Skip to main content

Commons Chamber

Volume 887: debated on Wednesday 5 March 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.

House Of Commons

Wednesday 5th March 1975

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Oral Answers To Questions

Scotland

Glasgow

1.

asked the Secretary of State for Scotland when he next intends to pay an official visit to Glasgow.

15.

asked the Secretary of State for Scotland when he next intends to pay an official visit to Glasgow.

I am frequently in Glasgow but have no immediate plans for an official visit.

That is most regrettable. Does not the Secretary of State recognise that he ought to pay a personal visit to Glasgow to see for himself the refuse which is lying about? Is he not aware that at this moment there are 50,000 tons of garbage lying about the place in Glasgow? What has he to say about the health hazard that that creates, and the possibility of rats, flies and other vermin? Does he not realise that the citizens of Glasgow are very worried about it all and are looking to him as the responsible Minister to do something about it?

I am not unaware of the situation in Glasgow. I have had informal contact on my visit to Glasgow with the people concerned, and my right hon. Friend the Secretary of State for Employment has had close and continual contacts. I shall continue to have those contacts, and I urge the hon. Gentleman not to exaggerate and not to get into something of a hysteria about these things. It is a serious matter.

Representatives of the corporation met representatives of the strikers today and urged them to return to work. We ought all to echo the hope that they will. The men undertook to consider this at a meeting of the strike committee on Friday, with a view to consultation with their members over the weekend. Clearly, the situation is delicate, and I counsel hon. Members not to say anything which would make the reaching of such a settlement more difficult. The other matters which the hon. Gentleman raised are under consideration.

Will my right hon. Friend confirm that, in spite of the great inconvenience caused to the citizens of Glasgow, he is in constant contact with the health authorities and there is, in effect, no health hazard whatever at the moment? Will he agree also that the hon. Member for Glasgow, Hillhead (Mr. Galbraith) might apply his not inconsiderable ability to other subjects by which he could help the people of Scotland better than he can help them on this?

I think that we must be careful here. No cause is helped by exaggeration or panic statements. The Greater Glasgow Health Board has confirmed that the strike has not yet had any effect on public health, but what we have to bear in mind is the effect of the cumulative backlog of work and the time that clearance will take. These are the matters concerning me at the moment, and for that reason my hon. Friend the Minister of State is to go to Glasgow tomorrow to make a further assessment of the position and to discuss it with the corporation.

Does not the Secretary of State realise that it is quite wrong for him to talk about exaggeration by my hon. Friend when he himself has not even been to see the situation? It there not a need to prepare contingency plans to have the rubbish cleared, and is it not an affront to the people of Glasgow and a gross dereliction of duty on his part and that of other Scottish Ministers that, when we have more Scottish Office Ministers than we have ever had in Scottish history, it takes three weeks of parliamentary campaigning to get one of his junior Ministers to go to Scotland tomorrow?

The hon. Gentleman should appreciate that the Question asked when I would make an official visit to Glasgow. I was in Glasgow last weekend, I saw the situation, and I talked to people.

The hon. Gentleman should realise that no one stays in that place all the time. I assure him that the position has been and is constantly under review.

Road Works

2.

asked the Secretary of State for Scotland what plans he has to ensure that there is no delay in road works and other infrastructure requirements in areas of Scotland affected by oil-related development.

Priority is given to finance for oil-related road and other infrastructure schemes, and extra assistance has been provided for local authorities in areas affected.

Is the hon. Gentleman aware that production targets for North Sea oil have already lagged behind? How much of this is due to lack of infrastructure in the oil-related areas? Does the hon. Gentleman realise that, because of the snail-like decision-making progress of his roads department, there are many important schemes, in my constituency in particular, which are being held up? What does he propose to do to speed them up?

If the hon. Gentleman will put down Questions about specific road schemes, I shall answer them. I do not accept his charges either about road schemes or generally. Under the Conservative Government there were considerable delays not only in road schemes but on the infrastructure generally. If the suggestion is that there were no delays, I remind hon. Members that the oil programme has certainly not been held up because of delays in the infrastructure under this Government.

Is the Minister aware that the Clyde Estuary is an important area for oil-related developments? Why is the Secretary of State still refusing to give the go-ahead for a motorway connection between Hunterston, one of these centres, and the M8 or the M74, in spite of repeated promises by himself and his Conservative predecessor? When will he do something?

I do not accept my hon. Friend's charges. Oil-related developments get priority. There are constraints on the road programme generally, as there are on all other programmes of public expenditure.

Since it is important to get on with this work during the coming summer, will the Minister say when the local authorities will be told finally what extra grants they will get, for instance, for schools, roads and housing?

I think that the schools figures are already out. There is absolutely no restraint on housing expenditure by local authorities, not only in oil-related areas but on any housing construction anywhere in Scotland.

Does the Minister accept that lack of housing is the greatest deterrent to improving the pace of the oil programme? Does he further accept that there is a very serious need to house properly the people already living in those areas, let alone the additional housing which will be required? Are the Government about to make a statement about additional resources or ideas they may have in mind to improve the supply of housing, particularly in the North-East?

There is no constraint on housing development other than the constraints which arise through the physical difficulties of finding the men and materials. There is no constraint on numbers or finance by the Scottish Office. The SSHA is deeply involved in these matters in many areas, including the hon. Member's constituency. It is there specifically in that case, however, to provide for incoming workers in accordance with the economic expansion programme. The provision of housing for the existing population is basically a local authority responsibility. We have had excellent co-operation from the local authorities and they are under no restraint from central Government.

If the Minister is so pleased with what his Government are doing to help in these oil-related areas, why has the school building programme been slashed? In the county of Kincardineshire it has been cut to 11,000 for the whole year.

The hon. Member should listen to the answer. There is no cut in the provision of roofs over heads. In the oil-related areas, particularly where there is an expansion of population, school provision is being made simultaneously and correspondingly.

Potatoes

3.

asked the Secretary of State for Scotland what has been the average price per ton for ware potatoes in Scottish markets for the 1974 crop; how this compares with the guaranteed prices; and if he is satisfied that Scottish potato growers are getting a fair return.

The average price received by Scottish growers from the beginning of the season until mid-February is estimated to be £24·40 per ton or £2·40 above the guaranteed price of £22 per ton determined by the previous administration. I am satisfied that this Government's determination of a guaranteed price for 1975 of £28 per ton should provide growers with the necessary confidence.

Is the Minister aware that recent estimates of the cost of loading dressed potatoes on to lorries in Scotland are between £29 and £30 a ton, and that the estimates for the crop which is to be planted this year are between £35 and £37 a ton? Both figures are well above this year's and next year's guarantee. Since imported potatoes are selling in my constituency at 10p a pound—which is £224 a ton—and housewives are paying that price, does he not agree that there is a good case for re-examining what the guaranteed price for potatoes should be after this year's crop has been planted and a proper cost of the assessment has been made.

That question raises a whole host of different matters. I am aware of the Potato Marketing Board's view of what the figures should be, but the normal pattern is for prices to be lower to our own producers and to rise from March onwards. We are satisfied that this guaranteed price should give confidence to the industry, because there is no evidence that things were difficult last year in spite of rising costs and the lower guaranteed price fixed by the previous administration.

Brussels

4.

asked the Secretary of State for Scotland when he next intends to pay an official visit to Brussels.

Will the Secretary of State ensure that his Department gives adequate publicity to the tangible benefits for Scotland of EEC membership especially from such sources as the European Social Fund, the European Coal and Steel Community and, in the near future, the regional fund?

If I remember rightly, I answered a Question by the hon. Member on that subject in January.

Will my right hon. Friend try to arrange a visit to Brussels before the EEC referendum? If he manages to get there, will he take the opportunity of studying first-hand the undemocratic and over-centralised nature of the EEC? Will he try to see that this over-centralisation and lack of democracy does not become a characteristic of the EEC referendum? Does he realise that many of us in Scottish constituencies would like the result to be announced constituency by constituency, so that we may know whether or not our attempts to get out of the Market are being backed by our constituencies.

I gather that my hon. Friend will have no trouble in making up his mind how he will vote. In view of the requests for me to visit Glasgow, Moray and Nairn, Dumbarton, Fife, and other places, I do not see any possibility of an early visit to Brussels. I shall be able to make up my mind on the nature of that organisation, I think, without such a visit.

On the right hon. Gentleman's next visit to Brussels will he consider putting the EEC fisheries policy on his agenda? Will he bear in mind that inshore fishermen feel that their interests are not being looked after, and that they are demanding a 50-mile limit now?

I had expected to have to deal with that point on a later Question, in which the hon. Member invites me to visit her constituency. However, we are not unmindful of the points which have been put concerning fishery limits, and so forth. This matter concerns, first, not only the EEC but the Law of the Sea Conference. Certainly the EEC and its ideas on fishery limits represent a further complication, and we are watching the situation.

Is my right hon. Friend aware that every Minister who is renegotiating the terms of membership is being increasingly satisfied that he is getting the terms we want and which were included in our manifesto? Has my right hon. Friend contacted Scottish industry, which provides the vast proportion of jobs in Scotland? It will tell him, as it told me in Glenrothes in Fife that if we get out of the Market there will be a massive increase in unemployment.

I do not think there is any doubt that the answer we get depends on to whom we direct the question.

Is the Secretary of State planning to give Scotland a lead on the referendum?

I do not know what the hon. Member means by a lead. Is he asking whether I am going to express my own opinion? Once the renegotiations are completed and we come to the referendum I shall be as much entitled to my opinion as anyone else. How I express it is a matter for me.

When he goes to Brussels, if he ever does, will the Secre- tary of State notice that that over-centralised bureaucracy has fewer bureaucrats in the Commission for 250 million people's welfare than he has in the Scottish Office for 5 million people's welfare?

Eaglesham (Bypass)

5.

asked the Secretary of State for Scotland when he expects to announce the commencement of work on the bypass of the village of Eaglesham.

Responsibility for initiating a scheme lies with Renfrew County Council, which has not put forward any proposals.

Does the hon. Gentleman realise the extent of the damage to structure and the environmental pollution which the people are enduring in this designated conservation area? Does he accept that until there is some co-operation with the Scottish Office about both the line of the road and the cost it is unlikely that the bypass can be brought forward, yet it seems to me and to all my constituents a matter of urgent priority?

The initiative lies with the county council, which has not put forward any proposal to us. It has introduced a certain number of interim measures, such as the 30 mph speed limit, school crossing patrols, and "no-waiting" restrictions. It has turned down a number of other proposals made by the residents.

Dairy Farming

6.

asked the Secretary of State for Scotland if the return for dairy farmers proposed in the statement of 17th February covers the rise in costs over the past 12 months.

Yes, Sir. This is a very substantial award. It consolidates and improves on the settlement last October and I believe it will allow the recent rise in confidence to be sustained.

Has the Minister noted the substantial drop in the number of dairy cows in the last return? In view of the probable shortage of milk for consumption and manufacture in the coming months, has he made an estimate of the increase during the summer? Will it also cover the allowances for additional costs?

I am not sure that I accept what the hon. Gentleman says. Production is up on last year. There is an allowance in the United Kingdom quota, as a whole, of 50 million additional gallons, and there is every sign of confidence in the industry. I cannot predict the yield from every cow, but the dairy industry is healthy, and I am sure that it will continue to be so.

If the Minister is so sure that confidence is returning to the dairy industry, can be say why dairy farmers are selling such large numbers of cows, and why there has been a downturn in the number of dairy heifers coming into the dairy herd in Scotland?

I can never understand why a lot of farmers do a whole lot of things. [Interruption.] The hon. Gentleman is getting beef mixed up with milk. I repeat that the dairy industry as a whole is very healthy and that there is a great deal of confidence—more than there was a year ago.

If the industry is so healthy, why did 270 dairymen apply to come out of dairy and into beef in December?

That is a tribute to this Government. All the farmers are very shrewd at seeing where the best bargains are. What the hon. Gentleman is saying is that the beef sector is also a healthy part of agriculture.

Industrial Devolution

7.

asked the Secretary of State for Scotland if he will now hold talks with the Scottish Confederation of British Industry, the Scottish Trades Union Council and the Scottish Council (Development and Industry) to discuss industrial devolution.

I and my colleagues have discussed industrial and devolution matters with these bodies on a number of occasions since we came into office. We shall continue to do so as necessary.

The Government's decisions to transfer to the Secretary of State powers to ad- minister selective financial assistance to industry, and to set up a Scottish Development Agency, represents a substantial devolution of responsibility for industry to Scotland.

I hope that industry itself will follow this lead and make the maximum effort to develop management and production capacity north of the border.

I am grateful for that reply. But the document containing proposals for discussion on the Scottish Development Agency, which the right hon. Gentleman circulated, is completely silent on the question whether this important agency will be under the control of the Scottish Assembly.

I hope that the House will see the Bill to set up the agency before Easter, and that we shall have the agency in operation before the end of the year. As we do not have a Scottish Assembly, it obviously cannot be responsible to an Assembly. It will be responsible to the Secretary of State.

Will the Secretary of State give an assurance that if the Government wish to ascertain the views of industry on devolution or any other matter in the future they will consult both sides of industry? Does he realise that the pilgrimage of half the Government to Glasgow Airport via Prestwick Airport last weekend might not have been quite such a propaganda flop if they had had firm proposals to make, and if they had not decided not even to consider interviewing and meeting the Scottish CBI and the Chambers of Commerce as well as the STUC?

The hon. Gentleman is out of date. We have already seen the Scottish CBI and the Scottish Council on the document mentioned by the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel). We had meetings with the Scottish Council at a working dinner on, I think, Friday evening, when there was a good exchange on most of these matters, including the very point raised in the Question.

Without wishing to see the principle of national rates of pay weakened, or to see Scottish workers paid less than workers in any other part of Britain, may I ask whether my right hon. Friend is aware that there is a case for having the capacity to deal with some aspects of industrial relations within Scotland? Is he aware that the quality of our industrial relations problems urgently needs attention?

Is the Secretary of State aware that recent estimates put the number of people on short time in Scotland as high as 80,000? How much of this is due to the branch factory syndrome, from which Scotland has suffered for so long? Does he agree that it is a strong argument for an indigenous base of industry in Scotland?

I do not necessarily accept the hon. Lady's figures. If she wishes to ask a question of that kind, requiring a detailed answer, I shall be grateful if she will put down a Question.

While considering these matters, will my right hon. Friend keep in mind that there are two distinct approaches on industrial devolution, one concerning those matters which should be decentralised and devolved to Scotland and the other concerning those which can be solved only if we keep cross-border control? On behalf of 7,000 Chrysler workers, who expressed precisely that attitude in order to preserve their jobs—the hon. Member for Perth and East Perthshire (Mr. Crawford) said that he entirely agreed with what they said and with what I said—will my right hon. Friend keep in mind that we cannot bring industry and jobs to Scotland unless we have total cross-border control on those matters, affecting the macro-economy of Britain?

This is an important question for discussion and argument. When one starts on the basis of being concerned to maintain the economic integrity of the United Kingdom, one begins to draw lines in respect of what can be devolved and what cannot be. I look forward to these continuing arguments over the coming months.

Comprehensive Education (Coatbridge)

8.

asked the Secretary of State for Scotland what applications he has in hand for the provision of accommodation for comprehensive education in Coatbridge; and if he will make a statement.

Lanarkshire Education Authority's school building proposals for the next two years included projects to provide accommodation at St. Ambrose, Columba and St. Patrick's Roman Catholic High Schools. The authority's proposals as a whole greatly exceeded in value the amount of school building my right hon. Friend was able to authorise for these years; and it will now be for it to decide, with the agreement of Strathclyde Regional Council, which projects to include in the programme for 1975–76.

Is my right hon. Friend aware that Columba High School, which is dubbed one of Lanarkshire's slum schools, requires about £1½ million for the provision of roofs and to replace an annexe, and that Coatbridge High School and St. Patrick's High School require £1·3 million—all at 1974 prices? In other words, over £3 million is required, but the county council is satisfied that it will not be able to afford one penny for those improvements for the next two years. Will my right hon. Friend visit Lanarkshire and discuss this serious situation? Will he give us an assurance that resources will be made available to eliminate these slums from the town of Coatbridge?

My hon. Friend should be aware that Lanarkshire has been allocated £6,424,000 for 1975–76 for new starts. The priority given to school building is very much a matter for the local authorities to decide and to agree on amongst themselves. As regards visiting Lanarkshire, I understand that Lanarkshire is visiting me first to discuss this and other matters.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply I wish to give notice that I shall attempt to raise the matter on an early Adjournment debate.

Lanarkshire

9.

asked the Secretary of State for Scotland when he next proposes to pay an official visit to Lanarkshire.

Is the Secretary of State aware that that answer will not be regarded with much joy by the steelworkers in Lanarkshire? Before the right hon. Gentleman comes to Lanarkshire will he persuade his Cabinet colleagues to reconsider the decision not to set up a Scottish Steel Corporation? Will he establish such a corporation, so that the number of jobs available for steelworkers in Lanarkshire can be expanded? Further, in the context of the southern part of the county, will he persuade his Cabinet colleagues to reconsider the decision not to keep the fuel subsidy for tomato growing, so that the 2,000 people employed in that industry are not thrown on the same unemployment scrapheap as are thousands of steelworkers in the same county?

Steel and tomatoes together. May I suggest that the hon. Gentleman addresses his remarks on tomato growers to the appropriate Minister? He will then receive a clear answer.

Exactly. If the hon. Gentleman puts such a Question on the Order Paper it will be answered by the Scottish Office. I do not agree with the policies and plans that the hon. Gentleman's party has put forward for steel. I assure him that I had the opportunity, as did my hon. Friend the Minister of State, of a discussion with steelworkers from Lanarkshire. The hon. Gentleman will be disappointed to know that after the discussion someone actually moved a vote of thanks to the Scottish Office Ministers.

If the Secretary of State has not the guts to visit Glasgow in the present situation, will he go to Lanarkshire and explain to the people there how he sat in the Cabinet and weakly agreed to the largest cut in the Scottish educational building programme in Scotland's history, from £69 million last year to £39 million this year, which will greatly add to Lanarkshire's acute educational problem?

The hon. Gentleman should appreciate that the amount being spent in the form of capital expenditure this year in respect of Scottish education is greater than it was last year, and greater than it was the year before. When he talks about new starts, let him remember what his Government did. They postponed starts and pushed them forward a quarter, with the result that a quarter of last year's starts are going into the next year's starts. The hon. Gentleman has to put that into the balance as well. The hon. Gentleman can take no pride in what his Government did.

Is my right hon. Friend aware that the cuts in the school building programme in Lanarkshire are considerably smaller than the cuts being made in most of the education authorities in Scotland? Is he aware that at the same time the actual expenditure per head, under the discretion of the local authority, is lower in Lanarkshire than in most education authority areas? Further, is my right hon. Friend aware that the steelworkers in Scotland were well satisfied with the hearing that they were given last week?

Is the Secretary of State aware that the Lanarkshire building company of William Louden and Sons Limited has gone into liquidation? It is clear that in the past three years it donated £60,000 to the Labour Party. Will the right hon. Gentleman indicate whether that company and perhaps some others might still be solvent if they had not given financial support to the Labour Party? Further, will the right hon. Gentleman state the extent to which Labour Party funds in Scotland are dependent upon donations from big business?

I can assure the hon. Gentleman that his question was well worthy of himself. I should like to know exactly how much money was donated to the Tory Party by all the other firms that have gone bust as a result of the three-day working week, the hold-up of materials, and the escalation of prices that took place as a result of the confrontation last winter.

Post Office (Alterations In Addresses)

10.

asked the Secretary of State for Scotland what consultations he has had with officials of the Post Office in Scotland with regard to suggested alterations in addresses.

Consultations about the use of the names of the new Scottish regions in postal addresses are still in progress.

Is the Minister aware that the Post Office believes that the onus is on the public to say why there should not be a change from counties to regions in their addresses? Does the right hon. Gentleman agree that this measure, which the Post Office has already forced on areas in England, is unnecessary, unpopular and undemocratic?

I am afraid that the hon. and learned Gentleman is wrong. In fact, the Post Office is at this minute consulting the Post Office Users' Council for Scotland. Among other bodies it is also consulting the Scottish Council of the CBI, the Scottish Council (Development and Industry) and the new regional islands and district councils. It will consult anyone else, including even the hon. and learned Gentleman, if he cares to send the Post Office his views.

Is the hon. Gentleman aware of the intolerable suggestion that Argyll should be called West Strathclyde? Is he further aware that Argyll is the oldest area with a Gaelic name in Scotland? Will the Minister take a stronger line on this unparalleled attempt to rob us of our identity?

Strathclyde is also a very old name. No decisions on these matters have yet been reached. It is not strictly a matter for me, but I am happy to convey to the Post Office any representations that are made on these matters.

If the hon. Member for Argyll (Mr. MacCormick) is so proud of his county, will my hon. Friend confirm that slogans in the county of Argyll saying "Go home you Sassenach, go home" are removed by the Scottish National Party?

As far as I know, it is not proposed by anyone that "Sassenach" should appear in any postal address.

Fishing Industry

11.

asked the Secretary of State for Scotland what recent representations he has had from the Scottish fishermen with regard to their financial problems.

The Scottish Trawlers' Federation and the Scottish inshore industry have pressed for aid to enable them to meet current operating difficulties. As the hon. Member will know, and be pleased about, we announced on 27th February our proposals to give the fishing industry assistance for a six-months' period. The order embodying these proposals will be laid before Parliament as soon as possible.

I thank the Minister for that reply. Does he accept that by the time we have the 200-miles limit which is proposed by the Law of the Sea Conference there will be no fish left to fish? Should there not be a 50-miles limit round Scotland before the 200-miles limit is introduced? Does the hon. Gentleman agree that such a limit is particularly necessary for the herring industry, which is in danger of being completely wiped out by foreign boats this summer?

I wish Opposition hon. Members would give us a wee bit of credit. The Question concerns the financial problems of the industry. We estimate that over £2 million will be coming to Scottish industry. Is the hon. Gentleman now indicating that the official policy of one of the Opposition parties is a 50-miles limit? I think that that would be disastrous. We shall do our best—[Interruption.] Unfortunately, herring have a habit of breeding outside even the 50-miles limit. The sooner some members of the Scottish National Party get to know something about herring, rather than just looking for votes, the better. I repeat that we are concerned about the future of the fishing industry as a whole, including the herring industry, and that it will be very much to the fore at the Law of the Sea Conference next month.

Does the hon. Gentleman accept that he may be chased by irate housewives in Provan because they are unable to get fish to eat with their chips? He should perhaps take this matter a little more seriously. All fishing interests welcome the Government's recognition of the problems of the fishing industry by the granting of financial assistance, but is the hon. Gentleman aware that there is strong feeling that the assistance is heavily biased towards the large deep-water boats, and that boats of 40 ft and under have been excluded from the scheme, although their costs have also risen substantially? Will the hon. Gentleman undertake to review the matter to see whether assistance can be given to the small man as well as to big companies?

The hon. Lady should not say "Hear, hear" before she has heard the reply. I look forward to the day when a member of the Scottish National Party will congratulate the Government on doing something worth while. Surely I do not need to spell it out. It is obvious that the operating assistance is geared to giving the greatest amount to those who have the heaviest costs. The bigger the boat, the more expensive it is to run. Therefore, there is a graded system which we think is fair to all. I assure the hon. Gentleman that there will continue to be fish for the housewives of Provan and every other constituency, provided that we get the 200-miles limit, because the key to the problem is the conservation of the supply of fish.

Does the Minister accept that the fishing industry is grateful for what was announced last Thursday. Does he also accept that severe problems remain? Is he aware that in Aberdeen the average price per hundredweight last month was down 18½ per cent. on last year? That is largely because of the distribution of foreign-caught frozen fish. What is needed is a temporary ban on the importation of fish from the non-EEC countries. Will the hon. Gentleman call an early meeting with the fishing industry to discuss its long-term stability?

That is a more constructive approach. We are aware of the difficulties which face the fishing industry because of the glut of fish in world markets. Scotland cannot be isolated from that, any more than any other country can be isolated from it. I am always willing to discuss constructive proposals from any section of the fishing industry.

Scottish Trades Union Congress (Meeting)

12.

asked the Secretary of State for Scotland if he will make a statement on the meeting between members of the STUC and the Prime Minister and himself on 27th–28th February.

Both parties to the meeting agreed that it provided a most valuable opportunity for wide-ranging discussion of matters vital to the Scottish economy. In recognition of its success, my right hon. Friend the Prime Minister has proposed that the meeting should be repeated at annual intervals.

I welcome my right hon. Friend's reply, but is he aware that Lord Beswick appears to think that Hunterston is near the Arctic Circle? Following the talks, he stated that there was a shortage of houses and social amenities in the area. Did not my right hon. Friend inform the noble Lord that Hunterston was within nine miles of Irvine new town, which is building one of the most modern shopping centres in Western Europe and is committed to building houses for incoming steel workers? Is my right hon. Friend aware that the Cunninghame District Council, which is the local authority in that area, is committed to building houses for incoming steel workers? Will my right hon. Friend remind Lord Beswick that there are only two niggers in the woodpile, of which he is one, because he has prevented the construction of a motorway to improve the road system around Hunterston. The other is his right hon. Friend the Minister for Transport, who has allowed British Railways to lift up tracks one after another in this important development area, so making impossible the provision of adequate railway services. Will my right hon. Friend do something? We are fed up with saying this.

My hon. Friend should be careful what he says. I attended the Press conference at which Lord Beswick spoke. My hon. Friend has attributed words to Lord Beswick that were never uttered.

They were uttered by a journalist from the South. I asked him whether he thought that Hunterston was in a remote Highland area and made the point that my hon. Friend has just made.

As unemployment must clearly have been on the agenda at this meeting, what indication did the Secretary of State give of when the unfortunate trend of unemployment in Scotland is likely to reverse and the figures to start coming down? As the visit was regarded by many people as a bit of a washout, what was its cost to the taxpayer?

I cannot answer the last part of the supplementary question without notice. If the hon. Gentleman had been at the meeting he would have heard that the discussion on employment was on a constructive basis and was concerned with what could be done. The STUC recognised that the rise in unemployment in recent months was not the Government's responsibility but resulted from past conditions and from the present world position. Understanding was expressed of the Government's policies. I hope that we shall be able to pass those policies through the House with the help of everyone concerned as quickly as possible, particularly the establishment of the Scottish Development Agency.

Does my right hon. Friend accept that what was discussed in Glasgow last weekend is of vital importance to all of us? We should all like to have taken part in the discussion. Will he arrange for the matter to be debated in the House? Will my right hon. Friend ensure that he is not blinded by the promises from Hunterston and remember that retaining the finishing mills of DL and Clyde Alloy is of equal importance with looking after our steel making capacity?

I assure my hon. Friend that these matters were discussed and that everyone was aware of all the facets of the Hunterston development and the steel industry. I regret that my hon. Friend was not there, and I am sure he will be the first to appreciate that it was right for us to discuss these matters with the people who are responsible for industry and are familiar with the industrial situation. We also wish to see re-investment, real growth and modernisation in the Scottish economy.

Will the right hon. Gentleman confirm that the report in the Daily Record that the Scottish Assembly is intended to have some tax-raising power and control over trade and industry is correct?

The hon. Gentleman had better wait until we come to our final decision. What has been said and repeated is that the paper on devolution put forward by the STUC for discussion is one of the best we have seen, and certainly much better than the one put forward by the hon. Gentleman.

Geriatric Beds (Fife)

13.

asked the Secretary of State for Scotland what plans he has for increasing the number of geriatric beds in the county of Fife; and if he will make a statement.

To meet the requirements of Fife for geriatric hospital beds, 268 additional beds will be required by 1981. Minor schemes under construction will provide 58 additional beds by next year. Major schemes which will provide the balance of 210 beds are at various stages of planning or design.

Is my hon. Friend aware that the Fife Health Board, at the suggestion of the Department, has accepted a cut in the number of beds in phase 1 of the new hospital in Dunfermline district, which means that the number of geriatric beds will be reduced? I understand that my hon. Friend is to visit the Fife Health Board on 7th April. If that meeting takes place, will my hon. Friend discuss the subject of geriatric beds?

My hon. Friend has rather sprung on me his supplementary question about the district hospital. There is no question of the provision of additional geriatric beds being prevented. I am afraid that other commitments preclude my making the visit which I had previously arranged. When I do visit Fife or go to see the health board I have no doubt that the matters my hon. Friend has raised with me will be taken into consideration.

As the proposal to use the former maternity hospital at Newport-on-Tay for the provision of geriatric beds has been turned down on grounds of cost, will the hon. Gentleman consider the provision of extra geriatric beds in the St. Andrews area, in place of Newport-on-Tay?

Scottish Development Agency

14.

asked the Secretary of State for Scotland when he expects to finalise his consultations on the setting up of the Scottish Development Agency.

Does my hon. Friend recognise that the principle of the agency has been widely welcomed throughout Scotland? Will he give an assurance that there will be adequate finance for it from oil and other resources in Scotland and from the United Kingdom budget? Is my right hon. Friend satisfied that the policy proposals which are likely to be enunciated by the development agency will be in no way in conflict with what happens within the EEC?

I do not think they will. The agency has not yet been established, and there is some way to go before we shall know the final results of the EEC renegotiations. On the financial matter, I can give the assurance that there will be adequate finance to do the important job we want the agency to do.

Will the hon. Gentleman answer the specific point made by the hon. Member for Fife, Central (Mr. Hamilton) who mentioned the question of oil? Is it the intention that any kind of assured share of oil revenue will be available to the agency? Will the Minister do a little speculation, which his right hon. Friend was reluctant to do, and say whether, when the Scottish Assembly is established, it is expected or hoped that the development agency will be responsible to it?

I have nothing to add to what my right hon. Friend said on the latter point. As for the financing of the agency, it has already been made clear that this is not to be done by a specific allocation of oil revenue.

Grant-Aided Schools

16.

asked the Secretary of State for Scotland what representations he has received regarding the freezing of grants to grant-aided schools.

Have these 50 or 60 letters made the right hon. Gentleman aware that this vicious freeze is hitting hardest those least able to bear it, namely, the children of less well-off parents? Why does the right hon. Gentleman obstinately refuse to give to Scottish pupils the protection which his right hon. Friend is giving to English pupils? Will he now either restore the grant to its 1973 level, in real terms, or introduce a fee remission scheme on the same lines as that operating in England?

The hon. Gentleman should appreciate that the position in England is entirely different from that in Scotland. There has never been a fee remission scheme in Scotland, for the simple reason that there was not the same obligation upon these schools to accept children from local authority nominations. The hon. Gentleman should remember that this has long been the policy of this party and this Government. We instituted the policy when we were last in Government. It should therefore come as no surprise to him. This is not the time—during a period of financial stringency when we have complaints about the amount of money being made available for local authority schools—to increase the grants to this type of school.

Will my right hon. Friend urge members of the Opposition to accept that it has always been one of the traditions of Scottish education that educational opportunity should be available to children irrespective of their parents' income and ability, or willingness to pay? Will he further tell the Opposition, especially the hon. Member for Aberdeen, South (Mr. Sproat), that at a time when there is a shortage of funds for education which particularly affects children who can only be labelled as underprivileged, to try to fight for money for fee-paying schools is nothing short of irresponsible stupidity?

This is a principle which is completely outside the Scottish system of education.

Does the right hon. Gentleman not realise that the Government's policy on grant-aided schools is causing serious damage to local authority schools in Edinburgh and elsewhere? Is he aware of the statement of the Labour chairman of the Lothian Education Committee criticising the Government for their policy? In the interests of local authority and grant-aided schoolchildren will he consider giving help to the parents of those children presently at grant-aided schools?

The hon. Gentleman should be careful how he quotes people. I do not accept his general, sweeping statements. He should recognise that this policy has been in the forefront of our education policy for a long time. It should come as no surprise to him. The question how grant-aided schools will eventually be phased out will be a matter for consideration.

Will the Minister carefully review the position of the pupils who are now at school and whose parents, because of the freeze, cannot afford the new fees? Will he do something to help those pupils now?

I am prepared to look at anything, as the hon. Gentleman will appreciate. I am quite open to suggestions on this matter. It may be one of the things which we can look at when we examine the whole question of how and when to phase out.

Paraquat (Fatal Accident Inquiry)

40.

asked the Lord Advocate if he will make a statement about his reasons for ordering a fatal accident inquiry in the Kirkcudbright paraquat case.

In terms of Section 3 of the Fatal Accidents and Sudden Deaths Inquiry (Scotland) Act 1906 I may, in any case of sudden or suspicious death in Scotland, whenever it appears to me to be expedient in the public interest, direct that a public inquiry into such death and the circumstances thereof shall be held. In the case of the death of Ralph Harold Anders there was not evidence to warrant bringing criminal charges against anyone, but the death was suspicious as some of the evidence appeared to point away from accident or suicide. The death had attracted considerable public interest locally and there was much speculation and rumour. Moreover, solicitors acting for two brothers of the deceased specifically asked me to direct that an inquiry be held, as the brothers were concerned about how the deceased had met his death. In all these circumstances it seemed to me that the proper course was to direct that an inquiry be held under the 1906 Act.

Does the Lord Advocate appreciate that this and other cases have caused widespread public concern in Scotland over the fact that in a fatal accident inquiry a jury should be invited to return a verdict of homicide against a named person or persons? Is he aware that if that were done such a person would either have had a public verdict of homicide returned against him without trial or, if he were charged, before trial? Does the Lord Advocate appreciate that this is in keeping with the bad procedures of the law of England and contrary to the good procedures and practice of the law of Scotland?

The hon. and learned Gentleman has made a statement with which I do not agree, and I do not think that, on reflection, when he reads his supplementary question, he will agree with it himself. For reasons best known to himself the hon. and learned Gentleman does not follow the distinction drawn in the 1906 Act between fatal accident inquiries, on the one hand, where the emphasis is on accident, and sudden or suspicious death inquiries on the other hand. The Anders inquiry was a suspicious death public inquiry which Parliament specifically empowers the Lord Advocate to order. Where there is suspicion there is necessarily the possibility of subsequent criminal proceedings. The hon. and learned Gentleman would probably have been the first to complain had I not ordered such an inquiry into Mr. Anders' death.

With respect, may I ask whether that is the basis for the anxiety? Is not the basis for the anxiety the feeling among many of us that some of the evidence and statements made might have adversely prejudiced some people involved in the inquiry? Will my right hon. and learned Friend look at this again?

The fatal accident raises an important point, which I have to consider. I assure my hon. Friend that matters of that kind are in my mind and that when the notes of evidence have been received—they have not yet been received—I shall study them with great care, bearing in mind the points he has made.

Stirling

41.

asked the Lord Advocate what plans he has to make an official visit to Stirling.

I do not intend to make an official visit to Stirling in the near future.

Is my right hon. and learned Friend aware of the growing concern over the delay and apparent indecision of the Procurator Fiscal in Stirling in dealing with the objections laid concerning the election expenses of the Scottish National Party? Will he see that appropriate action is taken to ensure that the Scottish public knows exactly from where the Scottish National Party gets its election funds, even if it turns out that some of its sources are ordinary working-class Scots laddies like my constituent, Sir Hugh Fraser?

I cannot associate myself with the remarks of my hon. Friend. I wrote to him on Monday informing him that a report from the Procurator Fiscal in Stirling relating to the matter he has in mind had been received by me at the end of the previous week. I can tell him now that a complaint has been served on a common law charge and the case will be called in court on 10th March. Accordingly the matter is sub-judice.

Does the Lord Advocate agree that one way to resolve the problems of the hon. Member for West Stirlingshire (Mr. Canavan) would be for him to resign his seat and fight another election? I doubt whether he would be returned to this House if he did.

Fatal Accidents (Inquiry Procedure)

42.

asked the Lord Advocate if he is satisfied with the fatal accident inquiry procedure in Scotland.

the fatal accident inquiry procedure has been in operation for many years and is generally satisfactory. There is, however, room for improvement, and the question of amendment of the relevant legislation is under active consideration.

I am grateful for that reply. Will the Lord Advocate bear in mind that there is obviously widespread concern in the House and in Scotland about the number of fatal accident inquiries we have had in the past 12 months? Is there not a possibility that, through a change in policy, the right hon. and learned Gentleman is introducing the coroner's court system of England into Scottish law?

I can assure the hon. Gentleman that this is not the case and that there has been no change in policy in the Crown Office since I took the office of Lord Advocate a year ago.

Is the Lord Advocate considering, in his review, the question of legal aid for persons appearing before such a court?

This is a matter I have taken into consideration. I do not yet have anything to say on the subject.

Norton Villiers Triumph Limited Motion (Business Statement)

On a point of order, Mr. Speaker. May I seek your guidance?

Yesterday, 4th March, the right hon. Gentleman the Leader of the House withdrew his original explanation why the Norton Villiers Triumph motion had featured in the Business Statement on Monday night, 3rd March. Originally the right hon. Gentleman told the House
"It is because the Chairman of Norton Villiers Triumph had informed us today that this money must be forthcoming this week, otherwise there will be redundancies. This is the first that the Government have heard of the urgency of the matter."—[Official Report, 4th March 1975; Vol. 887, c. 1227.]
Subsequently yesterday the right hon. Gentleman told the House:
"I have now found that my right hon. Friend the Secretary of State for Industry met Mr. Poore, the Chairman of Norton Villiers Triumph Ltd., on Thursday of last week. My right hon. Friend telephoned me yesterday from Bristol, and said that this matter must be dealt with this week, otherwise there would be great difficulties in the firm. I pointed out to him the great inconvenience to the House in debating the matter this week. However, he insisted that the matter must be dealt with this week, otherwise there was a danger of redundancies. Therefore, I announced the matter last night."—[Official Report, 4th March 1975; Vol. 887, c. 1275–6.]
On 18th February and 24th February letters went to the Department of Industry in which the Government received final warning of the consequences for NVT of further delay in the NVT motion. In other words, the explanation given after the sitting was suspended yesterday is no more accurate than that which led to the trouble in the first place.

Further, the Secretary of State for Industry yesterday, in column 1272, told the House that he spoke to the Leader of the House late on Monday morning of this week. It follows that a Business Statement could have been made to the House at the normal time of 3.30 p.m.—unless the Government had already decided to guillotine the Finance Bill and that they would—regardless of progress made in Monday's debate—be making a Business Statement late on Monday evening.

My question to you, Mr. Speaker, is whether you will now guide me as to the appropriate manner in which the House can obtain a full and accurate explanation of this regrettable chain of events.

This matter has been raised as a point of order. It is not a point of order. It is not a matter for the Chair. It is a matter for the right hon. Gentleman the Lord President of the Council whether he wishes to say something on this point today.

I must ask the House to support me on this issue. We are to have a debate on this subject later today when all these matters can then be raised. Furthermore, whether there is disclosure of certain letters is again a matter for the Leader of the House and not for me. These are not matters which should be raised in the form of points of order. Recently the right hon. Gentleman the Leader of the Liberal Party asked in a point of order why the Lord President of the Council did not make a statement on a certain matter. Again, that has nothing to do with the Chair. These are false points of order. If the Lord President of the Council wishes to say something on this matter I shall not rule him out of order. However, I repeat that these are not matters for me.

The Lord President of the Council and Leader of the House of Comons
(Mr. Edward Short)

It is difficult to understand why the hon. Member for Henley (Mr. Heseltine) is making such a fuss about this matter. [HON. MEMBERS: "Oh."] The simple fact is that the firm needs money and needs it urgently. [Interruption.] Of course I knew about the guarantee to the bank. I put the motion on the Order Paper months ago and I have answered Questions on this topic in the House.

The hon. Gentleman referred to two letters. They are letters from my right hon. Friend the Secretary of State for Industry. I did not know about those letters. The first I heard about the extreme urgency of the situation was on Monday morning. Therefore, I made a Business Statement. Such a Business Statement is made either at the end of Business or at the beginning of Business. [HON. MEMBERS: "Oh."] The only error that occurred was when I said originally, in reply to the right hon. Member for Yeovil (Mr. Peyton), that yesterday—meaning Monday—was the first the Government had heard of the matter. It was the first that I had heard of the extreme urgency of the situation.

My last words to the House yesterday were words of apology. I am sorry that it occurred and I am sorry that it was done at the end of Business. But the fact remains that the firm needs money and it needs it this week, otherwise there will be redundancies. What is all the fuss about?

We are getting to the stage whether or not the authority of the Chair is flouted by putting forward these matters as points of order. These are points of argument which can be discussed later. This is a matter in which I must ask for the support of the House. I am not prepared to allow hon. Members to put points of argument as points of order.

Textile Industry

I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration; namely,

"the decision of the textile union to call a one-day national stoppage which stems from the contraction in the industry because of closures in the Lancashire textile mills."
I am somewhat hesitant, Mr. Speaker, to raise this matter as a point of urgency in view of yesterday's exchanges. Possibly, Sir, you will have seen the announcement on the "tape" earlier today that there is to be a one-day national strike of textile workers arising from the contraction in that industry as a result of which some 60,000 workers have been placed on short-time working and a further 2,500 workers have already lost their jobs this year.

I understand that in seeking to move the Adjournment of the House under Standing Order No. 9 I must establish that the matter is specific, important and urgent. The urgency of the matter is fairly clear from what I have already said. This matter involves the problem of employment and the effect which redundancies will have on families in the Lancashire area. That the matter is specific to the textile industry again is obvious from what I have said. Furthermore, it will also be obvious from what I have said that this matter is extremely important to those concerned, and indeed nationally.

I have already said that there is to be a national one-day stoppage. The workers have been forced to take this action and, therefore, there is a need for an immediate Government initiative to overcome the problem of rising unemployment in the textile industry in Lancashire. Against that background, Mr. Speaker, I request that I may move the Adjournment of the House in order that the matter may be considered.

I am grateful to the hon. Member for Preston, South (Mr. Thorne) for having given me notice of this matter. He is seeking to obtain the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter that should have urgent consideration; namely,

"the decision of the textile union to call a one-day national stoppage which stems from the contraction in the industry because of closures in the Lancashire textile mills."
I have great sympathy with the hon. Gentleman over the importance of this matter. My decision does not bear at all on the merits of his application but simply on whether I should disrupt the prearranged business of the House. I hope that other ways may be found for the hon. Gentleman to pursue the matter. I am sorry that I cannot allow him to do so under the Standing Order No. 9 procedure.

Mr Alan Grimshaw (Select Committee's Report)

On a point of order, Mr. Speaker. I wish to ask for your judgment on a matter which came to my notice at the latest possible hour. It relates to the Committee of Privileges which on behalf of the House is concerning itself with the circumstances under which Mr. Alan Grimshaw had been suspended from his employment with the National Coal Board following evidence which he had given to the Select Committee on Nationalised Industries and from which there flowed a report. That report is available to the Press and has been so available for a number of hours today, but is not yet available in the Vote Office. I should like your ruling, Mr. Speaker.

I shall investigate what the hon. Member for Don Valley (Mr. Kelley) said. I shall communicate with him or make a statement to the House on the point.

Ballot For Notices Of Motions For Friday 21St March

Members successful in the Ballot were:

Mr. Michael Neubert.

Mr. Robin F. Cook.

Mr. Robert Cooke.

Statutory Instruments

Ordered,

That the draft European Communities (Definition of Treaties) Order 1975 be referred to a Standing Committee on Statutory Instruments.—[Mr. Edward Short.]

Protection Of Mentally Retarded Persons (Evidence)

3.40 p.m.

I beg to move,

That leave be given to bring in a Bill to regulate the admissibility of statements in evidence of mentally retarded persons.
I should like to thank right hon. and hon. Members on both sides of the House for making a last minute change in the guillotine procedure to enable my Ten-Minute Bill to be taken today. I hope that all Ten-Minute Bills will be brought in in the same way when guillotines operate in future. I should also like to thank you, Mr. Speaker, for your help.

The object of the Bill is simple. It is to accord to someone, for example with a mental age of eight, both in interviews with the police and subsequently before the courts, that protection and consideration that a child with a chronological age of eight would normally be given, according to the rules by which we proceed.

The Bill's underlying message, which is not yet sufficiently understood and recognised by the public and the courts, is that it is unfair and leads to error to accord to many statements of the mentally retarded that degree of reliability which the courts properly and rigorously attach to those of the mentally normal. I know that judges at present have wide discretion as to admissibility in this area, but it is a discretion that they do not exercise with sufficient frequency. If one reads, say, "Cross on Evidence", one sees that it is a discretion which they exercise with less and less frequency as the years go by. At the least my Bill aims to ensure that they do so more often, since the absence of a statutory provision of this kind can lead the courts into seriously erroneous verdicts.

If the measure that I seek to introduce had been in force in 1950, Timothy Evans, for example, would be alive and free today. The same would have been true of Derek Bentley. These disturbing cases do not abate.

My interest in this matter stems from what was called the Confait case in 1972 in which an 18-year-old mentally retarded constituent of mine, Colin Lattimore, was convicted of murdering a homosexual prostitute in Catford on the basis alone of his confession to the police. Since then, Britain's most eminent forensic pathologist, Donald Teare, has pronounced Lattimore's confession to be wholly irreconcilable with the agreed alibi and the scientific facts about the onset of rigor mortis. My right hon. Friend the Home Secretary has been reconsidering all the facts about the case for over nine months. I hope that he will be able either to release Lattimore and the other two boys convicted with him, or to refer the case back to the Court of Appeal shortly.

The Bill requires that before any statement by a mentally retarded person is admissible, either a solicitor must have been present throughout the interview when it was made, or the prosecution must satisfy stringent requirements to the court about the fairness of the interview and the voluntariness and reliability of the statement. I know that definitions in this area are difficult, especially regarding mental health. I propose that two of the four well-established categories of the Mental Health Act 1959, subnormality and severe subnormaility, should be covered by the Bill. They are well understood, and, because they apply to assessments for special schools, they are often undisputed matters of fact in court.

I realise that this area is being looked into by Lord Butler's Committee on mentally abnormal offenders, but it does not consider police interviews to come within its terms of reference. Therefore, my Bill should not clash with any recommendations that that comimttee makes. In any event, I am keeping in close touch with the Butler Committee during the preparation of the Bill.

I understand that the Home Office has set up a committee to experiment with the use of tape recorders during police interviews, and I hope that this experiment will lead to a situation similar to that which now obtains in the United States of America, where all citizens are accorded greater protection than here during police interviews. However, I believe that the mentally retarded need special protection over and above this, partly because the reliability of their statements is liable not to be on a par with that of the statements of others, and partly because they stand in greater jeopardy of losing their liberty and their civic rights than do others who are sent to prison.

If a person ends up in Broadmoor, Rampton, where Colin Lattimore now is, or Moss Side, under Section 65 of the Mental Health Act, he is to all intents and purposes a potential "lifer". It is very difficult to get out. If an error has been made and these people continue to plead their innocence, that inhibits rather than assists their case for release.

I believe that the majority of the police will welcome a Bill of this kind, because the police do not like the allegations occasionally made about a small proportion of police interviews, any more than do hon. Members. I believe that the provisions of the Bill will, quite properly, cut down the number of such allegations as the habit grows of calling in a solicitor to listen to such interviews.

I have already had discussions about the Bill with the Minister of State at the Home Office. I am grateful to my right hon. Friend and to the Minster of State at the Department of Health for their interest. I hope after further discussion to persuade them to smile upon the Bill during its later stages.

Question put and agreed to.

Bill ordered to be brought in by Mr. Lewis Carter-Jones, Mrs. Lynda Chalker, Mr. Bryan Davies, Mr. Eric Moonman, Mr. Anthony Steen, Mr. D. E. Thomas and Mr. Christopher Price.

Protection Of Mentally Retarded Persons (Evidence)

Mr. Christopher Price accordingly presented a Bill to regulate the admissibility of statements in evidence of mentally retarded persons; and the same was read the First time; and ordered to be read a Second time upon Friday 18th April 1975 and to be printed [Bill 101].

Orders Of The Day

Finance Bill

[2nd Allotted Day]

Not amended in the Committee and as amended in the Standing Committee, further considered.

New Clause 4

Relief For Successive Charges

5'.—(1) Where the value of a person's estate was increased by a chargeable transfer (in this section referred to as the previous transfer) made not more than four years before his death, the tax chargeable on his death under section 22 of this Act shall, subject to subsection (2) below, be reduced by the following percentage of the tax charged on so much of the value transferred by the previous transfer as is attributable to the increase, that is to say—
10(a) by 80 per cent. if the period between the previous transfer and the death was one year or less;
(b) by 60 per cent. if that period was more than one year but not more than two years;
(c) by 40 per cent. if that period was more than two years but not more than three years; and
(d) by 20 per cent. if that period was more than three years.
15(2) No reduction shall be made under this section with respect to an increase attributable to property which, at the time of the death, was settled property, if, under paragraph 5 of Schedule 5 to this Act, tax is chargeable on the death as if the value of that property were reduced.
20(3) Where the value of a person's estate was increased on a death on which estate duty was payable, the preceding provisions of this section shall apply with the necessary modifications and, in particular, as if on that death there had been a chargeable transfer and the estate duty had been tax on the value transferred thereby.'—[Mr. Healey.]

Brought up, and read the First time.

3.48 p.m.

I beg to move, That the clause be read a Second time.

It will probably be for the convenience of the House if there is a general debate on this, which will include the amendments which will have to be moved later.

On a point of order, Mr. Speaker. I refer to the selection of amendments today. This is in no way related to your discretion in the selection of amendments. This is merely an inquiry that arises from the operation of the timetable procedure. The amendments grouped as selected for debate today appear to relate entirely to the new clauses, although there are matters and amendments relating, for example, to the schedules, which are printed on the Order Paper later and which relate to those same matters.

Would you be prepared to indicate to us whether it is your decision that these amendments should be selected and, therefore, presumably debated on a later day, or whether you would look favourably upon hon. Members whose names are to these later amendments to the schedules taking part in today's debate, even though their amendments to the schedules cannot in the nature of things be either selected or not selected?

My instinct is one of sympathy for the right hon. Gentleman. However, I should be unwise to express that sympathy too firmly, too quickly. Perhaps I might consider that point and give the right hon. Gentleman my reply later.

Further to that point of order, Mr. Speaker. As I understand it, your suggestion is that we have a general debate covering the amendments and the whole ambit of the new clause. Does that mean that you have in mind separate debates afterwards on the two groups of amendments, or merely separate Divisions?

On the same point of order, Mr. Speaker. The Official Opposition visualised having one debate on each new clause embracing the debate on the groups of amendments and then proceeding to separate Divisions at the end of that single debate.

I can see why the Chair should have some sympathy with the suggestion by the right hon. Member for Down, South (Mr. Powell). On the other hand, it might be worth bearing in mind that if we had a debate on new Clauses 8 and 3, that would be the only opportunity for a significant debate on agriculture, whereas if we were able to reach the schedule attached to new Clause 8, that would give a further opportunity for a debate on that schedule, which relates to forestry. We were about to suggest that we might, therefore, try to concentrate the debate on new Clauses 8 and 3 on agriculture rather than on forestry. In making that suggestion, of course, we appreciate that we cannot bind the House, let alone yourself, Mr. Speaker.

I point out that the new Clause 8 is only a paving clause for the schedule relating to forestry. It was my hope, Mr. Speaker, that you would be able to help us by allowing that schedule to be debated together with new Clause 8, otherwise it will be nonsense to debate a paving clause.

As the House knows, new Clause 4 is the first of a number of new clauses and amendments affecting the capital transfer tax which the Government are introducing to fulfil the undertaking that I gave on 6th August when I first published the White Paper on the tax. I repeated that undertaking on 21st January when we considered the Bill in Committee on the Floor of the House. My undertaking was to consider any reasonable representations made either inside or outside the House and to seek to meet them if I was satisfied that otherwise an injustice might be done.

After so many hours, days and nights of discussion in detail, it is easy to lose sight of the central fact, which is that the Government are now replacing a tax which was ineffective and unfair—ineffective because it was avoided on a colossal scale and unfair because it was avoided by only a minority of those affected and observed by the rest—by a tax that we believe to be fair and effective.

Like the right hon. Gentleman, I had assumed that estate duty was avoided on a massive scale. However, some of the evidence that has come to light recently will tend to make us both believe that the avoidance was nothing like as great as had been supposed. Will the right hon. Gentleman give the House a figure of the revenue lost by avoidance? Capital transfer tax will bring in less revenue than did estate duty, which would seem to argue that avoidance was not that massive.

No, Sir. No Government can ever estimate the tax lost by avoidance. The hon. Gentleman is seeking to understand these matters. He will, on reflection, understand that that is so. Equally, it is impossible to estimate tax forgone by evasion, never mind avoidance. But I shall seek to show that avoidance was more widespread than many people suspected, and some of the amendments that we shall introduce in the next few days will take account of that fact.

No one, certainly not the hon. Member for Cornwall, North (Mr. Pardoe), will deny that estate duty was an avoidable tax. The volume and intensity of the protests against the attempts that the Government are now making to close the loopholes for avoidance is proof of the scale and range of the avoidance of estate duty. But we must also admit that avoidance was carried out by only a small section of those affected and a miniscule section of the population as a whole. If that is what the hon. Gentleman was seeking to suggest, I agree with him.

Unfortunately, this tiny section of the population—a tiny minority of the minority affected by the tax—is that section which the Conservative Opposition have sought to represent in our debates over recent weeks. I refer to some remarks made by the Leader of the Opposition when she spoke on the Bill in Committee upstairs. They are people for whom a gift of £1,000 a year is too small for many ordinary circumstances. They are people for whom a wedding present of £2,500 is totally inadequate. Those are the views that the right hon. Member for Finchley (Mrs. Thatcher) expressed in Committee.

The Government are not prepared to make amendments to benefit this tiny minority of avoiders. As a result, we have been accused by the Conservative Opposition during our Committee discussions of destroying the sanctity of family life, of replacing the sanctity of family life by the drab orthodoxies of Eastern dictatorships, of operating against natural justice, and of handing over British business to the Arabs and the Americans.

This hyperbole bears very little relation to the facts, which are that the Bill allows any man or woman in this country to make a gift of £1,000 every year completely free of tax. The taxable gift starts at the same level as estate duty, namely, £15,000, but it is levied at rates that are substantially below the rates of estate duty, and those in respect of lifetime gifts are now very much lower still. Moreover—and this is a provision that initially was welcomed by right hon. and hon. Members on both sides of the House—for the first time since estate duty came into existence the Bill totally exempts gifts as between man and wife and thereby relieves widows and widowers of a burden which, on reflection, the Opposition would now regard as totally unfair, although they did nothing to relieve it when they had the power to do so.

4.0 p.m.

Before the right hon. Gentleman leaves family life and the widows, and perhaps orphans, will he consider the point put to him by my hon. Friend the Member for Blaby (Mr. Lawson) during our debates about a person who allows his widowed mother or any relation the use of a house? The right hon. Gentleman was disposed to say then that only if there were a formal agreement would it be caught. Will he tell us about that aspect of family life before passing on to other matters?

I shall be glad to do so, even though I might be trespassing on your patience, Mr. Speaker, in answering a question so far removed from the clause. The answer that I gave to the hon. Member for Blaby (Mr. Lawson) was on advice that I received. I have read with interest the points made by the hon. Gentleman in Committee upstairs. It is true that the precise juridical meaning of the word "use" in the clause is open to argument. For that reason, as I think the hon. and learned Member for Dover and Deal (Mr. Rees) knows, we have put down an amendment, which will be considered in the next few days, which will prevent the clause applying until April 1976. By that time we hope to have a completely satisfactory juridical formula.

This is not required. It will not be effective until about a year from now. During that time we shall seek to resolve the juridical point so fairly made by the hon. and learned Gentleman. I do not know what point the hon. and learned Gentleman thinks he made when he intervened, but I see that he is quite satisfied with the answer that I have given.

Most of the men and women who make up the tiny minority of the total population in this country who are subject to estate duty now and will be subject to capital transfer tax in future have uncomplainingly paid higher rates than are now proposed. They will be much better off under the new legislation than under the old legislation. But the Government are able to help those who have paid tax over the last 80 years only because they are closing loopholes which existed for that tiny minority within the minority who were rich enough to hire lawyers and tax consultants to exploit the opportunities for dodging estate duty under the previous legislation.

When the White Paper which contained indications of all the provisions in the Bill was first published, it was universally recognised to be a fair and long overdue reform in our tax system. Indeed, The Times at that date stated:
"The Government have shown reason and moderation in formulating its proposed gifts tax. … Indeed, it is the practical inadequacies of estate duty which make the proposed gifts tax … so acceptable."
It went on, in words so complimentary that I blush to repeat them, to point out that the gifts tax, capital transfer tax as we now call it, was a fair, just, long overdue reform which would close totally unacceptable loopholes in the existing tax system.

However, as we all know, when the Government finally published the Bill containing the measures to implement the White Paper they faced a massive and orchestrated campaign not to improve but to destroy the Bill. That campaign is now being led by the right hon. and learned Member for Surrey, East (Sir G. Howe). I must remind him of what he said on Monday morning on a radio programme just before we were about to consider the Bill and long before any guillotine had been proposed. He said:
"It is not a question of extra time for debate in the House. We shall be using our time in the House to use every legitimate parliamentary means to secure the withdrawal of this tax, and that is the object of our debate this week."
There was no question of improving the tax. The right hon. and learned Gentleman was seeking, as he has every right to seek—I am not complaining—to use every legitimate parliamentary means to prevent it reaching the statute book in any form whatever. We are using such legitimate parliamentary means as we think are appropriate to ensure that it does reach the statute book and shows that we are capable of implementing an undertaking on which we fought and won the General Election.

As we are always being told that such-and-such is bringing Parliament into disrepute, may I ask whether my right hon. Friend agrees that the right hon. and learned Member for Surrey, East (Sir G. Howe) certainly did his share in that broadcast to bring Parliament into disrepute?

The right hon. and learned Gentleman may have sought to do that, but the disrepute was brought on himself rather than on the institution to which we all belong and to which the rest of us, at any rate, pay respect.

The interesting point is that the right hon. and learned Gentleman was not concerned with widows, small shopkeepers and small traders who benefit from the Bill. For the first time for 80 years the ordinary small shopkeeper or business man will now be able to pass on his business free of tax to his wife and to his children at a lower rate than in the past. The right hon. and learned Gentleman was concerned exclusively with the tiny minority of our population who are having the opportunity of avoiding tax withdrawn from them altogether. Indeed, he was representing not those who vote for him but those who pay him.

The fact is—[Interruption.] We are delighted to see the hon. Member for St. Ives (Mr. Nott) on the Front Bench again after the unbridled attacks that he has recently been launching on the policies of the previous Government of which he was a member. We hope that he will show the same exuberance in castigating his right hon. Friends now that he is on the Opposition Front Bench as he did when fighting his way there from the back benches.

The Conservative leadership has revealed itself in its true colours as the defender of the rights of birth against the rights of ability and as representing those who believe that status, influence and wealth should depend on who one's father was, not what one is and has done.

There is a fundamental division on the Opposition Front Bench in this regard. It is one of the most fundamental divisions in British politics, and nothing reveals more clearly how fundamental it is than the hysterical excitement of hon. Gentlemen in debating this Bill which closes tax loopholes.

One point of interest has emerged from the debates. I revert here to the question asked by the hon. Member for Cornwall, North. The scale of avoidance was a good deal wider than most of us—I include the Government—imagined when the Bill was first introduced. More important than the scale of avoidance is the fact that after two generations of increasing avoidance of estate duty, whole sectors of our national life have come to depend on their ability to avoid a tax which Parliament introduced 80 years ago believing that it would and should be effective.

The right hon. Member for Farnham (Mr. Macmillan) put it fairly and clearly when, discussing this matter on the Floor of the House some weeks ago, he told us that there was indeed an element of truth in the argument that many family businesses survive only because of the loopholes in estate duty.

Will the Chancellor substantiate his statement about avoidance by reference to the Finance Act 1894? Will he demonstrate that Mr. Harcourt, when he introduced the Bill, meant it to apply to lifetime gifts? This is a fundamental point. So far the right hon. Gentleman has misstated the facts.

As so often, the hon. and learned Gentleman is attempting to change the argument completely. When Mr. Harcourt introduced the Bill, he did so in words which I only wish were true—"We are all Socialists now"—but he was introducing a Bill which sought to introduce a duty on legacies. We are closing loopholes which existed in the legislation introduced by Mr. Harcourt by introducing taxes on lifetime gifts. The hon. and learned Gentleman is not without a certain understanding of these matters, and I suspect he understands what I am saying now in that regard.

I think that we should get clear what the right hon. Gentleman means by avoidance and loopholes. I gather that he includes in that all lifetime gifts to the family. Does he call that avoidance, and is that a loophole?

It is not evasion. The right hon. Gentleman will understand the difference between evasion, which is breaking the law, and avoidance, which is using defects in the law to avoid paying taxation. There is nothing illegal about avoidance, but there is nothing terribly attractive about it, either, from our point of view. What we are seeking to do is to close loopholes through which so many people have avoided taxation in the past.

The fact that sectors of our national life have come to depend upon their ability to avoid a tax is a fact that we cannot and should not ignore. Therefore, in the new clauses and amendments that we shall introduce over the next few days we are seeking to temper the wind to the shorn lamb and we shall be discussing over the next three days, in the main, detailed concessions which the Gov- ernment have made to protect important sectors of our national life where a strict application of a fair and effective law would have produced results which were damaging to the national interest or were unfair.

The right hon. Gentleman will recall that, by a decision of Parliament, unemployment pay is not subject to income tax. Does he call that avoidance and a loophole? It is the same point as he is making. What Parliament has not sought to do is not a loophole. Surely the right hon. Gentleman will agree with the rightness of that.

Parliament took a conscious decision not to make unemployment pay subject to income tax, although the Conservative Party proposed to make it so subject under its tax credit system. In both cases Parliament was being invited to take a decision in full knowledge of its consequences. What I am arguing—and nobody can deny this—is that it was not the intention of Harcourt, or those who have increased or changed the form of estate duty since, to make it possible for it to be avoided on the massive scale on which it has been subject to avoidance in recent years. If Conservative Members are claiming that loopholes should continue to exist and that estate duty should remain an avoidable tax, let them have the guts to say so and defend that position in the country, because they will find that not one out of 10,000 of their supporters will follow them in that view.

We were discussing the hon. Gentleman earlier on in a friendly way. I should like to proceed with my speech, and I think the House will agree that I have been generous about giving way.

Not now; perhaps a little later. We are always pleased to see the combative and friendly face of the hon. Gentleman and metaphorically to dust his pants in as determined and friendly a fashion as he is prepared to do physically on occasions when he disagrees with someone on the Government benches.

During the next three days we shall discuss detailed concessions that the Government are making to fulfil the objectives that I have stated. The most important concessions, and those of most interest to the House and the country, are those which I said I intended to make when we started the Committee stage of the Bill on the Floor of the House about a month ago, namely, on agriculture, small businesses, forestry, the national heritage and charities. I point out to the House that we are putting charities in a far more favourable position than they were under the previous régime. These are all concessions which I volunteered to make before Conservative Members went into the Long March and which were welcomed by them when I stated this intention.

The hon. and learned Member for Dover and Deal is getting into a little lather about Marxism. Will he tell us what he is saying?

As the right hon. Gentleman challenges me, I can tell him that these Marxist analogies come readily to his lips because his views are redolent with Marxist thinking.

4.15 p.m.

The House regards the moth-eaten McCarthyism of the hon. and learned Gentleman with more sympathy and tolerance than disgust, though I dare say some people outside the House would not be quite so tolerant.

The concessions that the Government are making were forecast at the beginning of our Committee discussions and I am now implementing the undertakings I then gave.

New Clause 4 is of less general interest. We are introducing it not because it affects an important sector of our national life, but because, on reflection, and after listening to the arguments put to us, particularly in Standing Committee, by Conservative Members, we came to the conclusion that it would be fair to do so. As the House knows, the essential purport of the new clause is to relieve unsettled property of excessive taxation when the donee dies very soon after the initial transfer was made. As the House knows, Schedule 5 already provides for quick succession relief for settled property, and the new clause extends the provision to unsettled property.

As we are to take with the new clause the amendments which you, Mr. Speaker, have selected, perhaps I may explain why we do not find it possible to accept them and why we have put down the clause as it stands.

I deal first with the question of rates. The rates that we have chosen are those proposed by the official Opposition in Standing Committee in their Amendment No. 52. I find it a little astonishing that they now come along and propose a completely different set of rates. They are a little greedy, and their behaviour in this respect gives some colour to the statement of objective by the right hon. and learned Member for Surrey, East on the radio on Monday. These are not serious amendments. This is an attempt merely to delay and prolong discussion. The rates are the same as those proposed by the official Opposition and, except for the reduction from five years to four years, the percentage reductions are more generous than those under estate duty, despite the fact that the CTT scale of rates is lower than that under estate duty. That deals with one group of amendments.

There is another group of amendments asking us to give relief in the case of the second transfer not only on death but on lifetime gifts. To do so would be to go against the whole sense of quick succesion relief. We are giving relief on death, and death only, because death is the only event that gives rise to unforeseeable transfers and unforeseeable liability to CTT. A man has no reason whatsoever to make a lifetime gift within four years of a previous transfer unless he is willing to accept a liability to CTT.

The provision in our new clause is precisely the same as the provision under estate duty, which has stood on the statute book for many years and which the Conservative Party when it was in office never sought to change. Again, I suggest that the amendments they are proposing here are essentially filibustering amendments intended to prolong discussion and not intended to elicit serious consideration.

There is, however, one important variant—I concede this—to the régime under estate duty. That is the use of a tax credit instead of reduction of value as the basis on which the liability to tax is calculated.

As the House will know—although I do not insist that all hon. Members should accept this argument—that the reason for that is that it is very difficult indeed to trace unsettled property after the first transfer and to distinguish it from the rest of the property which belongs to the donee—impossible, in fact, to do so—without a degree of administrative vexation and juridical complication, which I think it would be contrary to the general interests to accept.

For that reason we have instead taken a percentage of the first tax as the basis for calculating the relief rather than a percentage of the value at the time of the second transfer.

For all these reasons. I commend the new clause to the House.

As the House knows only too well, we are working under a very strict timetable motion for these proceedings and I wish to speak as briefly as I can, not only to the new clause but to the amendments which are being discussed with it, in the hope that we may proceed with the other 15 debates in all that may be possible during the less than eight hours which are available to us—even if we do not vote at all against any of the Government's proposals or in support of any of our proposals.

I shall get on with it, indeed. I wish to get on with it, first, by dealing with the astonishingly unctuous and patronising observations made by the Chancellor of the Exchequer and shared in quasi-choric fashion by his hon. Friend the Member for West Lothian (Mr. Dalyell) about what I said on radio on Monday. I said, with justification, that the Opposition would use every legitimate parliamentary means to prevent this tax reaching the statute book in this way and in this form. To hear the right hon. and hon. Members opposite talking about bringing Parliament into disrepute is to raise astonishment inside and outside the House.

The right hon. Gentleman the Chancellor said that I had been following with interest the accumulation in every newspaper day after day of criticisms of what the Government are doing—the Financial Times on Saturday and The Guardian yesterday; and today I glance only at the headlines of three newspapers.

No. [HON. MEMBERS: "Oh."] The Daily Mail, under the headline

"Making a mockery of Parliament",
stated:
"But the way this Labour Government is trying to force its ill-prepared and inadequately debated measure through Parliament is utterly to be deplored."
Who is standing on the side of parliamentary reputation now? The Opposition are, and not the Labour Party.

The Daily Express, under the headline "Misgovernment", states—[Interruption.] I should be happy to harken to the Chancellor's laughter if he could identify a single newspaper of repute that sided with him in this matter, but he cannot do SO. [HON. MEMBERS: "The Morning Star."] I dare say that the Morning Star naturally might be one, but there are not many others.

The Daily Express has stated
"What makes this particular blade so obnoxious is that the Capital Transfer Tax (part of the Finance Bill) is, for Britain, a whole new concept in taxation which could produce many unforeseen and possibly disastrous consequences for small businesses, farms, family relationships and, ultimately, even for our way of life. To rush through such legislation is an abuse of the parliamentary system."
Finally, The Times, under the headline "Legislative Chaos", states precisely the point that I have made throughout our debates:
"The right thing to do with those clauses of the present Finance Bill concerned with the Capital Transfer Tax is to separate them and to reintroduce them later, after more mature consideration."
That is the strength of the case I have been making and am making here again today.

The new clause, so far as it goes, is welcome. But why on earth was it left out in the first place? We have had the answer in statements made throughout our proceedings, most notably and most candidly by the Chief Secretary in the debate on Second Reading, when he said:
"Preparation of the capital transfer tax legislation has been a mammoth task involving the framing of a complete new code."
He also said:
"As a result of the difficulties we have had in framing the tax, there are certain matters with which there was insufficient time to deal in the Bill as published".—[Official Report, 17th December 1974; Vol. 883, c. 1379–80.]
He can say that again!

Again, we find that even today the Chancellor, in another piece of euphemistic newspeak in answer to my hon. and learned Friend the Member for Dover (Mr. Rees) has decided to postpone altogether the operation of Clause 39 for 12 months, with the bland statement "It will take us at least that time to find a really satisfactory juridical answer." If that is true of the one clause which he thinks he can afford to postpone for 12 months, is it not true of every other clause?

The right hon. and learned Gentleman is making a great deal of the fact that the Government, on this important tax which seeks to limit tax avoidance, have listened to serious argument and sought to meet it by amendment. Would he not agree that this was a more responsive attitude than that which he adopted when he introduced a Bill not so long ago, under the threat of a guillotine, the purpose of which was not to close tax loopholes but to limit liberty? When that Bill was actually enacted it was found totally inoperable and required the use of a squalid device, the use of the Tipstaff, to permit its operation at all? The Conservative Party finally had to decide, if it ever had opportunity, never to introduce it again. Does the right hon. and learned Gentleman think that that is a better precedent?

If the Chancellor is driven to such irrelevance in order to justify his monstrous tax, we are indeed in a sad plight. Let me remind him that in the debate on that previous Bill—if I may follow him out of order for a second—we were willing to introduce dozens of amendments to meet representations made by the Labour Party, but the Labour Party, so dedicated was it to the preservation of parliamentary respect, was determined to vote against even those amendments that were made to meet its representation. Lunacy can go no further than that.

Order. This is a Second Reading debate on this new clause. I think that although the debate can go fairly wide, it can go fairly wide only on the new clause.

I am tempted, Mr. Speaker, to answer the desperate interventions by the Chancellor, but I shall remain within order.

The extent to which the Government have been responding to these things is demonstrated again on this clause by what my hon. Friend the Member for Guildford (Mr. Howell) pointed out in Committee, that after putting down seven amendments to the clause the Opposition secured four concessions and the Chief Secretary said that he would look at two other matters. That was six out of seven, and still the concessions come forward. Other major concessions, apart from those made in this clause, are being made even at this eleventh hour. Many of them are inadequate. All of them are necessary. All of them recognise the overwhelming legitimacy of the case we have been making. To hear the right hon. Gentleman saying, as though it was a disreputable argument, that some of my hon. Friends have been saying that some of these provisions offended against natural justice is odd. How can that possibly be cited as a disreputable argument? The Chancellor knows full well that the way in which this legislation is being handled is doing, has been doing and will continue to do injustice to the rights of people to make representations about it.

Let me take another example of an amendment which we shall be considering later, in relation to political parties. The original provisions in the Bill, which sought to do, and would have done, great damage to every political party other than the Labour Party, supported as it is by trade union subscriptions, were not there as a result of some error. The Chief Secretary, in discussing these provisions on Second Reading, said that the provisions had been considered. Yet today at last we see some concessions being made over political parties—not by error or a careless mistake but by a deliberate error after careful consideration.

The Chancellor, even so, seeks to take credit for the other concessions he was making in favour of charities. So far, so good. But what about the public bodies which fall outside the definition of charities or outside the definition of political parties? What about organisations such as the United Nations Association, the Disablement Income Group, many other well-deserving bodies, and the National Council for Civil Liberties? All of them enjoy relief under existing legislation, and for them the Chancellor has done nothing. It is another illlustration of the inadequacy of the concessions.

4.30 p.m.

The original Bill, wilfully or recklessly, was doing damage in many other directions—damage to the national heritage, damage to the farming industry, damage to forestry, and, perhaps above all, damage to small firms upon which millions of jobs depend.

The Chancellor sought to tell us that he was replacing an unfair and ineffective tax, if that is what it was. If he is replacing it by anything, he is replacing it by an unfair and destructive tax. It is deeply destructive, not of a minority of people whom he alleges we on this side seek to represent but of the foundations of many aspects of our way of life and destructive of the foundations of the employment of many people.

On all those matters the original proposals were profoundly wrong. The changes now proposed to be made are frank admissions of gross error, and in most, if not in all, cases they do not go far enough. This has happened because the Government, in introducing the legislation, have set out in pursuit of the wrong objectives and are proceeding from the wrong premises.

We on this side have made it amply clear, as did the previous Chancellor—Mr. Anthony Barber—that we have no quarrel with some form and some degree of capital taxation. Indeed, the same was said by my right hon. Friend the Leader of the Opposition. The Government are wrong to proceed on any other footing. However, the Chancellor has a positive obsession with what he is pleased to call "avoidance" in some newspeak use of language, setting out at all times in pursuit of the mere fact that the existing law does not suit his misguided social objectives.

How can it be avoidance, for example, to take advantage of provisions which were deliberately left in the law by generations of Socialist Chancellors, by such wicked capitalist characters as Sir Stafford Cripps, and which were designed to promote the use of life assurance? Is it avoidance to take advantage of the relief given on life assurance premiums? Of course it is not. The Chancellor does little credit to his cause by using the word in that way.

We have no quarrel with capital taxation of the right kind, but the Chancellor ignores the fact that in the United Kingdom already capital taxation is higher than in most other Western European countries. We are not concerned simply with estate duty. We have an accumulation of taxes on capital—capital gains tax, estate duty up to the present date, and stamp duty. The Government seek to add to that list not just capital transfer tax but the wealth tax as well.

The capital transfer tax that is proposed, so far from being designed to distribute or redistribute wealth, will have the effect of destruction and confiscation. It will have the effect of centralising not just wealth but power and initiative in the hands of the State and giant corporations.

The Chancellor chose to tease my hon. Friends for referring to the prospect of companies passing into the hands of the Arabs or the Americans. There will be little prospect of small thriving business enterprises remaining in the hands of anybody else if the Chancellor has his way under this legislation.

Clearly, the Chancellor's objectives are wrong. He will not be helping the weak by destroying the strong. He will only be penalising thrift and enterprise and threatening the jobs of millions of people throughout the country who depend upon small firms, small farms and such enterprises.

To hear the Chancellor seeking to defend the small shopkeeper is like listening to some absurd chorus by the wolf in praise of Little Red Riding Hood.

The only purpose of the higher rates which are proposed is to achieve the destruction which the Chancellor intends. With the high rates proposed in this legislation, it was folly in the first place to exclude the quick succession relief which we welcome in the new clause. Because of the high rates, we are pressing the first group of amendments to give some relief for transfers except on death. Without such further relief, small businesses will face the risk of extinction within a generation, and many jobs will go with them.

All the changes proposed in our amendments are made necessary by the high effective rates proposed. The rates set out in the original White Paper, even though amended, are made all the higher by the Revenue's right to exact tax from the donor at its option, by the bizarre right to gross up the figure upon which tax is payable so that the tax can be payable even upon tax, with the consequence that rates of tax upon capital will in some cases exceed 100 per cent.

No economic justification for the tax in this form has been suggested. There can be none. Nor can there be any social justification for confiscation on this scale. The Chancellor and his right hon. and hon. Friends have brought before Parliament what amounts in the end to a prescription for a peasant society. That is why, although we welcome the new clause, I am happy to press the amendments standing in my name.

The intervention by the right hon. and learned Member for Surrey, East (Sir G. Howe) contained about five relevant words. Those words were that the Tories welcomed the new clause.

The right hon. and learned Gentleman asked why the clause was left out in the first place. Today the right hon. and learned Gentleman displayed a degree of churlishness which those of us who have hitherto respected him as a great libertarian and upholder of parliamentary procedures found surprising in him. It was churlish of the right hon. and learned Gentleman to ask why the clause had not been put in in the first place and then to say that the Government had brought it forward in response to pressure by the Opposition. One would think from listening to the right hon. and learned Gentleman that that was a sign of weakness on the Government's part rather than that they had acted responsibly after being persuaded by reasoned argument.

We have in the capital transfer tax not the kind of bizarre picture painted by the right hon. and learned Gentleman, but a long overdue fundamental tax reform. The right hon. and learned Gentleman was guilty of a travesty of the truth in referring to the areas in which he said that the Opposition had been pressing for change—agriculture, small businesses, charities, forestry, the national heritage. In every major area of change the commitment to change the original proposal in the Bill was made by the Governmnt before we spent the 165 hours in Committee.

The hon. Gentleman did not say a word in Committee. He was such a distinguished member of the Committee that I regret I failed to notice him. Will he say when the proposal for a lower rate on lifetime gifts was brought in? If he does not remember that being introduced halfway through the Committee stage, he cannot have been listening.

Government Members who were members of the Standing Committee could not help noticing the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) because of his constant interruptions and the filibustering in which he was a leading participant. I am sure that if he wants to participate in this debate and put his point of view once again, he will succeed in catching your eye before midnight, Mr. Deputy Speaker.

I was saying that on all the major issues—agriculture, small businesses, charities, forestry, and the national heritage—the commitment, whether the hon. Gentleman likes it or not, was made by the Government before we had the marathon 165 hours in Committee.

No, I will not give way to the hon. Gentleman again. Anyone who gave way a second time having just received such a mouthful of abuse would not deserve to be a Member of the House. I shall listen to the hon. Gentleman with interest if he succeeds in catching the eye of the Chair.

In all the major areas, as I was saying and as I shall continue to say, even if hon. Members want to continue to filibuster at this stage of the argument, the Government had made their commitment long before the matter came under discussion upstairs. The present arrangements under the capital transfer tax leave many of the areas much more favourably treated than they were under the old estate duty.

We hear a lot about the small shopkeeper and the small businessman. When I hear about these busy entrepreneurial activists, I am at a loss to understand why we are in such a desperate economic plight today. Many of them are much more favourably treated by capital transfer tax than they were under the old estate duty.

This is certainly the case with many charities. It is nonsensical for the right hon. and learned Member for Surrey, East to complain about charities such as Shelter and the National Council for Civil Liberties when he knows that even under the Conservative Government none of those organisations received charitable status. For those bodies which have charitable status, the present arrangement under capital transfer tax is much more favourable. I believe that what we have to do as a totally separate issue is to look much more widely at the definition of a charity.

I am sure that the hon. Gentleman would not wish to mislead the House. The definition of a charity in the context of estate duty was that it had a public and charitable purpose, which is a wider definition than the definition used in the Bill, either originally or under the proposed new clause. Those charities to which my right hon. and learned Friend referred received concessions under estate duty but will not get them under capital transfer tax.

That is not my understanding at the moment, but I shall certainly consider what the hon. Gentleman has said.

I am sick and tired of hearing about what the BBC said on Monday morning. We have had it quoted five times so far. Instead of having this long, wide-ranging debate, hon. Members should say to the Government "Thank you for the constructive arguments. We welcome new Clause 4 unreservedly." We should not have the kind of grudging attitude adopted by Opposition Members. If they have any real desire for progress in our proceedings, they should say that they welcome the new clause. Instead of advancing their arguments over and over again, they should get on with the other topics which they allege they have not had time to discuss.

I wish to refer to the first amendment in the second group selected for discussion with this new clause.

Order. Perhaps I can help the hon. Gentleman. We are discussing the new clause in general terms. Should he wish to move his amendment in detail, an opportunity to do so will arise at a later stage. At the moment, discussion is on the new clause.

My understanding of the decision made by Mr. Speaker earlier was that that was rather an open question, but that he would wait to hear the nature of the debate before giving a decision. I understand also that it was the view of the Opposition—and certainly we support them in this—that they would prefer to take the amendments in the general debate on the clause and vote on them later.

My understanding accords with the recollection of the hon. Member for Cornwall, North (Mr. Pardoe)—that we should have a general debate covering all the amendments and that there would be separate votes as appropriate. Mr. Speaker left the matter open as to whether there would be separate debates, but it would be left to your wisdom, Mr. Deputy Speaker, or to his whether we should do so when we had concluded the main comprehensive debate.

I was trying to address my remarks not to the generality of the clause, but to the first amendment in the second group selected for discussion with this new clause. I refer to Amendment (n), in line 6, at end insert:

  • (a) by 100 per cent. if the period between the previous transfer and the death was two months or less;
  • (b) by 90 per cent. if that period was more than two months but not more than six months'.
  • The Chancellor referred to the two groups of amendments, in my view, wrongly. He was quite correct in saying that the first group of amendments sought to change the rates which the Opposition suggested in Committee, and I understand his reasons for discarding that argument. He then went on to say that the second group was designed to extend the concession in the new clause to lifetime gifts. That is not the case—I hope the Financial Secretary will accept this—because that is not the purpose of Amendment (n).

    4.45 p.m.

    The purpose of the new clause is excellent. It is to deal with the problem of quick succession. We accept that the Government have met the arguments in Committee at least partly if not to the extent that some of us wish. But the Government are being less than generous in the choice of the period to which the concession refers. In other words, they propose a figure of 80 per cent. for the first 12 months or less.

    We feel—and I think this will have the support of both sides of the House—that a very different situation can arise. There can be a situation in which a person who receives a gift dies in the same car crash as the person who makes the gift. That is an obvious example. A father and son might be involved in the same car crash. One might die before the other, although their deaths might be almost instantaneous, or one might die instantaneously and the other perhaps a month later of injuries received in that crash.

    That case is very different from those that the Government are covering in this clause. Therefore, we are seeking to subdivide the first 12 months. We say that if this disaster should strike in the first two months, there should be no tax payable at all on that transfer. We say, further, that after the two months but within six months a figure of 90 per cent. should apply, and beyond that the Government's figures seem to us to be reasonably fair.

    There is not only the case of two people killed in the same accident. One can think of other examples. There is the possibility of a gift being made to a person when, in view of the nature of the circumstances, he should not have accepted it. One can call various circumstances to mind. A man might be on his death-bed but not know that he is dying. Somebody might make a gift to him and he might accept it. Nobody would say to him "You are dying of cancer and you must not take this gift" because there is clearly a family conspiracy to shelter him from the knowledge that he is dying. He might accept the gift in good faith and then die a few days later. That situation should be covered, as it would be if our amendment were accepted.

    I therefore hope that the Financial Secretary will not simply rely on the words of the Chancellor in turning down this amendment. It is not an attempt to extend this concession of the new clause to gifts during lifetime. It is an attempt to make a distinction between the situation covered by the Government's new clause, where two deaths occur within a period of 12 months, which seems to be perfectly reasonable, and the situation where the deaths occur in a much shorter span.

    I hope that the Financial Secretary will recognise that the situation covered by the amendment is rather different, and that the amendment does not seek to drive a wedge into the principle of the tax or into the principle of the proposed new clause.

    I shall be brief, because the House has a lot of work to get through today. When the Chancellor of the Exchequer began—it is noteworthy that he has left early—he assumed a mantle of generosity as convincing as vows of chastity by Casanova on his deathbed. He tried to persuade us that his beneficent tax had been modified by the Government in such a way as to bring great benefit to many people. Throughout our debates on these matters, the right hon. Gentleman has used his hatchet men, appearing himself at the last minute, then disappearing.

    Throughout the wholly admirable and entirely justifiable strictures applied to his proposals by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), the Shadow Chancellor, the right hon. Gentleman guffawed his way along—

    Where is the right hon. and learned Gentleman? He is such a "shadow" that he has disappeared.

    No doubt, he is looking for the Chancellor, and it would be a good thing if he found him.

    The Chancellor accused my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) of being a motheaten McCarthyite. Anyone who knows about moths realises very well that during his short stay at the Treasury the Chancellor has brought forth more moths to break through, corrupt and the rest than any other Chancellor in living memory. The right hon. Gentleman combines all the least endearing characteristics of the two Cromwells.

    The two great Cromwells, Thomas and Oliver, who had, one might say, varying characteristics, and the right hon. Gentleman combines the least endearing of them both.

    The truth is that in this tax the Chancellor has taken on the wrong people at the wrong time and for the wrong reason. We must come back to the fundamental point, that the Chancellor's aim should be to raise revenue through taxation and not to clobber people or undermine the whole fabric of our society. The right hon. Gentleman will be remembered as the most Draconian figure in the Treasury for many a long year. He will be thought of by future generations with the same degree of revulsion and horror as was the squanderbug figure which haunted the childhood of many of us at the end of the war—squandering the best resources of the nation through the ill-thought-out and ill-considered schemes which he has put before the House.

    Nothing could more clearly show the justice of what I say than the way in which the Government are forcing this tax through without adequate time for debate. We ought to be able to debate the capital transfer tax at length—

    When the Chancellor talks—we are, of course, thankful for small mercies—of certain concessions for agriculture, forestry and the national heritage, everyone knows that those most closely involved with these matters understand that the concessions do not go far enough and do not meet the legitimate cases which have been advanced, yet the House is not to have time adequately to deploy the argument.

    It is essential that we have at least a brief debate on some of the vital matters of concern to agriculture, small businesses and the rest. The way that we now have to work is a damning indictment of the Government's handling of this whole business, and there has been a splendid endorsement of that indictment in today's leading article in The Times, which talks about the way in which the Government are mismanaging the nation's financial affairs.

    I have some difficulty in addressing myself to most of the amendments to the new clause, which I expected to be my task at this stage, because, with the exception of the hon. Member for Cornwall, North (Mr. Pardoe), no member of the Opposition has directed a word to any of the amendments. I take it that hon. Members consider them of trivial importance and they propose, therefore, not to divide on them. They have certainly given no attention to them.

    We had not a word from the right hon. and learned Gentleman the Member for Surrey, East (Sir G. Howe), the ephemeral Shadow Chancellor, as to the rate of relief, as to the changed basis of relief, or as to the extent of the relief for lifetime transfers by the donee. It is not surprising that he did not address himself to the rate of relief, because our new clause adopts in toto the proposals pressed upon us in Standing Committee. Why the Opposition should suddenly have a change of mind in the space of about eight or nine days I do not know, but I am happy to see them flexible in these matters. It is, however, a little churlish of them to accuse us of excessive flexibility whenever we change our minds to meet points pressed upon us by them.

    Be that as it may, I come now to the point made by the right hon. and learned Gentleman—I am searching to find parts of his speech to take hold of and to address myself to—when he said something about public bodies being disadvantaged under the new proposals. I accept that there may be some difficulties there, but most public bodies will benefit either by the £100 a year relief to donees or by the £1,000 a year tax-free transfer available to them under the tax or by out-of-income transfers. If there are further problems which are not covered by those tax-free reliefs, we shall be prepared to look at them.

    The hon. Gentleman has referred to the £1,000 a year exemption. Can he assure the House—this is an important matter—that the new Government amendment to Schedule 6, which we are likely to reach, dealing with the £1,000 a year exemption, is not intended to signify, as it seems to us to do, that the £1,000 exemption shall no longer be over and above the other exemptions under the Bill?

    Mr. David Howell
    (Guildford)