I beg to move, That this House doth disagree with the Lords in the said amendment.

Order. Will those hon. Members who wish to conduct conversations do so outside the Chamber.

If it would be for the convenience of the House, it might be suitable if at the same time we considered Lords Amendment No. 2, in line 15 at end insert:

"( ) in subsection (4) after paragraph (c) there shall be inserted the following new paragraph—

'(d) the provisions of this subsection shall not apply to retail shops with a selling space of less than 250 sq. ft.';"

I very much sympathise with the view that regulations affecting small shopkeepers should take fully into account their often limited resources. Indeed, the purpose of Clause 2(1)(a) of the Bill is to enable an order to be made allowing the full list of maximum prices simply to be kept available on demand rather than displayed in the shop. This modification of the Prices Act 1974 was introduced in part to help proprietors of small shops with little space to spare and many demands on their time.

The House has considered the issues raised by these amendments very carefully during the passage of the Bill. I believe that no one now seriously disputes that if large sums of public money are to be spent on subsidising essential foodstuffs, it is only right to make such regulations as are necessary to ensure that the full benefit is passed on to the consumer. However, perhaps it is necessary to restate the reason why, in addition to statutory maximum prices, a control on profit margins is needed.

It would certainly make the task to enforcement easier to rely on maximum prices only, but in setting the level of maximum prices, including the area prices fixed for bread, we had special regard for the needs of the small shopkeeper with high costs and low turnover. That is why the maximum prices are generally some way above the prices which most shoppers in urban areas have to pay. Without margin control there would be nothing except competition to prevent those selling at lower prices from raising their prices towards the maximum and thus absorbing part of the subsidy.

I believe that it is well recognised that competition is not always necessarily strong—for example, in rural areas, where there may be only one shop, which could well have a selling space of less than 250 sq. ft.

If instead—and contrary, incidentally, to the expressed wish of the trade—we were to rely on maximum prices only and these were consequently set much lower, at, say, something like the national average, the small shop would be the first to suffer. I am sure, therefore, that it will be agreed that gross profit margins should not be higher in percentage terms than they were before the subsidy was proposed. Only by control of gross percentage margins can we ensure that the full amount of the subsidy is reaching the consumer, and that the wishes of the House in giving effect to our subsidy programme are being properly met. If it is right to have gross percentage margin control for one shop, I believe it is right to have it for all shops.

The number of shops under 250 sq. ft. is undoubtedly large, even though their turnover individually may be small. Their prices may be higher than those of the large supermarkets but in some cases —I believe in quite a substantial number —they are well below the maximum prices set. A number of these small shops, for example, are no doubt members of the voluntary groups and so get the benefit of bulk purchasing. I think it wrong to deny the customers of these small shops, particularly the old and under-privileged who have to use them and cannot perhaps travel to larger shopping centres, the protection which is afforded by this legislation to customers of larger shops.

Moreover, it does not seem reasonable to exclude these smaller shops from the requirement to keep records needed to enable the control to be efficiently exercised and enforced. What we shall ensure in introducing the requisite orders under this clause is that only the minimum of records, adapted as closely as possible to the existing record-keeping practices of the trade, should be required from any retailer. In preparing the orders I undertake that we shall consider most carefully the particular difficulties of small shopkeepers. We shall, of course, follow the normal procedures of consultation which have been established with representatives of the trade—which the Bill extends to record-keeping orders. We shall carry out these consultations thoroughly before making any order. As I indicated in Committee, any record-keeping requirement would not operate retrospectively and a new reference period would in due course be set.

It is not in dispute that small shops should he subject to the maximum prices laid down for subsidised foods. It follows that the shopkeeper himself will need to know those maximum prices. It is only right that his customers, no less than the customers of large shops, should be able to see what those prices are. This is not a very onerous requirement, particularly as we have made provision that it shall be fulfilled with the maximum degree of informality. The notice can be handwritten and the display is to be required for only a small number of best-selling items.

I hope the House will recognise that it would not be reasonable to exempt one class of shop from measures designed to ensure that the full benefits of subsidy expenditure are passed on to the customer.

Like the Minister, I shall not detain the House long as this ground was gone over in depth in Committee. However, we are a little disappointed that the hon. Gentleman should have come back, after these amendments have been made in the Lords, and given such brief consideration to the compelling arguments put forward both in Committee and in the Lords. We have grave reser- vations about the wisdom of reinstating the provision that the Lords deleted.

As the Minister said, the purpose of the amendments is twofold: to give small shops some exemption, first, regarding the display of notices and, secondly, regarding the keeping of records for margin control on subsidised products.

The hon. Gentleman will recall that this matter was debated in Committee. We put down an amendment to try to achieve these two specific objectives. At that time the Minister's objection was that the amendment was framed in such a way that it effectively removed price control altogether. The Lords have made an amendment which not only meets the objectives that we had in mind, but does not sweep away price control in its entirety.

Having studied the debates in the other place, we know some of the Government's objections to the amendments. The first, which the Minister repeated tonight, is that if we deny the obligation on small shopkeepers to keep records, it will mean substituting an inflexible form of control for a flexible one; that is that control will rest on the maximum price mechanism rather than on margin control. We would not object to that, because the maximum prices seem sufficient for controlling the small shopkeepers, particularly as their prices are often closer to the maximum. They tend to have higher costs, higher margins and, in general, higher prices.

These amendments are designed to help the very small shopkeeper. We are talking here about shops of less than 250 sq. ft.—which is very small. We believe that many of these people have recently been overwhelmed by pettifogging and petty-minded bureaucracy. They have had to bear the burden of increased national insurance contributions and of acting as the Government's agent in administering beef and butter tokens. They have had to face the added burden of rates. We believe that if we could relieve them of some of the administrative burden that has been imposed upon them under the prices legislation it would give them some welcome relief.

It is common ground between the two sides of the House that the small shopkeeper has a special role to play in many communities. It is true that his prices are often a bit higher, and that often his margins have to be higher because he has a lower turnover, but in many cases he contributes to a sense of community. Although many people have their main shopping expedition at the weekend at a supermarket, the local shop serves a particular function for during-the-week shopping and for popping in for items which have been forgotten at the weekend. Also, for many elderly people the local shop is the main outlet for buying their weekly food requirements. They are on friendly terms with the local shopkeeper, and in that situation it is unlikely that one will find overcharging or subsidised products being sold at excessive prices.

We believe that the people at whom the amendment is aimed have been overwhelmed by the red tapists' paradise which the Government have been creating. There is an obligation to display or to keep notices of maximum national prices, maximum prices in particular shops, price range notices, notices of the most popular brands, and, on top of that, records for margin control purposes.

We have come a long way since the bread order. If the other orders relating to subsidised foods had followed the model of the bread order we should have reached the situation in which about 200 notices would have had to be displayed in a small shop. Fortunately, the Government retreated somewhat from that position, and we are urging that, having retreated a little, they should go further and recognise that there is no sense in maintaining the obligation to keep records and display notices in these very small shops.

The Government have made one concession, which we welcome. We welcome the fact that many of these notices need not actually be displayed but can be kept in the shop. But that does not relieve the shopkeeper from the burden of having to make the calculations that have to be put into the notices. The maximum prices under various orders are constantly altered. The maximum price of bread is about to be altered for the third time, and there are various kinds of bread for which the adjustments have to be made. The butter order has been amended twice, and there are no fewer than 26 varieties of cheese for which separate records have to be kept and separate prices have to be listed.

Since the debates in Committee we have had one development, and that is that the tea order has been laid before the House. It would need a lawyer to understand the tangled web of provisions under that order. I do not want tonight to go into its provisions—to do so would be out of order in this debate—but they are exceedingly complicated and they illustrate the burden that will fall upon the small shopkeeper trying to understand whether the goods that he is selling conform with it.

10.30 p.m.

I urge the Minister again, having made the concessions that he has, to go a little further. Now that a number of these notices can be kept in drawers, behind the sugar and under the dog and need not be displayed permanently, is it so necessary to continue with all these regulations? If a maximum price was displayed in a small shop, I wonder how many people would know whether it was correct. I suspect that only the enforcement officer would know. I wonder how many people, in front of all the other customers, will ask the small shopkeeper to open the drawer and show them the notices stuffed there. This does not serve much purpose at all.

A further point which has not been answered before is that the maximum prices specified on these notices often bear no relation to what is being sold in the shop. In fact, prices might be stipulated in some notices which would be illegal under other parts of the prices legislation. Some of the notices seem to have no relevance to what is sold or is likely to be sold.

The Minister cast a little doubt on the forces of competition in this area, but if these regulations are to be enforced on the larger trader—if he is to be compelled to have these notices and this margin control—it is unlikely that the smaller shop will charge much higher prices. If the regulations are actually biting on the larger shop the market will look after the prices charged by the smaller shop. In these small shops, where there is a close relationship between the customer and the shopkeeper, it is unlikely that the fiddling of customers that the Minister fears will occur.

Alas, because of regulations under successive Governments, small shops have been facing increasing pressures. In a number of respects, the number of shops offering services has diminished sharply over the last 10 years. In that time, a third of our newsagents, grocers and tobacconists and a quarter of our greengrocers, fishmongers and chemists have disappeared. There has been a dramatic rate of closure among small shoe repairers. Many of the people who operate these small businesses are close to despair at the burden being placed on them. They wonder whether it is worth all the effort, overtime and enterprise that they put into running efficient businesses. Beadledom and bumbledom will now be revealed in all their glory administering this tangled web of regulations.

The amendments will not go far, but at least they will remove some of the administrative burden on small shopkeepers. For that reason, we shall support the Lords amendments.

I represent a rural area in which there are still, although I dare say not for much longer, a large number of small village shops, many of which would come into the category defined in the amendments. I do not expect many of them to be there in my grandchildren's time if the present decimation of rural services and industries goes on.

However, I accept immediately the logic of the Government's argument: once we have price controls and subsidies, it is only right and proper that the controls should try to ensure that public money is not misspent and misused. Taking subsidies for granted, although I have opposed them, we have to have these regulations over the whole panoply of shops. This spectre of bureaucracy and red tape for these very small shops is a crippling burden for people who find it increasingly difficult to master the bureaucratic necessities of modern life and the running of a small business.

I have been unable to find out from the debates in another place with how many small shops through which subsidies may leak we are dealing. How many are there and how many are concerned with subsidies? What proportion of the total of subsidies is likely to go through them? I suspect that it is a very small amount.

We are adding not to the Government's administrative costs, but to the compliance costs of shopkeepers—unnecessarily, I suspect, because even if the amount of subsidy in each shop were to leak out, I dare say that would be a very small amount of public money. We have to balance the advantages of saving a small amount of public money against the inconvenience.

When we discussed this matter in Committee, some of us were concerned to press the Government to omit the implications of the maximum price orders and display notices for small shops. When we saw the concession that would offer either display of the notice or the keeping of records for reference, we felt we had gone some way in demonstrating the rightness of the moral argument.

It is absurd that we should be considering whether this information is useful to the public and whether it should be displayed or kept in a drawer. It is either useful and important information or it is not. As Government agree that it may be displayed or kept in a drawer, we must ask what is the object of having the information circulated to the smallest shopkeeper.

If it is not available to the consumer looking around and she has to ask for it, it can hardly be a particularly important piece of information in the retail situation, and this is the contention behind the Lords amendments which we wish to support. It is that, at this level of trading, the kind of information required to be kept is frankly useless to the consumer and the shopkeeper. Its utility is in direct relation to its accuracy and it will have to be kept up to date at increasing speed in view of the way in which food prices are now moving.

It would have to be used by the small shopkeeper in an intelligent and regular fashion and, with the best will in the world, I do not believe that the House could expect the lower end of the distributive trade to keep pace with what is required to utilise the information. The only possible use for it must be in the possible checks that may be imposed by the fair trading officers operating on behalf of the Department. As taxpayers, we would not wish them to be calling on the smallest outlets where the least trade is done in subsidised food. They should concentrate on maximum outlets where the greatest throughput is involved and where maximum prices for subsidised foods are of great importance.

I remind the Minister of the Price Commission's report on profits in the distributive trade. Paragraph 2.4 says:

"Profit margins within the control remain at a very depressed level. For Category 1 manufacturing and service companies, net profit margins in the fourth quarter 1974 were 50·2 per cent. of reference levels compared with 52·4 per cent. in the third quarter. A year earlier (fourth quarter 1973) they had been 71·4 per cent. For Category II manufacturing and service companies, the fourth quarter figure was 57·8 per cent. compared with 54·3 per cent. in the previous quarter and 65·0 per cent. a year earlier.

For distributors, there has been an a apparent sizeable recovery but this is largely illusory. In the fourth quarter 1974, net profit margins were 75·3 per cent. of reference levels compared with 58·8 per cent. in the third quarter. But the fourth quarter figures reflect the peak Christmas trading when profits are seasonally high. The 75·3 per cent. for the fourth quarter 1974 compares with 94·5 per cent. for the corresponding quarter of 1973. While the fourth quarter shows some improvement from the very depressed levels of the third quarter, the general level of profitability, seasonally-adjusted, is still very low."

It is paramount in distribution, where operating margins are continually being squeezed against costs, that we should recognise that, although the position is bad for the larger distributors covered by the report, it is even worse for smaller shops. We all know the administrative burdens and the costs that the small shops have to hear and their lack of opportunity to develop turnover.

I hope that the Minister will accept our view even at this late stage. If the information may be kept instead of being displayed, it cannot be all that useful, certainly not to the consumer, and it would not be worth while for the fair trading officer and the local authority officer to check on the smallest shops.

The buck having to rest on the smallest shop, which is a back not big enough to carry it, and following the trends against the small shops and the competition of pricing from the supermarkets and larger stores, there is sound reason for believing that maximum pricing, even in the smallest shops, would seldom be exceeded.

The hon. Member for Kingston-up-Thames (Mr. Lamont) stated on behalf of the Opposition that there was no objection to maximum price control in place of margin control. That was an honest admission of the difficulties of the Opposition in dealing with the powers involved in the Prices Act. That is in line with the views that the trade has expressed to us from the beginning—that cash margin control is not acceptable because of the rigidity that it would place upon the trade, and to move from a percentage margin control to a cash margin control, which I take to be the logic of what the Opposition are suggesting, would be quite unacceptable and for that reason not a line that the present Government would be likely to take.

The hon. Member has rightly emphasised that both sides of the House recognise the importance of the small shop in providing for the needs of the communities dependent upon them, particularly the less advantaged who are immobile and who regularly use the corner shop or the village shop because they cannot get to the larger shop. But that recognition has a certain logic that the Opposition have not been prepared to follow through, namely, that those who are dependent upon the corner shop must be protected from abuse. If Parliament votes substantial sums of money for food subsidies, it is right that those who use the small shoo should benefit as do those who use the larger shops.

The hon. Member for Cornwall, North (Mr. Pardoe) said that the amount involved might be very small because the number of outlets might be very small. There is no authoritative indication of exactly how many shops of this size there are, but that they probably run into thousands is certainly clear. Although their total number is large and their turnover fairly small, they are of key importance in servicing the needs of some people, particulaly those living in rural communities, as the hon. Member will be aware. We must protect people living in such communities just as much as people living in reach of the larger multiples.

I cannot accept his view that what we propose will place a crippling burden on the small shopkeeper. Both the hon. Member for Cornwall, North and the hon. Member for Pudsey (Mr. Shaw) made this point and it has been made in earlier debates. Although much has been made of these difficulties, it may be a measure of the trade's lack of interest that we have not received one representation on behalf of traders, large or small, about these proposed new powers. This must stem from the fact that from the beginning we have displayed a complete willingness to adapt our requirements to the needs of particular sections of the trade. When we bring forward orders we shall continue the practice of close consultation to ensure that difficulties such as have been apprehended are not realised.

Does my hon. Friend agree that one reason for the lack of representations from the trade is that it is probably in the interests of the small businessman to be brought into line with the supermarket? The small shop depends upon good will, and it is therefore essential that the customer should feel that he is getting in the small shop whatever the supermarket provides.

My hon. Friend has a valid point. There are advantages in the small shop keeper being able to announce to his customers that the benefits of the subsidies are being passed on. The hon. Member for Pudsey succeeded, according to his lights, in persuading the Government of the desirability of making certain changes in the law, particularly in respect of the requirement for information to be kept, not on display but available in the shop. He says that this is not important. I disagree. We made that change in the Bill to ensure that the small shopkeeper would not find his shelf space cluttered up with a lot of information. It seems a sensible change.

That is not to say that the shopper who uses the small shop should not be entitled to ask for information which the shopkeeper must have if he is to satisfy the legal requirement that he charges no more than the maximum price. All we say is that this information should be available to the shopper.

I hope hon. Members will accept that the purpose of these proposals is to ensure that the public funds involved are properly applied in a non-discriminatory way to all shoppers, regardless of the type of shop they use. They are a protection for those such as the disadvantaged and the immobilised who rely upon the special services of the small shop.

We have had a short debate and I must be careful to ensure that my speech does not greatly add to its length.

We have concentrated in earlier debates, quite rightly, upon the food subsidies themselves, staggering sums, an expenditure which we believe wasteful and largely indiscriminate. Here we are considering the unseen costs of the subsidies, the extensive apparatus of control, the demands on the unpaid time of shopkeepers and the unquantified expense of enforcement to local government, already suffering from the many duties transferred to it from the Government. To that extent we must agree with the Lords amendment. As my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont) said, these shops are an important part of our national life, providing a service to people in small communities, not only in the country but in those parts of our larger towns and cities that are old-fashioned and off-centre.

The owners of small shops work long hours, weekdays and weekends. They rarely take holidays, and are prepared to provide a wide range of articles in penny numbers. We ask for some special consideration for them. This legislation makes no distinction between the corner shop and the hypermarket. It is clear that orders will be introduced, and the Secretary of State has promised one that will make two small concessions to the small shopkeeper. First, he would not have to display the price range of non-subsidised foods. In the case of subsidised foods, the price range displayed would start at a higher price. The last is, presumably, a statutory figleaf to cover the fact that there are lower prices available in the larger supermarkets elsewhere.

The Government should go further—first, by exempting the smaller shopkeepers from the necessity to comply with this requirement of records which, far from being the free give-away indispensable tool of management it has been claimed to be, will turn out to be yet another unpaid job at the end of a weary day, and, secondly, by relieving small shopkeepers from the necessity of displaying all these official notices so reminiscent of the Second World War and the blitz, needing only the Fougasse poster "Careless talk costs lives" to be completely in period.

In case hon. Members should think that there is not some sign of concession, I should indicate that there is a breach in the 100 per cent. principle. Is it fair that these small shopkeepers should suffer these irksome chores merely so that civil servants should not turn uneasily at night at the thought of being arraigned before the Public Accounts Committee? The Under-Secretary of State, in the debate on the Butter (Prices) Order, pointed out that the Government

"have not required the display provisions to be applied to mobile shops, such as milk floats and the vans of grocery roundsmen."

Is the public's money not just as much at stake when the shops are mobile as when they are stationary? Is the little old lady who cannot walk down to the local shop to be at the mercy of her friendly van driver? Is not the house-wife to be protected from her milkman? The breach is already made. Emboldened, we go in hot pursuit for further exemption for the small shopkeeper.

There are other helpful passages from the same speech. The Under-Secretary said that maximum prices

"are intended to be those at which the reason-ably efficient small shopkeeper can continue to supply butter."

It therefore follows that only the unreasonably efficient small shopkeeper is

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

The Constitution of Malta was amended on 13th December last year and Malta then became a republic within the Commonwealth. As the House is aware, when a Commonwealth country makes this change from a monarchical to a republican Constitution it is necessary for legislation to be introduced in the United Kingdom to make appropriate consequential changes in our own law.

In accordance with established practice on previous occasions, the proposed legislation is short and, I believe, uncontroversial. The Bill itself provides that the law of the United Kingdom, the Channel Islands and the Isle of Man existing on 13th December 1974 in relation to Malta and to persons and things belonging to or connected with Malta is not affected by Malta's change to re-publican status. Much of the legislation on the statute book which relates to Commonwealth countries was formulated when those countries were under Her Majesty's sovereignty. As a result, one finds in it terms such as

"parts of Her Majesty's dominions"

and it is in order that such legislation should continue to cover Malta in her new status that the present Bill is required.

The Bill will have the same effect on the law of the United Kingdom's dependent territories in so far as that consists of Acts of the United Kingdom Parliament extending to them, and also of Orders in Council extending such Acts to them. The local legislatures in the dependencies do not have the competence to make the necessary provision themselves.

Malta remains a full member of the Commonwealth. The other member countries, including Britain, were consulted and have welcomed her continued membership. A number of other Commonwealth countries have become republics during their membership of the Commonwealth and these changes have not affected the status of Her Majesty as Head of the Commonwealth nor the esteem in which she is held by the peoples.

Malta is a fully independent nation and has been since 1964. We do not believe that her new status as a republic will in any way affect the good working relations between our two countries. The close bonds of friendship between us have been built up over more than a century of co-operation and have survived through times of great hardship, particularly in the dark days of the war, when the Maltese people inspired the admiration of so many with their steadfastness and courage in the face of great affliction.

We hope that our offer of technical assistance will make a valuable contribution to Malta's welfare. Likely fields for it are currently being discussed with the Maltese Government.

The first President of the new Republic is Sir Anthony Mamo, the former Governor General. Mr. Mintoff continues as Prime Minister.

Messages of goodwill for the prosperity of the new republic were sent on 13th December from Her Majesty the Queen, from the Prime Minister and from the Foreign and Commonwealth Secretary. I am sure that the House will want to join with me—

Before the hon. Lady draws to the end of her peroration, could she tell the House, in a few words, the major changes which the Bill will make?

The Bill makes changes so as to meet the necessary requirements to take account in our own legislation of the fact that Malta has become a republic. When Malta became independent it was assumed and known that she would ultimately go on to be a republic and that a Bill to make Malta a republic would have to pass through the House. Therefore, those changes, such as they were, were already incorporated in the independence Bill. Therefore, there are no basic changes which we have to take into consideration. Malta is a republic. All the relationships we have had with Malta in the past, and all the results flowing from those relations, still apply.

I gather that, in the absence of the Secretary of State for Foreign and Commonwealth Affairs and the other Ministers, the Under-Secretary of State is in charge of the Foreign Office. I should like to wish her the best of good fortune in this onerous task, which I am sure that she will not wish to last for too long.

I do not believe in repetition. As 1 think our noble Friends in the other place made clear, we accept the Government's interpretation of the Bill. It is very much on the same lines as previous measures, the most recent of which was the Sri Lanka Republic Act 1972. We associate ourselves with the good wishes which the Government have expressed to Malta.

Malta has been associated with this country for a long time. The bonds which bind us and that island are still very close. Malta is a member of the Commonwealth and has an association with the European Community. I am sure that the Under-Secretary of State, like myself, hopes that our joint connection with that organisation will remain in its present happy state for a long time to come. Malta is also in the ambit of NATO. We hope that that will continue.

We are also pleased that nothing in this Bill in any way changes the status or position of the Maltese people living in this country, who make a notable contribution to our life. Again, nothing in the Bill changes or alters the arrangements concerning emigration from Malta to this country. In other words, this is simply a tidying-up measure which enables the Maltese people to go on their way as a republic.

We should like to wish the people of Malta God-speed in their decision and to associate ourselves with the good wishes which the Government have expressed.

I feel that it is appropriate for a former naval person to speak for one minute about this Bill and to recall the connection which runs like a golden thread through the history of the United Kingdom and Malta.

Although it is a fait accompli that Malta is a republic, I regret it. I feel that both Malta and Britain may in due course come to regret it as well. I hope, however, that the new status of Malta within the Commonwealth will allow continuing economic and political cooperation and, subject to the vicissitudes of Government policy, co-operation in defence matters too, because the facts of geography remain as they have been through the centuries, in that Malta is the key to the Mediterranean.

As one who knows Malta well and who loves Malta dearly, I was sad when Front Bench speakers seemed to consider as a matter of comparative unimportance the change of the present status of Malta to that of a full republic. It seems to me that the ties of the Commonwealth must be extremely weak, fibrous and thin ii they can disappear by a wave of a wand.

It is often considered unwise and improper to involve the Chair in a debate, but I well remember that you, Mr. Deputy Speaker, were on the Government Front Bench at a time when Malta was going through one of her most difficult periods and that you stood up manfully for the people of Malta.

Like my hon. and good Friend the Member for Winchester (Rear-Admiral Morgan-Giles), I wish Malta well in the future, and I can confirm what the Minister said about the high esteem in which Her Majesty the Queen is held by the people of Malta. But when, before becoming a Member of this House, I was asked by one of my hon. Friends who was then Vice-Chairman of the Conservative Party whether I had any major disagreements with the party's thinking, my reply was that I thought that once we had independence and republics within the Commonwealth we could write off the Commonwealth. I believe that I have been proved right over these past 15 years. This seems to be yet another sad but, I suppose, inevitable addition to the weakness of the British Commonwealth in allowing republics and independence within it.

There are two matters of detail about which I wish to ask the hon. Lady. First, what will be the position of appeals to the Privy Council in the new circumstances? Secondly will there be any change in the agreed figures of the immigration quota from Malta? It would seem insignificant if there were no change. It would be significant if there were a change. In this significant moment for Malta, the Commonwealth and this House of Commons, I should like to know the answers to those two questions.

It is difficult to understand how the Minister can say that there will be no difference in the situation between our country and Malta as a consequence of this Bill when in her Government's White Paper on defence it is hinted clearly that when the present defence treaty with Malta ends it is not proposed to renew it, that it is not expected that it will be renewable, and that measures are being taken now in that regard. How the hon. Lady can say that no change is contemplated surpasses imagination.

I should not like anything to surpass the imagination of the hon. Member for Stroud (Mr. Kershaw). His argument is quite accurate. But the point is that it is not because of the Bill. I was asked what changes arose as a result of the Bill. Defence matters are not the direct result of the Bill. This is not a matter of controversy, and I am not trying to pretend that something is when it is not. I should have thought that the hon. Gentleman would have been aware of that.

As for appeals to the Privy Council, there is no provision in the law of Malta itself for appeals to be brought from the Maltese courts to Her Majesty in Council or to the Judicial Committee. It has not, therefore, been necessary to make any reference to such appeals in the Bill.

As the hon. Member for the City of London and Westminster, South (Mr. Tugendhat) pointed out, there is no change concerning immigration and relations between Britain and Malta. As he also pointed out, I am in charge of the Foreign and Commonwealth Office at the present time, and, therefore, it is not for me to pursue the point about the EEC and related matters.

I am grateful to hon. Members for the welcome they have given to the Bill. I do not regard it in terms of regret that Malta has become a republic. Whatever our views may be about that, I am sure that all of us, as has been indicated, join in extending to the President, the Government and the people of Malta our very best wishes and the expression of our pleasure that they wish to remain as members of the Commonwealth.

Before we part with the Bill I should like to place on record the memories that some of us have of the gallantry of the people of Malta during the war. The fact that that country of all countries was awarded a British decoration, the George Cross, which is normally awarded only to individuals, is something that we hope the Maltese will always prize. It is a memory that we hold dear. I hope that it will always bind us to the people of Malta, despite the fact that many of us regret the moving away commemorated by the Bill.

I was interested in that lesson in procedure, Mr. Deputy Speaker.

The scandal of Countesthorpe health centre is, first, that there is not one, and, secondly, how this has come about. I should like to go over the history fairly briefly.

Over the past few years the population of Countesthorpe has trebled from 2,000 to pretty nearly 6,000. In addition, the surrounding villages, which are in the same catchment area for general practitioner services, have a population of another 2,000. The development proposals already in the pipeline will increase the population of Countesthorpe by a further 2,500, making a total population in the catchment area of more than 10,000 people in only a few years.

All the people in Countesthorpe and the surrounding villages, but, above all, in Countesthorpe, are served by a partnership of three doctors, operating from a single, cramped consulting room in the private home of the senior partner. I think that everybody agrees that this is obviously an intolerable situation both for the doctors and, not least, for the wife of the senior doctor.

The people of Countesthorpe have nothing but the highest praise for the way in which the three doctors concerned have managed to provide a medical service, despite these appalling conditions, but they arc rightly seized with the real fear that before long their local medical service will collapse altogether. I am sure that the Minister will have seen the petition on that subject, signed by 1,700 residents of Countesthorpe, which I forwarded to his hon. Friend the Minister of State last month. This large number of signatures was collected with no difficulty at all over a period of only a few days, which gives some indication of the strength of local feeling on the issue.

It has long been clear that the only solution to this acute local problem is the provision of a fully equipped health centre for Countesthorpe. This was first proposed by the then county medical officer of health for Leicestershire in 1971.

During 1972 and 1973 a suitable site was acquired by the county council, and a firm of architects was thereupon commissioned, I believe for a fee of £3,500, to prepare plans for the building, the construction of which was expected to start at an early date.

But last year, as a result of the reorganisation of both local government and the National Health Service, the responsibility for health centre development was transferred from the county councils to the Department of Health and Social Security. The Department asked the Leicestershire Area Health Authority its suggested order of priorities for health centre development in the whole of Leicestershire during the current financial year, and quite rightly, the Leicestershire Area Health Authority placed Countesthorpe top of the list for the entire county. This was duly endorsed by the regional health authority officers last July, and it was generally assumed throughout the county that the construction of the Countesthorpe health centre would start this year.

Evidently it was not to be. The new Labour Government decided to use their powers to ride roughshod over local knowledge and wishes. Officers of the Department sat down with officers of the Trent Regional Health Authority and prevailed upon them to draw up a new list of priorities for health centres in Leicestershire, under which Countesthorpe was down-graded from No. 1 in the county to No. 15; in other words, from this year not to next year but to sometime or never.

Mr. Naylor, the regional administrator of the regional health authority, in a letter to Mr. Mansfield, the secretary of the South-West Leicestershire Community Health Council, dated 18th March 1975, said:

"The Ministers have decided that the 1975–76 Health Centre programme be centrally selected. The RHA have formally written to the Department objecting to this decision on the grounds that it minimises rather than miximises delegation which is a central objective of the NHS reorganisation, and asked that policy be reconsidered accordingly."

I hope that the Minister will address himself to that point, among others, in his reply. In view of the clear statement,

"The Ministers have decided that the 1975–76 Health Centre programme be centrally selected",

I find it astonishing that the Minister of State, when I raised the downgrading of Countesthorpe at Question Time in the House of Commons exactly a week later, should have sought to justify it by—I think the Minister will have to agree—the wholly misleading excuse:

"Countesthorpe health centre was not among the list of priority schemes put forward by Trent Regional Health Authority for consideration for inclusion in the 1975-76 programme."—[Official Report, 25th March 1975; Vol. 889, c. 236.]

This may have been technically correct, but in every other sense it is a travesty of the truth.

The "central selection" of health centre priorities is determined by the Department, and rubber-stamped by regional health authorities, according to eight criteria which the Minister circulated in the Official Report of 25th March as part of his answer to my Question. Following that answer, I got in touch with all the relevant bodies—the regional health authority, the area health authority, the community health council and the local district council—on the specific question of these criteria, and I have had written replies from all of them.

The only criterion which Countesthorpe clearly does not satisfy is c in the Minister's list, since it is not

"part of a larger development (including hospitals university teaching units)".

There is some disagreement among the authorities that I consulted over a and d, which are not strictly medical at all, but depend on whether the proposed centre is situated in an "urban zone" or

"a new town or other new community".

Bearing in mind the rapid growth of Countesthorpe, to which I have alluded, the area health authority is of the opinion that at least one of these criteria applies, while the community health council believes that both do.

But there certainly is a clear consensus among all these bodies that Countesthorpe satisfies at least five of the eight criteria. To be precise, b is:

"General practitioners are committed to present premises and are dependent upon a health centre for new premises."

A critical word has been left out of the Official Report. Criterion e is:

"General practitioners have strong desire to develop primary health care but are frustrated by lack of suitable accommodation."

The next one, f, is:

"Present general practitioner premises are well below modern standards and other means of improvement are not feasible."

That again is unequivocal. Criterion g is:

"Proposed centre is sited where there is at present inadequate accommodation for community based nursing staff or for preventive health activities."

Finally, there is h,to which the Department attaches particular attention:

"The proposed location is in a 'health deprived' area [a health deprived area should for the time being be interpreted as a locality in which the level of primary health care services falls well below the average obtaining in the Region]."

I am sure the Minister will not need reminding that the whole of Leicestershire is a health deprived area. He will no doubt recall that on 20th November last there was an Adjournment debate when all the Leicestershire Members, irrespective of party, combined to complain that Leicestershire's share of National Health Service resources was the lowest of the Trent Region, which in turn was the lowest region per head in the country.

I remind the Minister of what he said in reply to that debate:

"…my right hon. Friend recognises the need to continue to improve Leicester's relative position in relation to the region and the country as a whole."—[Official Report, 20th November 1974; Vol. 881, c. 1490.]

I think it is clear that, all in all, even on the basis of the Department's own criteria the case for a Countesthorpe health centre is overwhelming. Why, then, has the Department chosen to kill it —because that is what it has done by its decision? The only clue that I have been able to discover, because I cannot believe that Ministers have allowed party political considerations to affect their judgment, came in a letter from the Regional Administrator of the Trent Regional Health Authority dated 28th April in which he said, and I quote this for the last time:

"Stress was also laid by Department officers on the concept or urban deprivation, which in the Leicestershire circumstances relates to the city of Leicester itself."

But how can it be right that the city should get everything and the rest of the county and the less urbanised communities, even if they are considerably built up, are neglected? How can it be right, when the county health authority itself has carefully weighed up, from its own detailed knowledge of conditions on the ground, the relative needs of the different communities within its borders, that that judgment should be overruled—without any consultation, incidentally, with the area health authority—by the Secretary of State sitting in Whitehall?

Fortunately, the crisis at Countesthorpe has for the time being been somewhat abated by the decision, not perhaps unconnected with a certain amount of pressure on this subject, of the regional health authority and the area health authority, accepted loyally as a second best by the doctors concerned, to erect a small, prefabricated health centre in one corner of the site earmarked for the health centre proper. This, however, is not a satisfactory solution for anything other than the very short term.

The whole thing has been a shabby story in which a great deal still remains to be explained. The people of Countesthorpe feel this very strongly indeed. They and their doctors, for whom, as I have said, no praise can be too high for the way they have coped in appalling conditions, are still denied their health centre. Can they have it next year if it cannot be this year? I for one will not be satisfied unless the Minister gives an undertaking that this indeed will be so.

I want to make it clear that this is not a case of calling for higher public expenditure at a time of national economic stringency. This is a case of priorities within a given total of public expenditure, and priorities, too, within a given county. It is, above all, a case of proven need of a local community objectively assessed by those best placed to assess it not being overruled, as it has been done until now, or ignored by the man in Whitehall who thinks that he—or she— knows best.

Let me say at the outset to the hon. Member for Blaby (Mr. Lawson) that I well understand the feelings of the people in the area and certainly of many organisations in the area as witnessed by their representation of the problem they face and their wish to have this health centre. When, however, the hon. Mem- ber said towards the end of his speech that this was not a question of increasing public expenditure and that it was merely a question of priorities, I must say to him that this is the sort of argument we receive continually from hon. Members who advocate increased cuts in public expenditure in general but never the acceptance of any cut in particular.

The hon. Member knows full well that particularly in the Budget debate he called for considerable cuts in public expenditure. While we would wish that we could do more in the health sector, it is somewhat strange to hear people calling for cuts in public expenditure in general and always suggesting that their case is of higher priority than the remainder of the country.

I thought I made is perfectly clear that I was not calling for any increase in public expenditure in this field. The fact is that the area health authority said that this should be the first priority. Unless the Minister says that there should be no health centres built at all, his case will not stand up. We arc talking about a question of priorities, not the total level of public expenditure.

Whenever one talks of priorities, it must inevitably mean a question of one item as opposed to. another. If the hon. Member advocates the inclusion of one scheme as opposed to another, he must either call for an increase in public expenditure or name which of the expenditure he would propose to cut in place of that which he proposes to include.

The 1975–76 health centre programme must be viewed in the context of the national priorities, the policies and the resources which are available at the present time. I should like to highlight the general changes of direction and emphasis before dealing with the specific issue raised by the hon Member in connection with Countesthorpe.

In relation to policies and priorities, before 1973 there were no defined guidelines indicating where health centres should be developed. Local authorities' decisions to build health centres in particular places depended primarily on the willingness of general practitioners to work from the health centres, and, provided design proposals, cost limits and tenders were acceptable, loan sanction was approved by the central Government. Consequently, at that time, the impetus for health centre development depended more on local enthusiasm than on consideration of the quality of existing primary health care services.

In 1973 the then Conservative Government decided that loan sanction for health centre developments should be held nationally at £12 million, at 1973 price levels, and that this level should be retained for 1974–75. Because the number of schemes already proposed by local authorities—some 250—greatly exceeded the resources available, loan sanction was deferred in 1973 on many schemes, including Countesthorpe. The hon. Gentleman said that the decision to "abandon" Countesthorpe was the responsibility of the present Government: in fact, the deferment was a direct consequence of the decision of the previous Conservative Government in 1973. That Government also decided that the health centre programme should bear its share of the cuts imposed on health capital, thus reducing the allocation to £10·5 million, and announced their intention to select centrally for 1974–75 the health centre schemes considered to have the greatest priority.

When my right hon. Friend assumed office in 1974 she made clear from the outset her intention to seek to redress inequalities in health care provision by making financial allocations more responsive to health needs. In the debate on the National Health Service on 2nd December last my right hon. Friend explained that, despite the constraints within which she had to work in formulating the health capital programme for 1975–76, she had decided to give top priority to capital facilities for primary health care by increasing capital expenditure on health centres to £20 million in 1975–76. She stressed, however, her intention in this area, as in others, to be selective as a means of moving towards greater equality of provision.

My right hon. Friend also decided that the twin aims of ensuring a more equitable distribution of resources—for which the hon. Gentleman called in the previous debate—and the responsiveness of allocations to health care needs justified the continuation of central selection of schemes for the time being. It was not a new policy but a continuation of the policy of the previous Government.

I began by saying that the health centre programme should be viewed in the context of national priorities, policies and resources. Since coming to office we have clearly indicated our views on the priorities of primary health care; we have embarked on a policy of guiding resources to areas of health deprivation, and we have increased the resources allocated to health centre developments by £5 million this year, despite our present economic stringencies.

In the case of the area covered by the Trent Regional Health Authority, the region has been given approval to start health centre schemes costing in total about £1¾ million, accounting for 11½per cent. of the national programme, whereas the corresponding allocation by the then Conservative Government for 1973–4 was about £1 million in the same price terms or 6 per cent. of the national programme. This increased percentage is evidence of our determination nationally to improve the relative position of regions too long deprived in health care terms.

The hon. Gentleman talked of the Leicestershire area as part of the Trent area. Of the amount allocated to Trent for health centres in the current year. over £500,000 is for starts in Leicestershire. This figure represents about one-third of the region's total allocation. whereas the Leicestershire area accounts for less than one-fifth of the region's population. This switch is an acceptance of my point in the previous speech to which the hon. Gentleman referred, about health centres in this area, when I called for recognition of the need to improve Leicestershire's position. In health centre provision, we have improved the position of Leicestershire and Trent.

The hon. Gentleman has been critical of the method of selection of the health centre schemes for the Trent region in the first half of 1974. Prior to the Secretary of State's decision to select the programme centrally, officers of the Trent Regional Health Authority met area health authority officers in a series of forward-looking meetings and invited areas, after consultation with family practitioner committees and other interested parties, to submit health centre proposals and priorities for the coming year to the regional health authority.

The region intended to compile the 1975–76 programme on the basis of area health authority recommendations and the regional view of relative priorities, taking account of criteria already made known to local health authorities late in 1973 which did not, at that time, make reference to areas of health deprivation. If the hon. Gentleman is talking of areas of priority, surely it is right that we should give priority to those areas of health deprivation.

When the Secretary of State announced her decision to select the 1975–76 programme centrally, officials of my Department and the Trent Regional Health Authority, assisted by medical officers of the regional medical service, who are in close touch with primary health care matters in the region as a whole, met to consider the regional health centre programme.

The procedure adopted was, first, to consider proposals against the criteria drawn up for national selection and in the light of my right hon. Friend's wishes regarding areas of health deprivation ; secondly, to take account of the views of the priorities expressed by the area health authorities and the regional health authority and the feasibility of schemes to proceed ; thirdly, to list all schemes in descending order of service priority so that it would be possible to replace schemes that slipped from the firm programme by those next on the list, subject only to those schemes' readiness to proceed.

As a result of these joint departmental and regional considerations at officer level, a list of priorities was compiled for 1975–76 and a list for thereafter. The latter was intended to supplement the 1975–76 reserves as necessary and to act as an indicator to assist health authorities to programme future planning work.

These lists, together with those submitted originally by the area health authorities, were put to the regional health authority, which approved the later version. This was then sent to my Department for consideration and selection of the health centre programme by my right hon. Friend. Despite the fact that Leicestershire Area Health Authority gave Countesthorpe top priority, as did Leicestershire County Council in 1973, the scheme was not among those approved by the regional health authority for a start in 1975–76.

There was no Question of a Labour Government riding roughshod. The project was not in a list approved by the regional health authority. If one talks of democracy in the local health services and giving authority to those who ought to know, and do know, the regions best, it is better to accept the views of the regional health authority rather than the view, in the hon. Gentleman's words, that the man in Whitehall knows best.

This is a polite fiction. The regional health authority changed its list at the behest of the Department, just rubber stamped the Department's own interpretation of the criteria and forwarded a formal recommendation to the Department. The Under-Secretary must know that the people on the ground are those in the Leicestershire Area Health Authority. The headquarters of the regional health authority are in Sheffield, which is a long way from Leicester.

The hon. Member keeps talking of the list. When preparing the 1975–76 list for submission, the regional health authority approved a further list of health centres in terms of descending order of priority. The purpose of the second list was to ensure that, if selected schemes failed to start for any reason in 1975–76, another scheme could be brought forward from the ton of the second list. Countesthorpe was eighth in priority on that second list, not even top of that list. It was not that it was not a deserving case, but, as the hon. Member pointed out, there is a pressing need to provide improved premises for general practitioners in the village.

I am glad that he paid tribute to the work of the three doctors who have been practising in difficult circumstances in that area. I join with him in paying my tribute to their work. In a situation of increased but still limited resources, however, the view was taken that the problem of practice premises was capable of speedy solution by means other than the provision of a full health centre, however desirable that might be. Countesthorpe has to be compared with other parts of the region. When we are talking of priorities we mean comparisons.

I am not saying that Countesthorpe is perfectly catered for, but it is not as bad as some other parts. This is always the difficulty when one has to decide priorities. If priorities mean anything, they must mean providing for the worst before those who are even slightly better off. It is true that the village has grown. There are 6,000 or more inhabitants, and the hon. Member suggested a future population of 10,000, but a comprehensive range of health services is already available to them locally, including facilities for chiropody, audiology, speech therapy, school clinics, ante-natal and child health clinics, and facilities for health education.

An assurance was given that proposals to provide improved surgery facilities would be put to the hard-pressed general practitioners, and on this basis Countesthorpe was not included in the current year's programme, priority being given instead to Uppingham Road in the city of Leicester. The hon. Member mentioned the possibility of Countesthorpe serving a population of 10,000 and spoke of priorities. Uppingham Road health centre will provide facilities for seven doctors serving 20,000 patients. So if one is talking purely in numbers, and I am not making heavy weather of the numbers issue, there is a clear difference.

The regional health authority, the area health authority and the Leicester family practitioner committee have secured arrangements to provide health practice premises for the general practitioners, and I am sure that I carry the hon. Member with me in expressing pleasure that the doctors concerned have accepted this offer. The new premises will provide accommodation for health visitors, midwives and other members of the primary health care team, and should be ready for occupation by the end of the summer, which is rather quicker than would have been the case if Countesthorpe health centre had been included in the 1975–76 programme.

I am grateful to the hon. Member for giving me another opportunity. This is serious because it seems to have an implication for the whole country. Is he suggesting that any community with fewer than about 20,000 population cannot be expected to be allocated a health centre at any time under the present regime of the Department of Health and Social Security?