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Commons Chamber

Volume 892: debated on Wednesday 14 May 1975

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House Of Commons

Wednesday 14th May 1975

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Private Business

Scrabster Harbour Order Confirmation Bill

Stornoway Trust Order Confirmation Bill

Considered; to be read the time tomorrow.

Oral Answers To Questions


Fishing Industry


asked the Secretary of State for Scotland if he will make a statement on the present situation of the Scottish fishing industry.

The industry will benefit from the temporary subsidy arrangements and from the measures of protection against low-priced foreign imports which Norway has voluntarily adopted and which the EEC has now applied more widely. When I met representatives of the industry on 12th May I reaffirmed that the Government would pursue policies to safeguard them in relation to the overfishing of stocks, and would continue to strive for a modification of the common fisheries policy of the EEC to take account of the United Kingdom's special interest.

Although I am grateful to the Minister for all he has done and is doing, may I ask him to accept that there continues to be the gravest concern in the industry about the renegotiation of the EEC fisheries policies, falling prices, quotas and the break-up of the Law of the Sea Conference? Can he guarantee now that if other countries take unilateral action to extend limits we shall take immediate action? Will he accept that at next week's North East Atlantic Fisheries Commission meeting it will be the last straw for the industry if we fail to take a hard line and preserve fair quotas for the British fleet?

The hon. Gentleman has asked approximately six supplementary questions. I assure him that I appreciate the concern of the industry as expressed to me on Monday, and I can give him an assurance on his point about unilateral action by any other country. We have stated publicly that we shall be ready to take action if any other nation unilaterally extends its limits. That has been Third endorsed by the EEC. We shall be taking a hard line at the conference next week.

May I assure the Minister that we are grateful for the meetings on the fishing industry that have been held with him and with the Minister of Agriculture, Fisheries and Food? Can he give us any indication when we may hear something definite about quotas? Secondly, has he got any further with establishing regular meetings with an authoritative body which can speak for the fishing industry?

To some extent the timing depends on the outcome of the conference next week, which is probably the most important conference—even more important than the Law of the Sea Conference, which is a longer-term matter. It would be wrong to anticipate what might come out of the conference next week. On the right hon. Gentleman's point about regular meetings with the industry, as he knows—I do not say this by way of complaint—one of the difficulties is that the fishing industry is not as well organised as it might be, particularly among the inshore fishermen. We shall give fishermen every encouragement to improve their organisation, and we are always willing to set up a more regular formal type of working party or to have regular meetings, because we recognise that there are many problems facing the industry.

Will the Minister recognise that many of the troubles of the fishing industry are due to its own indecisiveness? Will he ensure that at the NEAFC conference next week he gives his officials a definite lead to give subsidies to boats under 40 ft. long and to those engaged in shell fishing? May I ask him not to wait for somebody else to take unilateral action? It is high time that he gave the industry a lead.

It is high time the Scottish National Party had a better spokesman on fishing matters. I am not sure whether it could produce anyone better, but the hon. Member for Banff (Mr. Watt) is totally misleading the House and, indeed, the fishermen. We have already reached agreement on the basis of a voluntary scheme for subsidies for boats under 40 ft. long. The fishermen were most appreciative on Monday of the fact that, because of the difference in arrangements, we are including over 100 additional vessels in this subsidy scheme. I do not know where the hon. Gentleman gets his information from, but as usual it is wrong. We shall be taking a hard line at the conference next week. No one—certainly not the hon. Member for Banff—needs to impress on me the serious situation facing the fishing industry in Scotland, and in particular the herring industry. I am very mindful of all the responsibilities that I have for looking after the interests of the fishermen.

Fish Stocks (Conservation)


asked the Secretary of State for Scotland what progress has been made at the Law of the Sea Conference to conserve fish stocks and protect these stocks from being overfished in the waters round the Scottish coast.

The Law of the Sea Conference has not been concerned with conservation measures as such. International measures to conserve our stocks are considered in the North East Atlantic Fisheries Commission which is meeting later this month.

As the Law of the Sea Conference has adjourned, and no ratifications of any changes could take place in less than about two years, does the hon. Gentleman agree that there is an urgent need for the EEC countries to negotiate with Denmark to reduce the amount of industrial fishing? I understand that the Danes catch about 1·3 million tons of fish, of which more than 1 million tons is for industrial, not human, consumption. The matter should be negotiated straight away. It cannot be deferred.

I accept what the hon. Gentleman has said. It is disappointing, as I think I hinted after my visit to Geneva the last time I answered Questions, that the conference did not come to firm conclusions, not only on fishing but on economic zones and all the other matters. I appreciate the concern about industrial fishing, but it is always difficult to tell a friendly Power that it is pursuing policies which are not in the best interests of everyone. It is partly because of industrialised fishing by Denmark and other countries that we are in our present serious situation. We shall be raising the matter next week.

Does the Minister acknowledge that the fishermen have shown a very responsible attitude to conservation and quotas? We on this side of the House are encouraged by what the hon. Gentleman has said about the hard line he proposes to take at the conference next week. If bilateral discussions with other countries are necessary, will the hon. Gentleman reflect upon the point that if other countries take unilateral action—if Norway takes unilateral action, for example—as a member of the EEC we are in a relatively strong position to deal with them?

I appreciate what the hon. Gentleman has said. [An Hon. MEMBER: "Denmark is the problem."] As the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) knows, this is not a pro-EEC or anti-EEC argument, and he was not trying to suggest that it was. [Interruption.] I am not sure whether my hon. Friend the Member for Keighley (Mr. Cryer) is on my side. I cannot even hear what he is saying. We accept the policies and approach of the fishing industry as a whole towards conservation. I feel concern because the United Kingdom quota for herring, for example, is coming down from 109,000 tonnes to a maximum of 66,000 tonnes for everybody. Inevitably, serious problems face the industry. Although the industry has been responsible. I share its fears and worries about its future livelihood. That is one of the reasons why we attach great importance to the conference next week.

Order. May I make an appeal to Scottish Members. It is nearly a quarter to three, and we have dealt with only two Questions. Can we go rather quicker?



asked the Secretary of State for Scotland if he will pay an official visit to Edinburgh.

As my hon. Friend must be aware, scarcely a week goes by without my being in Edinburgh on official business. I shall next be there on Friday.

We are grateful to my right hon. Friend for his continued presence and interest in Edinburgh. Will he be willing on one of his visits to Edinburgh to meet some of the many residents who have written to me urging support for the reform of the Scottish divorce law, particularly the two residents who later came to see me to ask whether they should wait for this House to make up its mind or move to England to qualify for a divorce there? Will he explain to them why the English Home Office is willing to take over a Private Member's Bill to stop cruelty to hares but the Scottish Office has still not found time to reform laws that cause misery to humans?

My hon. Friend spoke to me this week about a visit to Edinburgh but he did not mention divorce. I am always willing to consider the desirability or otherwise of meeting organisations. I cannot meet all those who would like me to meet them. As a Member of Parliament, I have received no letters on the subject. As Secretary of State, I have received 24 letters from individuals and four from organisations. I appreciate my hon. Friend's concern and frustration over his Private Member's Bill being obstructed, and I hope that this week the hon. Gentleman who is doing that obstruction will have a change of heart.

Rate Arrears


asked the Secretary of State for Scotland what is the latest estimate which he has of the total of rate arrears in Scotland.

Information is not collected on a national basis; figures for each authority are published in its annual abstract of accounts. I understand that the amount of arrears tends to be small in relation to total rates levied.

In view of the leniency shown by the Secretary of State and other Ministers towards councillors who did not implement the Housing (Financial Provisions) (Scotland) Act 1972, will the hon. Gentleman consider leniency also towards ratepayers who in certain areas of Scotland may face massive increases in rates, to such an extent that they may find it impossible to pay them?

I do not think that anybody will face massive increases in rates because of anything that has happened, or is likely to happen, under the Local Government (Scotland) Act, 1975.

Does the hon. Gentleman accept that there are certain areas where people will face a massive increase in rates whether or not they were involved in what happened under the Housing (Financial Provisions) (Scotland) Act? In particular, in the Banff and Buchan area of the Grampians region, certain burghs face rate increases of more than 100 per cent. What steps has the hon. Gentleman taken to have discussions with those authorities to see whether the blow can be softened, to give people an opportunity to meet a reasonable increase but not the savage increases with which they are now faced?

We have already introduced transitional arrangements. I believe that another Question about this is to be answered a little later, a Question affecting the regional rate burden, which is much the biggest part of the total rate burden. I think it will be found, when these arrangements are taken into account, that some of the forecast increases will not happen. Incidentally, if increases result from redistribution within a region there will be corresponding reductions elsewhere.

Will the Minister take the simple step of adding up the figures from the various authorities so that the House may have an idea of the total rate arrears position in Scotland? Would not that be prudent? The transitional order that the hon. Gentleman has presented appears to offer no Government action to help the transition but simply transfers the burden from one area to another, so that if there is a reduction in one area the cost will be added to another within the same region.

We have already increased the rate support grant from 68 per cent. to 75 per cent. of total local authority expenditure. That is a massive increase, well beyond anything the previous Government ever achieved. In the first part of his supplementary question the hon. Gentleman was talking about a redistribution within the regions. If any changes in rate burden arise there, they come from local government reorganisation, which was put through by the previous Government. It was always expected that there would be changes in rate burdens there. We have lessened them as far as we can.

On rate arrears, I have information about the four cities up to the end of 1973–74. The figure as a whole is less than 1 per cent. The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) may be interested to know that in Edinburgh total rate arrears were then proportionately three times as high as in Dundee, four times as high as in Glasgow and 10 times as high as in Aberdeen. Perhaps the hon. Gentleman should direct his inquiries first to his own backyard.

Mental Hospital Nurses


asked the Secretary of State for Scotland what representations he has had regarding the diminishing numbers of appropriately qualified registered nurses in Scottish hospitals providing for the mentally handicapped; and if he cm give an estimate of the position likely to obtain in the next few years.

None, Sir; but I am concerned about the position. My nursing advisers and the chief area nursing officers of health boards have set up a working party which is at present looking into the manpower aspects of mental and mental deficiency nursing and will be reporting shortly.

Is my hon. Friend aware that the matter is becoming serious? Fewer than 50 persons commenced training for this qualification in 1974 whereas there were 100 in 1972. Is he also aware that a number of factors—the Batchelor Report is one—discourage nurses in other specialities from going into hospitals for the mentally handicapped? To solve the problem, does he not agree that a six-month course for all registered nurses working in other sectors would be better than the present 18-month course?

I am aware that the position generally with regard to recruitment is not ideal. Until recently we managed to keep recruitment just above replacement level. As regards training, I require notice before I can give an absolute answer. Certainly I shall consider my hon. Friend's suggestions.

Galloway (Industry)


asked the Secretary of State for Scotland if he will take steps to encourage the establishment of timber-based industries in Galloway.

As Galloway is in a development area, assistance to new industry setting up there is available under the Industry Acts. The Government will give sympathetic consideration to eligible projects, but I am not aware of any approaches by interested bodies.

Will the Under-Secretary bear in mind the need for the Government to provide encouragement as well as to wait for people to ask for encouragement? Will he bear in mind that we in Galloway are no longer content to see the area treated as a kind of colony which produces raw materials to be taken away and processed elsewhere when we need the employment locally? Secondly, will he impress upon his right hon. Friend the need for us to have a speedy and safe means of transport out of Galloway? Will he therefore ask his right hon. Friend to give consent to make the A75 road into a dual carriageway?

I have enough bother looking after forestry without answering questions about roads. The hon. Gentleman made the point about the timber being taken away from the area. It is precisely because of the present state of the plantations that there is not, perhaps, the demand locally for the processing or the industrial side. To cheer up the hon. Gentleman, I should like to draw his attention to the fact that it is estimated that in the next 25 years the forestry and industry related labour force in the area should increase from 1,200 to over 2,000. Since forestry is a long-term industry, that is an encouraging and optimistic picture in his area.

As the greatest social problem in Scotland is the provision of more housing, will my hon. Friend take another look at the provision of timber-frame houses as they are not only cheaper but more quickly built? In these days when we want to increase the provision of housing and at the same time curtail public expenditure, would not this meet the dual purpose?

That is another question. The timber grown in Scotland has not been accepted so far by the building industry. While we are anxious to give every encouragement, there are practical problems which have to be overcome before the building industry will use such timber for that purpose in Scotland.

Did the Minister obtain his figures on future employment before or after the Chancellor introduced the capital transfer tax on forestry? Whilst wanting to see timber-based industries in South-West Scotland, we first need continuing supplies of timber. How will that happen in view of the Chancellor's penal taxation?

I gave up-to-date figures. The estimates are up to date. The hon. Gentleman should not exaggerate the possible fears in the minds of some people about the capital transfer tax. Concessions have already been made which I think go at least some way to meeting the citicisms.

Housing Subsidies And Rents


asked the Secretary of State for Scotland what effect the Government's proposed reduction of £80 million at current prices in housing subsidies for the financial year 1976–77 will have on the average standard council rent in Scotland.

The saving estimated for Scotland in the year 1976–77 is £10 million. Exchequer subsidies are not affected. The Housing Rents and Subsidies (Scotland) Act 1975 returns to local authorities the responsibility for deciding how housing expenditure after Exchequer subsidies should be met as between rentpayers and ratepayers. I expect local authorities to take a responsible view of the need to see that rent income bears a proper share of rising housing costs.

Although my right hon. Friend is a former schoolmaster, he does not seem to be able to do much about arithmetic.

The question is coming, Mr. Speaker. Is my right hon. Friend aware that the Chancellor announced in the Budget a cutback in subsidies of £80 million in the financial year 1976–77? Taking the figure of 5·7 million dwellings on a United Kingdom basis, is my right hon. Friend aware that that will mean an increase of £14 a year on the rent of the average council dwelling? Is he further aware that in view of the Chancellor's increase in the standard rate of income tax from 33 per cent. to 35 per cent., because of tax relief and mortgage interest the average person now buying his house will receive a further subsidy? This year a person buying an average house—[HON. MEMBERS: "Too long."]—will receive an increased income tax relief of £24. Is this—

My hon. Friend was also a school teacher. His subject was geography. He was wise to stick to that subject. My hon. Friend did not correctly quote the figure which was given by the Chancellor. That figure was £65 million. I quoted a figure in respect of Scotland of £10 million. That is the right figure, which I agree in respect of that matter.

We must face the facts of inflation and that for 15 months and more we froze the rents in Scotland. However, there comes a point at which with increased costs of building, mantenance, repairs and management, the bill must be footed. It is right to expect the local authorities to be reasonable in their adjudications as between rents and rates.

Does the Secretary of State agree that Scotland has a desperately serious housing problem? That being the case, does he argue that Scotland should be exempt from these cuts? Can he explain why in these discussions it appears that Scotland, with a £10 million cut, is carrying more than its British share?

If the hon. Gentleman will consider the relationship between the number of local authority houses and private houses in Scotland as against elsewhere he will realise that the Scots are not carrying more than the British share. Secondly, there is no cut in relation to housing. These expenditures have nothing to do with housing subsidies. The housing subsidies will be increased. We increased them by removing the £6, which had to be faced by the local authorities. If the hon. Gentleman is interested in housing, may I draw his attention to the fact that from 1971, until the time when the Conservative Government left office, there was the most disastrous decline in house building in Scotland. That should make him keep quiet about the matter.

Mental Handicap


asked the Secretary of State for Scotland if he has any plans to set up a National Development Group for the mentally handicapped.

The Scottish Health Service Planning Council and the Advisory Council in Social Work jointly are in process of setting up a programme group on mental disorder. I expect that this group will turn its early attention to mental handicap and therefore fulfil broadly the same rôle in Scotland as the National Development Group in England and Wares.

I welcome the Minister's reply and I am grateful to hear it. Has he read the reports produced by the Scottish Society for the Mentally Handicapped and by the Mental Welfare Commission indicating a great need for joint co-ordination throughout Scotland to ensure that the mentally handicapped are fully catered for in all aspects of their life?

Yes, I have received those reports. It is too early to comment in detail on some of them. However, in 1972 a circular was issued identifying targets for the provision of hostels by local authorities. Unfortunately local authorities have not responded as quickly as we hoped. Some have reached only approximately 20 per cent. of the target for residential provision for the handicapped in the community.

Will my hon. Friend finally use his influence on the Leader of the House or on whatever authority may have the power to institute a debate on the Melville Report, whether it be on the Floor of the House or in the Scottish Grand Committee? Is it not time that we discussed that report, which is rapidly gathering dust on the shelves in Westminster?

My hon. Friend is wrong, at the end of his remarks, to say that the report has been gathering dust. In fact, one part of the report has been carried into legislation, albeit by Private Members. Debates on the Floor of the House or elsewhere are not matters for me, but no doubt my right hon. Friend the Lord President of the Council will read my hon. Friend's remarks in Hansard.



asked the Secretary of State for Scotland if he will pay an official visit to the Island of Islay.

I would refer the hon. Member to the reply given to him by my right hon. Friend the Secretary of State on 23rd April.—[Vol. 890, c. 304.]

Is the Minister of State aware that people in all the islands had high hopes of the results of the Government's recent survey but that those hopes have since been dashed by the great increases in fares and freight charges to the islands? Does he agree that he should eschew the pleasures of Edinburgh for one weekend and go to Islay and speak to the local people about the problems facing them?

I thought that the outcome of the recent review had been rather well received. In fact, I had a letter thanking me for it from the hon. Gentleman's hon. Friend the Member for the Western Isles (Mr. Stewart).

Will the hon. Gentleman tell us why he is not prepared to help Western Ferries with the service they give to the island?

Opposition Members are always telling us to cut public expenditure. Therefore, to give subsidies to two operators for one island would be completely daft.



asked the Secretary of State for Scotland if he will convene a meeting of representatives of the new regional and district authorities to discuss the rates which they will levy in 1975–76.

My right hon. Friend met the new Convention of Scottish Local Authorities on 25th April and further meetings with it on local government finance will be held every three or four months. These will give opportunities for discussing expenditure, grants and rates.

Does the Minister accept that there is serious concern on the part of both business and domestic ratepayers in Scotland about the likely rates level this year? Certain local authority treasurers have said that their problems at present are like a nightmare. Will he therefore give some guidance to the people of Scotland and to local authorities about the maximum percentage increase which he, as a Minister, would regard as reasonable this year?

I think that the hon. Gentleman's questions are like a nightmare, but it is a private nightmare which is not shared by people in Scotland in the eventuality. As I have pointed out on previous occasions, one of the most effective ways of keeping rates down—I have already said in answer to an earlier question that we have given the biggest rate support grant settlement ever in the current year—is by ensuring that local authority expenditure is strictly controlled. Local authorities would be helped in that regard if they did not have constant demands by Opposition Members to increase their expenditure.

Housing Authority Rents


asked the Secretary of State for Scotland what is the average net annual rent paid by a housing authority tenant in Scotland; and how this compares with the corresponding figure for England.

On the latest information available, the average annual net rent payable by local authority tenants in Scotland is £110 and in England £155.

Will my hon. Friend bear in mind that this will be the last occasion for Scottish Questions before the present Scottish housing authorities go out of existence at the weekend? Will he take this opportunity of thanking all the Labour councillors who, over the years, have managed to keep rents in Scotland at such a reasonable level? Will he urge the new district councils which are taking over to follow in the same traditions and to resist any demands by Tory and SNP councillors, some of whom want to impose the maximum increases? Will he also bear in mind and possibly reconsider the proposal to raise the rents of Scottish Special Housing Association houses by 50p per week, because many of the tenants feel a sense of injustice as they already have to pay much higher rents than council house tenants living in the same areas?

My hon. Friend raises some wide questions. I pay tribute to the many people in local government whose authorities, as we know them, are going out of existence from tomorrow.

It is a little misleading to leave the impression that any housing authority in future will be able to avoid reasonable rent increases, bearing in mind the increased costs of building and the number of houses still required to be built. However, to some extent I share my hon. Friend's concern about inequalities in rents between one authority and another. Within the context of reorganisation, perhaps a fresh look can be taken at equalising rents between different authorities.

Does the Minister realise that, as a result of Labour policies, Scotland now has the lowest rate of owner-occupation of any country this side of the Iron Curtain? Will the Government explain what they intend to do about it? In particular, will they now give encouragement to allow council house tenants who wish to do so to become the owners of the homes in which they live?

The most practical contribution to increase the percentage of owner-occupation—we are committed to that—is, as we have already done, to assist building societies, to give encouragement to the private sector to build more houses and to ensure that the finance is available particularly for young people who want to buy houses.

When the Secretary of State compares Scottish and English housing, will he also look at the Government's English housing initiatives? Over the past few months the Secretary of State has said "No" to a Scottish environmental board, "No" to a Scottish construction industry liaison group and "No" to Scottish participation in the Building Societies Association Liaison Group. Will he stop saying "No" and start saying "Yes" to decent Scottish housing?

Hon. Members say that the answer is "No". I am not sure what the answer should be, because I do not think that I properly understood the question, which was so involved. I can only repeat that there is nothing to stop the maximum number of houses being built in Scotland by either public authorities or private enterprise. We have taken steps in both directions to encourage both sections of the industry.

Does my hon. Friend agree that the main obstacle to building both private and public sector houses in Scotland is the rate of interest charged to both the public and the private sectors? As well as increases in material and labour costs, the greatest burden now and in future is the tax exacted by the moneylender. Is it not time that the Socialist Administration produced money for local authorities at a far cheaper interest rate than is being done at present?

Yes, but I am afraid that my hon. Friend will have to face the hard facts of life. We are still living in a moneylending society. It is possible to provide cheaper money for local authori- ties, but that is merely another form of subsidy in present circumstances. The solution seems to be to get the economy on the right lines and to get interest rates generally down.

Is not the real reason for the difference between rents in England and Scotland that far too great a proportion of the rents is paid by rates in Scotland? Should not that be readjusted?

We have given local authorities freedom. We do not just talk about it; we do something about it. We are confident that, by and large, local authorities will act responsibly. This is a matter for the judgment of local electors. We believe in democracy. If one authority over-subsidises rents from rates, it is a matter about which local electors can express their opinion.

Disabled Persons


asked the Secretary of State for Scotland how many Scottish local authorities have a list of disabled persons; and if he will name them.

Almost all the local authorities in Scotland have indicated that they have, or are in the process of preparing, a list. The authorities and their present methods of obtaining information were given in the reply to my hon. Friend the Member for Eccles (Mr. Carter-Jones) on 18th March.—[Vol. 888, c. 405–7.]

Does my hon. Friend accept that to me that is a very disappointing reply? Is it not about time that the Government instructed local authorities to follow the example of, for instance, Motherwell and Wishaw Town Council, which is incurring considerable expense and time in advertising on television and in the local Press for a register to be compiled of every disabled person, whether mentally or physically handicapped? Will the administration, in which I have confidence, now instruct the new local councils from tomorrow that a register should and must be compiled as soon as possible?

We shall do everything possible to encourage local authorities who do not have such a list to prepare one. The new authorities begin their operations on 16th May. As well as discussing their development plans for social work services, we shall certainly be discussing with them the preparation of a list of disabled persons.

Is my hon. Friend aware that there is some concern that the personal quality of social work which has been established in places like Motherwell and Wishaw could be somewhat diluted and become anonymous in the vast regional administrations? Will he ensure that the personal quality of the service is not lost?

I think that provision was made for this in the Local Government (Scotland) Act. The Strathclyde Region, under that Act, has to produce a scheme for social work. I have seen such a scheme prepared. I am concerned to see that in these bigger authorities the personal attachment to the work is not lost, because we are dealing with a very personal social service.

Land Ownership


asked the Secretary of State for Scotland what representations he has received from political parties about the question of land ownership and the registration of land holdings.

Is my hon. Friend aware that the Labour Party at its conference at Aberdeen had a certain opinion on these matters? Does he recall the brilliant retort of the Secretary of State to the SNP slogan on oil that it is "Scotland's soil"? Can he ask our right hon. Friend how he can be so sure of his facts without a register of land holdings?

As my hon. Friend knows, I was present at the Labour Party Conference and I am very much aware of what it decided. We wait with interest to see what submission we receive from the Scottish Council of the Labour Party following that conference, and no doubt the Secretary of State will be able to explain the quotation he used during the debate.

Does the hon. Gentleman appreciate that one aspect of land ownership which could be reformed quickly is crofting and crofting tenure?

That is an entirely different question, as the hon. Member will appreciate. He should put down a Question to that effect if he wants an answer to it.

Public Expenditure


asked the Secretary of State for Scotland if he will detail the services affected by the 1976–77 public expenditure cuts.

I refer the hon. Member to my reply on 28th April to the hon. Member for Glasgow, Cathcart (Mr. Taylor).—[Vol. 891, c. 47.]

Is the Secretary of State aware that some of us on this side accept the need for cuts in public expenditure but that we find it difficult to reconcile that with the claims being made by Labour Members about the £300 million which will be spent by the Scottish Development Agency? Does he accept that on his side the left hand does not know what the right hand is doing, or is this further evidence of the bogus statement by the Chancellor during the last election that inflation would be held at 8 per cent.?

The hon. Member should appreciate exactly what the Chancellor said and what he did in the Budget. He certainly sought to restrain the rise in public expenditure. This is not an absolute cut: it is restraining the projected rise. Secondly, I remember his saying that we had to make available the necessary money to produce industrial development because our future depended on it. Therefore, he made available further moneys in respect of training and retraining of men. No one took objection to that. The same applies to the growth of new industry and to expansion within Scotland. We have to provide more money for that end, and that we are doing, without apology.

Is the Secretary of State aware that we in the Scottish National Party do not accept the public expenditure cuts in Scotland? Is he happy with those cuts? Does he not agree that Scotland can sustain economic expansion and that we do not need inflation?

The hon. Member should appreciate exactly what the Budget makes available to Scotland. We make available moneys according to need. That is why Scotland has had more than its share in the past. I hope that the hon. Gentleman will adopt a much more balanced outlook towards the United Kingdom and a little less selfish one.

Where will the £10 million cut in housing fall? is the right hon. Gentleman seriously saying that he accepted a larger cut for Scotland simply because we had more council housing?

The hon. Member is getting as muddled as ever. We know how the Tories cut housing expenditure: they simply stopped building houses.

The question was how we would achieve it. Public expenditure is not only national but also local. Local expenditure on certain housing matters has been causing the hon. Gentleman concern. So savings can be made there.

I have already told the hon. Gentleman, in respect of rents. May I remind him what his Government did? In January 1974 they stopped altogether any further expenditure on new schemes for improving local authority houses. That is one way of saving money. There are many other ways. We are examining them, but I am not deceiving people about how I expect local authorities to deal with the question of rents.

Public Buildings And Installations (Security)


asked the Secretary of State for Scotland if he is satisfied with the security of public buildings and installations in Scotland.

Responsibility for the security of public buildings, as of private property, normally lies with the owner or occupier. The police are always ready to assist and in consultation with those concerned with premises subject to particular threats have prepared appropriate contingency plans. Suitable arrangements have been made for the security of those buildings for which I am responsible.

I appreciate that there are matters presently sub judice. In view of the regretted spread to Scotland of robbery and violence for the attainment of political objectives, which inevitably accompanies nationalism, will the hon. Gentleman make plans for the protection of life, limb and property in view of this infectious manifestation?

As I explained, we are satisfied that the contingency plans which have already been made for buildings which are subjected to particular potential threats are adequate to meet any threat that anyone may attempt to carry out. Therefore, while I recognise the concern on this point, we consider that the present plans are adequate for the situation we face.

Does my hon. Friend agree that it is very dangerous to exaggerate the supposed latent potential for political violence in Scottish society? Will he take this opportunity to tell everyone in Scotland that there is absolutely no need for anyone to turn to violent action for political ends, because there is an abundance of democratic avenues open to everyone, of every political view, in Scotland?

I am most anxious that nothing said in the House or elsewhere should inflame a potentially highly inflammable situation. My hon. Friend's message is admirable, that there is no need for anyone of any connection or persuasion to resort to violence to achieve political ends. There are adequate democratic means to achieve them.

Does the hon. Gentleman agree with what I think most citizens would accept, that crime is objectionable whether it is political or nonpolitical, and that the best way of beating crime of any sort is to ensure that we have a strong police force? Will he therefore accept that there is a need to increase the remuneration of the police so as to recruit more people to the forces of law and order?

As I said, I am most anxious not to say anything that would inflame any inflammable situation. That applies equally to police pay as to the subject of the original Question.

Does the Minister agree that the Government's measures for the protection of oil installations, whether onshore or offshore, are at the moment almost ludicrously inadequate, and that this applies most strongly to onshore installations because they are more vulnerable? Will he therefore consider setting up a committee to make use of the considerable expertise which already exists in Scotland to assess properly the threat to onshore installations and to advise how best they may be protected?

The protection of onshore installations is the responsibility of my Department, through the police. The protection of offshore installations is the responsibility of the Department of Trade. I am satisfied that, so far as my Department is concerned, the protection of onshore establishments is adequately covered, although obviously we keep the matter under continuous review.

European Community Membership


asked the Secretary of State for Scotland what is his latest estimate of the effect on the Scottish economy of British withdrawal from the EEC.

The Government's view remains as I described it in my reply to the hon. Member on 7th April.—[Vol. 889, c. 349.]

Will the Minister indicate why the Secretary of State has not himself chosen to reply to my Question as he promised he would if I put one down? Will he also indicate how the Government reconcile the statement by the Secretary of State for Scotland that the European Community is a monstrous bureaucracy with the simple fact that the Scottish Office employs more civil servants than the European Commission?

The Scottish Office does a lot of things that the European Commission does not. It runs the police and prison services, for example, and so far as I know we do not yet have a Common Market prison service. Some of these comparisons are, therefore, perhaps a little misleading. My right hon. Friend said that if the hon. Gentleman put down a Question he would get an answer. He put down a Question and he has had an answer.



asked the Secretary of State for Scotland when he next plans to visit Glasgow.

Is my right hon. Friend aware that if he visits Glasgow he will find that the recent weekend speech by the hon. Member for Aberdeenshire, East (Mr. Henderson), which suggested that we should all join the Scottish National Party to bring prosperity to Scotland, is being treated with a great deal of amusement by my constituents? Does he agree that any party which is rejected by the STUC and by practically every trade union in Scotland, and a party which is following a dishonest line over the Common Market in that it wants Britain out and Scotland in, is not acceptable to the Scottish people? Does he further accept that any party which disagrees with public ownership of North Sea oil can do nothing for the prosperity of the Scottish people?

Would the right hon. Gentleman agree that it would do him and his hon. Friend the world of good if they read my speeches which are made at weekends or at any other time?



asked the Lord Advocate if he will pay an official visit to Glasgow.

I have no plans at present to make an official visit to Glasgow.

Is the Lord Advocate aware that we are very proud of our burgh courts in Glasgow? Is it his intention or hope that more stipendiaries will be employed in the new district courts in Glasgow and throughout Scotland? Has he comparable figures for the waiting times for burgh courts in Edinburgh and Glasgow respectively, bearing in mind that Glasgow has stipendiaries and Edinburgh does not?

Stipendiaries are not a matter for the Lord Advocate. As for the second part of the hon. Gentleman's question, trials are now being arranged for January 1976 in Glasgow, whereas in Edinburgh they are being arranged for as far forward as May 1976. It follows that the delay in Edinburgh is much greater than the delay in Glasgow. However, I can assure the hon. Member that when I assume the responsibility for prosecutions in these courts on Friday, I shall try to find out the position in relation to all district courts and where there is a backlog make appropriate representations to the local authority concerned for more court sittings.

In Edinburgh there has been much concern that if stipendiary magistrates were appointed work would be transferred from the local sheriff court to the magistrates' court. Is my right hon. and learned Friend in a position to give guidance to Edinburgh Council that such an appointment would not result in an intolerable increase of work for the magistrates' court?

That is not a question for me. My hon. Friend will get a reply to it if he puts it down to the appropriate Minister. The original Question concerned an official visit to Glasgow. I do not think that Edinburgh is in Glasgow yet.

Scottish Appeal Courts


asked the Lord Advocate whether he is satisfied with the legal service offered to clients in the appeal courts.

Does not my right hon. and learned Friend consider it a bit unfair that a client should hire a lawyer to deal with his appeal and subsequently find that the lawyer, without consulting the client, has abandoned the appeal and then has the cheek to send the client a bill for f15 expenses, as happened in a case I recently reported to my right hon. and learned Friend? Why is the legal profession in Scotland allowed to behave in such a disgraceful manner?

My hon. Friend has had a reply to the letter he wrote to me on this subject and I think I have dealt with all the matters he raised therein in so far as they are matters for me. Matters of legal advice given to clients must, of course, be taken up with the legal advisers themselves. In so far as a client is dissatisfied with the legal advice he is given or the fee he is charged for it, that is a matter to be taken up with the appropriate professional body, either the Law Society of Scotland or the Faculty of Advocates.

Will the right hon. and learned Gentleman seek to end speculation that the recent decision of the English Appeal Court concerning the law on rape has no relevance for the position in Scotland, and that the Government have no intention of changing the Scottish law in this respect?

I can confirm the first part of the question. On the second part, if there is a review of the law on sexual offences generally it is appropriate that Scotland also should take account of that review.

Scottish Divorce Law


asked the Lord Advocate what representations he has received from individual members of the legal profession, or associations of lawyers in Scotland, in support of the present Scottish divorce laws.

Does the Lord Advocate agree that it would appear that the entire legal profession in Scotland, a vast section of the public, Members of all parties in this House and the right hon. and learned Gentleman himself are all agreed that Scottish divorce law should be reformed? In these overwhelming circumstances, why are the Government digging in their heels and refusing to have a debate on this matter? [Interruption.] This is a Government responsibility. Will the right hon. and learned Gentleman undertake to press his right hon. Friends most strongly to have a debate in the Scottish Grand Committee before the Summer Recess?

It is incorrect for the hon. Gentleman to say that the Government are digging in their heels. The Government have been sympathetic to the possibility of legislation on this matter. The hon. Member should consult his hon. Friend the Member for Glasgow, Hillhead (Mr. Galbraith), who digs in his heels and opposes these measures whenever they come forward in the House.

May I suggest that in any new legislation which my right hon. and learned Friend might propose for dealing with a breakdown of marriage or for improving the divorce law, he should give the same priority to assisting the preservation of marriage in Scotland?

Is the right hon. and learned Gentleman justified in attacking me? Is not the Government's failure that they build without a foundation? Does the Lord Advocate believe in trying to change the law without a proper debate on Second Reading of a new Bill?

The hon. Member has every right to object to private legislation if he thinks it correct to do so, but he must surely accept the criticism which his stand would naturally attract.

Crown Office Staff


asked the Lord Advocate how many legally qualified staff work in the Crown Office.

There are seven Crown counsel, employed on a part-time basis, and six full-time civil servants who are legally qualified.

I appreciate that the Lord Advocate earns every penny of his salary, but will he say what anticipated enlargement of his staff will be required when he assumes his new duties under the District Courts (Scotland) Act this week?

The hon. and learned Gentleman will appreciate that my answer related to the Question, which sought to discover how many legally qualified staff work in the Crown Office. That does not include the Lord Advocate and the Solicitor-General for Scotland. However, I am happy to reassure the hon. and learned Gentleman that in taking account of the needs of prosecution in the district courts the staffing of the Crown Office was one of the factors considered.

On the eve of the visit of the American Ambassador to Edinburgh this week, and in view of the tremendous disquiet which exists over the conduct of local government in Scotland, will the Lord Advocate consider appointing a special prosecutor along the lines of the one appointed in the Watergate case in the United States to look into the activities in local government and its relationship with certain contracting industries?

I am happy to say that visits of ambassadors are not matters for the Lord Advocate.

European Community Law Officers


asked the Lord Advocate when he next intends to meet the Law Officers of other member Governments of the EEC.

I have no plans to meet the Law Officers of other member Governments of the EEC in the immediate future—at least in a Community context. However, I am proposing to attend a meeting of European Ministers of Justice which the Council of Europe is holding at Strasbourg on 22nd May, and I hope on that occasion to renew some agreeable and useful contacts with Ministers of Justice from other EEC countries.

Will the Lord Advocate end his mysterious silence on European Community matters? Will he give the House and the people of Scotland an assurance that his Department is quite satisfied that neither Scottish law nor Scottish legal institutions will be in any way endangered by continued British membership of the Community?

I am happy to confirm what has been stated previously by Ministers from this Dispatch Box, that continued membership of the EEC does not imply any threat to the domestic law of Scotland. It will undoubtedly continue except in so far as it is affected by the limited sphere of Community law.

The hon. Gentleman seems to be suggesting that I am in some way secretive on the general aspect of the EEC. I would have thought that I was being secretive in a perfectly proper way. I have the privilege of answering Questions, not in order to parade my personal convictions but in order to answer for the Government.

Ferranti Limited

With permission, Mr. Speaker, I should like to make a statement.

In August 1974 Ferranti Limited sought the Government's help to overcome the company's financial difficulties. As the House knows, the Government gave a guarantee under Section 7 of the Industry Act 1972 to the company's principal banker of additional overdraft facilities. Adequate finance was thus made available for the continuance of the company's business while solutions to its difficulties were considered.

Ferranti Limited is an important company. It has developed valuable technological capabilities in a number of areas, it is an important supplier of defence equipment, it has gained valuable exports, and it provides employment, mostly in assisted areas, including Scotland. Furthermore, with changes in financial and management structure, there are good prospects for the viability of the company. With the objectives of establishing a viable company, thus preserving emloyment, and maintaining a British capability in those areas where Ferranti Limited has a high reputation, the Government have agreed to provide financial support.

After constructive tripartite discussions with representatives of the work force and following negotiations by Sir Don Ryder with the major shareholders of Ferranti Limited, arrangements for the Government's financial support have been settled.

Details of the arrangements will be included in the Official Report but their broad effect is that the Government will subscribe a total of £15 million of new capital, partly in voting equity, partly non-voting, and partly in loan form at a commercial rate of interest. The Government will have 62½ per cent. of the total equity, and 50 per cent. of the votes, which is more than enough to give the Government effective control over the company.

There are provisions in certain circumstances for part of the Government's non-voting shares to be made available if the company is able to arrange a public marketing of its shares. At that time or at the latest on 1st October 1978, all the non-voting shares will acquire voting rights. The Government's voting power could not in any circumstances tall below 50 per cent. and might well increase.

Some changes will be made in the management of the company. A new chief executive will be appointed, as will a finance director, both to be approved by the Government, which will also have the right to appoint some other directors.

The Government believe that these arangements represent the soundest basis for an agreement between the Government and the shareholders to give Ferranti a viable future and to safeguard the interests of the work force. The new management would be required to prepare plans for the future of the company, including an assessment of the prospects for the transformer division which has been making heavy losses, but no decision to separate the transformer division from the company will be made without Government approval.

I should add that, in accordance with our approach to industrial policy, we shall be arranging for a planning agreement with Ferranti and that the Government will encourage the development of industrial democracy within the firm on an agreed basis.

These arrangements should provide the opportunity for the company to recover from its present difficulties and make a full contribution to the national economy.

I appreciate that the House does not have before it the Heads of Agreement between Ferranti Limited and the Government which the Secretary of State has kindly provided for me. May I therefore ask, in the light not only of the statement but of the Heads of Agreement which the House will want to study, whether the right hon. Gentleman would agree that this is an unnecessary and expensive deal that he has concluded? Does he agree that, first, it contains no indication about how profitability is to be achieved, nor does it give any indication of a commitment from the unions that they will help in achieving that profitability?

Second, is the right hon. Gentleman not aware that the nub of the argument lies in Section 11 of the Heads of Agreement wherein it is said that if the company wishes to float, the Government will take over an unending commitment to the losses of the transformer business at the date of flotation? While the Government are prepared to take over the liability for the losses of that company in the sort or medium-term future, is it not the case that if the Government took over the losses now there would be no need for the £15 million of taxpayers' money which is embodied in the statement we have heard today?

Third, is the right hon. Gentleman aware that while Section 7(4) of the Industry Act 1972, which must have been the basis of the legislative backing for his announcement, does not allow him to give such aid to a company unless there is no practical alternative means of helping that company, Section 11 of the Heads of Agreement proves that there is an alternative method of helping the company in partnership with the private sector at a much greater—[Laughter]—lower cost to the taxpayer? Fourth, will the right hon. Gentleman confirm that permission from Brussels was either not necesssary or has been sought and obtained?

I do not accept the first point made by the hon. Gentleman. As for the prospects for viability, work is needed to give viability to this company which has been managed without commercial success. Attention needs to be given to its problems. I believe that the prospects are good.

Turning to the point about the commitments by those who work in the company, our view is that these should best be tackled on a tripartite basis. Over the past few months we have achieved a notable contribution from those who work at Ferranti. I would not regard any commitment as being required solely from one side.

There are possibilities of dealing with the losses that have been accumulating over a period in the transformer division. I would be sorry to see another example of manufacturing capacity chopped out in the interests of short-term profitability, which is the broad view of the Opposition, made clear on many occasions.

Section 7 of the 1972 Industry Act, which was legislation enacted by the Conservative Government, did not even require me to report this matter to the House. The degree of accountability we have tried to breathe into that measure was reflected by my statement.

There was, of course, the alternative of a receivership. We took the view that a receivership at a time when the company's prospects depended on confidence in its continuing operations, and with employment at stake, would not be the right course for us to adopt.

Dealing with the question about the provisions under the Treaty of Rome, the Treaty of Accession and the European Communities Act, I understand that in this case, although we are today telling the Commission of the statement I am making, we are operating, as I understand it, within guidelines already approved. Therefore I am authorised to make the statement in this way.

Will my right hon. Friend accept the congratulations of hundreds of my constituents whose jobs are involved and the congratulations of thousands of members of the AUEW, which sponsors me in Parliament? Is he aware that those workers realise that it is only through actions of this kind that the Labour Government are able to safeguard them from the worst economic ills of the capitalist system? Will my right hon. Friend also bear in mind that it is important to ensure that the transformer division remains part of the industry? Although at the moment it is making a loss, in the past many of the experiments that were carried out by the firm were financed by the profits from the transformer division. Will my right hon. Friend accept that my constituents have been watching with interest the reaction of the Conservative Party, and will no doubt in future act according to what has taken place in the House today?

I am grateful to my hon. Friend for what he has said. My hon. Friend faithfully reflects the views of workers in Ferranti and workers throughout the country who are confronted, through no fault of their own, with a threat to their employment. I believe that the policy of Her Majesty's Government receives warm support throughout industry. Unlike the hon. Member for Henley (Mr. Heseltine), whose first remedy is always to sack them, we believe in re-equipping and improving manufacturing capacity as far as we can.

Although the Scots have very often heard it argued that their own plants are non-viable whereas the English plants might be viable, in this case the viability of the Scottish operations is very clear. I am grateful to Scottish workers for recognising that they should not impose on the English workers in the transformer division the penal sanctions that in the past other Governments have applied to unviable Scottish plants.

Will the right hon. Gentleman take note of the fact that my Liberal colleagues and I take the view that the electronics industry is a growth industry that should be encouraged, and that basically we welcome his statement? But will the right hon. Gentleman say whether the non-transformer divisions of the company have made a profit? If so, and if those profits are greater than the losses of the transformer division, will the right hon. Gentleman say what the company's profit forecasts are for the future? Finally, will the right hon. Gentleman give us the total global sum promised by the Government to industries in Great Britain in order to get them out of financial difficulties?

I am glad that the hon. Gentleman's considerable weight is placed behind our policy in this matter. I cannot answer his questions specifically. It would take some time to provide answers to them. However, I shall seek out such answers as can be given without damaging the interests of the company, and I shall let him know. The amount of public money that was running into private industry when the Conservatives were in power was about £2 million a day. We take the view that where support on this scale is required it is right that the injection of money should be followed by public equity and accountability appropriate to what has been put in.

Will the right hon. Gentleman tell the House who advised him to keep together the transformer division, which is loss-making, and the profitable Scottish operations? Will the right hon. Gentleman tell the House whether this take-over will be handled by the proposed National Enterprise Board or the proposed Scottish Development Authority?

As regards advice, as the hon. Gentleman will know, I have tried in all these cases to bring together management, the work force and Government to examine collectively the problems of companies that run into difficulties and not to operate only with the managements on the basis of restoring them to short-term profitability regardless of export and employment consequences. I have attended and participated in three tripartite meetings. Many of the proposals that have come forward have emerged from those meetings. The negotiations were undertaken on the Government's behalf by Sir Don Ryder. I should like to pay tribute to Sir Don's work in the difficult negotiations which have taken place. It follows that when the Industry Bill is enacted the shares that we acquire in the company will, in the normal course of expectations, be transferred to the National Enterprise Board.

Is my right hon. Friend aware that last week the Edinburgh Workers' Council, which represents approximately 5,000 production workers and salaried staffs, unanimously agreed to record its appreciation of the skill with which he has handled this problem and its support for Government intervention? Will my right hon. Friend assure the House that if there are to be changes in the management structure of the company the changes will be sensitive to the need to preserve the considerable autonomy that is at present enjoyed by the Scottish group of factories?

I am grateful to my hon. Friend for what he has said, but my part in this matter has been a small one because the work has been done by the people who work for Ferranti. It is not my wish or desire to seek to impose solutions on companies which probably know better than most what is wrong with them. Probably their advice is the best advice to be sought. However, we have had to take the decision ourselves as to the measure, nature and character of Government support.

As regards autonomy, there has been a general view expressed within the company, which I share, that decisions should be taken nearest the point where they are to be applied. That is in line with our thinking both about industrial democracy and management thinking. It is also in line with what both management and workers think. Having said that, I repeat my gratitude to the Scottish workers for not having sought to make safer their own survival at the expense of workers at Oldham and elsewhere.

Will the right hon. Gentleman tell us what steps he took to encourage other British companies in simililar lines of business to rescue Ferranti rather than to burden the taxpayer with the whole of the cost as it is now to be put on them?

There were discussions of one kind or another which I would not think it right to reveal to the House, as these matters have to be conducted with a reasonable degree of discretion. However, I say in all sincerity to the hon. Gentleman that, having had some experience in an earlier manifestation as Minister of Technology, the idea that somehow a merger is the answer to the problems of a company does not now seem to be as sensible as at one time it seemed, when really re-equipping, better management or better industrial relations are required. It is necessary to look into the heart of a company to find out why things have gone wrong and to see how they can be put right. That must be done on the basis of discussions with those involved, in the hope that out of them will come the will to implement what needs to be done.

Does my right hon. Friend think that there is a case for the rationalisation of transformer manufac- turing capacity in general in this country? When the National Enterprise Board is set up, will Sir Don Ryder be looking into that possibility?

I am not ruling out the possibility that there may be some improvement or strengthening of the industrial structure. These matters are in part dependent upon the level of domestic ordering and the prospect of export orders. What I would be opposed to—I know that my hon. Friend would be opposed to this as well—would be to use a difficulty in a single company as an excuse to rationalise to a lower level of capacity, so that when the upturn comes this country, as has so often happened in the past, will not have the necessary capacity.

Is it not the clear implication of the Secretary of State's statement that the company was at fault in not enforcing redundancies in the transformer division? What estimate has the right hon. Gentleman made of the numbers of redundancies required to make the company profitable?

The passion for redundancies on the part of secure and well-paid people, such as the hon. Gentleman, throughout our society, including ex-Cabinet Ministers on the Opposition Benches and even present Cabinet Ministers, indicates that underlying their apparent claim for efficiency there lies a hatred of working people that is reflected by what they say.

Now that HMS "Belfast" has finished firing, may I ask the right hon. Gentleman to explain to the official Opposition that they can neither defend nor expound capitalist enterprise until they are prepared to proclaim that there is no substitute for bankruptcy?

I do not want to intervene in an historic intellectual argument that has been going on between the right hon. Gentleman and his former colleagues, or to complicate the prospect of his return to the fold when they have seen the error of their ways, but the right hon. Gentleman is certainly right in saying that the Conservative Government in 1972 entirely reversed the Selsdon Park policy based upon the idea that bankruptcy was the right course for capitalist enterprise that failed. The right hon. Member for Knutsford (Mr. Davies), who advocated that policy, is leaning anxiously forward to confirm the wisdom of his own late conversion to a different course of action. The Conservatives abandoned that policy. They gave an incoming Labour Government an instrument of intervention that I have been glad to use until our new instruments are available, and all that is revealed is that their attachment to bankruptcy has extended to their own policy.

Order. I gather that the hon. Gentleman wishes to raise a point of order. I should prefer him to do so at the end of questions on this statement.

I should like to raise the point of order now, Mr. Speaker, because it so much affects what the right hon. Gentleman said in answer to a previous question which I think will worry many hon. Members who heard it. I shall be grateful for your advice, Mr. Speaker. The Secretary of State included his colleagues who are members of the Cabinet in those Members of the House who were in favour of redundancies. I should be grateful if the Secretary of State would clarify that remark.

As I have said before, fortunately or unfortunately I have no responsibility for what the right hon. Gentleman says, provided that he uses parliamentary language. Mr. Dalyell.

Even if it is out of order, may I say that if in the heat of the moment I appeared to give the impression that I was referring to members of the present Cabinet and not of the Cabinet of a previous administration, I simply admit the error.

Is the Secretary of State aware that many of my constituents who work at Ferranti are thankful that he had no truck with the idea of a receivership. Is it not true that many of the difficulties in which Ferranti is placed could have been avoided if we had pursued the concept of joint ventures in exports, as certain German electrical firms have done? Will not my right hon. Friend, with the Department of Trade, examine the whole question of joint ventures in exports with a view to building up further trade, particularly with Latin America, where Ferranti is doing rather well?

My hon. Friend will know that I have never criticised the management of a company that has got into difficulties, because I know that the problems of British industry are formidable, and I have never believed that there are heroes and villains in our industrial story. I am sure that what my hon. Friend says is right. Export possibilities in many firms have been lost. My view is that had there been a planning agreement in this company four years ago, the problems would have been identified earlier and could have been corrected without the trauma and anxiety of the last few months.

Will the right hon. Gentleman accept that the bankruptcy of individual concerns is perhaps preferable to a policy which leads to the bankruptcy of the whole nation?

I yield to the right hon. Gentleman in my expertise in these matters, as he bankrupted Rolls-Royce and Upper Clyde Shipbuilders and then brought them back into the public sector. Looking back over his experience in that period, it is questionable whether it would not have been better to call in the people concerned with those two great companies and seek answers to the problems without following the savage doctrine from which the right hon. Gentleman's own ideas derive.

Is the right hon. Gentleman aware that many of us heard him say that there were many in the House, including some of his fellow Cabinet Ministers, who advocated redundancies without themselves being prepared to accept them? In fairness to him, we also heard him say that that was a slip of the tongue and was unintentional. Are we to take it, therefore, that he excludes all his colleagues from being prepared to face redundancies, including those of them who are pathologically opposed to remaining in Europe now and who will not be prepared to face redundancy after 5th June when the country decides to remain in Europe?

The right hon. Gentleman's question is not even up to his usual low level of supplementary questions on industrial matters. If in the heat of the moment I made a slip of the tongue, I corrected it in the House. Well-paid and secure people in any walk of life or in any party are not strongly placed to demand redundancies in British industry. To that point of view, I strongly adhere.

On a point of order, Mr. Speaker. May I draw to your attention that you must have inadvertently failed to notice one Member of the Scottish National Party who wished to intervene on the statement and was not called.

Following are the details:

Heads Of Agreement Between Ferranti And Her Majesty's Government

1. Ferranti Limited (The Company) will take steps to increase its authorised ordinary share capital so as to enable the following transactions to take place.

2. Her Majesty's Government will subscribe £8⅔ million as ordinary share capital as follows:

£ million
4 million ordinary shares of 50p each £1.50 each6
2,666,666 non voting ordinary shares of 50p each at £1.00 each2⅔

This would provide Her Majesty's Government with 50 per cent. of the votes and 62½ per cent. of the total equity.

3. The rights attached to the non-voting ordinary shares would be increased to parity with the voting ordinary shares in the event of a listing being obtained or a marketing being undertaken, or, at the latest, on 1st October 1978.

4. Her Majesty's Government will subscribe £6⅓ million by way of a Loan Stock 1983/87 carrying an appropriate commercial coupon.

5. [This clause deals with the Company's bank borrowing limits, and contains commercially confidential figures].

6. Guarantees by Her Majesty's Government in respect of bank borowings and bid and performance bonds will be withdrawn.

7. The management structure will be as agreed in correspondence between the Company and Her Majesty's Government.

8. The future dividend policy of the Company will be one appropriate to a publicly quoted company of similar character.

9. Appropriate warranties will be agreed between the Company and Her Majesty's Government.

10. In the event of the Company's advisers arranging a marketing or listing of Ferranti shares at a price in excess of £1·50 each within the period to 30th September 1978, then Her Majesty's Government will make available:—

  • (a) to the then holders of the 4 million shares in issue at 12th May 1975, 1,333,333 non-voting shares at a price of £1·00 each (plus half any excess of the marketing price over £2·00);
  • (b) to the public, any other shares from those in issue at 12th May 1975 which have been acquired by Her Majesty's Government in the meantime, at the full marketing price.
  • 11. If at the time of such a proposed marketing, the price at which this could be undertaken is, in the opinion of independent advisers, materially prejudiced by the performance of Transformer Division, then Her Majesty's Government will take appropriate steps in relation to any losses of that Division so as to enable a satisfactory marketing to take place at the price which would otherwise be achievable, and the Company will proceed with the marketing accordingly. In the event of this clause being invoked by the Company, then the offer of shares under Clause 10( a) would be at a price of £1·00 plus half the excess of the marketing price over £1·00.

    12. The Board intends to recommend shareholders to support the agreement when submitted to an EGM and directors intend to use the votes of their shares and of those of which they are trustees accordingly.

    Sri Lanka Tea Estates

    The Secretary of State for Trade and President of the Board of Trade
    (Mr. Peter Shore)

    With permission, I should like to make a statement on the report by a group of hon. Members on conditions on the British-owned tea estates in Sri Lanka.

    There has been considerable public concern about these conditions, particularly following the recent television programmes. My right hon. Friend the Minister of State for Foreign and Commonwealth Affairs therefore asked the British delegation to the Inter-Parliamentary Union Conference in Colombo to extend its stay in Sri Lanka to investigate the conditions of workers and their families on the British-owned tea estates. Between 29th March and 8th April it held discussions with representatives of the Government of Sri Lanka, of the tea companies and of the local unions, and interviewed workers, medical staff and managers on a number of estates. Its report is published this afternoon.

    In the course of an extensive tour of rural areas, the group visited tea estates owned by the Government of Sri Lanka and by British companies. Its report places the problems of the tea estates in the context of Sri Lanka's very real economic problems. The group saw much to disturb it, including malnutrition among some workers on the estates it visited as well as among the urban poor. It has recommended a number of specific measures designed to improve the living and working conditions of the estate workers and their families.

    The report proposes that I should discuss these recommendations with representatives of the British companies with tea estate interests in Sri Lanka. I have today invited the President of the Ceylon Association and his colleagues to an early meeting for this purpose. Until this meeting has taken place it would not be right for me to comment on the detailed recommendations in the report, except to express the Government's warm thanks to my hon. and learned Friend the Member for Warrington (Mr. Williams) and his team for producing what will, I believe, be recognised as practical and constructive proposals for improving conditions on the estates. I should also like to express my appreciation of the co-operation and assistance given to the Parliamentary Group by the Government of Sri Lanka and their officials.

    All I would add at this stage is that a solution to the wider problems of the tea industry must be sought on an international basis. During the discussion on commodities at the recent Commonwealth Heads of Government meeting my right hon. Friend the Prime Minister gave special emphasis to the importance and value of an effective international agreement on tea. We shall continue to pay particular attention to this in our further consideration of commodity questions.

    Hon. Members and their constituents are naturally and understandably concerned about this matter. May I ask the Secretary of State to clarify the precise status of the report to which he has referred? Is it to be published as a Government White Paper, because I understand that it is not a report from a Select Committee of this House and, obviously, the House at this stage has not had an opportunity of studying it, whereas the Minister apparently has? Could he tell us whether the report confirms or rebuts the allegations which were made on the television programme to which he has referred?

    Finally, on the question of commodity agreements, for which I understand he has responsibility, could the Secretary of State tell us whether he envisages that these might be concerned with the stabilisation of tea prices or with the raising of tea prices in the context of the report?

    The hon. Gentleman has expressed concern. I think that when all hon. Members read the report they will undoubtedly feel the same sentiment.

    The report has been published by the Department of Trade. It contains the sub-title or explanation:
    "An investigation into conditions on British-owned tea estates in Sri Lanka carried out by a group of British Members of Parliament."
    There is no doubt about its status.

    On the question about the particular incidents and interviews that formed part of the Granada Television programme, the team, as hon. Members will find for themselves, made detailed inquiries into these matters and its conclusions are different from those presented on the television programme. However, there is no difference between the general assessment of the real conditions of stress in Sri Lanka and on the tea estates as reported by the team and the conditions revealed in the television report.

    On the hon. Gentleman's point about commodity arrangements and agreements, it is perhaps a little too early to say which of these two elements, the stabilisation of prices or the increase in prices, will receive the greater thrust of the discussion. However, I should have thought that both elements were important in a satisfactory international commodity agreement on tea.

    May I express to the Secretary of State our thanks for the kind words that he has used about our work and our report? May I join him in expressing the thanks of the group to many people in Sri Lanka who went considerably out of their way to help us and give us information?

    May I ask my right hon. Friend if he will do what he can, when he meets the tea plantation owners, to get them to organise some kind of agency to co-ordinate their activities with Sri Lanka trade unions, the Government of Sri Lanka and my right hon. Friend the Minister of Overseas Development in order to tackle the very sad conditions of poverty and hardship that we found in Sri Lanka?

    I certainly share with my hon. and learned Friend the appreciation that he volunteered of the part played by the Sri Lanka Government in making this investigation possible.

    Referring to the major recommendation that my hon. and learned Friend and his colleagues have made, namely, that over a wide range of matters that could have a considerable effect on the conditions and life of the people employed and living on tea estates—I shall certainly be very anxious to discuss this, in the first instance, with the tea companies' representatives and, following that opening conversation, in the second instance with all those in Sri Lanka and anyone else who can help us to arrive at solutions which will help to improve the conditions of life there.

    Would the Minister not agree that the report provides one further confirmation of the fact that a large number of the people living in the Third World are living at subsistence levels, and that the only way in which this can be overcome is if the Western world as a whole is prepared to make a genuine effort to contribute towards that solution, which means, in the end, an acceptance of the lowering of our own standards?

    I entirely agree with the hon. Gentleman that the heart of the matter is the appalling poverty that exists in a large part of the Third World and, in particular, in a large part of Asia—the countries traditionally referred to as those of the Indian subcontinent. One of the most striking general conclusions that the team makes in its report is that today, leaving aside under-employment—which is a tremendous problem in Sri Lanka, as it is in other Asian countries—actual unemployment is running at a level of 18 per cent.

    Is my right hon. Friend aware that at least one member of the Select Committee on Overseas Development is puzzled by the nature of this document to which he has referred? Will it be sent to the Select Committee?

    That is not a matter for me. If the Select Committee wishes to see this document, I cannot see any reason at all why it should not receive it, as I have done.

    I am sure that all hon. Members are grateful to the Minister for the speed with which he has made this report available to the House. He has only had it in his hands a week or so. He should be thanked for what he has done.

    However, is the right hon. Gentleman aware that the television programme "World in Action" has done vast damage to British interests not only in Sri Lanka but to a much wider audience? Is he aware that those of us who went on this mission found that the programme lacked balance, that it included a degree of distortion and that there are justifiable grounds for complaint? Will he take up with his colleagues on the Government Bench the possibility of examining whether some body, such as the Press Council, should not be set up to which British firms could appeal and which would apply to television programmes? This has been a scandalous misuse of the most important communication medium that we have.

    A difficult balance has to be struck between being, as it were, fair to the reputation of particular companies in programmes of this kind and to the wide public interest there is in having the maximum freedom of comment, particularly when programmes are commenting on matters of such genuine human concern. I do not want to enter into this controversy. I hope very much that damage was not done to the reputation of British companies. The report shows that the problem is not just one of British companies but it is to be found in all the tea estates in Sri Lanka. The underlying theme of both the report and the Granada programme is the sheer problem of poverty and misery which so many countries, including Sri Lanka, its people and its Government, are having to face.

    Will my right hon. Friend in his discussion with his colleagues take into account that hundreds of thousands of former British citizens who formerly had the franchise, who are now the Indian Tamil, so-called, and who make up the bulk of those who work on the tea estates are today stateless, without the vote, without social benefits and without health service or education assistance and that they are discriminated against in a shameless way? Surely we, as a civilised country, with a reputation for denunciation of what is happening in South Africa in the name of apartheid, should take the same attitude towards the Sri Lanka Government with regard to the Indian Tamil minority and call on that Government not to discriminate but to restore the Indian Tamil's right to vote and their right to citizenship.

    Of course there is a particular problem with Tamils, who originally came from Southern India and are employed in large numbers on these estates. But there are agreements and continuing exchanges between the Government of India and the Government of Sri Lanka about this problem. Clearly, while I am sure that we would want to do our best to help in any way we could to ease this problem, I believe that we must think very carefully indeed about the fact that here are two sovereign countries whose general policies are in no sense ill disposed in terms of the conditions of life of their peoples. We therefore have to handle any such approach with very great delicacy.

    Will the right hon. Gentleman accept my welcome for arranging an early meeting with the British interests in Sri Lanka? While recognising that the problem goes far wider than the British interests involved, may I ask whether he will convey to them the fact that many hon. Members believe that British concerns should set an example of decent remuneration and decent conditions and accept that tea prices must respond to that? Finally, will the right hon. Gentleman stop preaching the doctrine of cheap food now that we have yet another illustration that cheap food supplies have often been based on inadequate support for those who produce them?

    I hope that British companies will set an example wherever that is possible and reasonable. However, we must accept the fact that of the total supply of tea in Sri Lanka about 16 per cent. is produced on British-owned estates. Therefore, we really have to see this matter in the general context of the total production of tea in that country, and, indeed, more broadly, as I mentioned earlier.

    On the hon. Gentleman's last point, if tea was within the common agricultural policy and if, in fact, it was within the context of the kind of discussions we have been having about our food policy as a whole, I might come to rather different conclusions. However, my worry about tea has been the one serious reservation I have had about the Lomé Agreement. Unfortunately, within the Lomé Agreement there is some support for East African tea growers but no support at all for Asian tea growers.

    Has the Minister got even the vaguest intention of introducing any kind of legislation to affect citizens of the United Kingdom who happen to be involved in British companies overseas in regard to the conditions of their workers and so on? Is there even the vaguest intention to legislate, which this House could do if it wanted to do so?

    The hon. Lady will be aware that the legislation which is relevant to the operation of the tea companies is the legislation of the Sri Lanka Government, and there is very extensive legislation there.

    That is, perhaps, the answer to the hon. Lady's question. However, whether we can, in different ways, ourselves help through our actions here, indirectly or directly, to promote the kind of policies which the hon. Lady would no doubt like to see is one of the matters I shall be discussing with the tea companies.

    Is my right hon. Friend aware that this House and the whole country owe a considerable debt to Granada Television for awakening our conscience to the price of a cup of tea in this country? Whatever discrepancies may exist between the evidence produced by that company and the report of my hon. and learned Friend the Member for Warrington (Mr. Williams), they have done a singular service not only to the people of Britain but to mankind as a whole. Will my right hon. Friend try to see where the discrepancies exist so that they may be ironed out? Will he also bear in mind that the television programme considered not only Sri Lanka but the whole Indian subcontinent? Therefore, in terms of seeing the Ceylon Association, he ought also to see people from India, Bangladesh and the tea companies there involved, and the conditions on their estates, in order to try to improve the situation there?

    The positive side of the Granada programme—there have been a number over the last 18 months—has been indeed to awaken the conscience of people in this country to the very unsatisfactory rewards and prices received by our major tea suppliers. To that extent, I am sure that no one would dispute that they had done a useful service. However, it is only fair to say that, while no one will deny that that is a very valuable service, some criticisms have been expressed about the particular allegations they have made affecting certain families and conditions on their estates. We must keep a balance in our minds between the service done, on the one hand, and whether the attack on particular companies was fair, on the other hand. People should withhold judgment until they have read the report.

    On the second part of my hon. Friend's question, I should like to reflect on this matter. However, I should like first to have the conversation with the Ceylon Tea Company, about which I have informed the House.

    My hon. Friend the Member for Worthing (Mr. Higgins) asked a pertinent question about the status of the report. Is the right hon. Gentleman aware that I was the chairman of a well attended all-party meeting over a month ago which expressed deep concern about this matter and requested the setting up of a Select Committee? Is he aware that, in the event, the Select Committee on Overseas Development was unable to look into the matter because of the absence of any knowledge of the content of the report, and that the Leader of the House was unable to set up any other Select Committee? Since when has the IPU, or the CPA for that matter, been a vehicle for Government inquiry and report to the Government and not directly and primarily to this House? Is not this matter most unfortunate, if not actually discourteous to hon. Members who have expressed concern to the Government about it and have had to wait until today? Even now most of us have not seen the report.

    We must get this matter in proportion. Here was a very serious matter of public concern. As the House will well recall, it so happened that a number of hon. Members were in Colombo at the time, and my right hon. Friend the Minister of State for Foreign and Commonwealth Affairs—I think very sensibly—invited those hon. Members who were on the spot to conduct an inquiry, as it were. I really cannot see why we should feel in any way that their report will cut across the work of the Select Committee on Overseas Development, which I am sure will carry on doing very useful work in its own right.

    Statutory Instruments


    That the White Fish and Herring Subsidies (United Kingdom) Scheme 1975 be referred to a Standing Committee on Statutory Instruments. — [Mr. Coleman.]

    Residential Boats (Security Of Tenure)

    4.18 p.m.

    I beg to move,

    That leave be given to bring in a Bill to protect the occupiers of residential boats and other craft and moorings.
    All parties in the House have accepted the principle that people should have security of tenure in the homes in which they live. Over the years, that principle has been extended. In the case of caravan dwellers it was extended only last Friday through the Mobile Homes Bill. The outstanding exception now remaining are people who live in houseboats. They usually own their boats. But the owners of the land to which they are moored normally have the right to evict them from their moorings and to cast them adrift, so that these people become homeless.

    When this happens—it has happened 80 times on the River Thames in the last three years—it means disaster to these families. New moorings are very difficult to find. The boat may have to be sold at a price below its value because it has no mooring. A family may lose part of its savings and may have to turn to the local authority to be rehoused, as being homeless, so jeopardising the prospects of other families who need rehousing. This is all because the family has no secure right to a mooring in the first place.

    The problem is not vast. There are only about 15,000 houseboats in the United Kingdom. I hope that this will not count against them. The House is traditionally sensitive to the wellbeing of small minorities, and I hope that that tradition will be demonstrated today.

    The Bill will not seek to provide preferential treatment for houseboat families but merely to give them, as far as possible, the security enjoyed by the rest of the community.

    I have met many of the people concerned, and here I declare my constituency interest. There are about 200 such houseboats in the Twickenham constituency. That is well under half of 1 per cent. of the population. In their occupations the people concerned comprise a diverse but fairly typical cross-section of society. They include teachers, nurses and other social workers. There are designers, engineers and other skilled people. There are relatively few who are unskilled. There is one widow of a distinguished naval captain. Another is a well-known variety artiste. A fair proportion are young people saving to buy a house, which is something to be commended.

    The one feature they have in common is a liking for the riverside scene and of its peace and quiet. They are independent-minded people who do not automatically want to follow the crowd. Thank God there are still some people in the country like that. It is sometimes said that they are scruffy people. That I refute. They are useful citizens who have worth while jobs. They look very much like everyone else. I cannot accept that it is right that they should continue to live in fear and uncertainty over their homes.

    Until recently, the law has treated all boats in all senses as chattels rather than homes. However, two years ago Mr. Barber, as Chancellor of the Exchequer, agreed in reply to a Question of mine to treat houseboats as houses rather than boats for value added tax purposes. This meant that no tax was paid upon the purchase of them.

    Last year the present Chancellor of the Exchequer decided to allow interest on loans for the purchase of houseboats to be set against income tax, so the Treasury, in successive administrations, has recently treated houseboats as homes. Not so the Department of the Environment. That Department apparently regards an Englishman's home as his castle only if it happens to be on dry land and under successive administrations it has failed to remedy this matter. I hope that the Secretary of State and the Under-Secretary will take note of this. I hope that the Department of the Environment will take another look at this matter and will support this Bill.

    The main argument against the Bill is that it would interfere with the rights and duties of the water authorities in such matters as navigation, dredging and repairing the banks of rivers and canals. I accept the strength of that point but will include a clause in the Bill to allow for it.

    Some three months ago, Mr. Peter Black, Chairman of the Thames Water Authority, the largest such authority in the country, wrote on this matter to my right hon. Friend the Opposition Chief Whip. He said,
    "… provided the Authority's existing powers to require the unmooring and removal of vessels on the Thames is unfettered, I would not feel able to say that legislation conferring security as between houseboat owners and their landlords would of itself prejudice the Authority. However, an absolute right to remain moored in a particular location on the Thames cannot now exist and should not be created."
    He also said,
    "… I do not think that the statutory duties of Water Authorities need be unduly interfered with, provided any security granted is limited to the matter of the private rights of houseboat dwellers against their private landlords."
    That seems to me to be an eminently sensible and balanced opinion, and I hope that the Department of the Environment will give it due weight.

    What is at stake is the security and freedom from harassment and fear of a group of our fellow citizens who have so far, I believe, been accidentally excluded from the protection that is now given to practically everyone else.

    It is on these grounds that I beg to ask leave to introduce the Bill.

    Question put and agreed to.

    Bill ordered to be brought in by Mr. Toby Jessel, Mr. Alan Lee Williams, Mr. John Wells, Mr. Phillip Whitehead, Mr. Tony Durant, Mr. James Wellbeloved, Sir Nigel Fisher, Mr. R. C. Mitchell, Mr. Geoffrey Pattie, Mr. Nigel Spearing, Mr. Norman Lamont, and Mr. John Tomlinson.

    Residential Boats (Security Of Tenure)

    Mr. Toby Jessel accordingly presented a Bill to protect the occupiers of residential boats and other craft and moorings; and the same was read the First time; and ordered to be read a Second time upon Friday 11th July and to be printed. [Bill 162.]

    Orders Of The Day

    Housing Finance (Special Provisions) Bill

    As amended (in the Standing Committee), considered.

    New Clause 1

    Repayment And Disqualification

    ' —(1) in any case to which section 1 of this Act applies the District Auditor shall at the same time as he makes the certificate referred to in subsection (2) thereof make a further certificate stating the sum or sums which and the person or persons whom he would have surcharged under each of subparagraphs ( b) ( c) and ( d) of section 228(1) of the Local Government Act 1933 but for this Act.

    (2) Within 28 days of making the certificate required under subsection (1) above the District Auditor shall apply to the Court for such order or orders as the Court may think fit to make as hereinafter provided in respect of the said certificate and against any person or persons named in it.

    (3) On an application under subsection (2) above the Court may confirm, vary or quash the said certificate and if it confirms or varies it may:—

  • (a) order that any person named in the said certificate as confirmed or varied shall pay to the Council which incurred the expenditude or suffered the loss or deficiency in question, or to its successor Council, such part as the Court things fit but not exceeding £1,000 of the sums for the expenditure or loss or deficiency of which such person was responsible as certified therein; and
  • (b) whether or not it makes an order for the payment of any part of such expenditure or loss or deficiency if the total thereof exceeds £2,000 and any person responsible for authorising or incurring it is or was at the time of his so doing a member of a local authority, may order him to be disqualified for being a member or elected to a local authority for a specified period not exceeding five years.
  • (4) The Court shall not make an order under subsection (3) ( a) or ( b) above if the Court is satisfied that the person authorising or incurring the expenditure, loss or deficiency in question acted reasonably or in the belief that his action was authorised by law, and in any other case shall have regard to all the circumstances, including that person's means and ability to pay.

    (5) Any person liable to be affected by any order made in proceedings under any of the foregoing provisions of this section shall be entitled to appear and be heard in such proceedings.

    (6) The Courts having jurisdiction for the purposes of this section shall be the High Court except that, if no sum specified in the certificate given under subsection (1) above exceeds the amount over which county courts have jurisdiction in actions founded on contract, the county court shall have concurrent jurisdiction with the High Court.

    (7) Any expenses incurred by a District Auditor in complying with the foregoing provisions of this section shall so far as not recovered from any other source be recoverable from the local authority from the audit of whose accounts such expenses arose or from the council which is the successor to that local authority.'—[ Mr. Raison.]

    Brought up, and read the First time.

    4.25 p.m.

    With this, it will be convenient to discuss the following amendments:

    No. 14, in Clause 2, page 3, line 13, after first 'of', insert ( a)'.

    No. 15, in line 15, at end insert:

    (b) any sum or sums which the court may order to be paid to that council.'

    I should explain straight away that Amendments Nos. 14 and 15 follow from new Clause 1. The new clause is to be taken in conjunction with the present Clause 1 and will, in effect, become Clause 2 of the Bill if it is accepted by the House.

    The House will realise that our opposition to this shameful Bill is deepseated. As the debate continues this afternoon I am sure that it will become apparent that our position has been strengthened rather than weakened during our period in Committee.

    We accept the notion of the rent loss certificate introduced in Clause 1 and the procedure by which a district auditor, dealing with the failure to implement the Housing Finance Act 1972, shall not apply the normal surcharge procedure—which also entails disqualification where the surcharge is £500 or more—but instead shall issue a certificate setting out whom he would have surcharged and by how much.

    We accept this procedure for two reasons. The first is that, as we have repeatedly said, we have no desire to be vindictive and believe that justice should be tempered with mercy. We want our approach to this to be eminently reasonable, as it was in Committee. The effect of the certificate is that it identifies the people concerned but makes it possible not to apply the full rigour of the law which was operating at the time when these acts took place.

    Secondly, we accept the rent loss certificate procedure because it can be a means of ensuring that the business of making up for lost rents falls on the relevant community—in other words, that it falls on the people who benefited from the failure to implement the Act or, at least, elected the councillors who defied it.

    We believe that that again is a right ingredient in the Bill. So far, so good. Clause 1 in itself is not in all ways unacceptable to us. Where we part company from the Government is in the way that Clause 1 precludes the possibility of any financial burden or electoral disqualification—except in the case of the original Clay Cross surcharge, which we come to under Clause 4—falling on councillors who deliberately defied the law when they refused to implement the Housing Finance Act. Make no mistake about it: it was deliberate defiance.

    The position was made absolutely clear during the passage of the Housing Finance Act. Moreover, as I recall, on the Second Reading of the Bill my hon. Friend the Member for Southend, West (Mr. Channon) made it clear when he said:
    "The existence of default powers does not give a local authority the right to default on its statutory duties … default on a statutory duty is a breach of the law."—[Official Report, Standing Committee E, 23rd March 1972; cc. 4256–7.]
    The law was absolutely clear, and I do not believe that any councillor caused it to be broken except deliberately, though our new clause strengthens the safeguard against a penalty being imposed on anyone who acted
    "… reasonably or in the belief that his action was authorised by law."
    In other words, we seek in our new clause to make it completely impossible for anybody to bear a penalty or burden unless he has clearly and knowingly breached the law. We do not want anyone to suffer penalties unfairly. But we insist that to give this immunity from the consequences of actions in defiance of the law can only be an encouragement to similar breaches of the law in the future. We can all list examples of how this might occur.

    This is our fundamental objection to Clause 1. It is a matter of profound principle, and one where we disagree with the Government's approach.

    4.30 p.m.

    There is a further reason why we believe that the Secretary of State, the Attorney-General and their colleagues are wrong. The Government are taking this step before the full facts are known. This is one of the several crucial differences between the affairs that we are discussing at the moment and the Poplar example which has featured so much in our discussions. It is entirely wrong in principle to bring forward this measure before the facts are known. It is also foolish in practice. Moreover, it is a breach of the undertaking given by the Prime Minister on 4th April, when he said:
    "Only when we see the full extent and magnitude of the problem will it be possible for to to make our recommendations to the House and this we shall do."—[Official Report, 4th April 1974; Vol. 871, c. 1445.]
    We still cannot see the full extent and magnitude of the problem. In many ways we know very little more than we knew when we started on this issue a year and a half ago. We have discovered certain facts in Committee, but they are extremely limited. We still do not know, for example, the names of the authorities where surcharges may apply. As it happens, the district audits are proceeding very slowly and in nearly all cases have been suspended. I can understand that the district auditors may take the view that it makes sense to suspend audits while awaiting the results of the legislation, but it adds to the difficulties. We do not know what it is about which we are legislating. That cannot be a good basis for legislation. We know little more than that the sum involved may be £1·5 million spread over 400 councillors.

    We know that in cases where the audit has been completed, apart from the special audit at Clay Cross, there has been no surcharge or disqualification imposed. We also know now—this was the one valuable fact to come out in Committee—how relatively small are the sums to be recovered in all but one or two of the possible instances. But, essentially, we are in the same position as we were in April 1974.

    We cannot believe that it is right to decide whether all these councillors should be let off while we are in ignorance of the facts. We think it especially wrong, if not tragic, that the Secretary of State and the Attorney-General should promote such a procedure when the rule of law and the sovereignty of parliamentary government are under challenge on many sides. What would they say, for example, if some local authority in the future decided not to impose the rent increases which possibly will be required, perhaps by legislation, next year or even this year? It is on the cards that we may have legislation. We are in danger of having this deeply offensive community land legislation on the statute book. If it goes on the statute book, it must be implemented. No one must defy it. But people will be profoundly opposed to it and will have before them the example of what has happened to those who defied the Housing Finance Act 1972. The Government are setting a most dangerous precedent.

    What do we propose to set up in substitution for the Government's procedure? Our clause sets up a scheme devised by my hon. and learned Friend the Member for Southport (Mr. Percival), to whom I pay tribute and express my thanks, which could achieve a moderate answer to this admittedly very difficult question. In Committee we tried to persuade the Government that in its essentials it offered a real opportunity to take the heat out of this difficult matter, and came up with an answer which managed to combine moderation and common sense with a final upholding of the principle of the rule of law which we believe to be so important. I hope that the House will think carefully about what we are proposing again in this debate and will ensure that it is supported.

    In saying that, I am encouraged by two statements that we have had from Ministers during the passage of the Bill so far. On Second Reading the Secretary of State said:
    "I do not present our conclusions to the House in any spirit of dogmatic certainty that we have got them exactly right still less in a spirit of triumph."—[Official Report, 24th March 1975; Vol. 889, c. 50.]
    When I heard those words I was extremely grateful, because they appeared to indicate that the right hon. Gentleman was prepared to listen to what we had to say, and it was my hope that he would accept amendments which we put forward that were clearly more reasonable than the Bill's proposals. I acknowledge that we are to have some concessions from the Government today. However, I emphasise that they are useful but minor. We believe that it is not too late for the Government to accept the more fundamental amendment set out in our clause.

    In Committee the Under-Secretary said:
    "I confess that we are not entirely satisfied with the Bill as it stands."—[Official Report. Standing Committee D, 17th April 1975; c. 194.]
    He had our full support in saying that. But, again, cannot he see that in the approach put forward in this clause and in our other amendments we are not attempting to wreck the Government's proposals? Cannot he see that they are a genuine and serious attempt to improve them? The hon. Gentleman said that he was not entirely satisfied with the Bill. Here is a chance to improve it in a way which might begin to make it, although not wholly acceptable to the country as a whole, much more acceptable than it is at the moment. The Government must know that they have introduced a measure which has caused profound distress among very many people of whom a large number would normally be sympathetic to their party. Many people feel that this is perhaps the worst of all the actions taken by this present Government.

    When the Under-Secretary made the statement to which I have just referred, we were debating the method of collecting money which had not been collected. But I do not think that the hon. Gentleman confined his remark to this point. Therefore, I hope that we shall have from the Government some recognition that they still have not got it right. Let them prove the good intentions that they have expressed by accepting this clause which is based on the scheme put forward in Committee and which was never undermined by the Government. All that the hon. Gentleman said in defence of the Bill was that Government supporters believed that the Bill had got it about right. He did not set out to give a detailed defence of his approach to this matter, as opposed to the approach of the Opposition.

    The essence of our proposed scheme is that the possibility of financial penalty in place of surcharge and of disqualification should remain. But we have several important modifications to that. First, the full rigour which was required under the 1933 Local Government Act need not be exacted. The kind of modifications introduced in the 1972 Local Government Act should be applied in this Bill.

    Secondly, the guilt, if I may call it that, of an offending councillor would have to be clear beyond all doubt. I do not say that the Bill gives any reason to suppose that innocent people might be brought to book. But we have deliberately emphasised this point. We do not want anyone to suffer who has not committed an offence or defied the law.

    Thirdly—and this is very important—the decision whether penalties should be imposed should lie with the court, and that, in effect, will mean the High Court. This point was advocated during Second Reading in the eloquent speech by the hon. Member for Liverpool, Toxteth (Mr. Crawshaw), who said something which is bound to command a great deal of support; namely, that by putting this decision into the hands of a court, rather than into the hands of the Secretary of State or even of Parliament, it is possible to take this highly contentious matter to some degree out of the political arena. I submit that there is very good reason for doing so.

    It is also true that the courts are highly experienced in making the kind of assessments or judgments that would be required under our new clause, because that in effect is what they are doing the whole time. Given that we have landed ourselves in this very contentious political dilemma, in our view it would have been better to take the question of what penalties should be borne out of the hands of the politicians, who are inevitably caught up in this difficult wrangle, and put it into the hands of the dispassionate courts.

    Would the hon. Gentleman apply this principle only to cases where local authorities incurred wrongful expenditure or where they did not collect money that they should have collected, or would he apply it to cases where other public authorities did the same thing? Would he like the courts to take the effective decisions in both cases?

    That is an extremely general question. I am not clear what sort of example the hon. Gentleman has in mind. My approach throughout has been to look at the matter in a specific way, because we need a commonsense answer. We shall betray ourselves if we talk in terms of wide generalisations. I hope that the hon: Gentleman will forgive me if I do not give him a clear-cut answer on this point, because I do not think it is necessary to do so.

    Fourthly, I believe that our scheme overcomes the weakness of the Government's approach, because it would come into action only when the facts were known. Although the legislation would be completed before the facts were known, before the rent loss certificate had been issued and so on, nevertheless the actual decision about the type of penalty—whether there would be surcharge or disqualification—would be taken only when the facts had been brought to light through the procedure of the district audit. Because we have complained again and again that it is wrong to legislate with lack of knowledge of all the facts, it must be accepted as a powerful argument that it is much better to know what one is doing.

    Therefore, the essence of this approach is that once the rent loss certificate has been issued the district auditor would apply to the court. The court may, first, order that any person named could be liable to up to £1,000 towards meeting the deficiency, and, secondly, if the total loss in any particular area is over £2,000, it may impose disqualification of up to five years on those responsible.

    The differences between this approach and what would have prevailed if the Bill had not been brought forward are, first, that there is a maximum fixed to the amount of the liability. Moreover, the extent to which people would have to meet that maximum—in other words, the amount they would have to pay—would be determined in the light of the circumstances.

    Secondly, the raising of £500 to £2,000, as the point where disqualification may be incurred is quite simply a reflection of the change in the value of money over the passing of the years. However, coupled with this is the stipulation that one does not have to go the whole hog. If one disqualifies, one does not have to disqualify for the full five years. It is possible for the court to specify that in the circumstances it should be one year, two years, or three years, or whatever is the appropriate amount for the disqualification.

    I emphasize that under subsection (4) there would be no order if a councillor acted
    "reasonably or in the belief that his action was authorised by law."
    Subsection (4) also says that the court should have regard to
    "all the circumstances, including that person's means or ability to pay."
    Therefore, if the objection is made that the burden falls equally on the rich and the poor, the court has the opportunity—as it has in the not exactly parallel case of the ordinary fine—to make a decision about what is appropriate. Those who might argue that the people concerned were often very poor must recognise that there is this important qualification in our approach.

    4.45 p.m.

    Those liable to be affected by an order would have the right to appear and be heard in the proceedings. In other words, this scheme makes it possible to deal with those who defy the law in a way that is appropriate to the degree of their defiance, rather than under the perhaps too blunt instrument of the 1933 Act which allowed only a five-year period for disqualification and full surcharge. However, it sticks to the vital principle that a person must not be able to break the law with impunity, even if he has encouragement from the Labour Party in doing so.

    I can hardly believe that the hon. Gentleman is suggesting that the Conservative Party encouraged people to break the law created by the Housing Finance Act.

    How does the hon. Gentleman reconcile what he has just said with the fact that a number of councillors of one council were surcharged by the district auditor, asked to meet the Minister's civil servants in London and then let off the whole of the surcharge on the understanding that they would go home and be good boys?