A38 has also been the scene of accidents. Along the A38 thunder day and night heavy articulated lorries and a steady stream of private cars. At peak hours commuter traffic turns from or into the villages I have mentioned.

Over the years there has been much carnage, a good deal of which is avoidable. There were plans to alleviate the situation over a number of years, but little of substance has been done and accidents continue to occur. Cars turn right and wait in long queues well out into the fast lane. They jam up the junctions while undecided motorists decide what to do. Heavy lorries come out across the road before their drivers have adequate vision. Cars brake suddenly as a function comes upon them far too soon. Drunk or harassed drivers career across the central reservation or collide with traffic going in the other direction.

I understand from an answer to a Question on 20th December that the Department of the Environment informed me that in 1971 there had been two fatal accidents, five serious accidents and eight slight accidents at Branston junction, Barton and Wychnor Turns. In 1972 there was one fatal accident, three serious and five slight accidents at those positions. In 1973 there was one fatal accident, five serious and three slight accidents. It is true that there were no accidents at Barton Turn from January to September 1974, but for most of that time part of the junction was closed while Walton Bridge was being rebuilt.

Local people did not believe me when I told them that there had been only four fatal accidents, 13 serious accidents and 16 slight accidents in three years. I realised my mistake and discovered that several more accidents had occurred in the distances between junctions. A grotesque and tragic illustration of the point occurred on 30th December, just two weeks ago, when three people died, a woman, a man and his 10-year-old daughter when his car crossed the central reservation and overturned in the path of an articulated lorry.

Is it any wonder that local people are asking how many more must die or be maimed before something effective is done? We must remember that these figures are figures of actual accidents. We shall never begin to know the number of near misses which might so easily have resulted in death or injury. It is true that the road has been the subject of safety proposals. The Department of the Environment informed me on 20th December that
"It is intended to provide grade-separated junctions"—
by which I take the Department to mean flyovers—
"at Alrewas Turn and also at Barton Turns and then to close all central reservation gaps between Alrewas Turn and the Branston Interchange."—[Official Report, 20th December, 1974; Vol. 883, c. 665.]
The county council has told me, and the local newspapers have said, that
"Work on building a flyover on the A38 on Barton Turns is all ready to start."
I quote from the Burton Observer and Chronicle. An official of the county council said:
"We have completed all the administration and design work … We are waiting for the Department of the Environment to give us the money and say get on with it."
The official said that the scheme would cost about £1 million, and the authorisation for it would have to come from the headquarters in London and not from the regional office. Once the money had been allocated it would take about four months before work could start. The scheme would then take about 18 months to complete.

The spokesman said:
"This is a very bad junction. There have been a number of fatalities. Everyone within the county is very keen to get this scheme started. Administratively there is nothing to hold the thing up."

When the hon. Gentleman referred to "the spokesman', I missed the point. Is he referring to the county spokesman or to a spokesman from my Department?

I meant the spokesman of the county council.

May I add to that plan some other proposals which I urged the Department of the Environment to consider? First, before a flyover junction at Barton Turns is constructed, some danger signposting at Branston Junction might be erected. Secondly, some danger signposts might be erected between Branston Junction and Barton Turns—in fact, on the whole stretch of that road. Thirdly, there could be a speed limit of 30 mph along the whole stretch of that dangerous part of the road. Fourthly, much longer turn-off lanes to the junction could be constructed, so that more cars can queue without sticking out into the fast lane. At present we have the situation that if a line of cars wishes to turn right across the A38 at Barton, we get one or two in the actual junction space and perhaps another two or three cars back on the graded entry to the junction. There may well be 10 cars, with the last three or four stuck out into the fast lane of a narrow dual carriageway.

Fifthly, there could be a closure of the turn-off junctions at Barton and Wychmor Turns for lorries. They would have to make the extra journey to Alrewas or Branston to turn round. Lorries are so bulky that they create a greater danger than small motor vehicles. Sixthly, and most urgently, crash barriers should be put up along the entire length of this part. Coupled with that we could afford to take away most of the central reservation and thus widen the road on each side of the dual carriageway part. We could narrow the reservation and widen the road on each side by two or three feet.

I shall shortly be meeting county council officials, the police and officials of the Staffordshire District Council and other interested bodies to agree a set of proposals. The Government must find the money to provide a safe road not only for those who live in the constituency but, since the A38 is a main arterial road linking counties, for people who merely pass along that stretch of road. I ask the Government most earnestly to do so immediately, before more people die.

9.55 p.m.

It was right for the hon. Member for Burton (Mr. Lawrence), in view of the early dispatch of today's business, to take the opportunity of raising a most serious matter affecting his constituency and his constituents. As he said, we have for some time been dealing with the question of rates, and I agree with him that, however much rates may be a matter of serious concern to his constituents, the question of human life is of far more serious concern.

I must apologise to the hon. Gentleman in advance since the time which I have had to prepare an adequate reply has necessarily been brief. I am not, of course, the Minister with specific responsibility for roads and transport. However, I have taken note of all that the hon. Gentleman said, and I shall relay it not only to my Department and to my fellow Ministers but to the regional office concerned.

To all intents and purposes, looking at a map and looking at the road itself, this is an ordinary stretch of rural road. Nevertheless, it has a very had reputation for accidents. As the hon. Gentleman himself said, my hon. Friend the Under-Secretary of State responsible for transport gave an answer on 20th December and supplied figures for the three specific junctions about which the hon. Gentleman inquired. Looking at those figures, I must confess that I find them harrowing, bearing in mind that they deal with a stretch of road which is only about four or five miles in length.

The hon. Gentleman quoted the figures. There have been four fatal and 13 very serious accidents, according to the information supplied by my hon. Friend the Under-Secretary. What I did not know until the hon. Gentleman mentioned it tonight is that, in addition, there have been other very serious or fatal accidents along the stretch of road not necessarily at the junctions themselves. Then, of course, there was the tragic accident on 30th December when three people were killed, again on this stretch of road. These are very serious figures on a very small stretch of what appears to be ordinary road, and, therefore, account must be taken of them.

As the hon. Gentleman said, a number of accidents have occurred on this stretch. In the main they seem to have been caused by vehicles crossing the central reservation. The hon. Gentleman pointed out that sometimes the cause of an accident of this kind may be a stressed or harassed driver. At other times it may be a drunken driver who crosses the central reservation. The Department can take steps to deal with the stressed or harassed driver, but in the case of a drunken driver there is very little that can be done on a motorway or anywhere else because he will defy all the laws of road safety and of human nature and find a way to injure himself or other people by crossing a reservation or by committing some other utterly stupid act, so putting his own life or the life of others in danger.

I cannot accept, however, that all those involved in the accidents which have occurred on this stretch of road were under the influence of drink or that drink was responsible, although it may have been in one or two cases.

Some of the drivers may have been very tired. It is a long stretch of road between two large cities.

Driver fatigue is another problem, and it may be that the very fact that this is a stretch of ordinary rural dual carriageway in itself is deceptive to anyone driving along the road. He may feel safe, whereas he is anything but safe because of vehicles taking advantage of gaps in the central reservation to perform U-turns and because of the junctions themselves.

I understand that after what is referred to as the second accident—which I take to be the tragic accident on 30th December—the local Press contacted our regional office on the very subject of barriers which the hon. Gentleman has put as the most urgent and perhaps the most important and safest—

It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Dormand.]

As I was saying, the hon. Gentleman suggested barriers as perhaps the safest things that could immediately be provided to prevent accidents on this stretch of road. My hon. Friend replied—and this is the position—that it is not departmental policy to put barriers on all-purpose roads, but he said he would consider whether this stretch of road had any peculiarities that demanded safety barriers. I understand that, having considered the matter, my hon. Friend came to the conclusion—this is what my brief tells me—that barriers were not necessary.

In view of what the hon. Gentleman has told the House—and this is the great advantage and glory of the House—I must confess that I am not satisfied with that reply, and I shall ask my hon. Friend to look again at the matter, to discuss it with the regional office at Birmingham and to consider the whole question whether safety barriers should be provided as an immediate measure to cut down the carnage on this short stretch of road. I give the hon. Gentleman the undertaking that the matter will be looked at again in view of what he has told the House tonight.

As the hon. Gentleman said, there are schemes for grade-separated junctions. One is planned at Barton Turns, and work is due to begin later this year. The other grade-separated junction is the one that was suggested by my hon. Friend in reply to the hon. Gentleman at Alrewas Turn; that is the A38—A513 crossroads. It is important to close gaps in the central reservation between Alrewas Turn and the Brandston interchange. This again may be a helpful move.

The hon. Gentleman nut only posed the problems to the House but put forward a number of solutions to try to cut down the accident rate on this stretch of road. I am not competent to deal with whether those are proper solutions for this road, but I assure the hon. Gentleman that all his suggestions will be considered by our transport division, by the region and by my colleague the Minister responsible for transport as a possible means of reducing the large number of accidents on this stretch of road.

I do not know whether the imposition of a speed limit is the answer, because I have no evidence that the accidents have been occasioned by the speed of the vehicles concerned. I suspect—and I can only suspect—from what the hon. Gentleman said that some of the accidents may have occurred because of vehicles unexpectedly turning in gaps in the central reservation at points where motorists travelling in the opposite direction would not expect a vehicle to turn.

If that is so—and I do not say that it is—and if the gaps are closed as my hon. Friend said in his reply of 20th December, and if, in addition, the Department gets on with the grade-separated junctions, and if, further, we look again at the question of providing some form of barrier, that might help to deal with the problem. A barrier would to some extent help to deal with the drunken driver, because if he were to hit it he might damage himself and, unfortunately, his passengers, but he would not do any harm to an innocent motorist travelling in the opposite direction.

If those three matters are considered, it may be that the serious accident rate on this stretch of road can be reduced. I can do nothing but applaud the hon. Gentleman for raising a serious constituency matter tonight. I assure him that because of what he has said tonight, because of his Question on 20th December, and also because of the serious accident in which three people were killed on 30th December in a triple pile-up on this stretch of road, the Department will consider what can be done to try to improve the situation.

The hon. Gentleman asked who would pay. I am at the disadvantage at present of not knowing, because of the time involved, whether this is a trunk road, a county road, or what particular classification it is. If it is a trunk road, the cost will be the responsibility of my Department. If it is a county road, the cost will be the responsibility of the county council under the transportation grant arrangements. Again, this aspect could be looked at.

I assure the hon. Gentleman that all the points that he has raised in this Adjournment debate will be looked at by my hon. Friend, by the Department and by the regional office so that the carnage on this short stretch of road in his constituency may be eliminated.

Top Salaries Review Body

10.6 p.m.

I must state the position as stated by my predecessor on 14th February 1964:

"My predecessors and I have always deprecated the introduction of subjects in an Adjournment debate unless due notice has been given to the Minister concerned. The reason is really, that, apart from the House of Commons point of view, an ex parte statement without reply is not a very valuable Parliamentary proceeding".—[Official Report, 14th February 1964; Vol. 689, c. 799.]
That is the position of the Chair.

I am most grateful. Mr. Speaker. I shall not take up much of the time of the House, fortunate though it is that we should have 25 minutes available for debate. I appreciate that it would be useless to pursue a debate, as it were, in vacuo. However, I want to make this point.

I stand here, as it were, in the reverse position of a Written Answer to a Question, in that I am making a point without the Government being able to make a reply. That is most unfair. That is why I shall not proceed beyond a minute or so on the matter of top salaries. When a Written Answer which contains an important policy statement is made, hon. Members of this House are denied an opportunity of questioning and debating the point, just as the Government are tonight.

I gave notice of my desire to raise this matter on the Adjournment when the earlier debate looked like collapsing. With the assistance of two members of the full-time staff of the Whips' Office, I have sought a Minister to reply. However, I recognise that there are grave difficulties, during the course of an evening, when Ministers have many other duties to perform, in getting one to come here at comparatively short notice.

Therefore, recognising your injunction, Mr. Speaker, I should like briefly to urge on the Government that when the Top Salaries Review Body reports, the matter should be brought before the House and should not be accepted by means of a Written Answer.

The increases noted and accepted by means of Written Answer, given, be it noted, on the last day of Parliament before the Christmas Recess when there was no possible opportunity of raising the matter—this is the first opportunity that I have had—were larger than many people in my constituency earn as full-time annual salaries. The acceptance of the review body's report caused a good deal of consternation throughout the country, particularly in view of the background of the social contract. Therefore, I appeal to my two hon. Friends from the Whips' Office, to whom I am grateful for remaining, to bring these remarks to the notice of the Government. I shall seek further opportunities of raising this issue when the Government are in a position to reply.

It would be fruitless to pursue this matter now, but I would emphasise that if the Government make a decision like this members of the Parliamentary Labour Party have to face the country bound by it. When such decisions are made by means of a Written Answer, we cannot seek the reasons and do not regard ourselves as having to follow meekly behind. We have a duty to be involved, and we seek this participation. I am grateful for the tolerance of the House in listening to these few remarks.

10.10 p.m.

First of all, I would say that the Government are represented on the Front Bench, despite the absence of the Opposition. At a late hour this evening, I was informed that this matter could arise. We have duly attempted, at short notice, to get a Minister to reply. My hon. Friend has placed on record what he wanted to say and I will ensure that my right hon. Friend's attention is drawn to his observations.

Question put and agreed to.

Adjourned accordingly at eleven minutes past Ten o'clock.