The Opposition, and, I suspect, many Labour Members, welcome the opportunity to speak for large numbers of their constituents who are connected with small businesses or are self-employed and are intensely anxious about the prospects that lie ahead for them, their businesses and their families.

We shall listen with care to what the Ministers who are to speak in this debate say, but they, though no doubt trying their hardest to do their job, are not responsible for the conditions affecting small business men and the self-employed. We shall be condemning today by our vote this evening the strategy, philosphy and policies of the Government as a whole, and it is senior members of the Government, not relatively junior members, who should be answering in the House today for the condition of small businesses and the self-employed.

We are considering a very important subject—nothing less than the prospects for the prosperity of the country and the solidity of our liberties. Prosperity depends upon national wealth creation. Liberty depends upon widespread dispersion of decision making and of money. Both wealth creation and the dispersion of funds and decision making are closely associated with small businesses and with the self-employed.

National wealth creation is not, as the Government always seem to think, simply a matter of workers producing goods. It involves the matching of supply to demand. It involves constantly improved techniques by which individual men and women can produce more output. There is no other way in which to increase our national prosperity, and at the heart of this process of national wealth creation is the entrepreneur, the risk taker, the decision maker who matches supply to demand. The entrepreneur appears in his most clear-cut form as the small business man or the single self-employed man. It is he who is the entrepreneur in essence, and it is he who is being most fiercely attacked by the Government policies.

The economy depends upon a network of small production and service units, shops, workshops, agencies, small factories and services. I do not think that hon. Members realise how many small firms serve the production, for instance, of a Rolls-Royce car. It involves no fewer than 4,500 sub-suppliers, and so it is with almost every product or service which we take for granted in our national life. They are all the joint result of a large number of firms and services, mostly small, complementing, supplementing, specialising and competing.

The convenience of our daily lives and the functioning of our economy depend upon a pulsing fabric of more or less vigorous enterprise, the self-employed and small businesses. The very seed bed of our economy is composed of medium and small businesses. Large industries which we take for granted started as the idea of one man or one woman. From the ranks of small businesses grow the giants of the future. That is why today's debate, which is of interest to millions outside the House, is about nothing less than the prospects for our prosperity, the prospects for alleviating poverty and the prospects for improving social services. They are all closely connected with prospects for the self-employed and for small businesses.

I do not know whether hon. Members are fully aware of the inventiveness of this sector of our economy. I am a layman, but I look with the greatest interest every day at what is called the technical page in the Financial Times which has been run for many years by Arthur Bennett and Ted Schoeters. It contains a list of new inventions and innovations, and a large proportion of those reported every day come from small businesses. It is they who are more productive than the country realises of innovation and invention. An economy too dependent upon large firms and large establishments could quickly grow stagnant and flabby.

The vitality of our economy, the vitality of the country as a whole, and the vitality of individual towns and cities depends not upon large establishments but upon the untidy undergrowth of small, constantly adaptive competing businesses. It is upon their vitality that the richness of the fabric of the economy depends, and if anyone is interested in a fascinating comparison of one town with another based upon a comparison of the presence or absence of small businesses I commend to him a remarkable book called "The Economy of Cities" by Jane Jacobs.

If small businesses are to be able to prosper, and if the country is to be able to prosper, the Government have to take them intensely seriously. Damage small businesses, and one damages national wealth—creation. Stunt small businesses, and one stunts national prosperity. No private wealth from small businesses, no widespread national wealth; no national wealth, no welfare. There is a direct link between the climate in which the Government of the day allow small businesses to operate and the resources that will be available to that Government a very few years later, if they survive, for all their other social and economic purposes.

I cannot help but draw attention to the fact that only six Government supporters are on the benches opposite. They are the only Labour Members who have taken the trouble to come to listen to this debate on a subject of interest to tens of millions of people. What a contrast there is between the Labour benches and the number of hon. Members present on the Opposition side.

I hope that no one, even among the obsessively collectivist Labour supporters on the benches opposite, imagines that the contribution of the small business can be replaced by nationalised industries. In industry, when nobody owns nobody cares, and the essence of small businesses is that all those involved in them care intensely.

I wish, after that introduction which is more than half of what I am going to say, I could turn to the party record and point out that the Conservatives have an infinitely better record than the Labour Party in looking after small businesses. But in fact neither party has distinguished itself on this subject. To the Labour Party belongs the credit for having set up the Bolton Committee—a very sensible initiative—and to the Conservative Party belongs the credit for having put into action most of the recommendations of the Bolton Report. Let us take credit where credit is due.

The Bolton Report concluded that small businesses and the self-employed depend essentially upon the economic climate. It reported that at the time when it was studying the subject small businesses and the self-employed saw the climate created by the Government as at best indifferent and, in essence, as hostile to their interests. It reported that the interests of small businesses had been neglected by successive Governments. It urged in its recommendations that Governments of the future should seek to understand small businesses and the self-employed and should create for them an encouraging climate.

At the heart of those recommendations was one that tax should be cut and that small businesses should be enabled to retain more profit as the principal source for the financing of their expansion.

Successive Governments have imposed a whole series of burdens upon small businesses and the self-employed—administrative, statutory and fiscal burdens. Small businesses and the self-employed, already staggering under VAT, being unpaid tax collectors, and under the impact of rising rates and of a whole series of well meant but in aggregate overwhelmingly burdensome statutory obligations, now on top of all that have to suffer the nightmare of inflation, the nightmare of high taxation, and the nightmare, in combination with these, of price controls.

The people of whom we speak today have the honourable purpose of independence, a desire to prosper for themselves and for their families, and a desire to transmit what they achieve to the generation that follows them. If any of these motivations is destroyed, the seed bed of our future is damaged.

Let us recognise in this debate that at best the talent that fertilises the small business has an international market, that those who create small businesses from which the giants of the future will come can very well go to another country. They can carry their abilities elsewhere, or they can just not take the trouble. Be he a small shopkeeper or a taxi driver, be he a man providing a service, be he a man setting up a small workshop, he can, if the burden upon him becomes too great, withdraw his attitude of helpfulness and vitality and transfer to the status of an employed man, thereby impoverishing his clients and the community.

Is the right hon. Gentleman suggesting that the ability and talent of entrepreneurship is transmitted by heredity?

No, certainly not. The competitive process ensures that where the second generation has not the talent it is rapidly vanquished. It is not for nothing that the folk wisdom has it "From clogs to clogs in three generations". I do not contend that entrepreneurship is transmitted by heredity.

This country is lucky to have several firms—Pilkingtons, Sainsbury, Marks and Spencer leap to one's mind—where the enterprise, effort and good will have survived from generation to generation. We cannot tell for how long they will continue. If they do not continue, perhaps it will be because other companies have attracted those qualities; or perhaps one day the co-operative will display the entrepreneurship we have come to admire. If so, good luck to competition. I only wish that the co-operatives, which were invented in this country—they are a splendid invention—had kept the vitality of their founders and were offering competition to the best of our private enterprise firms. Nothing would be better for the country.

Does not what the right hon. Gentleman has just said negate his argument that the hereditary principle is essential in preserving talent and entrepreneurial activities?

No. It is the hereditary motive which is so essential. This is one of the ingredients of the hard work and the risk taking that lies behind the small business out of which will come the future industries which our successors will take for granted—just as we take for granted whole industries which were conceived in the brain of an unusual man or woman at the very beginning.

Among the self-employed and small business people today there are intense depression and anxiety bordering upon despair. The Government have added to the misery and the nightmare of inflation. On top of the cash squeeze, price controls, high rates, negative profit—that is, a loss in real terms—the Government have added gratuitously, and almost unaware of the damage they are doing, the hideous concept of the capital transfer tax, coupled with the capital gains tax, all shortly to be reinforced by a wealth tax.

Before my right hon. Friend leaves the philosophy, will he include the professions, including doctors and consultants, who feel that their freedom to practise their skills and to look after their clients or their patients in the way they think best is relevant to the philosophical argument that he is advancing?

Yes. The doctors and members of other professions are, to the extent that they are self—employed—some are not self-employed—and even to the extent that they are not self-employed, at the very heart of this discussion.

I should have liked to have kept my contribution to the debate, to the general principles, but I must for a moment glance at one aspect of the current complex of miseries that is relevant to small businesses. I refer to the credit position.

The expanding small business—after all, it is on the wealth of the expanding small business that the future depends— often goes through a stage of over-trading. It is important that we as a country find ways without subsidy by which a small business can obtain credit to finance stock and debtors during that period of expansion.

I must add as a rider that the capital transfer tax will encourage small business. men to keep cash outside the business in order to have some money with which to meet the tax on transfer. Leaving that aside for the moment in the hope that one day either the Government will repent or we shall sooner rather than later repeal the tax, I come to the point that we need to try to find some way in which small businesses can improve their credit arrangements.

The credit for a small business during a period of expansion is not an ideal subject for the banking mechanism. It is a bit long term. I note with admiration the efforts of, for instance, Barclays Bank to provide a much-improved service for the small business.

I note, too, that other countries cherish their small business sector far more care- fully than we do. Other countries take seriously the philosophy which I have attempted to articulate and make special arrangements for small businesses. We should try to learn from them. There are initiatives in Holland, Sweden and America. In America, the Small Business Investment Corporation deserves our close study. I hope that we shall hear that the Government are studying what we can learn from other countries.

Against the background that I have been describing, even at the time of Bolton the number of our small businesses per million of the population was far less than in comparable industrial countries. It was far less than in America, for instance. Since Bolton, there must have been a steep decline.

The birth rate of small businesses is far less than the death rate. That was true at the time of Bolton. In the terrible climate since Bolton it must have got worse. So small businesses are not replacing themselves. Therefore, we should do our best to learn from countries which nurture and foster the health of their small business sector better than we do.

Does not the right hon. Gentleman agree that the decline can be attributed to a considerable degree to the activities of big business—for instance, in property speculation, resulting in high rents? It has been made more difficult for small business men to obtain premises as a result of take-over bids. It is not fair to put the blame to some extent in the court of big business?

The hon. Gentleman is stressing one part of a valuable truth. Both major political parties have supported comprehensive redevelopments and have sought to sweep away—as I did when I was Housing Minister—whole untidy tangles of small premises in centres of towns. But in so doing we have impoverished the life of those towns and have damaged small businesses. If the hon. Gentleman reads the books "Death and Life of Great American Cities" and "The Economy of Cities" by Jane Jacobs, he will see that they are an attack not on property development but on town planning concepts to which property developers have responded. We must balance the benefits of town planning in our system with the damage it causes.

We are discussing not only economic issues but the social contribution of small business men and the self-employed. They are an independent breed of people who are admirable in themselves. They enrich our society. Their industrial relations, because on a small scale, are generally much warmer than is the case in larger concerns. There is a perception of a common interest between small business men and their workers which is infinitely valuable to our national life. The small business man, unlike an executive in a large company, is often rooted in the community. He or she contributes to social and charitable life; they are able to sit on the bench and are able to initiate cultural and political activities. That is a most valuable contribution to our society.

The small business man and the self-employed person are decentralised, and that again is a great advantage to our society. There is a dispersal of funds which underwrite our political, social and cultural liberties. There is a close link between economic, social, cultural and political liberties, and at the heart of that link is the small business man and the self-employed.

My right hon. Friend gave an illustration involving Rolls-Royce. Has he any idea of the number of people involved either directly or indirectly in smaller businesses as a proportion of the whole countrywide activity? I believe from that point of view the situation is too little understood.

I am grateful to my hon. Friend for asking me that question. I think it is true to say that over a third of the labour force in this country is employed in small businesses or is self-employed. I give that answer using the Bolton definition.

I was saying that the self-employed are a valuable and also a vulnerable sector of our community. They have as much right to be considered as any other group in our society. They choose to be self-employed for their own reasons, but we all benefit. They are valuable because of their sturdiness, independence and hard work.

The freedom to be self-employed is an aspect of liberty and we should sustain it. They are vulnerable, however, because of the cumulative impact of inflation, taxation, contributions, rates and price controls. The small businesses and the self-employed are the seed beds of liberty, vitally, inventiveness, prosperity. They are vital to our future.

The present Government have inflicted wanton damage on their prospects. I must confess that no Government have given small businesses the encouraging climate recommended by Bolton. But the present Government have totally underestimated their importance, their driving force and their vulnerability.

The new burdens, including capital transfer tax on top of all other taxes and menaces, are destructive to the point of malice to them and to the national interest. By damaging small businesses and the self-employed the Government are damaging all the people of this country—not least the poor and the weak and those who depend on the social services. This is why I hope my right hon. and hon. Friends will vote on this issue this evening.

This is the second time in recent months that the House has had the opportunity to discuss small businesses. We almost had a similar opportunity last Friday—and I was sorry to see that opportunity missed —and this subject was well aired in the other place. I must point out that in the last three or four months we have had rather more discussion of the subject of small businesses than we had in the previous four or five years.

I hope that this debate will be conducted in a reasonable, sensible and logical manner. I hope that we shall not experience the situation which I faced in the 1940s as a young Labour candidate. In those days housewives leagues appeared only during periods of Labour Government. They disappeared completely when Conservative Government were elected.

The right hon. Member for Leeds, North-East (Sir K. Joseph) conceded that these problems had been faced by Governments of both political complexions over the years, and I believe that we must get down to the job of looking thoroughly at the situation. However, I was a little disappointed to hear him suggest that some Labour Members were hell bent on destroying small businesses. That is not my point of view and I know that it is not the point of view of my right hon. and hon. Friends. Many of us—including my hon. Friend the Minister of State, Treasury, and myself—have had some experience of these matters. We are very conscious of our great responsibility in ensuring that small firms grow and flourish. I agree with the right hon. Gentleman that they make a most valuable contribution to the well being of our community, both economically and socially. Small businesses provide good jobs, often steady jobs and jobs of continuing interest.

We all accept that the hon. Gentleman is concerned about small businesses. We hope that he will convey that concern to members of the Cabinet and, indeed, will influence them in their thinking. It appears that they do not have the same concern for small businesses as does the Minister.

I assure the hon. Member for Gillingham (Mr. Burden), of whose interests in this subject I am well aware, that my colleagues in Government discuss this topic at considerable length. Perhaps I can do no better than to quote the words of my right hon. Friend the Prime Minister, speaking on television. My right hon. Friend said:

"We want to help not only small firms, many of whom have been very hard hit by inflation and the liquidity problem, but also want to see the privately owned area within the mixed economy enterprising, alert and profitable. I think that will help to dissipate some of the uncertainty caused by too much public debate.

That, in a nutshell, sums up our attitude to small firms.

Despite what the right hon. Gentleman said, I have rather less sympathy with the people who elect to classify themselves as "self-employed" because they see personal advantage in it and then cry out when some of their "perks" are taken away. I am not now speaking of the small shopkeeper or the professional man but of all those who operate, for example, within the "lump" in the construction industry and their ilk. I make this point to illus- trate how dangerous it is to generalise about the self-employed.

I recognise that there are problems in running a small business. Many of the problems no doubt will be identified by other contributors to the debate. I hope to mention some of those problems, but in this wide-ranging debate the House will not expect me to anticipate all the points. Furthermore, I have the advantage of having present throughout the debate my hon. Friend the Minister of State, Treasury, who will deal with the matters which come within his purview.

I am sure the Minister does not want to mislead the House or malign an important section of the community. Therefore, I hope he is not implying that all workers who are self-employed within the construction industry are the target for his wrath under the collective title of the "lump".

I am not attacking people who are self-employed in the construction industry but people who operate in that rather odd way that is described as the "lump". I suggest that they are not doing this country a great service.

I return to the point that I was making. I shall not deal with all the points that no doubt will be raised. I am sure that Conservative Members would not expect me to do so. I say quite frankly, as did the right hon. Member for Leeds, North-East that not all the difficulties that we now face suddenly arose in the course of the past year. The right hon. Gentleman acknowledged that there had perhaps been neglect during his days and suggested that perhaps there had been neglect during my days. That was why my right hon. Friend the Secretary of State for the Environment, when he was President of the Board of Trade, set up the Bolton. Committee. The right hon. Gentleman's administration set up the Small Firms Division. That is a division which is constantly working in this area.

The right hon. Gentleman indicated that the main issue facing businesses in general, be they large or small, is inflation. I am sure that the right hon. Gentleman would not expect from me in a 10 or 15 minute speech a major contribution on inflation. However, I think that we are all conscious of the fact that inflation has hit businesses in general. I hope that the right hon. Gentleman will recognise that in the worldwide situation that we are facing, the Government, and the Chancellor of the Exchequer in particular, are doing everything possible to cope with this difficult problem.

No.

The hon. Member for Conway (Mr. Roberts) says "No". I shall be delighted in the course of the debate to hear his answers. I am sure that his right hon. Friend the Member for Leeds, North-East will also be delighted to hear them. There are those of us who may perhaps too modestly claim that we are not certain of all the answers. If the hon. Gentleman has them all I shall be delighted to hear them.

Surely the whole burden of my right hon. Friend's criticism of the Government was that they are exacerbating the position of the self-employed and small businesses, given that they are already suffering from inflation. For example, there is the increase in the insurance contribution that is to be made by the self-employed. A self-employed man on £50 a week will find that his insurance contribution will increase by 98 per cent. but the contribution of the employed person will decrease as from April of this year.

But inflation is nothing new. It was a matter that was very much in the minds of the right hon. Gentleman and his hon. Friends. They did not manage to curb inflation or to stop it any more than did any other civilised country in Western Europe. It is within the will of this Government to do all that they can to sort out the problem as best they can.

The right hon. Gentleman also raised another important matter that hits small firms hard—namely, the whole question of local government rates. I spent most of my representational life as a local councillor. I have always been very conscious of the burden of local authority rates on small firms. We are well aware of the difficulties that face everyone as a result of this year's rate increases. They are, as the right hon. Gentleman pointed out, the direct result of inflation.

Undoubtedly the system needs to be reformed. It is worth pointing out to Conservative Members that when they were in power they neither curbed inflation nor did they set about reforming the local rating system. By contrast this administration has set up the Layfield Committee to consider local taxation. Further, we have provided more generous rate support. For the first time we have allowed people, such as small shopkeepers, who live on their premises to benefit from an appropriate part of the reliefs which in the past have been available only to domestic ratepayers.

My hon. Friend has mentioned the effect of rates on non-domestic ratepayers. Does he agree that one of the conclusions of the Labour Party's report to the Layfield Committee was that rates on non-domestic ratepayers, such as small business men and the self-employed, are in effect an indirect tax on the consumer?

Yes, I take that point. Such points will be made to the committee.

rose—

No. If I keep giving way, the many hon. Members who want to make only a short contribution will have no time.

During the debate which we had in December a number of hon. Members referred to the relationship between large companies and their suppliers. As has been pointed out already, this is a matter about which we are all very conscious. Critics of Government sometimes forget that the damage done to small firms is often done by their larger brethren. I am constantly bombarded by complaints about the way in which large firms squeeze their small suppliers and customers by delaying payments and making what appear to small business men to be arbitrary and detrimental changes in the terms of business.

My right hon. Friend the Secretary of State for Industry has appealed to the CBI to draw the attention of its members to the damage which these policies can do to the small firms sector. It is worth remembering that the small firms are an integral part of our industrial fabric. We have pointed out that if they are squeezed too hard it is the big battalions which may also be the longterm sufferers.

In our debate in December the hon. Member for Basingstoke (Mr. Mitchell), when the issue of writing to the CBI was raised, suggested that perhaps we in Government should raise the matter with the nationalised industries and our own public Departments. I have considered the matter and I am satisfied that in broad general terms most of those industries behave very well. Nevertheless, we have taken the opportunity of writing to all the chairmen of the nationalised industries and of drawing this matter to the attention of all Government Departments.

As the Minister has mentioned that matter, I must tell him that I have a constituent who has a firm that is in grave financial difficulties. The largest sum owed to my constituent—namely £2,197—is owed by the Paymaster-General.

I cannot answer that point straight away. If the hon. Gentleman's constituent is owed that sum by the Paymaster-General, it strikes me that he is something more than the small business man I have in mind. I suggest to Conservative Members that if they have any influence with some of our large enterprises they can perhaps help by backing my right hon. Friend the Secretary of State for Industry in the approach that he has made to the CBI. If we can persuade the large companies that the prompt payment of bills is an old-fashioned business virtue, that will go a long way to ease us out of our current liquidity problems in the small firms sector.

The Industry Bill is a matter of great controversy. I do not propose to deal with it at great length. Suffice it to say that I believe that the planning agreements, which lie at the core of the Bill, will be of considerable benefit to small firms. For a long time they have been subjected to various pressures as a result of the lurches which large enterprises have enjoyed. If they can see the planning agreement system in operation I believe it will help to give them some sort of guidance for the future.

I also hear a great deal about the difficulty which small firms have in obtaining money from commercial sources. The right hon. Gentleman also mentioned this matter. Suggestions have been made from the most unlikely quarters that the Government should step in. This is a matter that we are considering carefully. There is little concrete evidence that the banks and the financial institutions are failing to do their jobs. Indeed, I believe that within the limits of financial prudence the clearing banks are generally going out of their way to help the small companies. Where they cannot do so, the reason is usually not unwillingness but the unsound nature of the proposition.

The right hon. Gentleman said that he hoped that we within the Government were looking at how other countries help small firms. I can assure him that at this moment we are carrying out quite detailed studies of schemes which are operated in Europe and in North America. Clearly there are lessons to be learned, but I must tell the right hon. Gentleman that from what I have seen so far some of the schemes look less attractive when seen in the context of the financial and industrial environment in which they apply as compared with the position in Britain. Where they are most attractive, they often serve the same purpose as the help which is available in the assisted areas of this country.

In our White Paper on the Regeneration of British Industry we recognised the particular problems of small firms and said that we were looking at the need to help them with their liquidity problems, I assure the House that this matter is still under active consideration. But we cannot ignore the recommendation of the Bolton Committee, that openly discriminatory policies in favour of small firms are not the answer. In all our policies we are seeking to avoid unintentional cases of discrimination against them, but we must be careful to avoid treating them as something special simply on account of their size.

In these difficult times all sections of the community must bear their fair and proper share of the burden. When the Prime Minister, in answer to a Question in this House last May, announced that I had a broad responsibility for the interests of small firms, I saw it as my duty to ensure that they did not carry more than their fair share of the burden. I assure the right hon. Gentleman that I have maintained the closest contact with my colleagues on all aspects of policy formation.

Is the hon. Gentleman solemnly taking responsibility for having talked to his senior colleagues about the effect of capital transfer tax on small businesses? Has he discussed with them the Employment Protection Bill? If so, while I respect him personally, I suggest that he is not being effective in drawing to the attention of his senior colleagues the damage that this legislation will do to small businesses.

I assure the right hon. Gentleman that all these matters are drawn to the attention of my senior colleagues. My hon. Friend the Minister of State, Treasury will deal with capital transfer tax at a later stage. Indeed, I believe that concessions were made to small business men. We may have to wait for some time for the Employment Protection Bill. However, as I said, all these matters are drawn to the attention of my right hon. and hon. Friends.

Some of the difficulties facing small firms arise from their lack of management expertise and the specialist facilities which larger firms can afford. This was recognised by Bolton. I pay tribute to the Conservative administration—I hate having to do this, but I paid tribute to them in December and I do it again—for introducing the network of Small Firms Information Centres which seek to help business men find solutions to their problems. These Small Firms Information Centres are proving most valuable to all small firms throughout the country. We have continued the publicity about them. Indeed, they are flourishing now. We have had about 90,000 inquiries so far. About a quarter of those inquiries are from people who are thinking of starting up new businesses.

We have recently engaged consultants to carry out a thorough survey of customer reaction to the service to find out whether changes are needed to make it even more effective. I believe that this is a valuable way of helping small firms to succeed. We hope that the service will grow in future.

As I said in my opening comments, I do not under-estimate the problems facing all enterprises at this time. They are real and reflect the difficulties facing the whole nation. The Government are determined to solve those difficulties so that we can forge ahead. I believe that time will show that many of the fears about the consequences of our policies are groundless and that small business men have been done a disservice by their would-be champions who cry wolf every time any new policies are introduced.

Hon. Members opposite must bear in mind that, although factors outside the control of this country have played a major part in our economic problems, their policies during the last four years were not particularly helpful to the small firms sector. Before becoming a Minister I had close contact with small firms and received many complaints about shortages, and so on, especially in the latter part of 1973. Indeed, the introduction of the three-day working week damaged many small firms. These difficulties have been with us for a very long time. The Government are determined to ensure that small businesses of every kind are able to play their important part in the life of Britain.

Successive Governments have placed burdens of regulation and taxation on small businesses. To those burdens have been added inherently political measures to which small business men must have regard in their planning. Many of those measures may of themselves be reasonable and sound. It is their cumulative effect which is so difficult for the business community to understand or to combat.

I should like to list some of the measures that have to be taken into account by business men—measures not inherently of a business nature. First. VAT has created much paper work, and surely the small businesses exemption limit should be increased, as it is already too small due to inflation. Secondly. threats of multiple capital taxation—capital gains tax, capital transfer tax, and the proposed wealth tax—all create uncertainty and confusion. Thirdly, there are the high top rates of individual taxation of 98 per cent. and of 83 per cent. on earned income.

These taxes have the effect of overloading the debt structure of a business, and they discourage self-financing in favour of borrowed money. That, in turn, makes expansion and investment less safe for any business and, therefore, makes it more difficult for business men to raise money for any new programmes of development. This is apart from the threat to survival of the medium and larger size businesses arising on death.

Fourthly, political decisions make exports difficult or impossible to countries such as Rhodesia, Spain or Chile, and these work through to the small component makers in the economy.

Would the hon. Gentleman care to comment whether our membership of the EEC has added to these administrative and bureaucratic burdens on the small firm? I was contacted by a small firm in my constituency which manufactures hats which complained that, in relation to its imports and exports to and from the Common Market, it was being burdened with extra form filling and bureaucracy.

But not half so much as the in-again, out-again, come-again Finnegan policy which leaves small businesses uncertain whether we are to be in or out of Europe.

Will the hon. Gentleman give way?

I should like very much to enter into further debate with the right hon. Gentleman, but I promised to limit my time.

Fifth, there are Government deals with countries which have exceptionally cheap labour. For example, in the Press today there was a report of a case of subsidised competition of men's leather-uppered footwear from Czechoslovakia, Poland and Romania which comes in at half the price that the most efficient British firms, paying fair wages in this country, have to ask.

Sixth, there are often confused and complicated tariff arrangements with which firms have to cope.

Seventh, there are more Government-sponsored disparities over loans. How can a business man understand that it is right to give an enormous cheap loan to the Russians at perhaps half the rate of interest at which he can borrow money to improve the machinery in his factory in this country?

The eighth question is that of planning permission, often long delayed and causing grievous bottlenecks. The ninth is the industrial development certificates, which are often refused when for sound and sensible expansion. Firms are required to leave an area where they know that they can operate well and go to one where they know that they cannot. Tenth, there are the training board levies, which cause more problems.

Eleventh—the latest example—is the Press advertisement for the Price Commission, inviting the registration of small firms under complex regulations. Twelfth, is the Employment Protection Bill.

I am not advocating or denigrating any of these measures at the moment, but collectively they impose a burden of obligation with which smaller businesses, which do not have research staff, cannot cope. Solicitors and accountants often cannot answer simple questions on which business planning depends because of the complexity and uncertainty of the laws. Business men today spend far too much of their time talking about the effects of regulations and possible laws instead of getting on with their work.

It is true that successive Governments are responsible for this. The purpose of government is to make decisions; the purpose of Parliament is to talk about things; but the purpose of business is to get things done. It has been well said that no one wastes the time of those with something to do more than those with nothing to do. Let the Government, so far as they can, leave business men alone to get on with their jobs uninterrupted.

Government intervention is, of course, essential to secure fairness in trading, to bring security to consumers and for demand management. But when government tries to change the proper internal practices of business, it can only create confusion, even where the actions of government are most helpful—for example, with the 100 per cent. allowances for machinery purchases. These must be good when the taxation of personal earnings and profits is so high. They enable the replacement of old machinery. But in some cases surely it would be better to build up substantial sums of capital out of profits, to give a larger investment later at a more appropriate time. Surely it would be better just to let the firms make and save their profits for reinvestment.

Sometimes very simple solutions are the best. High profits lead to high investment, which in turn leads to high output, which in turn leads to high wages. On the other hand, low profits lead to low investment, which in turn leads to low output, which in turn leads to low wages. It is indeed as simple as that. There is no more to it than that.

Let the Government concentrate on macro-economics, but let the business community concentrate on how to do its own work that it understands. My message is: cut the endless Government measures which confuse all business planning and set business free so that our country as a whole may benefit from the prosperity of business.

The debate so far has shown that there is no monopoly of care for the welfare of the small business and the small business man. Evidence can be, has been and will be produced during this debate to prove that the actions of Governments over the years can be cited by either side to castigate the other side. The small business man wants not charity or special consideration but a fair crack of the whip. At the same time, however, he will accept that it is difficult to make a case for special exceptions for other elements in the business community. We are making a case not for special exception for the small business man, I hope, but for equity and fair play. In any society, some will be unable to stand the pace and the heat, and this is especially true among small business men.

I was interested in the comments of the right hon. Member for Leeds, North-East (Sir K. Joseph), who almost regretted that the co-operative movement was not as strong as it once was. Would that the co-ops were stronger and could recapture some of the zest of their early years. If the movement gets stronger, it will do so by penetrating the business sector. This will inevitably mean that some elements in the business community will suffer. I do not think that the small business men will thank the right hon. Gentleman for making those encouraging noises to the co-operative movement.

But I have news for the right hon. Gentleman and the House: the co-operative movement, without his good will and aid, is getting stronger every day. I declare an interest because of my association with the movement. It is one of those unique organisations which comprise both big and small businesses. There are co-operative societies with more than 1 million members, with more than £100 million-worth of trade a year, and small societies with less than 1,000 members doing less than £500,000-worth of trade. But the movement has this unique difference—the capital which runs a co-operative society almost overwhelmingly comes from the community, as does its management. The management is not controlled, as in many other businesses, from afar.

While appreciating the problem of the small business man, we must recognise that there have been some significant changes which have assisted him in the past year—although I recognise that there have been problems. For instance, great stress has been laid not only on the cost but on the accessibility of credit. I agree that a number of banks, one of which is the Co-operative Bank, are doing what they can to assist smaller businesses. But we should remember that in mid-1973 the interest rate which affected all other credit facilities was 10 per cent. By the autumn of 1973 it had risen to 11 per cent., and when the Conservatives left office just over a year ago it was 13 per cent. In the past year it has dropped successively from 13½ to 11½ to 11¼ to 11 to 10¾ to 10½ per cent., until last week it was down to 10¼ per cent.

So among the welter of information that we should let the small business man know that we are conscious of, and besides hearing what he has to say, we should remind him of some other factors. I am not putting this forward as a benefit, but it needs to be taken into account. When this Government put through the Prices Bill and activated the Price Code, one of its major measures in an attempt to curb profits was the provision that all businesses must operate on gross margins 10 per cent. below what they had been. But it exempted businesses with turnover of £250,000 a year or less.

We can get into a long argument about what makes a business big or small; Bolton has something to say about what is a small business. But a retail business that takes £5,000 a week is of a fair size. It is not the corner shop or a chain. A business taking £5,000 a week through one shop is not the smallest of businesses. Yet special steps were taken by the Government to exempt such businesses from the operation of the Price Code.

Reference has been made to the reasons why businesses are going out of existence. We have all received information from the National Federation of the Self Employed. Bankruptcies appear to be on the increase, and some businesses have gone out of existence. Bolton reminded us of the many reasons for this. It appears that they do not go out of business because they have been forced out. The biggest reasons for going out of existence, according to Bolton, are problems of succession, problems where the management—

There is a reason for bankruptcies which appears obvious to many of us. Bankruptcies have been rising under this Government. Were they not also rising under the last years of the previous Socialist administration, before the Conservatives took office? Is there not a connection?

The hon. Gentleman suggests that bankruptcies in 1974 were ipso facto caused by factors peculiar and unique to 1974. That is nonsense. I believe that close scrutiny will show that a business which went bankrupt in 1974 did so because of an accumulation of problems in 1972, 1973 and 1974.

What about 1969 and 1970?

Nineteen sixty-nine and 1970 were the last two years of a Labour Government, whose period in office should have been extended. The electorate showed common sense in 1974 and gave us a further opportunity.

The problem of succession is one of the major reasons why small businesses have gone out of existence. The other reason is that a small business may perfectly properly decide to sell out to a bigger business, because there is something in it for it. I see nothing wrong with that argument.

The other factor which reduces the number of small businesses is the changing pattern in consumer demand—the mobility of the shopping public, the establishment of the hypermarkets and the supermarkets. I do not claim that big business is better, but many small businesses voluntarily go out of existence in that way.

The Minister referred to a debate in the other place on 5th March. The Earl of Gowrie, when talking of the dangers to the small man, said:

"Because I feel that these policies are almost literally lethal, I must try to clarify dangers in the Conservative position as well. In recent decades there has been a tendency for my political Party to become associated in the public mind with a 'big business' ethic of hard selling, high consumption, and easy credit."

He then said:

"In practical terms, the business ethic weighs heavily on the self-employed; the supermarket heavily on the corner grocer."

He went on to say:

"There are, too, the little local difficulties of resale price maintenance and value added tax".—[Official Report, House of Lords, 5th March 1975: Vol. 357, c. 1258–9.]

The abolition of resale price maintenance by the Conservatives did more harm to the small business man than any other measure in the 1960s.

I turn now to the value added tax. We have heard a great deal from the Opposition about the punitive nature of the capital transfer tax. It will greatly affect the small business man. However, the great gripe of the small business man is the weight and volume of work which he now has to do in connection with VAT, as we see in the letter from the National Federation of the Self Employed, representing these unpaid tax collectors. VAT was introduced by the Conservatives. We must be fair and realistic.

I hope that my hon. Friend the Minister will take careful note that for many small business men the introduction of a multi-rate of VAT is likely to be extremely burdensome. I hope that it is still possible to reconsider the cost of bringing in new machinery and a great deal of documentation, not only to the co-operative movement and big business but to small businesses, especially pharmacies and chemists. They are very upset at the prospect.

The record of the Labour Government on small businesses, certainly by comparison with the Conservative Party is fair and credible.

In a short debate of this kind it is all the more imperative for hon. Members to be as brief as possible. Practically everyone who is in the Chamber at present is anxious to take part in the debate which must finish at 7 o'clock. There is no question but that we can accommodate everyone if hon. Members will be reasonable and show some fairness towards each other. Interventions lengthen speeches, because the hon. Member on his feet has to add to his remarks by replying to the hon. Member who intervened. It would be helpful if we could keep interventions to the minimum.

I want to make only two points. The first is to draw attention to a somewhat curious phenomenon. Despite the gravity of our present economic situation, and despite the fall in the value of money, consumer spending, far from diminishing, appears to be on the increase. Those whom one might have expected to be the hardest-hit by these circumstances seem to be not just spending more and more but spending on inessentials.

The reason is that all incentive for thrift, the expansion of businesses and self-reliance is rapidly being eroded and is disappearing. I should like to interpose a personal illustration. My mother was a refugee in 1917 from the Russian Revolution. Her philosophy was formed, when a child, in what might be described as a disintegrating society. It was her philosophy—and I hope that she will not mind my saying that it still is—that we should live for today, because tomorrow will take care of itself.

But if the good people of today do not have foresight for tomorrow there are evil men who will exploit the barren void that they leave. The Dark Ages after the collapse of the Roman Empire, the rise of the Nazis and the emergence of Stalin all show that this is true.

The kind of people who can normally be expected to be building up reserves of wealth for investment, expansion and saving have now concluded that none of it is worth while, that one might as well spend now and let the future look after itself. That is the attitude that seems to be abroad today. In other words, our social agriculturists, those who farm for tomorrow and not just for today, are saying to themselves "Let's eat the seed corn before it is confiscated from our barns and warehouses." All history has shown, from ancient Egypt through to modern times, that that is an early symptom of national disintegration.

I come to my second point, which leads directly from the first. Modern attitudes and economists have managed to obscure an essential truth which ought to underlie our whole approach to the special situation of the self-employed and small businesses. It is that wealth is the result of work that has not been dissipated but has been stored. It is, indeed, the seed corn. The purpose for which the storage takes place is to provide sustenance for the present, protection for lean years, and, above all, the creation of new resources for the future.

Those are basic human incentives, but there is another that is of abiding value wherever democracy counts. It is that the storage and creation of wealth are the essential concomitants of liberty, personal freedom and independence. Take away a man's personal wealth, however modest that affluence may be, even if it is merely hard-earned life savings, and one reduces him to a slave of the State, however benevolent or evil the State may be.

Those who would redistribute wealth believe that they are transferring independence to those who have been denied it. They are mistaken. The very process merely transfers the liberty of one set of individuals, most of whom have earned it through years of hard work, initiative and perhaps risky enterprise, to a bureaucracy.

rose—

I shall not give way, because I have promised the Chair that I shall be brief.

That bureaucracy, if it does not squander the wealth, certainly cannot hand it over to a single deprived individual.

Order. I appreciate the cut of the back of the hon. Gentleman's jacket, but I should like to see whether he has a two-button or a three-button front to it. I should be grateful if he would address the Chair.

I apologise, Mr. Deputy Speaker.

The debate is also about a justifiable resentment felt by many people in many sections of our community, a resentment based on past disillusion, present anger and future fear. Those fears are justified by the history of recent events. The Government have been warned. They must take account of them. My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said that where nobody owns, nobody cares. I would add that where nobody keeps anything, nobody will work to create anything.

The Opposition, in a number of speeches, have created an incredible philosophical meringue. There has been talk of inheritance, thrift and prudence. The hon. Member for Hendon, North (Mr. Gorst) talked of slaves, as if to suggest that those people who worked under an outright free enterprise system in this country in the last century were in some ways better off than their descendants today, as if their individual freedoms were better than they are today in a mixed economy. If the hon. Gentleman asked the great bulk of the population whether they would prefer to return to the days for which he seems to have such a hankering, he would find that he was in a small minority.

There has been thrust at us, not merely in this debate but in a whole series of debates this Session, principally on the capital transfer tax but also on other issues, such as the question of inheritance. It should be made quite clear that there is a distinction between a parent's natural desire to do the best he can for his offspring, to protect them from illness, to clothe, feed and educate them. But that is very different from the right of the offspring to inherit wealth or power accumulated by their parents. We on this side of the House have never said that it is not the duty of a parent to look after his offspring, to give them better conditions and better education. But we believe that we are doing just that for all the population. That is one of the reasons why there is a Labour Party, and why we are in power.

We recognise that fundamental right. We do not recognise any moral or social right of a person to inherit money when he has done nothing to help create it, and when many such people are totally unable to continue to hold it or are unsuitable to do so.

Does the hon. Gentleman want to confiscate it?

I hope that by the use of the capital transfer tax, by taking into the hands of the State money that would otherwise be inherited, we may be able to relieve certain of the earners and creators of wealth from taxation. The whole trouble of our society is that we have always taxed the creators of wealth much more than the inheritors. Over many years birth has been more important than merit. We on this side of the House believe that merit is more important than birth. We shall tax inheritance in the hope that as a result we shall be able to tax the creators and earners of wealth less.

I am amazed that the Conservative Party, which is supposed to stand for free enterprise, merit and the individual's having the fullest possible opportunity to succeed, should subscribe to a system —the system of inheritance—which directly mitigates against the opportunity of the individual to succeed. It prevents him from succeeding, because it puts wealth and power into the hands of those who have been born to them, rather than those who merit them, and it keeps them there.

It is also important to make it clear that we on this side of the House care deeply for small business men and small businesses. Conservative Members are wrong to suggest that the small business man is not related to the things which we are doing, because the small business man's prosperity depends almost entirely upon the prosperity of the bulk of the working population.

The people who spend money in the local shops are the working people who live in the neighbourhood. Every time a trade union succeeds in obtaining a rise for its workers—I am not here to discuss whether that rise is justified—the money is spent in the shops and businesses of the people we are discussing. Therefore, when we on this side of the House look after the working population, we are also looking after the small business man and the shopkeeper.

I end on a serious and positive note. Small businesses have great difficulties which stem largely from a lack of management skills on the part of most people in them. A man who may be particularly good at his job may well lack management skills. For example, a carpenter may begin a carpentry business of his own. When he is a one-man outfit it is easy for him to charge. He knows his overheads, and his cash flow is a simple process. The business may well expand, because his overheads are low and he can under-cut the competition, but he may not have sufficient expertise in cash control to realise that his overheads are eating into his profits. We then see the well-known small-business cycle of small businesses beginning, flourishing, and then becoming bankrupt because of their very success.

I feel that there is a very real need for help to small businesses on the question of management. I should like to make a comparison with the scheme run for small farms. It is called, I believe, the small farm scheme. It is run by the Agricultural Development and Advisory Service, and under it small farmers, who agree to certain provisions, are helped by the ADAS to keep their books and to understand their cash flow position and credit position. This scheme has been a very great success in enabling small farmers to manage their businesses better.

I appreciate that it would be a very major task to make such a system available to all small businesses. However, I believe that as a Government we must try to set up a system whereby the managerial problems of small businesses can be reduced and, in particular, education in the management of small businesses can be improved. There may even be a case for looking to teaching at schools in this respect. This matter must be improved, otherwise we shall be in a situation in which genuinely small businesses—I am thinking of the one, two or three-person business and not, say, a 50-person business—every time we introduce new taxation or other problems for them will find themselves in great difficulties in coping with their problems.

In conclusion, I ask my right hon. Friends on the Government Front Bench to look into the whole question of improving the management efficiency of small businesses.

:The hon. Member for Dudley, West (Dr. Phipps) has developed a rather curious concept of helping inefficient small businesses and clobbering the successful. My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) referred to the ô of small businesses in innovation and the creation of wealth, and to the value of continuity and investment in the future. My hon. Friend the Member for Hendon, North (Mr. Gorst) developed that point when he attacked the efforts of the present Government to prevent the creation of new wealth and the spread of wealth and to destroy the principle of being able to pass investment on to a succeeding generation.

I take up a point made by the hon. Member for Dudley, West. I do not think that my right hon. Friend was saying that anyone has a right to inherit. What my right hon. Friend was saying, I think, is that if a man who is successful in building up a business is taxed very heavily on his earnings and his savings, and the Government take his wealth away from him if he leaves it to his children or if he gives it to them before he dies, all that the Government are doing is saying that it is not worth saving or investing in the future. They are saying "You cannot take it with you. You cannot give it away, so you had better spend it."

That is the point that my right hon. Friend was making—not any point of principle about rights, but a point of practice about what those on whom the future of this country is likely to depend may well do, if right hon. and hon. Members on the Government side of the House prevent them doing what they would far prefer to do—that is, use their talents in a socially useful way by building and developing for the future.

I turn briefly to the one aspect of this particular point which the capital transfer tax has affected very sharply—that is, the spread of ownership. Let us not forget that the justification for this savage attack on businesses, on private businesses and family businesses in particular, is to redistribute wealth. Yet there is one aspect of the capital transfer tax that does the very reverse. It prevents or hinders the owners of wealth from redistributing it to employees in a particular company when that company has grown to a point at which such redistribution becomes possible.

Small businesses do sometimes grow even without the help of the Government —and with the "incompetent" management that led, for example, the late Lord Marks from a stall in Manchester to a chain all over the country. They grow, and not only in the retail trade but also in manufacturing and other aspects of our industrial life. When they grow they sometimes wish to go public or to make a share placing and get some institution or other to take up some of their shares. One might think that that would be an admirable opportunity for the Government, with their views about the redistribution of wealth, to encourage the existing shareholders in an unquoted company, the owners of a partnership or the proprietors of a business, when making a placing with a financial institution or selling shares to the public, to give or transfer them to their employees, either individually or collectively through a trust. But no. Now, of course, that attracts capital transfer tax.

We have elaborate provisions in the schedules to the Finance Act—I have forgotten whether it is yet an Act or is still a Bill—to exempt from some provisions of the new taxation trusts on behalf of employees. But they do not exempt such payments into such a trust. The legislation does not exempt transfer from a private company, partnership or business of part of the shares to a trust set up on behalf of the employees. For example, if a company were making a placing of, say, 30 per cent. or 40 per cent. of its shares and wished to put 20 per cent. or 30 per cent.—whatever figure one cares to name—in trust for its employees, that transfer would be a gift from the existing shareholders and would be subject to capital transfer tax, as I read the legislation.

There is a similar disadvantage on distributions to individuals from trusts on behalf of employees. The way in which that is phrased in the particular schedule prevents the distribution from a trust which may be set up by a company, private or public, for the very purpose of spreading the ownership of its shares among the people who work for it.

There are many ways of spreading share ownership and many forms of share ownership schemes. Some of them involve the setting up of a trust for a limited period, and after that period has ended —whether it is defined by years, or targets of success, or turnover, or profit levels of the company—the beneficiaries of those trusts become owners of the shares concerned.

I am asking the Minister to consider very carefully whether he expects us to accept that his Government's views really mean to redistribute wealth with the difficulties of the present legislation on capital transfer; or whether they will make changes to help spread the ownership of wealth among those who the hon. Member for Dudley, West said helped to cerate it—to help earners become owners. That is an ideal to which we of the create it—to help earners become owners. which he and his colleagues, year by year, make harder and harder to attain.

More and more people in more and more activities are questioning the cult of bigness, whether it be in States, in local government, in schools or universities, or in industry or commerce. The virtues of the small entity are being discovered now anew, and voices of such prophets as Leopold Kohr and Schumacher are being heeded with growing sympathy.

If the pressures of the big State in our technological society and of big business are to be withstood by people, there must be radical decentralisation in a pluralist order, in which small enterprise can flourish and in which the autonomous person can stand on his own two feet in the face of the State.

However, although an awareness of the value of the small entity grows as people are increasingly crushed by the big Governments—whether they be Labour or Conservative—this has not brought encouragement to the small business enterprise. On the contrary, the small enterprise is discouraged by having thrown on it an intolerable burden of work and of rates and taxes. VAT, as we have heard this afternoon, was imposed by the Conservative Government —and that, we can note, with a view to membership of the Common Market. The small shopkeeper, the guest house or hotel keeper and the garage keeper were shamelessly compelled to act as the State's agent in collecting taxes.

The extra burden imposed on people whose hours are already far too long, almost unbearably long, is certainly excessive. A small garage owner in my district, who is open seven days a week, spends 24 hours each week on VAT because in his case it is divided into four different categories. Small firms have no staff to do this work. If they employ accountants the cost can be crippling.

Self-employed people face a stiff increase in national insurance contributions. If a shopkeeper with a wife and two children earns £2,000 a year, he will pay £50 a year more in tax and social security payments than the ordinary employed man on the same wage. The benefits he would get are smaller. To this must be added the effect of the capital transfer tax.

While we welcome the Government's concessions to small firms, small farms and small businesses, the position is still perilous. In Wales 52 per cent. of farms within the 50–150 acre group are owneroccupied—a much higher proportion than in England. Even at the reduced rate, where is the farmer to find the money to pay both capital gains tax and capital transfer tax?

In 1972–73 Welsh farmers had an average annual income of £1,602, £261 less than the average male income for all jobs in the United Kingdom. Where are they to find the money to pay these taxes?

The last and most onerous burden is the rates—general rates, sewerage rates and water rates. To illustrate the situation I shall give three examples from Carmarthen. The first is a guest house which last year paid £160 in general rates and £9 in water rates, a total of £169. This year it is paying £268 in general rates and £50 in water rates, a total of £318. The second example is that of a small hotel which last year paid total rates of £4,050 and this year is paying £11,850. The third example is a small shop which last year paid £962 in general rates and £46 in water rates, a total of £1,008. This year it is paying £1,455 in general rates, approximately £363 in sewerage rates and approximately £168 in water rates, making a total of £1,978. The rates for the small garage to which I referred increased by 800 per cent. between 1972 and 1975. It is calculated that next year the average increase in Welsh rates will be 51 per cent. compared with an average rise in England and Wales of 25 per cent. How can the small business bear this crushing burden?

It is essential that local authorities have the power to raise some of their own taxes in a more flexible system that suits the potential of the area. For example, there could be a tax on caravans and second homes in my area. However, this is a matter for the Layfield Committee, as is the consideration that must be given to transferring from local authorities the cost of teachers' salaries, which comprise such a large slice of their budget. It is essential that this is carried out without further encroachment on the autonomy of local education committees and educational policy. The universities have shown that dependence on the central Exchequer need not of necessity destroy local autonomy.

It has frequently been said that the Government are attempting in some way to destroy small businesses. The tale of woe has been told many time in debates on the Finance Bill. So great have been the cries of lamentation, especially about the effects of the capital transfer tax, that we might be forgiven for thinking that the prophecy of St. James has at last been fulfilled when he said:

"Go to now, ye rich men, weep and howl for your miseries that shall come upon you."

I am not suggesting that that day has come.

I do not wish to become involved in the argument about capital transfer tax and self-employed contributions, although during the debate on the Finance Bill it struck me as odd that the Chief Secretary to the Treasury did not subscribe to the idea that small is beautiful. I subscribe to the idea that small is indeed beautiful. I also subscribe to the idea that "small" is important in terms of the number of people employed in small concerns.

Hon. Members have raised the question of the number of people employed in small businesses. The figure is difficult to calculate. In a Written Answer last Monday I was told that over 14½ million people are employed in units of less than 500. Of course many of those units are sub-units of larger concerns. Even taking that into account, a high proportion of the work force in this country is employed in small businessses and companies.

The importance of small businesses as employers is common ground between all hon. Members. I hope that it is also common ground that there is great virtue in retaining and encouraging elements in our economic, social and industrial life which are small and humanitarian. To destroy the small, either out of malicious intent or out of some inadvertence, would be quite inexcusable. Yet that is precisely what Conservative Members are accusing the Government of doing, only they tend to put more emphasis on the malice than on the inadvertence. They are saying that the Government's actions will result in one of two things. Either small businesses will go out of business and millions of people, according to the large advertisements in the newspapers, will be thrown out of work, or small businesses will be gobbled up by the big battalions.

The Government's proposals on capital transfer tax are not half as swingeing as Conservative Members would have us believe. That is not the point I wish to make. There is a third way. I spent part of yesterday morning at a conference listening to two people speak of their experiences. One was a man who had inherited a business. Because he is a man of high moral principle he decided that he could not continue as the sole owner of the business and simply transfer it to his children. He decided not to "give" the business to the employees but to "transfer" the ownership to all the people working in his enterprise. [Interruption.] It is now a commonly-owned enterprise and an extremely successful one. [An HON. MEMBER: "They cannot believe it."] Perhaps not, but that is the case. He is a man of high Christian principles. So was the second man who spoke. By his mid-30s he had been offered the managing directorship of a considerable company in this country but he turned it down to become involved in a small, common-ownership enterprise.

If Christian principles afford an exemption from liability to capital transfer tax, this is good news. The hon. Member will find, however, that transferring a business to a large number of workpeople carries exactly the same liability to pay tax as if the business had been transferred to that person's children.

I am not making that point. I am talking about the motives from which these people operated. This man did not want the business to be transferred to his children. He did not believe that that was a particularly high motive. He had a much higher motive in transferring ownership of the business to all the people, himself included. who worked in it.

The other man I have mentioned was a managerial "whizz-kid" of considerable talent and experience. I found the speeches of these people extremely moving and inspiring, although they would not thank me for quoting them or saying that about them.

There is this third way of making the people working in the company the joint owners. This is the way of common ownership, or co-operative ownership.

We have heard a great deal lately about manifesto commitments. There is an old and basic commitment in the Labour movement which stands behind any manifesto on which we have fought an election. That is the commitment to common ownership. The appropriate form of that common ownership may well be nationalisation for some industries. There are other smaller and more local forms. Common ownership of small businesses is one of the most important of those forms. Such ownership does not guarantee commercial success, although it so happens that the common ownership firms of which I have heard have generally had an excellent commercial record.

Common ownership in no way isolates them from the cold wind of economic recession. It does not solve the human problems. What it does is to provide a framework in which people can grow and develop and work at their relationships with one another. Such a framework is essential. Without it there would be conflict which would be destructive or which would simply be suppressed. Without it human freedom—we have heard much of this—cannot be truly exercised. Neither can democracy develop. Like the setting up of a comprehensive system of education, it is the first step in a long journey.

I know that many Conservative Members have small businesses. I ask them seriously to consider the experiences of the men I have quoted. To the Government I make the plea that they do all in their power to encourage common ownership, to transform the small so that it becomes even more beautiful. The idea of co-operation is as old as the hills. Like all good ideas, it has to wait for the time when it can come into its own. I believe that that time is rapidly approaching. We should do all in our power to give it every possible encouragement.

rose—

May I again appeal to hon. Members to make speeches of roughly five minutes duration? Time is getting short.

We must thank the Opposition for giving us the chance to discuss this subject. We all know of the pressure which has brought this debate to the Floor of the House. It results from the growth of the self-employed protesters who have formed their own union to protect their interests. I say "The best of luck to them." In one respect at least these people have been effective, in that they have woken up the Conservative Party which, they felt, had been their protector over the years but which has deserted them recently.

Rightly or wrongly this section of our community feels persecuted. It is fed up with form filling. It does not understand the national insurance scheme and thinks that it has been cheated. It does not understand the rates situation. It certainly does know that it is feeling the full economic pressures current in our society. This is true of shopkeepers, farmers, or people involved in the building industry. I represent a rural but semi-urban constituency, and I know how important this section of the population is in such a constituency.

It is difficult to elicit relative percentages of self-employed. The 1971 census suggests that, for the groups I could identify, the Truro constituency, which is typical of many in this situation, has about 10·5 per cent. of the population in that category while the national average is 4·7. We all know that the figures are higher than this, but where I could identify this sector those were the figures suggested. Those are low-wage areas and exemplify the pressures on rural life today.

These people form an important section of society and deserve our protection. They have written letters to me in substantial numbers recently, complaining, among other things, about VAT. I believe that there is a case for some form of tax allowances for the small, self-employed person to help him overcome his VAT difficulties. The medium-size firm employs an accountant and charges those services against tax. The large company employs a network of accountants, the cost of which is legitimately charged as an expense of running the business. The individual who does the work himself gets no such benefit for his efforts.

It is time that the £5,000 exemption on VAT was changed, at least brought up to date to take inflation into account. We Liberals were disappointed that our amendment to the Finance Bill, an amendment which would have had this effect, was never called. We have a Liberal newsletter called "VAT News No. 5". This deals with the new, super-simplified VAT scheme. Simplified or not, it extends to 94 pages. Such complications present difficulties for the man working on his own.

We have introduced a marginal tax rate of 41 per cent. on an income of £30 to £31 per week for the small self-employed person. I spoke and voted against this. This 8 per cent. rate on the national insurance contribution is unfair. The whole scheme is ludicrous. We do not buy stamps to pay for defence or for education and we certainly do not buy stamps to pay for our roads. It has been said that on the day a person claims his pension he will have paid for only about 60 per cent. of the benefit. This, it is said, is the main benefit we get from our contributions. As a man gets older the figures for his pension get worse. It is time the whole thing was scrapped and the money collected by way of more normal forms of income tax. In this way there would be a fairer spread of the tax burden. Perhaps a payroll tax on companies would assist. If we are to maintain the present system there is a case at least for permitting some of the national insurance contributions to be charged against income tax.

On rates, I make no great comment about the reforms of local government, but it was not the Labour Party that pushed them through but the Conservatives. Perhaps I may say a brief word in defence of local councillors. It was not they who reorganised local government or reorganised planning to the ludicrous state it has now reached. Local councillors do not have the power to put forward reforms which are so desperately required. The reorganisation of local government should have gone hand in hand with a Layfield-type investigation, and this should have been done in 1971 or 1972. When the blame is to be handed out for the present rates problem that faces small businesses—and not only small businesses—it is only right that those who are complaining about the rates should know where the blame rests. All the public relations exercises on Private Members' Bills, and we all know how much effect they will have, will not overcome the tremendous problems which have been caused.

Whether these small business men are persecuted or not they are feeling the full draught of the economic pressures and difficulties. They feel that they are carrying an unfair burden, and it is up to the Government to try to overcome some of these difficulties. These people make up an extremely important part of our economy, and without their initiative and enthusiasm—and it is enthusiasm we miss in so many sections of our economy—the country would be a much worse place.

I wish to speak not about the general principles expressed in the debate but, briefly, about the effect on my constituency of the Government's treatment of the self employed and the small business man. I do so because I believe we are at a crossroads. If we do not hear the cries of anguish coming to us, a fundamental part of our way of life will die, and, once dead, nothing will resurrect it. The whole future of individual business enterprise, and therefore individuality itself, is at stake.

Communities like the one I represent—the small towns of Petersfield and Alton and their surrounding countryside and villages —depend on these small businesses for their very lifeblood. If that is true of East Hampshire, how much more is it the case in some of the remote parts of Scotland and Wales? Village life is based upon the small family store and the small local concerns, and when they close the whole community feels the effect. Four hundred such concerns are currently failing every month, and they are not replaced. Each failure means one more journey to town and one less source of local employment. Those who are concerned about urban deprivation will soon find the corollary in the villages. As the small businesses move out, the chain stores move in, and the vice of centralisation and depersonalisation takes a firmer grip. Anyone who does not believe this need only look at the postbag that I and, no doubt, many other hon. Members receive.

The self-employed man and the small business man are individualists. They stubbornly refuse to conform to half-baked theories of State control and the desire for security above all else. This type of man is an enterpreneur, a creator of wealth not only by his toil but by his enterprise and ideas. While others are squabbling over their share of the cake he is making the cake larger. The wealth that he creates—or what is left of it by the taxman—is private wealth, but it is wealth that benefits the whole community. It is a cohesive and civilising force that binds people together, a force that requires self-discipline, though that may sound a strange word in some parts of the House.

Slapping on penal rates of taxation and contributions is not giving justice to the self-employed and the small business men, and I suspect that the Government knew that. I suspect that they calculated that it could be hushed up or fudged and that they would get credit for keeping down the contributions of the employed more than the employed could reasonably have hoped. Amongst the many letters that I have had on this subject was one from a group of the parish priests of the 11 parishes in the Bishops Waltham Deanery, and of all people surely there is least justification for penalising the Church. I have had many letters from confectioners, tobacconists, newsagents, nursery school headmasters, veterinary surgeons—the list is endless and it shows how widely these grievances cut right across all aspects of our society.

Here we come to the nub of the problem. The Government have abdicated their responsibility for protecting the weaker and they have abandoned those most admirable people who struggle on because they value their independence, dignity and ability to fend for themselves. They do not fit into an easily regimented pattern. They are the artists and musicians—often the most creative members of our society.

I do not say that all the self-employed are badly off, but they are such an immensely varied group of people that it is wrong to collect them together and tax them without consideration for what they do. It is almost like sticking a needle into every fifth name in the telephone directory and putting an extra tax on those selected.

I have more to say but I want to be brief and to give other hon. Members a chance to speak. I have been in this House only for six months but I have noticed that every time the Minister comes to the Dispatch Box he talks about the past and about the faults of the last Government. He talks about everything but what is to be done for the future. May we tonight hear from him not whose fault it was, because I am certain that both sides are to blame, but what he is going to do about what has become an unfair and intolerable burden for the small business men and the self-employed in this country.

This debate is founded on a fallacy. It is founded on the astonishing assumption that the Conservative Party is the party that has some special sympathy with and understanding for the plight of the small business man and the self-employed. That is utter nonsense, and there is no evidence to support that contention. It became apparent during the last Conservative Government that a multitude of small traders were going out of business or were at great risk because of the activities of the take-over merchants and the asset strippers. A great number of businesses were absorbed or dissolved under that activity, and the purpose of the operation was not to provide greater efficiency or a better service but simply to maintain or increase price levels and to concentrate profit into a more restricted area. That is how small businesses were put at risk under the last Government.

I accept that at one time private enterprise was abrasive and aggresive and that the captains of industry took great risks with capital. Perhaps to some extent the ordinary citizen eventually benefited from the spin off of these activities. But this buccaneering has long since gone. Today capitalism is cannibalistic. It devours competition, and to associate capitalism with entreprise these days is to practise deception.

The position now is that wealth and power are accumulated not by competition but by the creation of private monopolies which are accountable neither to the customer nor to the country.

What about the nationalised industries?

The nationalised industries are certainly accountable to this House, and that is more than one can say for private organisations. So far from stimulating competition, the modern capitalist aims to ensnare and extinguish any thrusting competition and the rôle of the Conservative Party in this is to protect and preserve the system. The Conservatives seek to preserve what is obsolete and inefficient.

That is understandable, because their income is drawn from this system. That is how they manage to maintain themselves as a political party. It is clearly absurd that the party that is dependent on financial support from the giants of industry and commerce should express anxiety about small businesses.

The recently established Federation of the Self Employed is an interesting development. I do not doubt the integrity of most of the people who have enrolled under its banner. The great danger is that there will be yet another take-over bid. The independence of the association is already at risk. It is under siege by the Tory Party, and that is one reason for the debate today. The Tory Party is desperately anxious to win friends and influence people.

Many of us recall the existence of the famous Housewives' League, which was taken over by the Tory Party when it was sinking fast and used for electoral purposes. What happened to the Housewives' League? It became defunct because it had served its purposes. I remind the self-employed that the new association is in the position of the lady who went for a ride on a tiger and ended up inside it. They should beware of the company they keep and should look long and hard at those who are attempting to bewitch them by the debate today. The Conservative Party may shed crocodile tears on their behalf, but it also possesses crocodile teeth and, given the opportunity, will gobble up the organisation completely.

By the nature of their calling the self-employed include a wide variety of individuals who have little in common. Amongst the self-employed are the small shopkeeper and the private tradesman but there is also the pop star and the financial wheeler-dealer. It will be interesting to see who most influences the policy of the new organisation, because so many of different beliefs sail under the same flag.

It is crystal clear that a huge area of our economy is administered by small business people and administered very efficiently. I have never believed that "big is best". The lunatic variations in local government boundaries have demonstrated that it is not. Many services are superior simply because they operate close to the customer and have an intimate understanding of local circumstances.

There is great scope for a wider contribution at this end of the economy. I should like to see an extended involvement by local authorities. The surveyors and solicitors at the town hall could provide a cheaper and more efficient service for people who purchase their own homes. There are many other ways in which municipal enterprise could be a stimulant to the rate fund rather than a drag on it.

There is growing recognition of the success of co-operative ownership, and throughout the country workers are co- operating and proving that the work force has the capacity to run its own industry efficiently and competitively. The National Enterprise Board is not designed solely to assist the giants of industry. Many small enterprises will be well pleased when the Department of Industry sets out its full stall.

Many of us have a genuine respect and affection for those engaged in small business. I warn small business men that the party that represents the monolithic corporations can offer naught for their comfort. Small business is directly dependent upon the prosperity of the broad community. The small shopkeeper is the first to feel the crunch at times of industrial stress. The three-day week was the death knell for many small traders. A party or Government that invites industrial conflict and confrontation is the natural enemy of the small business man and the self-employed.

rose—

Order. I know that the hon. Member for Argyll (Mr. MacCormick) will speak for only five minutes.

It is ironic that the Under-Secretary of State should appear to claim some merit for so many discussions having taken place on the self-employed under the Labour Government. The reason for the extent of the discussion is clear. The self-employed among our population are suffering as they have never suffered before. However, I am not here to lambast the Labour Government. I am not here to apportion blame between the Labour Party for its Social Security Act and capital transfer tax, on the one hand, and the Conservative Party and the introduction of VAT, on the other. We must try to be more positive.

One of the most interesting speeches this afternoon was that made by the hon. Member for Truro (Mr. Penhaligon) who had gone to the trouble of looking through the 1971 sample census forms to find out the size of the problem in his constituency. I have done the same. I am surprised to find that more than 16 per cent. of the working population of Argyll are self-employed. When one adds to that 16 per cent. all the people they employ, the element of self-employed in my constituency becomes substantial.

I gained the impression from the speech made by the hon. Member for Cannock (Mr. Roberts) that there are still hon. Members on the Labour side who tend to think of class. I assure him that the self-employed in my constituency do not form any social class. Far from it, they form a broad cross-section of the population.

During the last few weeks I have spoken on this problem at non-political meetings throughout Argyll. At the largest meeting, which was held in Oban, whose population is only 6,000, more than 300 people attended the meeting. That is the measure of the depth of feeling amongst all self-employed people of all classes—to use the sort of expression that Labour speakers have tended to use in the past.

I never mentioned the word.

The implication was clearly there.

I wish to develop one aspect raised by my hon. Friend the Member for Hendon, North (Mr. Gorst), who spoke of the importance to the self-employed of the concept of investment. I believe this to be a vitally important matter which should not escape the attention of hon. Members. Whether people work on their own account as farmers or builders, they are building up their enterprise and investing funds which would otherwise be dissipated in a profligate life.

I conclude by asking hon. Members of all parties to think of positive measures to improve the position of the self-employed.

I wish merely to say a few words about the position of small businesses, which are a vital part of our industrial sector. From that sector will come the entrepreneurs and those who win exports for us in future. Scotland has perhaps a higher proportion of such businesses than has the rest of the United Kingdom.

It has been fashionable in recent times on both sides of the House to talk as though we had our political thinking wrong and had made mistakes. I think that some of our business beliefs are wrong, too, in that we worship the goddess of size—as the hon. Member for Carmarthen (Mr. Evans) also mentioned—and that this has damaged industrial enterprise. Where do we find inefficiency? Where do we find a lack of competitiveness? Where do we find poor management and strikes, and where is morale not good? I suggest that it is in large firms and nationalised industries—in both the so-called private and the so-called public sectors. There is little point nowadays in asking a person whether he feels it would be better to work for British Leyland or for British Railways. They are rather similar. In their previous incarnations, British Railways was separated into the LMS, the LNER, the Southern Railway and the Great Western Railway, and British Leyland was separated into Jaguar, Rover, Austin and Morris, and they were much better firms individually then than they are collectively today.

When a small firm goes bust, it goes out of business. With a large firm or a nationalised industry, the State comes along and bails it out with taxpayers' money.

Looking towards the god of size has another damaging effect. What happens to a local community when a small firm is taken over? The main reason for firms being taken over is the taxation policy of successive British Governments. What happens next is that we get what is called rationalisation, which is really the beginning of inefficiency because a firm finds it difficult to compete with other small firms. The final death knell comes when head office sends a chartered accountant to be the chief executive. That is usually the end of a small thriving business.

What happens to local interests? Firms of this kind for many years have supplied local councillors to authorities. The big firms say that their employees have not time for this work. The small firms have supported local charities. Now the big firms say, "We shall covenant these at source and deal with them in that way." Therefore, the community suffers when businesses grow from small to large.

Right hon. and hon. Members on both sides of the House should be thinking of encouraging small businesses, for the sake of the country's future. They should be given every encouragement instead of every discouragement.

In the few minutes available to me I want to make two substantive points. However, before coming to them, I want to refer briefly to one matter raised by the hon. Member for Aberdeenshire, West (Mr. Fairgrieve) when he spoke of inefficiency in the nationalised industries. I do not know which industry he was referring to, or which part of that industry. but I ask him to come a little more up to date and to recognise the increasing evidence that labour productivity in the nationalised industries bears comparison with that in any other private industry. be it large or small.

The hon. Member for Argyll (Mr. MacCormick) accused Government supporters of introducing class into the argument. I have been sitting here for most of the debate and I have not heard one speaker use the class argument. Not once has class been mentioned from the Government benches. Whenever it has been mentioned it has come from an Opposition Member. I remind the House that many of the people whom we are discussing today are not members of the Tory Party, of the Liberal Party or of the SNP. They are members of the Labour Party. I shall not argue about the statistics. I simply make that point.

Like others among my hon. Friends, I represent a constituency whose prosperity has been based upon a thriving small business sector, and I should not support any Government measure likely to undermine that basic prosperity. I believe that none of the measures which my right hon. and hon. Friends have introduced will have that effect.

I come, then, to the first of my two substantive points. It refers to town planning In that connection I have considerable sympathy with what the right hon. Member for Leeds, North-East (Sir K. Joseph) said. Many local authorities, when they were carrying out clearance schemes, swept away completely many small, back-street business men who in the past had provided employment not only for themselves but also for others, albeit in many cases only a handful. Local authorities as well as central Government must bear the responsibility for this. If it is not too late, I urge local authorities when they are carrying out clearance schemes, to ensure, as my own local authority does, that any small business men in a clearance area are provided with alternative accommodation, if necessary purpose-built accommodation, so that they do not go out of business, so that they have alternative premises, and so that they may continue to thrive.

The second of my substantive points concerns the difficulties faced by small business men as a consequence of the effects of their bigger brothers. I hesitate to call them "bigger brothers" in this context, because it is really a case of dog eat dog. Smaller companies, especially those dealing primarily with the large multi-store outlets, find continually their profit margins decreasing. This happens a great deal in the hosiery and footwear industries. This continual paring of profit margins does not benefit the consumer. Many of the multi-store outlets also deal with the low-cost supplier countries, and I can guarantee that there is practically no difference between the retail prices of many hosiery and footwear articles produced at home, where the profit margins of the producers have been pared down, and of imported articles from a low-cost supplier. Here it is a case of a large company paring down the profits of small business men.

I hope to hear my hon. Friend say that be is considering seriously making a further investigation into the relationships between small businesses and large businesses, especially those concerned with hosiery and footwear.

It is a commentary on the times in which we live that there should be such widespread discontent and unease among small business men and the self-employed. I find this in my constituency, where we have always had a tradition, common in the West Midlands, of sturdy independence and of men leaving the shop floor to start on their own. Many famous businesses have started in this way. It is part of the fabric of our industrial life.

We all know why small business men and the self-employed are so unhappy and unsure of their future under this Government. The unfairness of the rise in their national insurance contributions together with the lack of benefit, and the arbitrariness and colossal rates of VAT, are but two outward causes of their discontent, but what really disturbs them is that they feel that this Government are hostile to them and hostile to any entrepreneur who is ready to have a go. It seems incredible that this Government should not back those who are the creators of wealth—some 2 million of them who employ another 4 million.

It is fitting that at this stage I should declare an interest. I am the proprietor of a small consultancy business. I gave up a salaried job with a great and famous firm to start on my own with a partner at the age of 41. The business has prospered, but now we have the cloud of the capital transfer tax over us and the worry about what, if anything, I shall be able to leave my children. I have been enabled, by giving up a salaried post and becoming self-employed, not only to feel that I have a stake in this country but to stand for Parliament, which no salaried man can do. We have many trade unionists in this House. We have many who were directors of companies. We have too few practising industrial managers. They cannot afford to get here. I took the risk, and I have got here. Now everything that I fought for and built up is put at risk by this Government.

Do the Government want everyone to belong to the Civil Service, to the nationalised industries or to the large firms? Why are the Government so vicious to the small man? Is it his sturdy independence which they so dislike? Is it hatred of the professions and their high standards? Anyone going to Europe, especially to France, sees that the small business is so well entrenched that no Government would dare harm it. It is no wonder that France is already very much further ahead than we are.

If we wish to raise productivity and prosperity, if we wish to raise ourselves from the inertia and lethargy that we now see, the Government must look again at what they are doing to the small man and to the small business. These are the people who have the inventions, the drive and the guts. They are the people who one day, if they prosper, will make small firms into large ones.

This has been a short debate but a worthwhile one, and if there had been more time many more hon. Members would have spoken. Perhaps I might venture, in the words of the immortal Lord Stansgate, to say "Thank you for your company".

We have been debating the problem of small businesses against the background of accelerating inflation, and, as we all know, this means that companies need more working capital. One of the pronounced features of the present Government's tenure of office has been the way in which they have taxed away from small businesses the essential working capital which they had rather than giving them the chance of accumulating more, by bringing in a Budget with increases in corporation tax, advance corporation tax, and income tax, and so on, all stripping away the money that is needed to finance a business.

For the large business the answer is provided by the Secretary of State for Industry, who provides cash with strings. I realise that this fits in with the concept of the Labour Party's determination to transfer wealth, power and decision-making into the hands of the State. Resources are more and more allocated by centralised decisions or by bureaucrats and the pressure of politicians. It is the grand Socialist concept. The Chancellor of the Exchequer takes, and the Secretary of State for Industry provides aid with strings, and so, without even a nationalisation Bill, there passes into the hands of the Government increasing control over the enterprises of this country.

What of the small businesses? They are equally affected by rising costs and by excessive taxation, but they have no one to whom they can turn. In effect. the Government are castrating the small business sector and then complaining of its lack of virility. This is the forgotten sector, or it would be if it were not for the Opposition who continually draw its problems to the attention of the Government.

These small businesses were not forgotten before the election. We then had the plans of the Labour Government, including those for the regeneration of industry. They said then that

"in times of economic difficulty it is often a small business man, dependent to a great extent on personal wealth as a source of finance, who suffers the greatest hardship."

That is right. They said:

"The Government therefore are reviewing the problems of small businesses and will put forward separate proposals to cater for their special needs."

That was last August, and we are still waiting for some of them, although to be fair it must be said that we have had some of the special proposals.

The self-employed have been singled out for increased contributions. Corporation tax is up and advanced corporation tax has been introduced. A wealth tax is proposed, and we have the Employment Protection Bill. We have had capital gains tax and the inflation-increased effect of it. All these things have been brought in against the background of increasing inflation. The Government have introduced measures, but hardly those which will support or help the small business community.

We all knew that when pensions went up last summer they would have to be paid for, but what we did not expect was that the increase would come from a reduction in the average amount paid by the average employee and that the self-employed would pay a savage and disproportionate increase. I call on the Government today to ensure that in the Budget which they will introduce within the next month or six weeks they take some steps to help this group of people. I realise that it will be asking too much to expect the Minister to withdraw the social security measure which increased the contributions of the self-employed, but I ask him to consider very carefully whether he can make the contribution allowable for tax. I ask him to do this when he offers advise to the Chancellor of the Exchequer for his next Budget.

I should like to sum up the problems of small businesses under three heads—time, money and motivation. I propose to deal first with time.

One can define a small business in a number of ways. Bolton described it as employing 200 people. The tax law defines it as a company with profits up to £25,000. I define it as a company where there are one or two working proprietors, and it is their ability to cope with the mass of regulations, which consume their time, that is the key to the amount of time that they can spend on the productive side of their business.

So many of these small business men are trapped in a web of controls and regulations of growing complexity. My hon. Friend the Member for Upminster (Mr. Loveridge) drew attention to this. They are caught up with price controls, profit regulations, returns to the business statistics office, consumer protection, hire-purchase regulations, training boards, labelling regulations, the Trade Descriptions Act, VAT calculations, wages councils, Factories Acts, contracts of employment, and so on. The list is endless yet all this constant outpouring of stuff has to be observed by the hapless manager before he can start to think about the productive side of his business. All these things may be individually justified, but cumulatively they are suffocating initiative. That is one of the major factors which face these small businesses when they think about the time factor.

The suggestion that the next Budget should contain multiple VAT rates applying to the business community will, if implemented, be the straw that will break the camel's back. I join the hon. Member for Edmonton (Mr. Graham), a Government supporter, and the hon. Member for Carmarthen (Mr. Evans) in what they had to say. I agree with the illustration used by the hon. Member for Carmarthen to show the difficulties which even the two-rate petrol tax brings for many garages.

I propose to deal next with money. A business needs more money today than ever before, because the cost of stock is up and because of the amount of working capital that is required. The Government gave some relief in the autumn Budget against stock appreciation, but not for the small business. The business which has £25,000 worth of stock or less received no help at all.

The Minister will, no doubt, say that the Government have given a bankable assurance about help in the next Budget. I want to know from where I can borrow against this bankable assurance. What bank will lend money on the strength of that? In 1974 compared with 1973 there was a 65·6 per cent. increase in bankruptcies. Where can these companies go for a bankable assurance? What will be done to give them the money? Will they be resuscitated or helped? They cannot be, and the Minister knows it. That was a bogus promise.

One sympathises with the Minister who has responsibility for small businesses, and we are grateful to him for what he said today. I agree that we do not want subsidies for small businesses, but the logic of the case is that we should not tax them so much, that we leave them with their profits to fructify in their businesses, and that there is a reduction in corporation tax across the field.

I share the Minister's anxieties, but one has to ask what power he has and what influence he can use to put things right. His heart may be in the right place, but my hon. Friends are entitled to ask what influence he has. If he is no more than a postman conveying our views, worries and concern to other Ministers, that is not good enough in terms of doing something to help small businesses. He must succeed in persuading the rest of the Government of the rightness of the case which I believe he understands and sympathises with.

Looking at the problem in terms of money, one has to mention the wealth tax because already it is casting its shadow ahead. I know that Labour Members believe that accumulations of wealth are wrong, and that they should seek to distribute that wealth from the individual to the State. I see some hon. Gentlemen opposite nodding and others shaking their heads, but the point is that a business can be prosperous only if money is invested in it, and if the Government tax people that means taking money out of the business. Already many of those running small businesses are saying to themselves "We must take money out of the business so as to have the cash to pay the wealth tax", because they cannot pay the wealth tax by offering part of the business to the Government.

I come finally to the question of motivation. My hon. Friends and I believe that the Government have not the faintest comprehension of what makes people sweat long hours to build up a business. Above a certain size and when the proprietor is over a certain age, it is not what he is going to get out of it for himself. He could in many cases sell his business and live off the invested proceeds at a higher standard of living than he would get by continuing to work in the business. When a man reaches 50 or thereabouts his interest is in preserving what he has built up for future generations, in seeing that there is something that continues for posterity. This is a basic human trait. If we defy it, or fail to recognise it, we work against the grain of human nature, and for the destruction of people's motivation.

I am always interested when human nature is mentioned. I mentioned a person who appeared to act from quite different motives. He is one exception. The hon. Gentleman said that human nature is such that people act in a certain way. I have quoted the case of a man who acted very differently, and that knocks a big hole in the hon. Gentleman's argument.

I am sorry that I gave way, Mr. Speaker, in view of the brief time which is available. I apologise for not dealing in depth with what the hon. Gentleman said. I will simply say that there are of course people who operate from purely altruistic motives, but I do not think that there are many hon. Members who are sufficiently unrealistic as not to recognise that the motivation to which I have referred is one of the major motivations, and almost the only motivation of a man over 50 is to continue to build up his business for his heirs. The hon. Member's friend was able to do as he said before the introduction of the capital transfer tax. Had he waited until afterwards, his business would have been destroyed when he sought to pass it on.

The Finance Bill was guillotined and we were not able to discuss matters in great depth. Companies can be divided into three groups. There are the large companies which are quoted. For such companies, capital transfer tax may mean desperate difficulties and a loss of capital to those who own the shares, but they can sell shares on the Stock Exchange to realise the money.

Then there are the very small companies—so small that they make a small impact on employment in their locality. For such companies the capital transfer tax does not bite, because the sum involved is low.

In the middle there is a great slab of unquoted companies that are sufficiently large to be valuable in the employment they give but not sufficiently large to be quoted companies. These are the companies where trouble really comes.

I said in the House on 6th March—it is recorded in column 1852 of Hansard—that it would cost £50,000 a year, when income tax has been taken into consideration, to get enough money out of a business over eight years to pay the tax on a £250,000 business. I was wrong. It would be £63,000.

I am conscious that the Minister wants to wind up, so I will bring my remarks to a close.

We had a debate in the House on 6th December when the Government accepted a motion seeking the encouragement of individual enterprise and initiative. I raised this matter during Business Questions and asked when the Government intended to do something about it. I had a letter from the Leader of the House who said that he was anxious

"to take proper and practical account of"—

the interests of small businesses—

"of which they leave us in no doubt, in framing general policies and legislation … I am assured by my colleagues that they will, as opportunity offers, inform the House of the outcome of their deliberations".

This evening the Minister has an opportunity of doing just that.

I invite the Minister to do so and to tell us three things. First, will he give the House an assurance that in the next Budget consideration will be given to making national insurance contributions allowable for tax? Secondly, will he assure the House that the Government will not introduce multiple rates of VAT? Thirdly, will he explain to the House how the Government propose to resolve the head-on conflict between the Government's desire to destroy private wealth and the criteria of a small business that it is private wealth that provides the capital, private wealth that provides the investment, and private wealth that is the source of these jobs? How do the Government reconcile the two?

I extend a warm welcome to the hon. Member for Basingstoke (Mr. Mitchell) on what I believe is his first appearance at the Dispatch Box. I have argued, disputed and debated with him on many occasions. This is the first time I have seen him in this capacity, and I hope to see him in such a capacity many times in the future.

I accept the kind of tribute that the right hon. Member for Leeds, North-East (Sir K. Joseph) paid to the Labour Government for setting up the Bolton Committee. As one who followed the activities of the Bolton Committee with very great interest and a great deal of expectation, I must say that I am unable to dissent from the view that the Committee's report is a very disappointing document. This imputes no blame to those who worked so hard and who examined in the best way possible the various problems and possible solutions to the difficulties facing small businesses generally.

Those who expected that there would be some positive solutions available to be used by the Government were disappointed. I am sure that the right hon. Gentleman will be the first to admit that the suggestions he made were very much second order matters for assistance to small businesses. He dealt with the possibility of credit assistance to small businesses. He dealt with the difficulties faced by small businesses in retaining premises consequent upon the clearance of city centres. I am sure that we all agree with what he said in that regard.

That does not go to the heart of the main problems facing small businesses and the way in which we wish them to be treated if they are to thrive.

Will the hon. Gentleman make one thing clear? Is either he or his colleague the Under-Secretary of State for Industry directly responsible as a Minister either for the self-employed or for the professions, or are they speaking only for small businesses?

As the House knows, my hon. Friend the Under-Secretary of State for Industry has responsibility for small firms. Other aspects come under the general umbrella of the Treasury and other Government Departments.

Perhaps the most valuable suggestion made in the debate was that made by my hon. Friend the Member for Dudley, West (Dr. Phipps), who spoke of the need for a system such as we have for farmers with the Agricultural Advisory Service. My hon. Friend expressed the hope that a similar advisory service might be made available to small firms.

Management advice is one of the matters at present being considered by the management consultants who have been engaged to review the service of the Small Firms Information Centres. Small businesses in general have had the one overriding desire—this is a general observation, but it is true of many—to be left alone to pursue their own paths free from Government interference and free from the interference of many other large-scale bodies. If the Government are ever to be of any help to industry and to small firms, we must overcome the reluctance to deal with certain elements of government and find some way of providing real assistance—assistance which, so far, none of us can claim that either Labour or Conservative Governments have been able to give.

In dealing with the problems of small companies, I wish to deal with the question of bankruptcies which was referred to by the hon. Members for Basingstoke (Mr. Mitchell) and Upminster (Mr. Loveridge) and by my hon. Friend the Member for Edmonton (Mr. Graham). The level of bankruptcies has increased, and it certainly increased in the period 1973–74. The increase was a steady one, beginning in the third quarter of 1973, and went on right through the autumn of 1974. Nobody can dispute that fact. Therefore, I find it a little difficult to accept attribution of responsibility. Bankruptcies are not matters decided as a result of the events of the past month or two. Their causes existed some time ago.

I should not have referred to this matter had not certain Conservative Members raised the topic, and I must tell them that the major share of the blame and responsibility for the situation flows from the policies of the Conservative Government. [An HON. MEMBER: "Rubbish." The hon. Gentleman cries "Rubbish". If he recalls the virtual printing of £4,000 million in, deficit money, he will appreciate that that was one of the most disgraceful things which happened to small businesses in its effect on the economy generally.

I turn now to the topic of rates. The hon. Member for Carmarthen (Mr. Evans) made strong reference to this point and said that it particularly affects small businesses. A substantial lump sum is demanded of a small business, and that in itself is a problem. The hon. Gentleman will appreciate that we have set up the Layfield Committee and hope that some suggestions will be made as to how these problems can best be dealt with. Small but valuable assistance is given in regard to mixed hereditaments, and pressure has been put on local authorities to restrict the growth in local authority expenditure. That, again, will be of value in the present situation.

I turn next to the subject of national insurance contributions. I shall not spend much time on this topic, but I wish to point out that it was a piece of Conservative legislation which led to problems. We must consider the contributions paid by the self-employed and the increase in contributions as a direct consequence of the inflation which occurred from November 1972, when figures were put before the House. One aspect of the matter which has not generally been understood is that the large increase in retirement pension is of great benefit to the self-employed. In the year 1974–75 the cost of retirement pensions to the Exchequer was nearly £3,600 million. In the following year the figure had grown to over £4,500 million. That is an enormous increase, and part of that increase will go to the benefits available to self-employed persons.

On the question of tax reliefs on contributions by the self-employed, a question put to me by the hon. Member for Basingstoke, I would point out that I have received representations on this and other matters but I am unable to comment in advance of the Budget. I assure the hon. Gentleman that the matter will be further examined by my right hon. Friend the Chancellor of the Exchequer.

I turn now to two areas in which the Conservative Government cannot claim to have helped the self-employed and people in small businesses. My hon. Friend the Member for Edmonton pointed out that the abolition of resale price maintenance and the value added tax were measures introduced by a Conservative administration, and, although they had merit in certain respects, those measures had a great deal to do with the problems of the self-employed. The abolition of resale price maintenance and the problems to which it gave rise are matters with which we have had to contend in our constituencies. When VAT has to be dealt with by well over 1 million traders, obviously it gives rise to great problems.

I turn next to the taxation measures of the Labour Government. The Conservative Government changed the basis of the corporation tax system and produced a system favouring those who distributed most by way of dividends. The one thing that is clear about small firms generally is that their dividend distribution is much less than is the distribution in large companies. Nobody could claim that this is a benefit to the small company. Indeed, it was a great problem which the small company had to face.

I am appalled at the way in which the capital transfer tax is attacked as an imposition on small firms and small business men. Under the old estate duty, on a sum of £100,000 a figure of around £37,000 was payable. Under the capital transfer tax, about £28,000 is payable on death, and for retirement gifts about £14,000. On a figure of £50,000 as a lifetime gift, the amount payable is £3,875.

We find ourselves in great difficulty in

Before calling the hon. Member for Enfield, North (Mr. Davies) to move Second Reading, I should inform the House that I have not selected the amendment in the names of the hon. Member for Islington, South and Finsbury (Mr. Cunningham) and other hon. Members.

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

The Bill seeks to confer further powers on the Greater London Council and other authorities in Greater London. Many of the powers proposed in the Bill are being sought at the request of the London Boroughs Association, and the whole of Part IV is being promoted on behalf of the London Borough of Southwark.

In introducing the Bill I am mindful of two considerations—first, that such a Bill covering a wide range of issues, although asking for limited and specific powers in each area, provides one of those all too rare opportunities vouchsafed to London Members to air the grievances of their constituents and to discuss important matters relating to the capital city and its government.

I should be less than frank with the House if I did not confess that, were I not charged with the valued responsibility of ensuring that this Bill gains safe passage through what I hope, perhaps forlornly, will be calm and serene waters, I should welcome the debate tonight as an opportunity to express particular constituency problems of my own relating to the governance of London. However, I express the hope that, however widely the debate ranges, however keen, for example, hon. Members are to rebut the criticism, for instance, emanating from quarters not too far distant from County Hall—criticism which in my opinion is ill-judged and ill-founded, suggesting as it does than London Members have been remiss in advancing the interests of the capital city—the House will view the Bill as raising no major issue of principle and no matters of acute controversy to hinder its Second Reading. I express the view that any defects—to myself as the presenter, glorying in my partiality, they appear quite miniscule—can be rigorously considered in Committee after Second Reading.

My second major consideration in presenting a Bill containing so many disparate provisions is that this speech could readily assume Miltonic proportions with a cataloguing of the angels as in "Paradise Lost". That would be boring in the extreme to hon. Members for whom the details of the Bill are precisely fixed in their minds after many hours of diligent study. I propose, therefore, to reserve my comments for those parts of the Bill which suggest themselves as raising minor and, I know, readily assuage-able fears in the minds of hon. Members so that subsequent speeches can be sweetly affirmative rather than sharply critical.

The Bill in Part II, Clause 3, is an attempt to reduce the hazards presented to that most highly respected section of the public service, the Fire Brigade. Firemen face increasing hazards in tackling blazes in which new chemical and chemical substances are involved. These dangers will be readily appreciated by hon. Members.

For my part, I had a most forcible reminder of this problem only a few weeks ago when a bomb had been placed in a chemical works in my constituency. Fortunately, on that occasion the fire was readily controllable. The firm has the highest safety standards and the danger was minimised. That this is not everywhere the case is readily appreciated when it is recognised that 169 members of the London Fire Brigade have been injured in fires involving hazardous substances in the period July 1973 to July 1974.

Accordingly, Clause 3 seeks to empower the council to specify warning signs relating to substances likely to prove hazardous to firemen and to require that the signs be displayed as appropriate. The clause would also enable the council, subject to a right of appeal, to regulate the storage of hazardous substances and to make provision for the enforcement of requirements relating to the display of warning signs and to storage. The clause empowers the Secretary of State to give directions to the council as to warning signs. This will ensure that the council keeps in step with any national regulations which may be introduced in this context.

Clause 4 seeks to extend the time limited by earlier enactments for the compulsory purchase of land by the council for the provision of pedestrian subways under the Strand and for the Thames Barrier. The extension sought is for a further three years until December 1978.

Clause 5 seeks to amend Section 25 of the Thames Barrier and Flood Prevention Act 1972 on the lines agreed with the interests concerned.

Clause 6 introduces an element of perhaps greater innovation and concern, because it contains provision to extend the powers of the council to introduce bus lanes. The council is the leading bus lane authority in the country, with more bus lanes than any other traffic authority and consequently with greater experience of their performance and the problems which they present. Bus lanes serve a useful purpose in assisting bus operation without serious disbenefit to other traffic. They present an opportunity for improving public transport services and for securing the most efficient use of available road space.

In particular, Clause 6 relates to the problem of with-flow bus lanes. As the council has readily identified to hon. Members, the problem of traffic observing contra-flow bus lanes is minimal. I imagine that that statement has made hon. Members smile. One is not surprised if motorists hesitate to cross four-feet-wide concrete obstructions to enjoy the doubtful privilege of a head-on collision with a carefully driven but enormously heavy London bus. The council wishes to reduce the degree to which motorists intrude upon with-flow bus lanes and to maximise the flexibility of bus lane designation so that access to adjacent property is appropriately safeguarded. These objectives can be achieved by the council assuming powers to segregate physically with-flow lanes by mountable, and in some restricted cases non-mountable, barriers. In the majority of cases, it is proposed to use mountable dividers con- structed of raised rubber strips or rubber posts, readily traversable in any emergency or when the lane is not in use.

Bus lanes are the subject of member-level decision, not administrative action, and permanent designation is subject to an order being made under Section 6 of the Road Traffic Regulation Act 1967, offering substantial protection to the public by dint of the consultation or objection procedures outlined in the procedure regulations. Bus lanes contribute to efficiency in the use of road space and on the basis of present reviews make a contribution to road safety. A recent review, for example, showed a reduction of 16 per cent. in the total number of accidents after the introduction of bus lanes covered by the review.

Clause 7 seeks to consolidate and marginally extend the current available powers to buy, publish, produce and sell books, pamphlets and other articles relating to local government in London. A particularly valuable facility which is being sought in this respect refers to publications on the contents and historical significance of local-authority-controlled museums and historic buildings. The capacity to extend public appreciation of these treasured possessions by the compiling and publication of pamphlets and books is something which hon. Members will, I am sure, be prepared to extend to the appropriate local authorities.

Order. Would the hon. Gentleman forgive me for interrupting him? I have another duty to perform.

I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Finance Act 1975?

2. Offshore Petroleum Development (Scotland) Act 1975

3. Supply Powers Act 1975

4. Statute Law (Repeals) Act 1975

5. Social Security Benefits Act 1975

6. British Railways Act 1975

I am obliged to the hon. Member

Clause 8 seeks to widen the council's powers under the Housing Act to cover land other than a highway, particularly in respect of the growing problem of parking obstructions on council estates. Not only do tenants suffer from the growing problem of irresponsible parking, and not only by other tenants but sometimes by commuters seeking refuge from parking restrictions of the public highway; at least as important are the difficulties presented for the emergency services. I imagine that many hon. Members could cite instances of real difficulties faced by ambulances, police and the fire service in gaining entry to certain parts of council estates when there have been real emergencies.

Moreover, parking grievances are often the source of contention between tenants and harassed estate officers seeking to enforce parking restrictions. Anything which reduces that tension is to be commended. Notwithstanding particular grievances which may get an airing in this debate, I believe that it is recognised that the majority of estate officers carry out a sound job conscientiously and with consideration for their tenants.

Clauses 9, 10 and 11 seek to confer powers sought by several local authorities in private Acts in recent years to enable them to reach such agreement with developers that the planning authority shares in the profits of a development. Clause 9 would help the authority to enter into an agreement to determine the way in which the land is to be developed and to ensure that the resources of the developer are adequate. Provision is also made for the agreement to be enforced if necessary and the clause permits the local authority to take or acquire shares or other securities in any company incorporated in the United Kingdom with which such an agreement is entered into.

Clause l0 seeks powers for the councils to participate in any development of land which they own or have agreed to acquire and which they are entitled to dispose of by statute by entering into an agreement with any person under which a payment can be made to that Person in return for an interest in the development. Clause 11 confers the borrowing powers on the London borough councils and the City Corporation in connection with their exercise of their powers under the preceding two clauses.

The intention behind Clause 12 is to enable the councils to have the power to establish foreign loan reserve funds. The present Treasury underwriting of foreign loans ensures that the council's effective rate of interest is only 1 per cent. below the appropriate Public Works Loan Board rate, although the councils can offer and in the past often have offered secure loans at much more favourable rates. If the councils had funds to enable them to bear the exchange loss risks themselves, they would be enabled to borrow abroad economically.

Part IV, of course, represents provisions relating to Southwark Council and its desire to remedy the deplorable condition of Nunhead Cemetery, Linden Grove, S.E.15, which I imagine are quite unexceptionable.

I thank the House for the tolerance that it has extended to me in the arduous and no doubt over-lengthy task of moving the Second Reading. Despite the length of my speech, I am all too well aware of the imperfect way in which I have been able to identify the major proposals in the Bill. Had I intended to tackle this formidable task with the attention to detail to which hon. Members are entitled, I may have been accused of seeking to replace the hon. Member for Essex, South-East (Sir B. Braine) in the Guinness Book of Records for length of a back-bench speech. That would have been as unwelcome to the House as to the sponsors of the Bill, who would have seen the Bill no doubt submerge in the parliamentary equivalent of the waters of Lethe.

I have therefore sought to comment on the clauses most likely to awaken the critical interest of hon. Members. I hope to be able to reply to any points of substance raised in the debate. I hope that all hon. Members will recognise, however, that particular details can be appropriately reserved to the Committee stage, should the Bill gain its deserved Second Reading.

I compliment the hon. Member for Enfield, North (Mr. Davies) on the fluent way in which he moved the Second Reading. Over the years, we have heard many hon. Members move Greater London Council (General Powers) Bills, and he lived up to the calm and sensible standard which they have set on those occasions.

Alas, the tenor of this debate has been in danger of being altered by the garrulous ramblings of a small-time local politician named Harrington. His article in the Evening News last night was an insult to all 92 London Members. He is clearly so busy making speeches that he fails to read what happens in this House. He failed, for instance, to notice the unity of the London Members on the question a few days ago of industrial development certificates, or the fact that London Members of Parliament have made major contributions to debates on subjects of particular reference and interest to London —housing and rates.

One is tempted to think of blocking the Bill in view of his remarks, but I suppose that Illtyd Harrington is of so little real importance that it would do a disservice to the people of London to interfere for that reason with legislation which they want. None the less, he owes an apology to all hon. Members.

On behalf of all London Members, I am sure that I can say that we all share the sentiments the hon. Gentleman has expressed about the offensive article to which he referred. I undertake that in correspondence I am now having with Mr. Harrington I shall ask him to write a letter to the hon. Gentleman and, I hope retract some of the remarks which he made in the article yesterday. The hon. Gentleman rightly said that he referred to 92 hon. Members, and that was a bit sweeping even for Mr. Harrington.

That is an extremely handsome intervention which, I am sure, all hon. Members greatly welcome. I am most grateful to the right hon. Gentleman. Let me dismiss Mr. Harrington by saying that I imagine that his speeches and articles are part of his design or his bid to become not deputy leader but leader of the Greater London Council.

It seems to me that there are several sensible provisions in the Bill. I turn, first, to the end of the Bill, which deals with cemetery proposals. From inquiries which I have made, I see these proposals as of extreme importance. It may be that, in a future Session, there will be a requirement for similar legislation to cover the Highgate Cemetery in the London Borough of Camden, which is in equal danger of neglect. As it has such distinguished graves in it as those of Karl Marx and Sir Rowland Hill, an ancestor of my wife, I am sure that the cemetery is completely bi-partisan, and the sort of proposal put forward would receive some support.

There are three items in the Bill which give a little cause for concern. I shall refer to Clauses 3, 6 and 7 in general, and make some detailed comment also.

Clause 6, probably the most important one, deals with bus lanes. The hon. Member for Enfield, North (Mr. Davies) went to great length to try to explain the problem of contra-flow lanes and other lanes. Certainly, it is quite a frightening experience to stand in Piccadilly and hope that the bus will remember to come the right way and have its headlights on. But we are not concerned with the contra-flow lanes, because they derive their legislative existence from a different Act. We are concerned with the extra powers that the GLC wants to take in order to have more with-flow bus lanes.

Up to now, the problem with bus lanes has been that the police have been gravely undermanned and unable to enforce the provisions. There is a bus lane in Finchley Road. I travel down that road every morning at bus lane time. I am always passed by seven or eight cars in the short space of a few hundred yards, and they seem to get away with it. I am left fuming, because I decide that it is right to be law-abiding. If there were sufficient police, the people who try to jump the bus lanes would be prosecuted, and there might be more general observance of the law.

The Greater London Council is asking to take powers to provide permanent barriers. This is where I think some difficulties arise. As the hon. Member rightly said, there are two sorts of barrier—the mountable and the non-mountable. As I understand it, the mountable type of barrier is made of a strip of rubber, approximately 4 inches thick. I hope, Mr. Deputy Speaker, that you will forgive me if I do not try to convert that into the metric system, because off-hand I do not know what it would be, and I am not sure that the House would want to know.

It is 10 centimetres.

I accept that, if it is right. This mountable bus lane divider will compress into approximately 2 inches. If the hon. Member in charge of the Bill, should he be fortunate enough to catch your eye, Mr. Deputy Speaker, is able to say that this would be the general type of divider put in. a lot of the fear many of us have would, I think, be removed. I and, I am sure, many other hon. Members, have had representations from organisations such as the Multiple Shops Federation, which has been in touch with the Greater London Council and its parliamentary agents for about six weeks.

It seems that, if the Bill goes through with the clause drawn in its present form, there will be no guarantee that the Greater London Council will normally use a mountable, as opposed to a non-mountable, type of barrier. That would present many problems. There are many premises in London where there is no rear access road and where vehicles seek to unload. Those vehicles will be put in a very difficult position if they have to park on the other side of the road, or if they have to park on the off-side of a permanent non-mountable barrier.

For example, what will happen to bank bullion vans which are delivering valuable cargoes daily? It must be a security hazard, adding to the problems of the police, if such vehicles delivering to banks where there is no service or rear access road have to park on the other side of the road or outside the bank but separated from it by a permanent lane. It would be simple for a gang of villains to use that lane with a car, quickly do some damage to the people delivering, and take the money. The security angle should be looked at.

I am not all that happy about saying that bank bullion vans should use rear access roads, because the first thing one learns in security in this area is that one must try to avoid using the same routine and the same route. The possibility of non-mountable barriers would make it that much easier for wrong-doers to know that there was a sitting target on certain days of the week.

I am told that in the West Central district of London the district post office is worried that it will not be able to complete its first delivery of mail in the morning as early as it does now if it is forced to remain outside the barrier.

I specifically ask the hon. Member to try, if he can, before the end of the debate to get some undertaking from the Greater London Council that it would be prepared to state that, where there is no rear access, it would use only the mountable type of barrier.

Clause 3 seems to be somewhat unnecessary. The hon. Gentleman gave reasons why he thought it necessary. I should like to hear a little more, because I am not certain that local Bills are the best way of dealing with the matter. In my view, there should be national legislation, and my understanding is that this is provided for in Section 1 of the Health and Safety at Work Act. It would be dangerous for many local authorities to start introducing their own powers when one would hope that the Government would make regulations which would then be applicable to all local authorities. I am worried that one local authority Bill should do it.

Perhaps the Minister will be able to give us some guidance as to whether the Government would wish to see this provision removed from the Bill in Committee, with some sort of undertaking that they will introduce the appropriate powers in a Government Bill or under appropriate regulations.

I have had discussions with the promoters about Clause 7, because I am not happy that it is right in present circumstances. I accept that it is right that local authorities should have the power to

"publish, prepare for publication, contribute to the publication"

and so on, but the people of London are complaining that their rate burden is extremely heavy. I put this as non-controversially as possible. It would be unfair at this time to ask them to run the risk of having to make a contribution to such a scheme as the clause nvisages, which might run at a loss.

I hope that the hon. Gentleman can confirm that the promoters are prepared to give an undertaking to move a suitable amendment in Committee making clear that the clause would be subject to—in the technical term—taking one year with another, the income being sufficient to defray the expenditure thereunder. That is a necessary safeguard. Such an undertaking would be in accord with precedents in the Water Act 1973 and the Local Government Act 1974, and would remove fears that the clause would be operated without too much concern for London's ratepayers.

Does the hon. Gentleman wish to prevent London local authorities from issuing to their ratepayers small booklets and publications free of cost relating to their functions and services or their history? Next year, things might be easier, and they might want to issue such publications under powers given in the Bill. Is the hon. Gentleman saying that he is not prepared to trust London local authorities to make a judgment on these minor matters?

I take the hon. Gentleman's point. There are two ways of looking at the matter. One is for local authorities to prepare, have available and, if necessary, distribute to their ratepayers informative leaflets on their functions. I am not certain, though, that it is right that they should have the unfettered power to publish anything else without regard to cost. The operation should be self-balancing. I am not asking that it should be profit-making.

Clause 8 is extremely important for all of us who have local authority housing estates in our constituencies. No so long ago, we had the constant complaint from our council tenants that the police were not willing to include council estates' internal roads on their beats. Both sides of the London Boroughs Association put a great deal of pressure on the police, who have now agreed that they will include such roads in their normal work. That is greatly welcomed.

The clause gives the local authority an opportunity to commence proceedings against those people, some of whom live in the estates and some of whom do not, who use the roads to park their surplus vehicles. Quite a number of the vehicles are fugitives from salerooms. It is wrong that council tenants should have those vehicles dumped on them and have their amenities ruined, without the local authority being able to take action. The clause takes care of that irksome matter, about which many tenants have complained.

In general, the Bill is acceptable. It gives an opportunity for the House to discuss London matters, and in particular to consider the powers being sought by the GLC and the London boroughs. Because of the procedure adopted by the local authorities in London, we can see at once which parts of the Bill are the requirement of the GLC and which are inserted at the request of the London boroughs. It was not long ago that some members of the GLC, belonging to both political parties, were not happy about allowing their Bill, as they called it, to be the vehicle for some borough proposals. Those days have gone. Probably it would be unacceptable to the House to have a Greater London (General Powers) Bill and a London Boroughs (General Powers) Bill. But, if friend Harrington goes on as he has, it might be wiser for the London boroughs to have their own legislation, which would not run the risk of being blocked.

If the hon. Gentleman can give us assurances on the two points I have mentioned, the Bill will deserve to be given a Second Reading in the interests of Londoners.

I intervene briefly at this stage as it may help the House if it knows the Government's attitude to the Bill, so ably moved by my hon. Friend the Member for Enfield. North (Mr. Davies).

I deal first with the remarks recently made in the Press by Mr. Harrington. There may be a failure of liaison or communication somewhere, but, having been a Minister for 12 months, I can assure the House. Mr. Harrington and the public of London that at Question Time, in delegations, in letters, in committees and in debates hon. Members from both sides of the House who represent London constituencies are never slow at coming forward. I read Mr. Harrington's remarks with astonishment. I can only attribute them to a failure of communication somewhere along the line.

Generally speaking, the Government have no objection to what the Greater London Council is trying to achieve in the Bill. There are a few points still to be discussed with the promoters, but 1 hope that they will be resolved before the Committee stage.

The hon. Member for Hampstead (Mr. Finsberg) raised a number of points which could better be discussed in Committee. For example, he mentioned the special powers in Clause 3 with regard to the fire brigades. Not being a Home Office Minister, I cannot give a detailed reply, but the matter can be dealt with in Committee.

The hon. Gentleman's point on Clause 7 concerns a matter which is subject to negotiation. The 1972 Local Government Act gives wide powers to local authorities in these regards, and we shall want to know in what respects the GLC wishes to exceed those powers or to have different powers.

I must mention the powers given in the Bill with regard to Nunhead cemetery. All hon. Members will agree that what has happened to that private cemetery is a disgrace. It is saddening for all the people whose relatives have been buried there, and it is an environmental eyesore. The Bill gives powers to the London Borough of Southwark to deal with the cemetery. I have received delegations led by my hon. Friend the Member for Peckham (Mr. Lamborn), my right hon. and learned Friend the Attorney-General and my right hon. Friend the Chief Whip. No junior Minister lightly disregards a deputation led by his right hon. Friend the Chief Whip.

Although the Government will be introducing a variance Bill subsequently, it is unlikely that it could be reached in this Session, and many of the difficulties with regard to Nunhead Cemetery could be overcome in this Bill. I am not certain about the position on Highgate Cemetery. I understand that the London Borough of Camden is seeking to acquire it. I do not know whether, under the terms of this Bill, discussion of that matter can be raised. I hope so.

I therefore ask the House to follow the convention on Private Bills and to give the Bill a Second Reading so that it can go to a Select Committee which can examine the detailed issues involved with the benefit of extra evidence before it.

I follow my hon. Friend's argument about Illtyd Harrington's statement, but my hon. Friend and his Department are in part responsible for that man's attitude. After all, he is chancellor of the GLC. I wish that my hon. Friend would understand that the rate support grant does not show any favour to London but, on the contrary, hurts London very badly. I resent what Mr. Harrington has said. But my hon. Friend and his Department should be looking at ways of giving more rate support grant help to London to enable it to resolve its problems.

I quite understand my hon. Friend's point. If Mr. Harrington had attacked me or anyone in my Department, that is fair game in politics, but it is quite wrong to attack 92 hon. Members for deficiencies he may consider that we have in that regard. Perhaps my hon. Friend will be able to pursue tomorrow some of the points he is trying to raise today.

I repeat that I hope that a Second Reading is given to this Bill so that the detailed points which will no doubt be raised later in the debate can be examined in Committee.

Like my hon. Friend the Member for Hampstead (Mr. Finsberg), I find nothing particularly offensive in the Bill. Indeed, I find a good deal to commend it. I am particularly pleased to see the provisions in Part IV concerning cemetaries because in my constituency we have a similar problem at the Chingford Mount Cemetery. Although the local authority is hopeful that we shall be able to acquire it and put the cemetery to rights without taking compulsory powers, we have taken the precaution of discussing the matter with the GLC and may want to use similar powers at some other time. I shall be pleased, therefore, to see those powers enacted.

Part II gives us a particular opportunity, and a right one, in Clause 3, to refer to the London Fire Brigade. It is all too rarely that we have an opportunity not merely to legislate to assist the fire brigade but to acknowledge the work that its members do in London. I live in the City not very far from the main City Fire Brigade station. I know how often the brigade turns out. I hear it every time it turns out. Because I live so close to it, I was acutely aware of the work that members of the fire brigade did during the recent Moorgate disaster. It is a pleasure—although under sad circumstances in this case—to be able to pay tribute to all that the brigade has done for Londoners.

Part II also relates to highways and bus lanes. I hope that if I stray over the edges of a bus lane here and there, Mr. Deputy Speaker, into more general highway matters, in view of the relatively rare number of occasions on which London Members are able to debate London affairs, you will not be too keen to call me back to the straight and narrow.

It all depends on whether the hon. Gentleman strolls or canters, because many hon. Members wish to speak in the debate.

As ever, Mr. Deputy Speaker, I shall watch most closely the expression on your face.

However, there are other forms of precedence for traffic on London roads. In particular, there are such things as heavy lorry routes. If ever we should find that we have heavy lorry routes with bus lanes as well, we shall be in very deep trouble. Under the Bill that could happen. The effects could be quite devastating for many people. I should like to quote briefly from a letter which I received only this morning. It is dated 11th March—so some of the mail must be getting through. It is from one of my constituents in Chingford, who says:

"At present, I can honestly say I am awakened every morning between the hours of 5 and 6 a.m. by lorries thundering past here, after coming down Friday Hill."

He continues in similar style, commenting on the difficulties of getting the road kept in a good state of repair, the noise, the danger to pedestrians and even larger hold-ups than occur during the already busy rush hours. He says:

"Apparently the hauliers claim they can save three-quarters of an hour in getting on to the M1 by using the A110 instead of the North Circular."

The hon. Member for Enfield, North (Mr. Davies) will be familiar with the A110 and all that it means to our constituents. Indeed, a new lorry route is being proposed, which runs from the hon. Gentleman's constituency to mine. It will run up an already dangerously steep hill on which there have been many accidents, through the edge of a shopping area, past a parish church, past schools and through residential roads. I hope that in these few hours that we have to discuss London's affairs, Mr. Illtyd Harrington can spare an ear for our proceedings. He may take note of the concern which London Members express over these matters.

Of course, lorry routes are sensible, and there should be a diversion of heavy traffic on to roads that are suitable for it. But the problem arises when there are no suitable roads and when the heavy traffic is diverted along residential roads. The GLC's policies towards transport and the GLC's predisposition towards protection of public transport have unfortunately been accompanied by a predisposition virtually to forbid road development in the Greater London area. As many hon. Members from the northern part of London will know, there are difficulties over the current improvements to the North Circular Road, the A406, at the junction with the A10, where the Greater London Council, curiously not hearing anything of what has been said here, has been extremely difficult about the roundabout reconstruction.

Before my hon. Friend leaves the question of lorry routes, may I ask whether he agrees that there is a great problem in that there are many roads, as I know in Southgate, which lorries are already using but which they should not be using because the roads are not wide enough? But now those roads are being designated as lorry routes because the lorries are already using them, so instead of stopping this we shall have even more lorries.

My hon. Friend is right. That is the position in relation to the route I am describing in my constituency. We all know that the lorries will not go away, any more than the buses will—except when one is waiting for a bus. The lorries will be there. Unhappily, all the road transport cannot be transferred to canals or railways. This is just not realistic. Since the Greater London Council has decided that it will not build new roads in London the problem has become worse. It will continue to get worse. The abandonment of the old ringways idea is now a long way in the past, and we should not go over that.

The need for further improvements of Ringway 2, the North Circular road, and the outer ringway, Ringway 3—although it is outside the boundaries of the Greater London Council area and outside the terms of the Bill—is imperative. The Minister is well seized of that. His Department is doing all that it can to help. Indeed, even the Greater London Council is not obstructing that—possibly because it is outside its own boundaries —despite its propaganda against road building. That is the main feature of the Greater London Council's activity concerning my constituents.

Mr. Harrington and his friends would be well advised to remember that at the end of the day when the inevitable increase of traffic occurs on dangerous roads such as Kings Head Hill. it is they who will take the blame and not the unfortunate lorry drivers.

The only other matter about which the Greater London Council is upsetting my constituents, apart from the increase in rates about which there will be a debate tomorrow, is the council's housing policies. I welcome the minor but important provisions in the Bill for the removal or control of parked vehicles on council estates. This is a major problem and a great irritation to council tenants. Council tenants do not have a good life, especially in London. Their rents may well be lower in many cases than they should be, but in many ways they get a pretty raw deal from their housing authority.

In the main the Greater London Council's housing policies are appalling. As many hon. Members have had a bash at Mr. Harrington, I would add that one beacon of light at County Hall is Councillor Tony Judge, chairman of the Housing Management Committee. He has dealt with personal problems brought to him by myself and many other hon. Members. He is always courteous, helpful and most concerned with the welfare of his tenants. This makes an extremely pleasant change. My constituents are greatly affected by the Greater London Council's programme of municipalisation. Now that the money is not available for former tenants to improve the houses they have bought, matters will become worse.

It is a pity that we do not have more time to talk about London. I am not sure how much time is given to Wales, but I am aware that a great deal of time is given to Scotland. There are Scottish Questions and there is a Minister for Scotland. I do not think that Scotland has a greater claim than London in these matters. I hope that note will be taken of this in high places, not least by the Government Chief Whip who I know has the interests of London at heart—even if it is sometimes in a somewhat perverted way—and that we shall have more time to debate London affairs than we get on this customary occasion of the Greater London Council (General Powers) Bill.

I put my name to a motion to prevent this Bill from becoming law without a debate. Although some Conservative Members did the same, there was no collusion between us. I blocked it for my reasons, and no doubt they blocked it for theirs. I wanted to ensure that I had an opportunity to express my grievances, and those of my constituents, about the inefficient housing management of the Greater London Council—not about its housing policies. It is rather odd to use the House of Commons as a platform to express grievances about the conduct of a local authority, but since this House is invited by the Greater London Council to pass legislation, we should use the opportunity to express grievances and to seek remedies before the legislation is passed.

I concede that many of the housing management problems facing the Greater London Council are largely intractable. I shall not express the grievance felt by one third of Greater London Council tenants who wish to be transferred from one tenancy to another. There is a severe limit on the extent to which the Greater London Council can accommodate the wishes of a fraction of those people.

Certainly, the Greater London Council cannot hope to satisfy all the people who are seeking council accommodation but who are not at the moment housed by it. However, aspects of its conduct of housing management can be improved. I am not suggesting that the GLC is the worst authority in the country, but it is certainly very had. I echo the remarks of the hon. Member for Chingford (Mr. Tebbit) about the present chairman of the housing management committee of the GLC. I hope that he will rapidly introduce badly needed improvements to the efficiency of the machine.

Among the general criticisms which can justifiably be mounted against the GLC's housing management are that it is impersonal and inefficient, and that people who are up against it feel that they are up against a brick wall. They feel that they have to nag to get anything done. Usually they do not get it done even when they continue nagging, and even when they use their elected representatives. In the face of this inefficient machine, they feel quite helpless.

I know that they must feel helpless because I, too, feel helpless.

Around Christmas, I wrote to the leader of the Greater London Council saying that, in the light of some recent events, I intended to block this Bill. Five weeks later, when I had received no reply, I was invited not to block the Bill on the ground that my letter had been passed down to the housing department and had not yet come up again. If my letter can be dealt with like that, I wonder—indeed, I know —what happens to Mrs. Smith's letter about her blocked drains. To be asked to withdraw opposition to the Bill on that ground adds insult to injury.

I also asked to see the form of the notice to quit served by the Greater London Council, when necessary, on its tenants. I did not receive it. I asked another councillor for an account of a meeting with local district officers on a problem in my constituency and did not receive it. This is happening all the time. Every hon. Member could repeat cases of that type. It is high time we said that the Greater London Council housing management is lousy and that it ought to be and can be rapidly improved.

I illustrate this by the example of repairs. In a tenant's rent book there is a form which can be used to notify the council of the need for a repair. I shall refer to a few cases, but I do not want to invoke a remedy in individual cases through this debate. The other night, I visited Mr. and Mrs. Bull who live in Stranraer Way. They moved into a new GLC flat last September, and since then they and their neighbours have suffered from blocked drains. It is not the grievance but the lack of response to the grievance that is significant. The blockage has been cured for most of the people originally affected by it.

These people have had this trouble since last September. Not only does the water not drain away from their kitchen sink but the bath water from the upstairs neighbour does not drain away properly. It drains into their kitchen sink and bubbles up there. When the people upstairs have a bath and then pull out the plug, that water finds its way into the kitchen sink of the flat below and has to be ladled out with buckets and thrown over the outside garden wall. It is a severe grievance. It might be thought that any competent officer would say, "We have to do something about that". Nothing has been done about it. The problem has been corrected nearby, but not in that instance.

In all that time, not a single letter has been received by the tenants from the district office saying, "We are terribly sorry. We are doing all we can to put it right, but we are having this or that difficulty and it will take us three weeks" —or whatever the time. This is what I am complaining about—not the original grievance but the way in which the situation has been allowed to be delayed and the manner in which the tenant has personally been neglected.

Tenants simply do not know what is happening about this incident because they have heard nothing from the local office. The same situation exists in the empty flat next door, where the sewage just bubbles up into the kitchen sink and spills over on to the floor. It can be seen through the window.

Would my hon. Friend agree that this is not on the housing management side, in that the appropriate department is the architect's and surveyor's department because it built the place like that? The real issue is that the architects and surveyors are unable to find a solution to the mistakes in the building they have put up.

No, it is not. I totally disagree with my hon. Friend. I am not complaining that the surveyors or the architects or someone put in a drain that was blocked. All sorts of things can happen when a building is being constructed. What I am complaining about is that the housing management side of the GLC has not seen fit to give this matter sufficient attention and have it corrected. It will have to be corrected some time. The tenants cannot go on having other people's bath water coming into their kitchen sink for ever. If it were given the right priority, it would be dealt with. It should not be the case that a tenant affected by such a severe grievance does not hear a word from the local office. That is what I am complaining about.

There is a Mr. and Mrs. Hurst in Braithwaite House. I am taking examples from different parts of my constituency to show that it is not just one set of officers involved. Mr. and Mrs. Hurst had no hot water from October of last year until February of this year. Three lots of plumbers came, confessing that they were unable to deal with the situation. That was spread over many weeks. I am glad to say that that case has recently been attended to by a new and much better estate officer for that area.

Other tenants in Braithwaite House in Bunhill Row have repeatedly complained about people improperly spraying cars, mending car engines, taking engines out of cars and putting in new engines—generally using the grounds of this block of flats as a garage. Cleaning was not carried out. The lavatories on the ground floor were allowed to become so filthy that they were totally unusable. That is admitted by the GLC officer who attended a meeting of the tenants' association a month or two ago.

Many of the tenants at that meeting said that they did not know who the estate officer was. They are supposed to know who the estate officer is. They are supposed to get a letter telling them who he is. The letters were apparently sent in their direction but they never received them. When it was suggested that the letters had not been posted but had been handed to the caretaker to pass on to the tenants, they said, "Oh well, that is clearly what happened. The caretaker put them down the chute". They have had plenty of experience of what happens in that block to back up that view.

None of these things was attended to until they formed a tenants' association and until some of us put some weight behind the complaints being made. It ought not to be necessary for a Member of Parliament to be involved in this. I have other things to do than get involved with such affairs. I resent the fact that I have to become so involved.

I am listening to my hon. Friend with care. It is right and proper that these complaints should be aired. So far, he has not mentioned what is a vital ingredient when discussing the GLC. May I ask him what was the rôle of the GLC councillors in this?

That is not a matter with which I intend to deal. I have a Mr. and Mrs. Creelman in Grimthorpe House who had a plumbing difficulty which was reported to the Chalton Street office of the GLC, which in my experience has the very worst reputation of all the GLC offices for dealing with complaints—and that is saying something. This problem was reported on 2nd September and various people called almost immediately. A plumber called a couple of weeks later without notice and therefore could not put it right. In early November another plumber came. He managed to puncture a pipe causing a flood.

All of this is verified from the accurate records kept by the Citizens' Advice Bureau which assisted Mr. Creelman in presenting his complaints. When I took this case up with the GLC, I was told in a letter of 12th November that it had had only one notification of this complaint, on 18th October, and that it had been rectified on 30th October. What comes out of that case is the fact that complaints were made but were clearly not recorded. In its letter to me. the GLC said that it had been notified only once. Much of what I am complaining about could be corrected by a proper system of recording complaints when people send them in, telephone them in or call personally.

I wrote to the district officer on 3rd December asking whether he could reconcile the account of the Citizens' Advice Bureau about the number of times the complaint had been made with his account to me. That was on 3rd December and I still have not had a reply.

There is a Mr. Bunby in Orkney House. When it rained, the water came in through his window, in very large quantities, because he lives on the top floor of a high block and the wind blows the rain against the window. That was the fault of the architects. We all know what disasters occur when the over-excited imaginations of architects cause them to use new and untried devices in local authority designs. The defect was notified in the autumn of 1972. It was finally fixed about 18 months later, in January 1974.

I wrote to the former chairman of the housing management committee of the GLC on 12th August 1973 after months of trying to deal with the matter through officials. There was no reply. I wrote again on 29th October 1973. No reply. I wrote again on 8th January 1974, and finally I received an answer on 30th January 1974 which said:

"I am sorry I had not been given the necessary information about the rain penetration problem to permit me to reply before this."

There is no cold water supply in Godfrey House on the St. Luke's Estate. This was reported in September 1973. Difficulty with the cold water supply there had repeatedly occurred since the place was put up in 1969. In 1971, it took the GLC from April to August to get it right. I should say that at that time that area was represented in this House by my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown). I wrote to the GLC about that case. It took nine weeks to reply to my letter. In January 1974 the trouble recurred.

Those are only illustrations of the incompetent manner in which the GLC deals with notifications of complaints. We all know, and every GLC councillor knows, that that is the kind of thing that happens. I have picked out not all the cases in my files but only a selection from different GLC blocks.

My second major complaint is about what I call the counter—about how the GLC tenant or would-be GLC tenant is dealt with when he goes to a GLC office. In a word, badly.

There are three reasons why people may go into the local GLC office—to get a place, to get a transfer, or to notify the need for repairs and so forth. It is the common view of all GLC tenants who come to me that they are treated rudely. This is partly because the GLC in most district offices uses for the purpose the junior clerks in those offices. These clerks did not join to do that work and they are not trained or equipped for it. They do it only for about half a day per week, and that is a perfectly common situation.

I have suggested that it would be better to use on the counter the kind of experienced woman who runs a citizens' advice bureau. There is a difficulty because then the gap which now exists between the public and the office might become a gap betwen the counter staff and those who take the decisions. But such a woman would be a useful intermediary between the public and the officers. I have had complaints recently of people having to wait three hours in the King's Cross office in my constituency—partly because it is being improved to speed up the process by which people are interviewed.

Tenants are frequently told, and they resent it enormously, that their files are lost. Usually they are not lost; they just cannot be found.

Order. I am sorry to interrupt the hon. Member, but will he be kind enough to say to which part of the Bill he is speaking, because he has been speaking for a long time?

I blocked the Bill in order to ensure that we should have a little time to discuss these things, Mr. Deputy Speaker, and, as you will be aware, there is a part of the Bill specifically dealing with housing management. I think the whole of my remarks come within that broad definition, but I shall certainly try to avoid going into great detail on the subject, and you will be glad to know that I am nearly through.

But I must stress that these little things are the things which matter, and thousands of my constituents want me to use this opportunity to say to the GLC not just that it is getting exposure in the House of Commons but that, if these things do not improve, the next Bill will not pass—not with my vote, at least, and with my opposition.

I wish that counter staff would not tell people that their files are lost when they just cannot lay hands on them.

Recently the GLC has initiated an experiment—an information office at Highbury Corner in my constituency operated in conjunction with the local citizens' advice bureau. The blurb about this office states that the GLC officials should not sit in their offices waiting for people to come to them but should go out and reach the people. Frankly, the GLC tenants that I know do not want the GLC to come out and meet them; they just want the GLC to deal competently with their complaints when they bother to go to the GLC's offices.

There are other matters not concerned with the counter service or repairs that I could charge the housing management department with, but time inclines me to cut these matters out.

The essence of the difficulty is not staff shortage, which is the excuse frequently advanced for these grievances. The essence of what is wrong is lack of supervision. There is a lack of supervision of caretakers by estate officers and of estate officers by district officers, a lack of oversight of counter clerks by the heads of the offices in which they work and a lack of supervision of the district officers by the officials at County Hall. Bosses just do not take enough interest in what their subordinates are failing to do, and if that could be remedied by pressure from on high the quality of administration would greatly improve even without taking on lots of caretakers and the better staff the GLC wants.

The remedies are clear. Bosses must take more of an interest in what their subordinates do and they must make themselves responsible for their subordinates. Second, it must be recognised that dealing with the public is a special task not to be undertaken just by any junior clerk who has been recruited to the office for other purposes. Serious consideration should be given to having a special corps of people recruited for that purpose alone. Third, I suggest that some sort of leaflet or booklet should be made available to tenants telling them the essential facts about their tenancy, who they are to complain to and so on, and including the name of their GLC elected representative.

Finally, and this is perhaps the most important, the GLC would do everyone a favour if it would adopt the practice of abating the rent of any tenant who has had for a reasonably prolonged period a marked reduction in the quality of his tenancy because of drain blockage, no hot water, no central heating, and so on. Under the Housing Finance Act it was perhaps illegal for any such reduction to be made, but under the new legislation I believe that the court could hold that it was reasonable to reduce the rent if there had been such a reduction in amenity. I hope that some tenant soon will make an experiment of taking a case to court in order to get a reduction in rent for these reasons. Nothing would make the GLC housing management department move faster than the possibility that there would be a reduction in rent revenue.

I believe that the GLC has a very bad record on these matters. I recognise that the chairman of housing management has a difficult task, but unless there is an improvement in the kind of complaint which is coming to me, I intend to use the next opportunity when a GLC Bill comes before the House not just to require that it should be debated but to do my very best to ensure that it does not pass until there is a reduction in this kind of grievance.

I congratulate the hon. Member for Islington, South and Finsbury (Mr. Cunningham) on his marathon speech. The House has every right to hear of and listen to the problems and complications which all who live within the Greater London Council area have to suffer every day of their lives. Those problems are not peculiar to inner London. The problems in the outer London boroughs, one of which I have the good fortune to represent, are identical.

The Bill no doubt contains many aspects which are beneficial to residents in Greater London. We have heard the details of some of the important contents of the Bill ably presented by the hon. Member for Enfield, North (Mr. Davies). It is good to know that his leadership is equally effective in the Chamber as on the football field. It is gratifying to know that there is such versatility in his performance and I congratulate him on the manner in which he presented the proposals.

The Opposition's principal objection to the Bill is in relation to Clause 7 in which reference is made to the GLC seeking powers to enable local authorities to buy, publish or produce and sell, books, pamphlets and so on. My hon. Friend the Member for Hampstead (Mr. Finsberg) referred to this. That subject can be discussed later in Committee. As so worded, the clause is not totally acceptable to the Opposition.

I have been privileged to receive the customary communication from the Solicitor and Parliamentary Officer of the Greater London Council who, whenever Socialist legislation is about to be proposed, beseeches me to support it, but he suffers the hallmark of the eternal optimist which, in this case, is the name "H. Wilson". I read these communications but on this occasion I shall not be asking the Opposition to divide the House and I shall support the Bill.

Although we accept the Bill, it causes deep concern to many hon. Members on both sides of the House because of the current problems within the GLC and the fact that in many respects it is local government at its worst. There can be no one in the House who does not feel concern and apprehension at the way in which the GLC operates within our society. That goes for whichever party is in power in County Hall. That is why I want to devote a few moments to the general principle of the Bill and the underlying causes of a potentially massive problem for residents within the GLC area.

The Bill seeks to confer further powers upon the GLC and other local authorities within London. While many of its aims are beneficial, the whole principle of giving further powers to the GLC must be called into question. Most people in London know the GLC and County Hall as an oversized and totally remote giant which has expanded into people's lives since its birth 11 or 12 years ago. Not only Londoners view the misery and problems of London with alarm; its deputy leader does, too. We are bound to look fairly closely at what was said by Mr. Harrington in yesterday's Evening News. In a frenzied and hysterical outburst, which I believe is not always a characteristic of the Welsh, he said that it was up to the 92 London Members of Parliament to be more effective.

Before the hon. Gentleman goes on too much about the "Wilson" name, may I intervene to say that he has made a devastating attack—with great justification—on the creator of this amorphous body, the GLC and the London boroughs—one of the greatest evils the Tory Party ever perpetrated. The creator was none other than his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), who was recently involved in trying to get rid of his former leader the right hon. Member for Sidcup (Mr. Heath).

I follow to a certain extent what the hon. Gentleman says. I agree that the GLC was brought into prominence in the early 1960s by the Conservative administration, but the time has come to take stock of it. As I said earlier, irrespective of whichever party is in power in County Hall, everyone has grave misgivings about its operation.

The deputy leader of the Labour majority in County Hall clearly has lost his relish and capacity for the job. Many of us who have read that article feel in some respects that Mr. Harrington's comments echo the near hopelessness which many residents within the Greater London area feel. Mr. Harrington said,

"I am tired of our MPs. There is no one so smug as an 'arrived' politician. I spoke to a meeting of MPs on a problem of special importance to London. Only one-third of them turned up. That's the problem. London's MPs have got to pay more attention to London."

Mr. Harrington says that he addressed a meeting at which only 30 Members of Parliament turned up. I do not believe that Opposition Members were invited to attend the meeting. There may be good reason for having a combined meeting of representatives from both sides of the House to hear the problems and to argue them out in full. But to launch upon this outburst is unworthy of the relationship between County Hall and the Chamber.

My colleagues and I were in the audience addressed by Mr. Harrington. He addressed 42 of my colleagues, which is between 75 per cent. and 80 per cent. of our strength in the House.

I take the hon. Gentleman's point. That is a high percentage. Back-bench committees on both sides of the House which meet regularly from Monday to Thursday do so from four o'clock until after 6.30 p.m. With all the various committees—between 15 and 20 —Mr. Harrington has done extremely well to get so many Members of Parliament. That undoubtedly demonstrates the great interest which Socialist Members of Parliament have in Greater London affairs.

The GLC has been like a runaway vehicle. There has been no brake and no steering wheel for some time. This problem has to be looked at not only by the Government but by this House as a whole. It is our problem as well. But I say to the deputy leader of the Labour majority on the GLC that if he has lost his nerve, if the job is too big for him, I hope that he will get out before he does any more damage. The confidence of Greater London residents has been gravely damaged over the past 24 hours.

The damage is quite terrifying. Apart from more than £2 million council housing rent arrears, which is the current situation, there is a likely storm over next month's rate increases. My constituents write to me, as I am sure they do to right hon. and hon. Members on both sides of the House, saying, "I can't pay. It's not that I won't pay. I simply can't pay. What do I do?" I am sure we all get letters like that, and the problem is growing. We are getting more and more letters, and all of them reflect an element of the mood of sheer hopelessness surrounding everyone in these days of inflation.

The GLC-Government spending was amply highlighted in a recent excellent article by Mr. Joe Rogaly in the Financial Times which went into one of the most important problems in the situation facing the country and facing the Greater London Council. Mr. Rogaly wrote:

"The pitiful case of London Transport tells the story best. Its capital debt was written off by a generous Government at the end of 1969. In each of the following four calendar years it made a small surplus on revenue account. In the coming 1975–76 financial year it will need a subsidy of at least £40 million from the GLC plus a further £53 million handout from Whitehall.

The principal reason for this £100 million turnround into loss is that the Labour Party took control of the GLC in April, 1973, having made an election promise not to increase fares. What happened after that, in the words of one official, is that Sir Richard Way, the then chairman of the London Transport Executive, 'ran rings round' his nominal masters at the GLC in negotiations for improvements in staff pay and conditions. These were necessary to improve recruitment and hence the service; what the Labour councillors failed to notice, even when nudged by their own internal staff memoranda, was that you could not do this without increasing the price."

On the face of the Rogaly article and GLC affairs, it would appear that there is considerable justification for a public inquiry into the management and operation of the GLC,!especially of its finances. A good case in point is its housing policy. I can see no justification for the GLC embarking on a land-buying spree when it already owns enough land to build 37,000 dwellings. If there is a target of 6,000 dwellings per year, the next six years could be fully occupied in that activity.

The wretched fact is that at present we have a fares standtill, a rent standstill, municipalisation, staff increases, an accumulation of unused land and too tight a control of commercial development.

The hon. Gentleman mentions a fares standstill. He is aware, of course, that in 10 days there will be a substantial increase in fares.

That is to be welcomed, but it is a little too late. The damage has been done. That is the tragedy of the situation.

The matters referred to by the hon. Member for Islington, South and Finsbury concerning the problems on housing estates occur regularly in my constituency. I have two large housing estates, the Ben-hill and Shanklin estates, and enormous problems are created for their GLC councillor and for me because of the inadequacy of their administration. The hon. Gentleman spoke of having to wait five weeks for a reply. I would settle for that. At the moment, I find that it takes two or three months to get replies from the GLC.

Many of these large blocks of houses and flats suffer gravely from substandard designs and building materials. There are leaking homes. Many of these constituents live in near squalor as a result of inefficient and leaking buildings. The GLC tends to pass the buck to the London Borough of Sutton. But Sutton does not have the powers and is not able to begin the work which it would like to see done without the guidance of the Greater London Council, which is, alas, too slow.

If the inadequate Chairman of the GLC's Policy and Resources Committee cannot help to put his own house in order —and it is principally a GLC matter when these problems arise—I urge my hon. Friends to prepare for the day when the GLC must cease to operate in its present rôle. The time must come when the Department of the Environment will have to have a junior Minister for London and the London boroughs will have to be given more autonomy. The residents of London are sick and tired of vast organisation and I disagree with those of my right hon. and hon. Friends who have long held to the theory that bigger is better. I do not believe it is.

Time is running out and a serious decline in local government could be the slippery slope to a breakdown in our recognised organisation of life in this country. A swifter slope could emanate from County Hall. The confidence of Londoners has been badly shaken by the outburst of this deputy leader who runs the GLC, and the fact that he cannot put his own house in order should hasten his resignation to his leader Sir Reginald Goodwin.

I dislike the very principle behind the Bill, but I can see that there are many advantages and benefits to be gained from it. I have no doubt that if at some future stage more legislation is introduced on the Floor of the House designed to give wider powers to County Hall we in the Conservative Party will vote against it.

When speaking on a Greater London Council (General Powers) Bill, I usually refer to the fact that for 15 years I was a member at County Hall of both the London County Council and later the Greater London Council. In view of some of the remarks that have been made this evening, I suppose that I should almost hide my head in shame, but local government in London, and local government at County Hall, has some tremendous achievements to its credit.

I agree with the hon. Member for Sutton and Cheam (Mr. Macfarlane) that the new format of London and, indeed, of general local government is far too large. It has ceased to be local government. I spent many all-night sittings at County Hall demonstrating the opposition of the Labour Party, which was then in control of the GLC, to the London Government Act, and I think that most of the problems to which the hon. Gentleman referred stem from the fact that the GLC is too large. The administrative problems which it was expected would arise have all too vividly been shown to be real.

The hon. Member for Sutton and Cheam said that we can now take stock of the GLC because it has been running for 10 years. But, far from taking stock, only two years ago the Conservative Government were steam-rollering through another local government reform measure to impose on the rest of the country what they had inflicted on London.

I believe that the London County Council, the predecessor of the GLC, was the finest example of local government administration in the country. It pioneered local government not only for Britain but for the world, and people came from all over the world to see it.

One of the problems arises from the blurring of functions between the GLC and the London boroughs. There is far too great a tendency in planning, for instance, for the GLC to interfere with decisions on the ground which should be left entirely to the London boroughs. The GLC's functions in planning should be strategic, and it makes a mistake when it goes too far and starts dealing with day-to-day matters. The problems arise from the size of the GLC.

On housing management matters, I deal with two district offices. Although, of course, I do not always receive satisfaction, I invariably receive a reply within a week. The situation which has been described by some hon. Members must be special to their area, which shows that it is an administrative matter rather than a matter of general complaint.

I wish to speak particularly to Part IV of the Bill concerning Nunhead Cemetery, which is in the borough of Southwark. The cemetery occupies about 52 acres in inner London. It is in a disgraceful state.

As the Minister said, and as the Secretary of State in the previous Government will know, together with my right hon. Friend the Member for Bermondsey (Mr. Mellish) and my right hon. and learned Friend the Member for Dulwich (Mr. Silkin), I have over the years made the strongest répresentations for powers to be available to deal with the situation that has developed at Nunhead. We have all had hundreds of letters from constituents and have attended many meetings with relatives of people buried there.

Almost two years ago, I attempted to introduce a Private Member's Bill which would have enabled local authorities to deal with the situation in cemeteries in their area, particularly privately-owned cemeteries. The problem arises because such cemeteries were developed in the early part of the nineteenth century. With the development of large urban areas, church authorities could no longer cope with burials in their areas. As local authorities did not then have the necessary powers, large private cemeteries were developed.

Many cemeteries in this category no longer receive burials. Nunhead has been closed for burials since January 1969. Highgate cemetery to which the hon. Member for Hampstead (Mr. Finsberg) referred, is in the same ownership as Nunhead cemetery.

I hope that the Minister, apart from welcoming the steps which will enable Southwark to deal with the situation at Nunhead, will say that the Government recognise the great need in many urban areas for powers to enable the local authority to step in to ease the situation.

Since January 1969 no burials have been carried out at Nunhead, and since then no maintenance has been carried out. Indeed, little or no maintenance has been done for the last 12 years. When I was mayor of the borough in 1963, I visited the cemetery as a result of complaints I had received from borough residents. It was in a deplorable state at that time, and with the passing of the years it has grown much worse.

The cemetery is 137 years old, it contains 45,000 graves, and the estimate is that there are 250,000 persons buried there. The whole place is more like a jungle than a cemetery. There are huge trees growing out of the graves. The Southwark Council has had to deal with dangerous trees along the perimeter of the cemetery which would have been a hazard to traffic. The council has just obtained the agreement of the owners to enter the cemetery to deal with other dangerous trees which are in danger of falling on private dwellings on the far perimeter of the cemetery. It is possible for relatives to obtain access to the cemetery only at weekends. It is barred for the rest of the week.

I welcome the fact that the GLC has included within the legislation a provision to enable Southwark Council to deal with Nunhead Cemetery. Both the council and relatives have represented to me the need for action to be taken. Furthermore, the Commonwealth War Graves Commission, which has the responsibility for 690 Commonwealth war graves there, has written to me decrying the deplorable condition in which the cemetery has been allowed to deteriorate.

I hope that the Bill will be given a Second Reading to enable the Southwark Council to attempt to undertake the enormous task of restoring some kind of order to the chaos which at present exists.

It is a pleasure to be called to speak following the remarks of the hon. Member for Peckham (Mr. Lamborn) with whom I spent three years at County Hall, albeit on opposite sides of the council chamber.

I wish to pay tribute to the way in which the hon. Member for Enfield, North (Mr. Davies) introduced the Bill. I am sorry that I cannot display towards the hon. Gentleman the same enthusiasm and loyalty that I was able to display on the football pitch last Sunday.

As a member of the Greater London Council for more than three years and as a Member of Parliament I did not share the experience of the hon. Member for Islington, South and Finsbury (Mr. Cunningham). In my dealings with the GLC I have had prompt and courteous replies from senior staff. If I had undergone any different experience, I would have got hold of the GLC representative concerned and I am sure he would have taken up the matter very quickly and ironed it out as my GLC member is conscientious and efficient. It is intolerable to expect Members of Parliament to do their own duties in Parliament and also to be expected to do the duties of the GLC in their constituencies.

It is appropriate that we should be discussing these matters tonight following the hysterical outburst in the Evening News. In the light of the accusations made in that newspaper, I asked my secretary to contact Mr. Harrington this morning to ask when the meeting was held to which London Members of Parliament had been invited. I gather the gentleman concerned was courteous in a long and diverting conversation with my secretary, but he was very evasive in his replies. I understand from the remarks of the hon. Member for Hackney, South and Shoreditch (Mr. Brown) that Conservative Members were not invited. If there was a low attendance of Labour Members, I imagine that it was a reflection of their opinion of Mr. Harrington rather than their opinion of the importance of London. I think that the article displayed advanced symptoms of a disease that has unfortunately become prevalent in County Hall—namely, a willingness to blame everyone else for the problems of London but itself. It will blame the London boroughs, it will blame the Government and it will even blame the Common Market, but it never blames itself for the problems now facing London.

It is time that the GLC had a good look at itself. It is time that it asked itself whether it is not responsible in some way for the problems it accuses everyone else of being responsible for before it dishes out these general accusations to MPs and to various organisations.

The article suggests that MPs representing London boroughs are less effective than Members representing other areas. That is totally misguided. Time after time we have been told in the Chamber by Members representing constituencies outside London that all the culture in the country, all the investment, the highest wages and the lowest rates of unemployment are to be found in London. Their argument is that London Members have been too effective in representing their constituencies and not ineffective, as is alleged in the article. It is interesting to read Mr. Harrington's comment. He said,

"There is no one so smug as an 'arrived' politician."

No one has tried harder to get into this House than Mr. Harrington and no one has failed so often. It ill becomes him to make this criticism. I hope, in the light of the intervention of the Government Chief Whip, that Mr. Harrington will be deleted from the list of Parliamentary candidates for the Labour Party.

I am in agreement with Mr. Harrington when he says that the Layfield inquiry is too long and too late. Of course, on this side of the House we made it clear that we would offer immediate relief to ratepayers in London and elsewhere by removing the burden of education from the rates.

The specific criticisms that I have to make concern, first, London Transport and the deficit of £126 million that has been accumulated since Mr. Harrington took over control of the Policy and Resources Committee. My right hon. and hon. Friends have grave concern when they see that the block transport grant allocated to London does not go towards building new tube lines, or buying new buses or trains but is used to subsidise fares. It is a misuse of the funds for improving London's infrastructure if the funds are diverted and used for subsidising fares.

Secondly, there is the problem of accommodation. It appears from the newspaper article that there has been a cutback of the funds available for modernising the property that has been acquired. It would seem sensible to reduce the money spent on acquiring property and to divert it to modernising the property that has already been acquired. The houses which the GLC has acquired will remain empty and unused if funds are not diverted. That would be a misuse of the housing stock.

My third point of criticism is the rate. In the last two years of the period when my colleagues and I were in command of County Hall the rate was held virtually static. In the past two years it has increased by 85 per cent and 80 per cent. It would be immodest to claim that the difference is due only to the change in control. There have been other factors at work. Possibly the increase in the number of staff at County Hall is in part responsible for the increase in rate. There has not been the same financial discipline in County Hall since the change in control.

It is time that we had a good look at the GLC. It is time that we tried to define its functions somewhat more clearly. All over the country we are seeing the same sort of problems as those which hon. Members who represent London seats have seen in the past 10 years. There is the confusion of responsibility. That is the confusion of determining where the boroughs end and the GLC begins. There is the problem of the access to funds to carry out the projects which are the responsibility of the top-tier authorities. I hope that it will be possible for the Department of the Environment to set up an independent inquiry to determine how the new structure of London government is working. It has existed for 10 years. There is a fund of experience of the problems that the new structure has created. We have heard about some of those problems this evening.

Cemeteries are mentioned in the Bill. It seems from what was said by my hon. Friends the Members for Hampstead (Mr. Finsberg) and Chingford (Mr. Tebbit) that the problem is not confined to the London Borough of Southwark. In my own constituency there is a disused churchyard in Churchfield Road which is an eyesore and which has been so for many years. Has the time not come to employ some sort of general Bill to deal with the question of disused cemeteries rather than to pick them off one by one in a general powers Bill? I throw out that suggestion to the Department of the Environment.

If hon. Members will cooperate, everyone will get an opportunity to speak in the next hour.

; I note what you have said, Mr. Deputy Speaker. I will be brief.

I do not propose to join in the general condemnation of the GLC. Nor do I believe that we should react like a bunch of tender flowers because some harsh words have been spoken about us by a robust Londoner, Mr. Illtyd Harrington, who has done so much for London. I think that at least would be acknowledged on both sides of the House. At the same time, knowing Mr. Illtyd Harrington, I am sure that, having said a few harsh things about us, he will not mind it we say a few harsh things about him.

I want to put firmly on record that I consider Mr. Illtyd Harrington to be one of the greatest products of London local government that this great metropolis has had. He has devoted his life to the enhancement of London local government.

Having said that, I should like all members of the GLC to understand that it takes time for London Members of Parliament to adjust when a Labour GLC takes over from the appalling myopia of its Tory predecessors. We must also acknowledge that it is in many respects an amorphous organisation. Indeed, when I was involved in local government in the metropolitan borough of Fulham. I was appalled at what was proposed. We were told by the right hon. Member for one of the Leeds seats—I do not know which seat any more than I know to what socio-economic group he belongs, but that should identify him—that wonderful things were to happen, that expenses would be reduced and administration made much easier. Many of us felt that the comfortable, cosy and, more efficient manner in which the old LCC boroughs operated was first class. They had excellent liaison with the greatest local government organisation in the world—the London County Council. London had the most forward-looking, sensible, efficient and caring local government in the world.

I ask Mr. Harrington to bear in mind many issues—for example, the fading away of factories and the threatening rise of unemployment in London. If some of our colleagues on the GLC had been prepared to listen to what we were saying when they were giving so much encouragement to the planning committees of the London boroughs, things might have been different. For example, in my constituency it was easy to obtain planning permission—indeed, encouragement was given by the GLC, of which I understand Mr. Harrington is deputy leader—for the removal of factories, the loss of almost 1,000 skilled jobs, and the erection of warehouses, all of which will add to the awful traffic problems being endured in Ealing to which reference was made by the hon. Member for Ealing, Acton (Sir G. Young). Much of that can be related to the lack of liaison between the planning officers of both the GLC and the London boroughs as a whole.

My last little message to Mr. Harrington is : "You, too, boy, should pull out your finger and get all these planning officers together. Let us not have so much of the nonsense that we have had to endure from County Hall and we will do our best to try to meet the points of criticism that you have made of us." It is difficult for people in local government to endure the screams from Conservative Members and members of the general public when the rates go up. Any suggestions from the GLC or the London boroughs about cutting services are always wrong. We have to put up with the Jekyll and Hyde attitude of so many people to taxes and rates.

I acknowledge the awful problems described by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham), and I hope that they will be quickly remedied. I asked him to explain why his GLC councillors were doing nothing. I am sorry that he is not here, because he said that he would explain it, but he omitted to do so. I have a first-class liaison with the Rev. David Mason who represents Ealing, North at County Hall. I cannot imagine such appalling incidents as have been described tonight being perpetrated on our constituents.

In both national and local government we should consider the awful trend perhaps inadvertent, towards inhumanity in the bureaucracy we create. The great ideals of housing and education which were put into practice by London local authorities show a record of magnificent achievement. I pay tribute to Sir Reginald Goodwin and his colleagues, but there are still some warts spoiling the aspect of the GLC and giving an unbalanced picture of what it is trying to do.

There are problems particularly in housing and transport. Those great ideals put on the statute book by members of my party at County Hall are the achievements of men and women who believe that this should be the best capital city in the world. I do not want that marred by inhuman administration or unfortunate utterances by some of their leaders. The great record of the GLC should not be spoiled by isolated incidents. If one person is disgruntled, frightened or hurt, his case must be pursued. If we can bring into the administration of local government much greater compassion and humanity, we shall make a great leap forward in raising the status and enhancing the dignity of local government in London.

The hon. Member for Ealing, North (Mr. Molloy) made a robust speech and gave some advice to County Hall. I, too, shall try to be brief and robust and to give advice to County Hall.

The hon. Member referred towards the end of his speech to "the bureaucracy we create". He is so right. The GLC staff increase since the Labour Party assumed control is 3,700. In the six Conservative years prior to that, the reduction was 3,500. There is a lesson for all of us there.

I shall confine my remarks to one area of one policy. Faced with the many examples of incompetence and mismanagement that characterise the workings of Mr. Harrington and his kin in County Hall, it is tempting to range wider. Why do I choose this one area? Because I am convinced that it will lead to greater homelessness in Greater London.

"Municipalisation" is an ugly word which conceals an ugly and evil reality. As a policy it is not a crime but it is a blunder, as many hon. Members know. I accept that in all walks of life there are some rotten apples. The Conservative-controlled Greater London Council on occasions had to step in and buy up privately-rented property where the landlords were totally unable or unwilling to fulfil their social and humanitarian obligations. Alderman Perkins was the distinguished chairman of the Housing Committee at the time. I supported his approach, which was realistic and compassionate.

In total contrast is the foolish and antisocial approach adopted in County Hall today. Mass municipalisation cannot be adequately defended on housing grounds by any Labour hon. Member. I remind hon. Members of the words of the deputy director of Shelter, Mr. Christopher Holmes, who has said,

"The great risk of municipalisation is that local authorities will dissipate their resources on houses that are easy to buy and easy to manage. They will prefer to buy by agreement—it's so much simpler and faster.…the effect will be to by-pass once again the needs of those tenants trapped in the worst, multi-occupied, badly equipped and poorly repaired houses."

In other words the policy that the Labour Party has put forward at national and local level is by-passing the housing needs of Greater London.

The Labour Party's interest in municipalisation is not for the sake of improving housing conditions, but for basic, primitive, Socialist reasons. It believes that control by county hall and town hall is good in itself. It is delighted that home ownership in the Greater London Council area is well below the national average. It ignores the importance of the privately-rented sector to London which has a special requirement for such a sector, as it has a large mobile population with special needs.

Put simply, the fact is that Labour Members believe that a good dwelling is a council dwelling, for Londoners, if not for themselves. How many Labour Members live in council houses? Rightly, very few, because as hon. Members they can afford to make their own arrangements.

The hon. Member for Islington, South and Finsbury (Mr. Cunningham) has a record for attacking the management of housing in County Hall. When I was working there I had on several occasions to listen to similar speeches. Yet he is a standard bearer of mass municipalisation. He is pushing hard for greater control by councils over individual lives. How can he match his attitude on housing to the reality of what is happening inside County Hall?

Just as 1 can criticise bad council housing management and nevertheless want good municipalisation with good management, so can the hon. Gentleman, I presume, criticise bad private landlords, but nevertheless support private landlordism as such.

The hon. Gentleman may have missed my opening remarks, when I criticised some landlords. Having listened to his speeches on the way the Greater London Council administers its property, I believe that the GLC is hardly a good recommendation for taking more private housing into public ownership. Labour Members make great use of rented accommodation in London. and rightly.

I believe that the Labour Party has failed completely to think through this disastrous programme. It forgot initially the number of staff that would be required to carry it out—a specialist staff in short supply. To attract them costs a great deal, and they are attracted from London boroughs.

Having attracted the staff and gone in for the purchase, which in many cases is compulsory purchase, the council has to administer those extra properties year after year. Perhaps it is no surprise that under the present administration the staff required by the Housing Department has risen so steeply. Last year the GLC bought a pricey West-End office block, which will cost Londoners about £l0 million. The GLC is always very generous with other people's money.

Should the GLC be managing more houses? No. It should be reducing its stock of council housing. I accept the arguments for maintaining a float of about 50,000 houses, but the GLC's housing stock is far bigger than that. What right has a strategic authority to be in the housing management business? It should see housing at the strategic level, as a regional Government, and should not be involved in organising housing in other people's boroughs.

What is the cost of this great venture of which Labour Members are so proud? The GLC is spending £69 million on the acquisition of private dwellings in 1974–75 —£30 million for new property and £39 million for existing property. The money must be borrowed. If we assume interest rates of 15 per cent., we can see that we are talking of £10 million for 1975–76.

The average cost of acquiring a dwelling is £11,800. We must also take into account that it costs about £13,000 to convert many dwellings to the right standard. Therefore, the true cost is about £24,000. During 1974 a total of 3,170 dwellings were so acquired, only 1,117 being with vacant possession. About 5,000 people can be housed in those dwellings. That means that £40 million has been spent on housing about 5,000 people—£8,000 for every man, woman and child.

Labour Members may be proud that this is Socialism, but if they come into my constituency and meet the blue-collar workers in the pubs they will find it described by a sharper name.

Is the hon. Gentleman complaining that the GLC is paying too much for bad housing, that it is buying bad property which costs too much to put into good repair? Is he suggesting that it should confiscate such property, rather than pay £11,000 per dwelling?

Of course I am not in favour of confiscating property, but I am totally against the whole programme of municipalisation. For the same cost the GLC could house 17,000 people in nearly 4,000 brand-new dwellings. Would not that be a better alternative? How can Labour Members continue to give their support to such a wasteful programme?

The Secretary of State for the Environment has rightly said that local authorities should contain their expenditure if possible. The Department's Circular 171/74 recognises, in paragraph 43, the additional costs of managing municipalised dwellings in scattered locations away from housing estates. Where it is not possible to achieve full compensa- tory savings in management to pay for this extra work, the circular states:

"reductions in repair or maintenance expenditure should be made."

Labour Members are encouraging the GLC to proceed with a crash programme of mass municipalisation at the same time as they are admitting that the repair and maintenance of the GLC housing stock will suffer. Are they aware that when they took over control of County Hall about 50,000 properties still required rehabilitation and modernisation? When the Conservatives took over six years earlier, the figure was much higher. Are Labour Members aware that some 2,000 GLC properties are vacant at present? Are these compelling reasons to spend some £70 million of the ratepayers' money in our city today?

The main charge against this programme, however, is that it is reducing the supply of rented accommodation at a time of acute housing shortage in Greater London. I remember only too well after the Labour Party had produced its manifesto for the GLC elections that ridiculous phrase about "removing the scourge of the private landlord from London", and the number of telephone calls and letters that were received at County Hall from people who decided to give up being in this line of business. They were moving out of housing and reducing the number of bed spaces available for the citizens in our conurbation.

I do not accuse the Government or the the party in control at County Hall of lacking compassion. I accuse them of lacking the competence to cope. The record of the Labour Party in the GLC over the last two years is proof of that. The GLC's municipalisation programme is a crazy programme because it is adding to homelessness. The GLC is reducing the stock of housing in London at a time of growing homelessness. If the Labour Party continues to run County Hall as it has been doing over the last two years, the pressure will mount on all sides of the House and in all parts of London to do away with the GLC.

I happen to be a supporter of the GLC because I support a strong strategic authority for Greater London. If we do not have a strategic authority, we shall have just 32 London boroughs with varying degrees of urban disease. We would be ruled by Whitehall. I would rather that London were ruled in the strategic sense from the far side of the river rather than from this side. I invite Labour Members to get a grip on their party at County Hall and see whether they cannot produce a better deal for Londoners and my constituents.

I wonder what form the debate would have taken if Mr. Harrington had not made his intemperate outburst yesterday. We shall never know.

The Bill before us is fairly narrowly prescribed. One can understand and perhaps forgive the outbursts of, for example, the hon. Member for Bexleyheath (Mr. Townsend). He was making political points and one can understand these things. However, I am hoping that in the last few minutes of the debate we may return to the Bill.

My hon. Friend the Member for Enfield, North (Mr. Davies), introducing the Bill, stated its purposes very clearly. He said that he was hoping and, indeed, expected that during the evening hon. Members representing various London constituencies would give examples of how the Bill would affect their particular boroughs. That is what I propose to do.

This Bill suits my borough very well indeed. I want to refer to just one or two aspects of particular interest which are welcomed by the Borough of Redbridge, of which my constituency is part.

My first point arises on Clause 3. As has been explained, the basic idea in the clause is to give much greater protection to the fire brigade when it has to deal with certain substances which are in storage. The proposal is so to signpost the containers that the brigade would have very little difficulty in dealing with these things. This matter is of particular importance to my constituency because there is there a large chemical complex of Laporte Industries, which is adjacent to a school and a highly built-up residential area. There has been a great deal of trouble and anxiety in this area, particularly since the Flixborough disaster. There has been a great deal of uncertainty because, faced with this rather awesome complex on their doorstep, the people in the district are not too sure about what is in the various containers and they are worried. They know that there are storage facilities for cyclohexane. This gives them cause for complaint and anxiety.

Most of the containers within the complex are quite innocuous and if the residents knew what they contained the impact would be lessened and there would be greater understanding between the residents and the firm. Although this is mainly designed for the protection of the fire brigade, it would have that effect in my constituency.

I agree with the hon. Member for Hampstead (Mr. Finsberg) that this is a matter that could be introduced on a national scale rather than on a city scale. It could be extended to cover the containers which deliver chemicals and other substances to chemical complexes. These containers pass through my constituency on their way to the Laporte chemical works. The vehicles travel along narrow roads and often find it difficult to manoeuvre, which gives rise to anxiety by the residents. This is highlighted by the tragedy that has happened today.

Large vehicles carrying these containers hurtle through my constituency on their way to the tip at Pitsea. It might be a good idea if the containers were labelled with their contents so that in the event of a breakdown in London or in my constituency, the police and fire brigade would know how to deal with it. My authority welcomes the proposals set out in Clause 3.

Clause 8, in Part III of the Bill, deals with the management of housing estates. This will be of value to authorities which have been plagued by parking on their estates. Hon. Members have pointed out the dangers and hazards caused by such parking, over which councils have little control. These additional powers and the co-operation of the police, who hitherto have been loth to go on to council estates because they regarded them as private property, can obviate many of the difficulties facing local authorities. My constituents are worried about illicit parking, the blocking of entrances to estates and parking on narrow roads which often means that vehicles such as furniture removal vans are forced to park on verges and pavements and so cause damage and expense to the borough.

I welcome the Bill on behalf of my constituents.

I welcome Clause 5 which relates to the Thames barrier. This is an important subject which has not been mentioned in the House in the past two or three years. Nevertheless, the need for it remains as great as ever. The need for it is growing because the risk and dangers of a large flood in Central London are increasing year by year. Those risks are increasing partly because the southeastern corner of this country is sinking by one foot every 100 years relative to the sea. I do not know whether that means that your part of the country, Mr. Deputy Speaker, is rising by one foot every 100 years. We do know that there is a great interest in the question of water supply in Wales but at least you are not so threatened by floods as we are in London.

The second reason for the risk increasing is that the estuary of the River Thames has been dredged to allow large tankers to come a long way upstream. This facilitates the inward flow of the North Sea surge when it arises. A North Sea surge comes about because a heap of packed-up water moves southwards from the upper area of the North Sea, which is more or less triangular in shape. If this heap of water—which was experienced severely for the last time in 1953 when about 50 people were drowned at Canvey Island in Essex and at Mablethorpe and Skegness in Lincolnshire—coincides with an abnormally high spring tide in London, coupled with a large flow of water coming downstream from the non-tidal area due to heavy rainfall, conditions are present for a serious flood.

The risk of this is great. Professor Bondi, Professor of Mathematics at London University, produced a report for the Greater London Council in 1960. He assessed the risk in any year as being about 1 in 10 by the late 1960s. I have a Question tabled to the Minister for Agriculture to be answered next week asking how that risk is now assessed in the light of the works carried out on flood walls by the Greater London Council in the interim. I would like to quote an extract from a publication by the GLC of a few weeks ago called "Thames Flood Defences". It says:

"Such a flood in London would paralyse the central part of the underground railway system, knock out power, gas and water supplies, cut vital telephone and teleprinter services and severely hit thousands of homes, shops and factories, businesses and buildings. It could take months to get London functioning normally again. Nobody can accurately assess the probable flood damage bill. It could be enormous—easily £1,000 million—and that would not count the sheer human misery, suffering and loss of life. Everyone involved must see that everything possible is done to prevent it."

Apart from the economic damage to the whole country, let alone the capital city—-which would be extremely serious if the Underground were to be out of action for many months—there is a danger to life. If the Underground were flooded and if the warning system did not work in time, there could possibly be a casualty list which would make the Moor-gate accident seem like chicken-feed in comparison.

I refer to the effect of the floods on my constituency, which comes as far upstream as the tidal area of the Thames goes. There are flood walls as far upstream as Hammersmith because, following the severe floods of 1928, the then London County Council constructed flood walls as far to the west as its area extended. That did not include the Middlesex and Surrey banks of the tidal area of the Thames, where the Greater London Council has been constructing some local flood walls. This work is not complete and the existence of the walls in some cases means that there is an enhanced danger of flooding in the remaining places where the walls are not yet complete. I would like the GLC to complete these works as quickly as possible.

There was a bad flood on 29th January and some of my constituents approached me about it. Their house had been flooded indoors to the depth of one foot. The carpets and floors were ruined. The electricity system of the house was damaged and a great deal of distress was caused to the household. This was one of several such cases in my constituency, and on that occasion the trouble was caused by only a mild North Sea surge. In the event of a bad North Sea surge the damage could be very much worse. I therefore hope that the GLC will hasten the work it is doing on the walls, and I hope that the barrier will not be postponed from 1979, which is the intended completion date according to a reply to a Question I put down two weeks ago. In spite of heavy cost, it is imperative that this important barrier scheme is not deferred.

I agree with some of what was said by the hon. Member for Sutton and Cheam (Mr. Macfarlane) to the effect that the GLC is too large a body, that its powers are not too well defined. But why was it created? It is too large a body and it was not given the strategic powers that alone could justify creating a body of that size. We should not be politically innocent on this matter. It was created because the old London County Council, a very good local authority, was consistently Labour controlled. The electors re-elected it Labour for three years after three years and the then Conservative Government believed that something had to be done about it. That is why this body, with all the criticisms that have been made about its structure, was created. Now, alas from the point of view of the Conservative Party, the electors are voting for Labour Greater London councillors as well.

rose—

I will not give way. The hon. Member made an aggressive speech and I did not attempt to interrupt him.

Now that the GLC is beginning to show Labour majorities, we are told that it is time to have a look at the council. The need to have a look at the GLC has existed ever since the GLC was created, but Conservatives take that line only now that the council has become Labour controlled.

I do not believe that there can be major surgery on the capital's local government once a decade. I believe we would do great harm if we tried to carve it up now. For some time ahead we shall have to make the best of the present structure. For that reason I congratulate my hon. Friend the Member for Enfield, North (Mr. Davies) on his clear presentation of the Bill. I welcome it, and I particularly welcome Clause 7. I think that his financial anxieties about it will be met by an amendment that I understand it is intended to make.

I have a special constituency reason for welcoming the Bill. The Borough of Hammersmith is to become the owner of what was the Palace of the Bishop of London at Fulham. I hope that part of the premises will be used for a local museum. The diligent work of some of the local archaeologists who established for the first time that there was a Roman settlement at Fulham will, I hope, receive due recognition.

In the capital city one of the problems is that there are a number of areas which inevitably have a floating population. I believe it is important for each part of the capital to try to give people a sense of local identity and local history. The effect of this is not immediate, but if one constantly regards cultural matters as things which can be shoved to the bottom of the list and, always for reasons of economy, ignored, then one has only oneself to blame if in time a city is produced which has no dignity or self-respect and which has an unnecessarily high crime rate. I welcome Clause 7 and think that it will be valuable.

We use this debate as an occasion for any complaints we have about the GLC. With a body of that size, whether private or public, some things are bound to go wrong and there are bound to be some causes for complaint. In all fairness, nothing in my experience would justify my making the tirade made by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham).

I shall merely mention two matters which I hope that the GLC will notice. First, there is a tentative proposal, only at officer level, to turn Wandsworth Bridge Road into a juggernaut route. I hope that, before making any decision, the GLC will listen to the opinions of the London Borough of Hammersmith about that route.

Secondly, one knows what can sometimes happen when the GLC is engaged in development. In one area in my constituency badly needed development is being done, but I ask the GLC to consider whether such a long period must elapse between the beginning and the end of such development. During that interim period, the people have an awful life. As one family after another is rehoused, the remaining families find themselves living in a desert of vacated properties to which come squatters, vagrants, rats and the danger of fire. It is important that the interval between the first knocking down of houses and the rehousing of everyone in the area is as short as possible. I hope that the names Bayonne Road and Everington Street will be engraven on the hearts of those at the GLC who are responsible.

I have one general point. Why are we debating these important matters under the guise of a Private Bill? This debate is made possible only if someone is prepared to go through the hostile gesture of saying that he does not want the Bill. There should be a London grand committee. It would not interfere with the proper rights of London local authorities any more than the Scottish Grand Committee interferes with the rights of Scottish local authorities. There should be a Minister responsible to it. That would solve many problems. For example, it would give Londoners some control over their own police force. I make no complaint of the Metropolitan Police—quite the contrary—but it is anomalous that Londoners should have to pay a police rate but have no say in the control of the London police.

We all know that there are many problems in London that require the knitting together of the police, the local authorities at both levels and departments of central government. That is often a laborious process. Therefore we want a Minister. He need not be called the Minister for London. He might be from the Home Office or the Department of the Environment. He would have direct responsibility to the London grand committee. We could then conduct these debates as they should be conducted and possibly Mr. Illtyd Harrington would occasionally turn up to listen to them.

The GLC is putting forward proposals for the closure of Rainham Creek. I am concerned about the proposal, although it is connected with the subject of the speech made by the hon. Member for Twicken ham (Mr. Jessel)—flooding. I have no time to develop my theme and I will merely make a brief apeal. I ask the GLC to think again on this proposal because it is possible for the creek to be closed at times of maximum danger without necessarily being closed permanently. I am in principle opposed to the closure of tidal ways unless there is no alternative. I ask my hon. Friend the Minister to give due notice to the GLC that I shall oppose any proposal to close Rain-ham Creek.

Secondly, the GLC will shortly put up proposals to my hon. Friend about the southerly route across the marshes in connection with the A13. I hope that my hon. Friend will give careful consideration to those proposals which are to come forward shortly.

I am grateful for the opportunity to speak on two clauses which have relevance to recent happenings in my constituency of Edmonton.

The first is Clause 3 which refers to the need to protect firemen, those who work in buildings and the public. The effect of the clause is to strengthen protection against fire risk. We have had two experiences in Edmonton in the past two or three years. One was a warehouse fire. Unbeknown to many people, stored inside the warehouse was a large quantity of PVC sheeting. Fortunately, there was no loss of life, but there was a great deal of near-lethal smoke. The powers in the Bill will make sure that that which is stored in such premises is known and sign-posted so that anyone working in the premises will be alerted.

The other case was more serious. Two people were burned to death in a lift when they were trying to get out of a building. The Minister informed me in a letter that the fire started in the bulk store on the ground floor, near but not immediately adjacent to the lift shaft. The store contained materials—polyurethane foam—which are amongst the most highly inflammable solids used in industry and which, when ignited, produce large quantities of smoke and toxic fumes.

I am advised by the Minister that efforts have been made and that research and inquiries have been carried out. A code of practice has been published recently which will strengthen the powers and draw to the attention of people working in buildings of this kind the need to look at these matters.

I warmly welcome the provisions in Clause 8 which widen the powers to control parking on private service roads and courtyards on estates. I expect that we have all experienced similar frustrations to those of fire appliances, ambulances and even of ordinary citizens as a result of the careless parking of individuals living in and visiting estates. The powers in the Bill will make it more difficult for people who unthinkingly decide that they can park their cars where it suits them, regardless of the resulting dangers to others.

I am pleased that the Bill is so practical. In essence, it will be to the benefit of a great many people in the Greater London area.

This has been a most interesting debate. In the short time remaining to me, perhaps I might comment on a number of the matters raised in the debate and give the assurance that, if I fail to comment on any, officials of the GLC will write to those hon. Members who made them. That applies especially to my hon. Friend the Member for Hornchurch (Mr. Williams), who raised a matter of substance late in the debate which is considered to be very important.

I could have wished that there had been on both sides of the House greater sympathy for local authorities in their present plight. Even including the GLC, local authorities are caught between the Scylla of ever-increasing demands made upon them by the public and by central Government and the Charybdis of an outdated, unfair and unproductive system of finance. I sought to guide this Bill on behalf of the authority so that the vessel in which it travels could gain added sails and seaworthiness. In order further to improve the supports of the vessel, may I deal with the defects in the Bill identified by the hon. Member for Hampstead (Mr. Finsberg), who raised some very important issues which, subsequently, other hon. Members reinforced?

Reservations were expressed about Clause 7 and the council engaging more enthusiastically in producing and selling pamphlets and books than is consistent, in the view of the hon. Member for Hampstead, with the financial stringency necessary in these harsh times.

The promoters of the Bill have prepared an amendment which they propose to move in Committee. It is to add, at the end of the clause:

"… without prejudice to the exercise of their powers under any other enactment, the council and every borough council shall use their best endeavours to secure that, taking one year with another, their income under this section is sufficient to defray their expenditure thereunder."

I think that that gives some assurance that no unjustified expenditure is likely to be incurred under this clause.

I propose now to comment on the other substantive point made by the hon. Member for Hampstead. He referred to bus lanes. It is because the council is mindful of the many problems which bus lanes create that it is seeking to introduce the concept of flexibility, a concept which, on the whole, the Department of the Environment does not altogether share but about which it tends instead to be rather rigid.

The hon. Gentleman is right in assuming that what the council wants is a situation where dividers are used for bus lanes. They will not, as things are now, be used in all cases by any means. The mountable type will be used in the great majority of cases for the "with-flow" bus lanes. It is not possible to give an absolute assurance that the non-mountable type will not be used in "with-flow" cases, but they could be used only in special circumstances, and certainly only where 24-hour bus lanes are envisaged.

Clause 3 has been promoted by the council because of the anxiety of the fire brigade over casualty levels—witness the figures which I mentioned in my first contribution to the debate—and in the knowledge that any regulations governing matters of this kind, which could perhaps be made under the Health and Safety at Work Act, are likely to take an unacceptably long time to appear.

It seems to me that in this debate we have reached a great deal of concurrence on many of the points that have been raised. In fact, vast sections of the Bill have scarcely been commented upon, except perhaps in support of them. My hon. Friend the Member for Peckham (Mr. Lamborn) clearly identified the issues raised by Part IV, and I did not detect any reservations in the Chamber about that part of the Bill.

Perhaps the unity of the debate has been partially contributed to by recent events. I have felt this evening that there has been a political football in the Chamber, and it has not been one of the clauses of the Bill. This football seems to have been kicked pretty consistently and accurately in the proper place. Some hon. Members will be aware that I have covered myself in mud, if not in glory, in pursuing difficult targets recently, and thus I have refrained from joining in the game this evening.

I remind hon. Members that the Bill is of enormous importance to local authorities in the London area—not just the GLC itself, but also the London boroughs. It is enormously important to the people of London who will derive significant benefits from the various clauses. Bus lanes help to promote improvements in traffic flow, and they certainly help to improve public transport. Many of us have reached the stage at which we recognise that public transport makes a significant contribution towards dealing with the massive problem of commuter traffic in London and the vast numbers of people who have to move across London to and from their daily work.

I think few hon. Members present would doubt that the provisions in the Bill which are welcomed and supported by the fire brigade are those which we should like to see enforced for the benefit of that group of men who give such sterling service to London and risk their lives in such a way that we ought to make every contribution that we can to their welfare and safety.

Bearing in mind the assurance that no undue expenditure will be incurred, I think that the clauses relating to the publications of local authorities reflect a growing awareness on the part of local councils that people are demanding a greater amount of information not only about what the councils themselves do, and that for which they are responsible, but also about the facilities which councils control so that the public's enjoyment of these facilities—particularly museums and historic buildings—can be enhanced.

A considerable part of the debate has concerned the question of housing management. None of the criticisms which have been voiced should be taken lightly. However, in all conscience I must aver that other housing authorities by no means as large as the GLC can be subject to much the same criticisms. I suspect that there are hon. Members present from outer London boroughs who would from time to time echo the views advanced by my hon. Friend the Member for Islington, South and Finsbury when he identified certain deficiencies of the GLC.

Hon. Members have expressed real concern about the administration of housing in the London area. However many intermediaries there are between the council and the tenant, and however many people are solicitous on tenants' behalf, hon. Members are from time to time drawn into these difficulties. Every surgery that hon. Members undertake throws up, if their experience is similar to mine, a whole range of housing cases. The vase majority of representations which are made to us concern housing matters.

I would not want to minimise the impact of the various representations which have been made in the debate. If authorities can be defended, it is along the lines that the vast proportion of their resources and their commitment in terms of manpower and ideas should be directed to house building and to the increase in home provision in London. I am only too well aware of the validity of many of the points which have been made, but, however intense the grievances of tenants are, people without homes are in an even more grievous state. It is important not to minimise, when asking for a redirection of resources, the concentration of the effort of housing authorities upon the essential requirement of ensuring that sufficient homes are provided

The debate has enabled an exchange of views to take place and a number of problems have been aired. It is a pity that the way in which the House organises its business means that London, which comprises such a substantial part of the nation's population, which commands such a great deal of resources, and on which the rest of the country is so dependent. is accorded less time than is justified. I am glad that in the debate it has been emphasised that it is important that the House should be enabled to discuss London's questions more frequently.

I beg to move,

That the Appropriation (Northern Ireland) Order 1975, a draft of which was laid before this House on 25th February, be approved.

This order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974. It is a relatively formal piece of mechanics needed to ensure that funds are available for the services of the Northern Ireland Department—those services which were transferred under the 1973 Constitution Act.

Hon. Members who are interested in the Government's plans for public expenditure in Northern Ireland or arrangements for providing money needed for them—such as taxation matters and grants-in-aid in respect of the Northern Ireland Office—should look at the relevant section of the recent White Paper on public expenditure up to 1978–79, and the discussion paper on Northern Ireland finance and the economy which my right hon. Friend issued last summer and which took up the story from the previous administration's White Paper called "Northern Ireland Financial Arrangements and Legislation."

These are important matters. Choice among competing claims for limited resources is the stuff of government. I hope that it will be possible to arrange a debate on this matter in the not-too-distant future in the Northern Ireland Committee, to the establishment of which the House agreed on 10th February. Moreover. I hope that the Convention will take a deep and constructive interest in this subject.

The order is the third—and last—of the appropriation orders for this financial year in the annual cycle of supply legislation for Northern Ireland Departments. The purpose of the order is two-fold. In the first place, it appropriates the Spring Supplementary Estimates and Further Spring Supplementary Estimates for the current financial year 1974–75 and, secondly, it appropriates the sums required on account of expenditure to be incurred in 1975–76.

I propose to deal first of all with the Spring Supplementary Estimates and the Further Spring Supplementary Estimates. The total additional provision which is sought is £75 million. If this is added to the main Estimates provision approved by the House in July 1974—£618 million—and the Autumn Supplementary Estimates provision approved in December 1974—£32 million—the total Estimates provision for 1974–75 is £725 million.

Pay and price increases account for some £48 million of the additional requirements, including substantial additional sums of money for pay increases to nurses and teachers. Some £33 million is accounted for by increases in real expenditure and £5 million by transfers within the public sector. These increases totalling £86 million are reduced to a net total of £75 million for the two volumes of Supplementary Estimates by savings of £11 million on other real expenditure —for example, on schools building and equipment, industrial development, water and environmental services, new construction and improvement of roads. I now propose to describe the more important items making up the £33 million increase in real expenditure.

In Class VII, Vote 2, provision has been made for a grant of £21 million to the Northern Ireland Housing Executive to enable its accumulated deficits up to March 1975 to be written off in accordance with the statement made in the House by the Minister of State on 31st January. I should explain that the Executive inherited deficits from the former local authorities of £3 million. In the first year of its operation, 1972–73, it incurred a deficit of £¾ million. In 1973–74 the deficit was £4 million, and a deficit of over £14 million is expected in the current financial year. This large increase is mainly due to the cumulative effects of escalating building and repair costs and high interest rates at a time when rents remained static. No part of the grant will be used to cover the amounts owing by tenants who may have taken part in rent strikes in the past. Every effort is being made to recover these and other arrears.

Rents have not been increased during the current year and in the same Vote provision of £2·6 million is being made to compensate the Housing Executive. which is the sole public housing authority in Northern Ireland, for loss of income resulting from the national policy of rent freeze. It has been agreed that weekly rents charged by the Executive will be increased from April by an average of 60 pence.

Will the Minister kindly indicate how the sum representing the arrears of rents is being carried or met, at any rate temporarily? If it is not being met in this order, how is it being met?