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Commons Chamber

Volume 928: debated on Thursday 17 March 1977

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House Of Commons

Thursday 17th March 1977

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Private Business

Greater London Council (General Powers) Bill (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday next.

Merseyside Passenger Transport Bill (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday next at Seven o'clock.

St Paul's Playing Field (Trust) Bill (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday next.

Oral Answers To Questions

Agriculture, Fisheries And Food

Forestry (Private Sector)


asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the level of plantings in the private sector of the forestry industry.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food
(Mr. Gavin Strang)

The level of planting in the private sector follows from decisions of many woodland owners who are influenced by their own individual appreciation of all the factors. The Government have acknowledged the concern expressed by the private sector over falling planting levels in recent years, through the setting up of the interdepartmental review of forestry taxation and grants, announced by my right hon. Friend the Minister of State at the Treasury last July. Ministers are at present considering the review body's report and hope to make an announcement shortly.

My Question was whether the Minister was satisfied with the level of plantings in the private sector. I expected him to answer "Yes" or "No". Does he realise the importance to the timber trade of plantings in this country? Is he aware that there has been a 64 per cent. increase in imports and only 34 per cent. increase in plantings? What is he going to do about it?

We shall be announcing our decisions in the light of the review. I can assure the hon. Member that we value the private industry and that we would like to see it making a full contribution to our forestry industry.

Will the Government be announcing a policy on this matter? When do they expect the review to be published?

Does the Minister agree that it would be advantageous for farmers living in less favoured areas to plant more trees in order to expand production from the land? Will he consider giving the industry further financial aid to plant more trees in those areas?

I am aware of the interesting studies that show how tree planting can increase not only forestry productivity but agricultural productivity where there is a proper integration. The new Chairman of the Forestry Commission is keen on that.

The Minister has still not answered the Question put to him by my hon. Friend the Member for Folkestone and Hythe (Mr. Costain). Is the Minister satisfied with the situation or does he share the view of everyone else who knows anything about the private forestry industry that it is most unsatisfactory and that the situation is caused by the inability of his Department to do anything about it. Does he accept that the intransigence of the Treasury has crippled the industry?

It is preposterous to suggest that the Treasury has crippled the industry. The hon. Member must appreciate that the main tax advantage to the industry—not to mention the Government grants that the private forestry sector obtains—is through the income tax schedule provisions. The Government specifically modified capital transfer tax in the 1975 Finance Act to include a special provision for the forestry industry.

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

Poultry (Carriage By Road)


asked the Minister of Agriculture, Fisheries and Food how many routine checks of poultry travelling by road have been made by officials of his Department in the last full year for which records are available; and how many contraventions of the regulations have been found in the same period.

The enforcement of the regulations protecting the welfare of poultry in transit is a responsibility of the local authorities and of the police. No central record is kept of the numbers of inspections made or of contraventions of the regulations.

Is the Minister aware that that is a most unsatisfactory answer? Is he thinking of improving the regulations in any way?

As the hon. Lady knows, since she takes a deep interest in the matter, the powers are derived from a very old order indeed. Although it refers specifically to cruelty to poultry in transit, we are looking again at the matter to see if it is possible to tighten up the regulations.

Fishing Methods


asked the Minister of Agriculture, Fisheries and Food whether he will review fishing methods in Great Britain in the interest of conservation.

The Minister of State, Ministry of Agriculture, Fisheries and Food
(Mr. E. S. Bishop)

All fishing methods are kept under active consideration.

Does the Minister agree that as the pressures increase upon the British fishing industry it is becoming increasingly essential that in the interests of conservation there should be a proper balance between methods, including the size of mesh nets, beam trawling and purse seining? May we have a review of the British fishing industry that takes account of the European situation?

Yes, I accept, as the hon. Gentleman does, the importance of conservation. He will know that under the Fishery Limits Act we have powers to look at fishing methods as well as other aspects. But what really matters is the way in which we control fishing effort in the areas concerned. These are matters that are under consideration.

As the Minister will no doubt have to move in agreement with his colleague the Secretary of State for Scotland, will he also do so in agreement with his colleague the Secretary of State for Northern Ireland, so that the same policy may apply to all parts of the United Kingdom?

Yes. Conservation is not a matter that concerns only the Sussex coast, as the hon. Member for Shoreham (Mr. Luce) may have implied just now, because of his interest. We are concerned about conservation in the whole of the area around the British coast. We are considering these matters in consultation with those concerned.

On the question of fishing methods, will my hon. Friend bear in mind that an extension of fish farming at appropriate points around the coast of Britain, especially around the coast of West Wales, would substantially increase our food supplies? Will he and my right hon. Friend give very careful thought to that matter?

Yes. My right hon. Friend may be aware of the debate that we had in October, I think, when this matter was discussed. I think that I said then that there could be an increase in food supplies from fish farming which would probably be significant, although not as significant as some may think. Also, the Government's concern about this is indicated by the fact that the Ministry spends over £1 million a year on research and development in that sector. However, I shall certainly bear in mind my right hon. Friend's comments.

Is it not time that the House recognised that man's technical ability to catch fish now outstrips the fishes' technical ability to reproduce themeslves? Will anything short of the banning of some of the modern technical methods save our fishing industry?

That is quite an important point, but the fact is that we must recognise that conservation measures should be non-discriminatory and that they can affect our own fishermen as well. I think that that is something that they would accept. These matters are under review within the Community. We are most anxious to bring forward measures from time to time to protect our stocks.

Does the Minister agree that more important than reviewing the fishing methods of Britain is reviewing the fishing methods of our EEC partners? Will he assure the House that no British fishing boat will be restricted in any way so long as one Danish fishing boat is allowed to continue with Danish industrial fishing methods?

I think that the hon. Gentleman was present at the recent meet- ings at which we had been discussing this matter in connection with various orders to ban herring fishing and certain fishing methods. As I have said, methods of control must be nondiscriminatory. We must bear in mind the effect on all concerned. Community vessels are also covered by any restrictions within the 200-mile limits. But conservation, basically, is the responsibility of the member State. It is something that we think is of great importance.

My hon. Friend referred to the Fishery Limits Act 1976. In terms of other nations' fishery limits, can he say when we can expect some agreement with Iceland and a positive agreement with the Faroes? Also, when will the British Government do something to help the deep sea fishing fleet? This has particular relevance to employment on Humberside.

With regard to Iceland, I have nothing to add to what was said by my right hon. Friend yesterday and by the Foreign Secretary on 9th March. I think that my right hon. Friend also referred yesterday to the Faroese position. These matters are under urgent review because of their importance to our own industry.

Food Prices


asked the Minister of Agriculture, Fisheries and Food what are the latest figures available for the effect of Common Market membership on the price of food in Great Britain; and if he will make a statement.

I refer my hon. Friend to the reply given to the hon. Member for Faversham (Mr. Moate) on 28th January 1977.

Does my right hon. Friend now agree, however, that the cost of our Common Market membership, in terms of food prices, is appalling? Will he not make it quite clear to our partners in the Common Market that our continued membership depends upon a drastic revision of the Common Market's agricultural and food policies?

It is no secret that I have for some time thought that the cost of our food would increase once we were in the Common Market. That I believe to be the case. I think that the retail food index has risen by 108 per cent. during our time of membership of the Common Market, to December 1976. How much of that rise is actually due to membership of the Common Market and how much is due to other factors is a little difficult to say. However, concerning the CAP and the present price review, Her Majesty's Government have made the position totally plain.

Does not membership of the Common Market affect the price of food in all parts of the United Kingdom and does not the figure that the right hon. Gentleman has just quoted apply to the United Kingdom and not just to Great Britain?

The right hon. Gentleman is entirely right in that. It is, of course, perfectly true that they affect the United Kingdom as such. If we are really being pedantic about this matter, perhaps I should add that horticulture is in a rather special situation.

Is my right hon. Friend aware that the EEC Commission proposal for the exclusive use of dairy fats in the making of ice cream in the United Kingdom will, if carried out, surely cause a massive price increase and, what is even more serious, will probably create considerable unemployment in the industry?

I am aware of the difficulties about this matter. What I have said is that if the Commission's proposals mean merely that we are to have proper labelling, I do not think that any hon. Member could justifiably complain. What I think we can complain about is if measures are introduced under the guise of correct labelling which are in fact restrictive and contrary to most of the ways in which this country has been doing things.

How does the Minister see the price, to the housewife, of bacon and pork over the next two years or so, in view of the catastrophic fall in numbers of pigs subsequent to the drop in prices? Does he appreciate that the help that he gave earlier this year has been quite inadequate and that the pig industry is facing very serious problems?

It would be a little unfair to the three other hon. Members who have Questions on the Order Paper on this subject if I were to answer that question now. Perhaps the hon. Gentleman will be a little patient.

Did my right hon. Friend notice that at the close of last night's debate the Opposition Front Bench committed the Tory Opposition to accepting the whole of the Commission's present price package, acceptance of which would lead to a further increase of nearly 15 per cent. in food prices in this country and carry the total balance of payments costs to about £900 million?

It was rather late at night, but I was a little surprised this afternoon when I saw the hon. Member for Derbyshire, West (Mr. Scott-Hopkins) nodding his head in agreement when I was talking about the exclusive milk feature and when he was agreeing with me about other disadvantages in the milk package. The milk package is an essential part of the whole package, as well as the prices.

Does the Minister agree that there are advantages in the milk package as well, and that if 1 ½ million cows are taken out of production in Europe it would be a great advantage to the level of production? Does he further agree that part of the reason for the rise in the cost of food is not the CAP but the inflationary measures that the present Government have introduced?

I do not agree with very much of that. It is for the hon. Gentleman, on a suitable occasion, to tell the House why he attacks individual parts of the milk package but nevertheless wants us to accept the lot.

Agricultural Subsidies


asked the Minister of Agriculture, Fisheries and Food what representations he has had from farmers in and around Aberystwyth about recent Government policy on subsidy to agriculture.

My right hon. Friend has received no such representations from individual farmers in the Aberystwyth area.

Does the Minister agree that if we are to increase production from the land we shall have to spend more money on research and on modern agricultural techniques? What plans has he for research in Wales?

While we have received no individual representations, we have of course received representations from the farmers' unions. I think that the hon. Member is right to stress the importance of R and D. My Department's expenditure on it in this financial year is expected to total about £37 million, compared with £34·5 million in 1975–76. There is an experimental husbandry farm near Aberystwyth. Welsh farmers also benefit, of course, from work done elsewhere, particularly in other experimental husbandry farms.

Many farmers in Wales are concerned about the level of assistance for marginal land. If there is to be a greater output of food from our own resources, much of it can come from marginal land. Will the Minister give an assurance that there will be an improvement in the grant provisions for marginal land farmers?

I am aware of the substantial percentage of marginal land that exists in Wales. I think, however, that the hon. Member will be aware of the help available to farmers in marginal areas under the less-favoured areas legislation and other provisions, such as the Farm Capital Grant Scheme, and the Farm and Horticulture Development Scheme.

Does my hon. Friend agree that farmers in Wales, as in the rest of Britain, would be far better off if we abandoned the CAP and reverted to a farming policy of giving guaranteed prices for the farmers and cheap food for the consumers?

We may have a great deal of sympathy with the points made by my hon. Friend, and we may look back to the days of guaranteed prices and fat-stock schemes—arrangements that were ended by the Conservatives—but I believe that we must now accept that the greatest assurance for confidence that the industry can have is embodied in the steps being taken by my right hon. Friend the Minister.

Common Agricultural Policy


asked the Minister of Agriculture, Fisheries and Food whether he has any new proposals for reform of the common agricultural policy.


asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the progress of the negotiations to reform the common agricultural policy.

My right hon. Friend explained to the House yesterday our general approach to the CAP and the progress of negotiations on the Commission's price proposals for 1977–78, which include changes in CAP mechanisms.

Does the Minister recall that about nine or 10 years ago Dr. Mansholt called for reform of the CAP, and that since then, because of the vested interests, very little other than tinkering with the fringes has happened? In view of the almost universal contempt in which it is now held, is it not time to scrap the CAP and start again?

Some modifications have been made since Dr. Mansholt's statement, but the hon. Gentleman is substantially correct to this extent: the CAP relies far too heavily on end prices in meeting the problems of smaller producers in Europe.

Is it not a melancholy truth that the CAP is dominated by nations other than Britain and that any attempts to achieve a reform must depend on other Governments? Since the system is highly advantageous to those other Governments, are not those attempts by my right hon. Friend liable to be frustrated?

Certainly it is the case—the EEC proposals have brought this out strongly—that the attitude of other Governments to CAP price fixing in the Community is very different from that of the United Kingdom. I hope, however, that when we finally bring home a settlement on the basis of the current proposals we shall be able to demonstrate to my hon. Friend that we can secure significant changes in the British national interest.

Surely the Government ought to be consistent in these matters. How is it that on something that they can control the Government gave a 15 per cent. or 16 per cent. increase on lamb prices and a 31 per cent. increase on wool? Is it not about time there was some honesty in these matters?

I do not think that the hon. Gentleman could have heard my reply last night. We have increased the guarantees under the traditional British system—a system that has already been commented on by my hon. Friends. By so doing, we have not affected consumer prices, which is very different from the implications of some of the proposals that we were discussing in Brussels.

Has my hon. Friend seen the latest report from the Cambridge University Departments of Applied Economics and Land Economy that the CAP is costing Britain's balance of payments £600 million a year and is raising food prices perceptibly above the level at which they would be if we were able to buy food on the open market? Is he aware that this does not allow for the recent talks on further increases in CAP prices? Can he do anything about it, or are we to have this millstone permanently around our necks?

So far I have read only The Times report on the findings of those departments. I shall read the full document with interest when it is published next week. I certainly agree that at present, even with the mcas, the United Kingdom is paying more for some food imports than it would have paid if it were not confined by the CAP.

The Parliamentary Secretary's logic is becoming more ludicrous every moment. In his reply to my hon. Friend the Member for Devon, West (Mr. Mills), why did he say that it was acceptable to have a 16 per cent. increase for lamb, because that is only a guaranteed price, when he is refusing a 3 per cent. rise across the board under the European package?

Let me try to spell it out in simple terms. Yesterday's announcement will not affect food prices one iota. The Commission's proposals, combined with the transitional steps—

Very well then, even without the transitional steps, the Commission's proposals will increase food prices in this country by around 2 per cent.

National Farmers' Union


asked the Minister of Agriculture, Fisheries and Food when he expects to meet representatives of the National Farmers' Union; and what subjects he expects to discuss with them.

I keep in close touch with the National Farmers' Union on matters of concern to the agriculture industry.

Will my right hon. Friend discuss with the farmers the Common Market farm price proposals, which will mean an extra 70p a week on the food bill of average families in addition to the 24 per cent. anual increase in the price of food that they have already suffered? Does he agree that the Tory Government made a mistake in the first place by taking us into the Common Market and that the Labour Government made an even bigger mistake in recommending us to stay in? Will he now try to extricate us from the stupidity of the common agricultural policy, which has become an albatross around our necks?

Whatever I think and whatever I may have said in the past, we are now in the Common Market, and the CAP is part of the Common Market. That does not mean that I have to accept every proposal that is put before me. The Government believe that the price rise that we have been talking about needs to be avoided. That is why I have told the NFU exactly where we stand. I further pointed out to it that the best way of penalising its members' production is to provide food that the housewife cannot afford to buy.

Is the right hon. Gentleman aware that the NFU is deeply concerned about the EEC proposals for milk? Is he also aware that in this country we do not produce surpluses of liquid milk or dairy products? Is he aware, too, that the doorstep delivery of milk in this country is unique within the EEC? Will he ensure that no steps or decisions are taken in the EEC that will damage the dairy industry, either the trade or the producer?

I have that very much in mind. Wherever the butter mountain exists it certainly does not exist in the United Kingdom. Furthermore, our traditional method of having milk delivered daily to the doorstep is something that we must protect. It is for that reason that I am fighting very hard to preserve for us the milk marketing boards—as good an example of practical Socialism as it is possible to have, as my hon. Friend said yesterday.

When my right hon. Friend next addresses a meeting of the National Farmers' Union, and particularly when he next meets Sir Henry Plumb, will he draw attention to the excellent speech made yesterday by the hon. Member for Holland with Boston (Mr. Body). who pointed out that in the end the interests of farmers and consumers are the same and that British farmers stand in danger of losing the good will of the consumer? Will he ask Sir Henry to support the continued mutton regime in this country with deficiency payments rather than a system of intervention?

I thought that the hon. Member for Holland with Boston (Mr. Body) made an extremely clear and remarkable speech. It was one of the best that I have heard for some time. I do not think I need draw it to the attention of the NFU, as I am sure that it will have read it with interest. There is a great deal in my hon. Friend's second point, but fortunately, now is not the moment that the question becomes imminent.

I hope that when the Minister sees the NFU he will take the opportunity to explain to it how the answers that he has been giving today fit in with his maintenance of the "Food from Our Own Resources" policy as there seem to be major conflicts.

I shall explain to the NFU that "Food from Our Own Resources" is very much the basis on which we improve our own country's agriculture. For that reason, as I have pointed out from time to time, certain of our partners in Europe regard it as anti-communautaire and rather nationalistic. I must point out that the policy of Her Majesty's Government has not in any way destroyed confidence in agriculture. It is material that applications for the Farm and Horticultural Development Scheme, in which the farmer has to put down about three-quarters of the money, are increasing. There were 227 applications in September 1975 and 3,420 in September 1976. That is not the sign of a bad industry.

Surplus Products (European Community)


asked the Minister of Agriculture, Fisheries and Food if he will guarantee that future EEC food surpluses will be used for the benefit of member countries.


asked the Minister of Agriculture, Fisheries and Food if he will make a statement concerning the disposal of structurally surplus agricultural products arising within the EEC.

It is our policy that an end is brought to structural surpluses and, where they exist at present, priority is given wherever feasible to Community consumers in their disposal. Structural surpluses will be removed only by keeping producers' prices at realistic levels.

Does my right hon. Friend recall that when the Euro-fanatics on both sides of the House were dragging us into the Common Market they said it would assist in helping Third World countries, that it would help in standing up to the Eastern bloc and that it would, through economies of scale, improve Britain's standard of living generally? Will he explain how selling butter to Russia and other countries fits in with those criteria? It sounds like double-Dutch to me.

First, we agree with my hon. Friend about the need to ensure that surpluses are dealt with in the proper way. The best way to deal with them is to prevent them by the common price restraint system that has been advocated in the Community by my right hon. Friend. As some of the prices in the Market are above those in third countries, it means that when commodities that are in surplus are sold outside the Community, to third countries, there has to be some adjustment to make them competitive. That is another reason why we should ensure that the changes that come about in respect of surpluses are not to our disadvantage.

Will the hon. Gentleman explain why it was not possible to sell off the butter mountain cheap in this country to old-age pensioners, for instance, rather than to sell it cheap to Russia?

Briefly, the answer is that my right hon. Friend has made various suggestions to the Community about the disposal of butter and other surplus supplies. Among other suggestions, he mentioned the need for helping our schools. The fact is that there are bound to be supplies that have to be in surplus and sold outside—[Interruption.]—and up to now that has been the Community's policy. However, the Commission has decided to modify its system by granting export licences for butter. The intention in future is to ensure that no further advance fixings or refunds are authorised for exports of butter to Eastern Europe. I emphasise the need to prevent surpluses in the first place and to ensure that when they arise they are used as far as possible for the benefit of Community consumers.

Does my hon. Friend agree that having nearly drowned in a lake of wine the poor CAP is now sliding into absurdity down the slippery slopes of a mountain of butter? In spite of the Damascus mood of the Conservative Party, does my hon. Friend agree that the real task is not merely a matter of disposal but to put an end to the creation of surpluses? Is my hon. Friend aware that there will be no final solution if he and his right hon. Friend do not continue to fight in Brussels to ensure the standstill of intervention prices?

After the statement of the hon. Member for Derbyshire, West (Mr. Scott-Hopkins) last night, that we should accept the entire Community package, it was obvious from yesterday's debate that there was no surplus of ideas or policies to set against the policies that we are putting forward. There were peaks of platitudes and lakes of loquacity, but nothing was put forward as a real alternative.

"Food From Our Own Resources"


asked the Minister of Agriculture, Fisheries and Food if he will make a statement on progress towards achieving the objectives of the White Paper "Food from Our Own Resources", Command Paper No. 6020.


asked the Minister of Agriculture, Fisheries and Food whether the targets set for home grown food production in "Food from Our Own Resources" are being met.

I refer the hon. Members for Braintree (Mr. Newton) and Kidderminster (Mr. Bulmer) to the reply given to the hon. Members for Cirencester and Tewkesbury (Mr. Ridley), Devizes (Mr. Morrison) and Romford (Mr. Neubert) on 17th February.

Is the hon. Gentleman aware that we are grateful that he has not attempted to say that a fall in production of 20 per cent. is an outstanding success? One contribution that can now be made to the re-expansion of agriculture is to give farmers the opportunity to spread incomes and tax liabilities over a longer period—for example, three years. Will he confirm the whispers that his right hon. Friend is in favour of that? If so, will he press the point on the Treasury, for the Budget?

In his first major speech to the Farmers' Club my right hon. Friend pointed out the potential benefits that he saw in a scheme of that nature. I am sure that the hon. Gentleman will appreciate that there are other financial considerations that will have to be considered by the Government before they can make such an announcement.

Does the hon. Gentleman realise that many farmers regard the White Paper at best as a public relations exercise and at worst as a fraud? Will he specify a sector of farming in which, if a farmer invests in furtherance of the Government's declared objectives, he can assure the farmer that he will get a commercial return over the life of the investment?

Perhaps I can best answer the hon. Gentleman by referring him to page 37 of today's Financial Times, where he will read that the National Farmers' Union has said that the increase will help the expansion of sheep production, which both the Government and the industry wish to see. As I think the hon. Gentleman knows, that is part of "Food from Our Own Resources".

Does my hon. Friend agree that "Food from Our Own Resources" has been held back by the common agricultural policy and that the production of more food has been held back as much as the pricing of our food has been increased by the CAP? Is my hon. Friend prepared to speak to his right hon. Friend to ascertain whether he will continue making to the Cabinet and the Government generally the suggestions that I made in the debate yesterday, namely, that the Cabinet should abolish the CAP?

I cannot agree that the CAP has held back agricultural production in the United Kingdom. I agree that it is important that we strike the right balance between the interests of our producers and consumers in fixing agricultural prices to secure expansion without inflicting unnecessary increases on consumers.

Does the Minister agree that in the context of "Food from Our Own Resources" Scotland, unlike England, is self-sufficient in terms of both food and fish?

If the hon. Member is suggesting that we should not expand agricultural production in Scotland because we produce proportionately more. I think that Scottish farmers would disagree most strongly. We hope to increase sheep production, particularly, and we are looking to the French market.

Dairy Products


asked the Minister of Agriculture, Fisheries and Food whether he has any new proposals to ensure that EEC retail prices for dairy products are reduced to a level closer to prevailing world prices.


asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the policy adopted in the EEC for the future production of milk and dairy products.


asked the Minister of Agriculture, Fisheries and Food what specific proposals he has to put to the Commission to prevent the continued building up of dairy produce surpluses in the EEC.

In discussions in the Council of Ministers on the Commission's price proposals and the proposed action programme for the dairy sector, the United Kingdom has consistently advocated the maximum possible restraint on common milk prices and indicated a willingness to consider other appropriate measures that could lead to a better balance in the dairy products market.

I welcome the tough line that the Minister has taken so far in reforming the common agricultural policy, but may I suggest that the Government consider pressing for an automatic relationship between target prices in the EEC and world prices? If there is to be such a big gap in the prices of commodities such as butter, the British consumer will suffer and there will be no incentive to efficient production.

The hon. Member has echoed what I said just now about the difference in prices inside and outside the Community, which makes the problem of surpluses much more acute. My right hon. Friend has taken this into account and we have put forward very strongly to the Community that those member States that have the most efficient producers should be given the greatest encouragement, and that others with less efficient producers should be discouraged. That would help to restrain prices.

Will the Minister confirm that the policy of the EEC on the dairy industry not only helps inefficient Continental producers but militates against the interests of the most efficient producers in this country and the consumers alike by keeping prices high? In this respect, will he agree that EEC policy is a major obstacle to our achieving the objectives for the dairy industry envisaged in "Food from Our own Resources"?

I accept the points made by my hon. Friend. If he looks at the White Paper he will see that the last page gives the relative position of efficiency and output figures for the dairy industry in the various Community member States. Britain has the largest herd size—higher than either Denmark or the Netherlands—but it is only third in output. Also, we are only 60 per cent. self-sufficient in milk products. This indicates the possibility and desirability of giving our own farmers more encouragment in dairy produce and discouraging the less efficient producers in other parts of the EEC.

In view of the scandalous rise in the price of butter, up to 72p a lb. by the end of the year, compared with 35p in New Zealand, does the Minister agree that this is due to the transitional steps that, unfortunately, must be taken? Is there any scope for renegotiating the two transitional steps? Otherwise the poorer sections of the community in this country will be in real trouble by the end of the year?

My hon. Friend made it clear that he had considered this aspect of the treaty to see whether the transitional steps were inevitable. He did not find any way of overcoming this difficulty. I emphasise the importance of taking steps to see that surpluses are prevented and that prices are kept to a minimum.



asked the Minister of Agriculture, Fisheries and Food what steps he is taking to promote the sale of fresh mackerel to the public.

This is primarily a matter for the industry and the White Fish Authority, but my right hon. Friend and I are anxious to see better use made of this valuable resource.

Is the Minister aware that mackerel that has accumulated in Hull is being left out to dry in the mid-day drizzle—if it does not go rotten—to be ground into fish meal? If the mackerel industry is to go bankrupt the mackerel fishermen of Devon and Cornwall would rather that the fish were eaten by humans than used for fertiliser.

This raises the very important question of marketing mackerel. These resources are in greater supply than many others. I have visited Penzance and Newlyn and I am aware of the problems there. We have been doing our best to ensure that newer opportunities arise for marketing, no matter who catches the fish in the areas concerned. The Government have paid a grant of £12,000 towards a marketing study that cost £16,000. This matter is occupying our attention at present, and we fully recognise its importance?

Is the Minister aware that many Devon and Cornish fishermen resent the invasion of their waters by marauding Scottish fishermen?

I have no wish to be involved in any dispute between Scotland and Cornwall and Devon, except to say that Scottish fishermen are United Kingdom fishermen and they have a right to fish in British waters. As for trawlers from third countries, my right hon. Friend must be aware of the licensing provisions in the agreements with third countries to restrain the fishing activities of those countries.



I refer my hon. Friend to the reply that I gave to my hon. Friend the Member for Hemel Hempstead (Mr. Corbett) on 3rd February.

When my right hon. Friend again discusses economic policy with the TUC, will he ensure that it is not taken in by the posturing of the Opposition on matters such as increased food prices, where their policies would lead to even higher prices than those we have at present, on gas prices, where their entreaties for public expenditure cuts ignore the policies that the Chancellor has been putting forward, and on Shotton, where the works would have been closed had it not been for the reversal of policy by the Secretary of State for Industry?

My hon. Friend is quite right—and we all know that any introduction of the kind of policies favoured by the Opposition would lead to a higher cost of living throughout this country.

Doubtless the Prime Minister has discussed public expenditure proposals with the TUC. Will he admit that he is the first Prime Minister in the post-war period who has been too afraid to put his proposals for public expenditure cuts into a White Paper and lay them directly before the House on a direct motion for a direct vote?

I do not see what the right hon. Lady is complaining about. She has been pressing us for months to cut public expenditure, and we have now cut it. As regards a vote on a motion, I would expect to find every member of the Tory Party on my side in the Lobby.

But is it not the truth that if the Prime Minister put down a motion to approve the White Paper he would lose it and the whole of his economic policy as well, despite Government whipping?

If the right hon. Lady really means that, she is being very hypocritical in calling on me to reduce public expenditure. The reduction of public expenditure is what the White Paper is about, so perhaps she would reflect on the question why, when she has asked us to cut public expenditure and we have cut it, she would vote against the cuts.

Will the Prime Minister explain to the TUC how he expects to increase the authority of the Prices Commission in keeping down prices in the private sector if the Government override the Commission's decisions in the public sector, as was the case with gas prices? As he said outside that he was bringing this matter to the House, and as it would be doubtful that the House would approve it, what does he intend to do about it?

If I remember rightly, I was having an erudite discussion with my hon. Friends about higher institutions of learning in Birmingham when I was rudely interrupted with a question on gas prices. At that time I was under the impression that the matter would have to come before the House, but I find now that it does not.

I humbly apologise to the right hon. Gentleman and to everyone else for that grave and grievous error, which I trust I shall not repeat again. With regard to the general question, it is a matter that I hope we shall not have to repeat. As the right hon. Gentleman knows, the increase in gas prices was part of the undertakings that we gave to the IMF in relation to our borrowing requirements. There is no need for Opposition Members to say "Ah"; this was explained on 15th December and they knew it perfectly well.

It is contained in the document that is being discussed today. It would not be proper to go back on the cuts that were made then or on the increases made then. If we did we should have to find £100 million of cuts somewhere else. We shall not depart from the basic arithmetic of that agreement.

Will my right hon. Friend confirm that he is knowledgeable about the anxieties and incomprehension that have been expressed by some members of the General Council about the fact that the Government and the NEB are now saying that they cannot fill the vacancies among the directorships for which they have nominating rights because, it is suggested, there is no available managerial executive talent? Will the Prime Minister now say that he will try to encourage Ministers to resist the story that is put about that they have no knowledge of such talent, or no talent-spotting methods, by which they can fulfil these obligations? Will my right hon. Friend also look at the whole question of Government appointments?

I shall be glad to discuss this matter with my hon. Friend in more detail, but it is certainly the case that on occasions it is difficult to find people of the requisite talent to fill particular posts which are necessary to be filled. [An HON. MEMBER: "Look behind you."] I do not have to look behind me. I just have to look across the Floor of the House. This is a real problem in British industry and it is one to which we must devote a great deal of attention. I am bound to say that when I am looking for recruits I shall not look at the bunch of faded daffodils on the Opposition Benches.

Merseyside Shipyards


asked the Prime Minister if, as part of his visits to industry, he will visit the Merseyside shipyards.

I went to Cammell Laird's shipyard at Birkenhead on 3rd September last year, during my visit to Merseyside. I have no plans at present for a further visit.

Does my right hon. Friend agree that the long history of uncertainty facing the ship repair industry has been worsened by its exclusion from the Aircraft and Shipbuilding Industries Bill? Is he aware that Western Shiprepairers, which 12 months ago employed 1,000 people, is now employing 700, and that further redundancies are pending in the next week? The disappointment of the Merseyside workers is turning to anger as a result of the high unemployment level obtaining there.

Yes, I am aware of that situation, and I am glad to say that at the moment the temporary employment subsidy is assisting about 300 of the workers in that repair yard. As to the future of the yard, I understand that some of the ship repair companies have already approached British Shipbuilders about the possibility of being taken over. If the shareholders of Western Shiprepairers wish the company to be acquired they should approach British Shipbuilders, which would be free and willing to negotiate its acquisition.

Is the Prime Minister aware that if he does visit Merseyside he will find that the failure of the Government is measured not only by the failure in the shipyards but by the 11 per cent. unemployment there—and about three times that in the construction industry—and also by the 3,000 workers who in the last three weeks have been told that they will be sacked from Plesseys, Lucas and English Electric? When all this can happen it shows the pretty rotten state of the Government's policy.

That is not a fair description of the situation. The right hon. Gentleman knows the cause of some of the redundancies both in shipbuilding and, to a lesser extent, in Plesseys. Part of the cause in shipbuilding is due to gross overcapacity throughout the world. We have set aside £65 million for the support of those yards. That is additional public expenditure. I hope that the Opposition do not wish to vote against that tonight when they are so anxious to vote. We have taken other steps to ensure that, so far as possible, British shipping is built in British yards. With regard to Plesseys, this is a serious situation, which has been caused by a change in policy. This is now being examined by Professor Posner. I hope that within 90 days we shall get a report and that we shall be able to see what steps can be taken.

I believe that the country understands, even if the House does not, that the changes in technology that are taking place in our industrial situation mean that we shall have a very difficult period of adjustment ahead. The whole future of this country depends upon our industrial performance. Every Opposition Member really knows that.

Does my right hon. Friend accept that the people of Merseyside deeply appreciate the measures that the Government have taken to alleviate unemployment there, even though it is still intolerably high? In that context, will my right hon. Friend indicate when he expects to receive the report from the NEB on the investment needs of the area? Will he publish that report and, even more important, will he immediately and urgently put into effect its recommendations for the regeneration of investment and jobs on Merseyside?

The report will be made to my right hon. Friend the Secretary of State for Industry. I shall convey to my right hon. Friend what my hon. Friend has said. It will be for my right hon. Friend to decide about publication, but there is no reason why we should seek to hide anything from the House on this matter. Merseyside is in a most serious and difficult situation. The solution depends not only on our own efforts in overcoming inflation but on a higher rate of world trade, and a regeneration of world trade. That is why the London conference will be important, as well as other efforts to get industrial confidence reflated without giving way to inflation.

Ussr (Credit Agreement)


asked the Prime Minister if he is satisfied with the co-ordination between the Department of Trade and the Foreign and Commonwealth Office in relation to the Government's £1,000 million loan to the Government of the USSR; and if he will make a statement.

There is no such loan. If, as I assume, the hon. Member is referring to the credit agreement between this country and the Soviet Union, the answer is "Yes".

Can the Prime Minister deny that Labour's wonderful credit agreement with the Soviet Government is so marvellous from the Soviet point of view that not only will not one penny of profit accrue to Britain but the British taxpayer will be called upon to finance approximately 50 per cent. of the total production costs of anything that the Soviets choose to purchase under that agreement?

I should like to look at the arithmetic, because I am not able to give an answer offhand. It is certainly the case that £188 million has been taken up by the Soviet Union, and this has created jobs in this country, perhaps including some of the hon. Gentleman's constituents at Trafford Park. There is every reason why we should continue to make advantageous bargains of this sort in the same way that our industrial competitors do. The hon. Gentleman should know—if he does not, allow me to inform him and the House—that France, Japan and Italy, to name but three other countries, have made agreements similar to those that we have made with the Soviet Union. It would be foolish to cut ourselves off from that trade.

Will my right hon. Friend explain why Conservative Members are so anxious to discourage trade with the Soviet Union, in marked contrast to their friends in private industry and business who, in their scramble to buy diamonds, furs, timber, and especially oil, from the Soviet Union, have caused a balance of trade with the Soviet Union that is in the Soviet Union's favour to the tune of £400 million a year?

It is noteworthy that while we do buy a lot of the products to which my hon. Friend has referred, France, the Federal Republic of Germany and the United States not only buy much more but sell much more. It would be valuable if at some time the Opposition would tell us whether or not they want to go on trading with the Soviet Union.

Will the Prime Minister assure us, after investigation, that these British credits to the Soviet Union are not used for the purchase of Rhodesian tobacco by some of the satellite countries?

As far as I know, they are not. These are arrangements that are made, for example, with firms like Rolls-Royce for the export of industrial goods from this country. That is why they are not only bringing employment but are helping us with our balance of payments with the Soviet Union.

Business Of The House

The Lord President of the Council and Leader of the House of Commons
(Mr. Michael Foot)

The business for next week will be as follows: MONDAY 21ST MARCH—Second Reading of the Redundancy Rebates Bill.

Remaining stages of the Nuclear Industry (Finance) Bill.

Motion on EEC Document R/2639/76 on coking coal for the steel industry.

TUESDAY 22ND MARCH AND WEDNES- DAY 23RD MARCH— Debate on a motion on the statement on the Defence Estimates, Command No. 6735.

At the end on Wednesday, motion on financial assistance to the Meriden Motor Cycle Co-operative.

THURSDAY 24TH MARCH—Debate on the Chairman of Ways and Means' ruling of Thursday 10th February.

Motions on the European Communities (Definition of Treaties) Orders At 7 o'clock, the Chairman of Ways and Means has named opposed Private Business for consideration.

FRIDAY 25TH MARCH—Private Members' motions.

MONDAY 28th March—Consideration of Lords amendments to the Social Security (Miscellaneous Provisions) Bill.

Motions on the Family Income Supplements (Computation) Regulations.

It is expected that the Chairman of Ways and Means will name opposed Private Business for consideration at 7 o'clock.

The House will wish to know, Mr. Speaker, that it is intended to propose that the House should rise for the Easter Adjournment on Thursday 7th April until Tuesday 19th April.

Will the right hon. Gentleman explain why we have not had a Supply Day for three consecutive weeks when it is customary to have about one a week? Has it anything to do either with by-elections or with the fact that the right hon. Gentleman feels that we might ask for a debate on the Price Code and on gas prices?

With regard to Thursday's debate on the ruling of the Chairman of Ways and Means, we understood that discussions were taking place with regard to that and that those discussions had not yet been concluded. Therefore, will the right hon. Gentleman look at that matter again and substitute some other business for it—possibly a half day on Supply?

Taking the second of the right hon. Lady's questions first, I shall look at any question of any discussions which may be going on about Thursday's business. But it is our view that this motion should be discussed. Requests have been made to me that it should be discussed. We believe that the motion should be removed from the Order Paper. The proper way to do that is to have the discussion upon it and for the House to come to a conclusion. So I think that we should proceed with that business.

On the right hon. Lady's first question about Supply Days, we have complied fully with the Standing Order on the subject—Standing Order No. 18(7)—as I am sure she will acknowledge. This is a question of when Supply Days take place. One Supply Day which might have been asked for by the Opposition is a second day for debating the public expenditure matter that we are debating today. If the Opposition had wished to have a second day and to provide a Supply Day to discuss that, they could have had it.

I thank the right hon. Gentleman for acceding to the request from the Liberal Bench to take the Nuclear Industry (Finance) Bill at a reasonable hour. But will he say why it took him until the afternoon of the day in question—yesterday—to make that decision?

Will the right hon. Gentleman also say whether any statement is coming forward about a White Paper on direct elections, since it would be rather nice to be able to compare his version with those already printed?

I thank the hon. Gentleman for his acknowledgement of our desire always to have as many as possible of our debates at a reasonable hour. We were hoping that we would be able to continue with that business this week, but when we discovered that the discussions on the previous measure were proceeding somewhat more lengthily than had been calculated, we made arrangements for the Bill to be postponed. I think that that was a reasonable arrangement to make.

In response to the hon. Gentleman's question about a White Paper on direct elections, I advise him to await the publication of that White Paper before he jumps to any conclusion or makes any pronouncements.

My right hon. Friend will be aware that a public lending right Bill completed all stages in the House of Lords about a month ago. For the past three weeks, he has been expressing sympathy to the authors. When will he do something about it?

As I have said to my hon. Friend on many occasions, I am fully in sympathy with this Bill, especially as I have to declare my own interest every time that I refer to it. We had some difficult experiences when trying to get the Bill through this House before, and that has to be taken into account by the Government in deciding whether we are able to provide time for it.

Will the Lord President allow time to debate whether the work on the buildings designated for the Scottish and Welsh Assemblies should continue, in view of the fact that the Scotland and Wales Bill is now in limbo?

The phrase "in limbo" might be misinterpreted. Therefore, cannot accept the hon. Gentleman's description. But I believe that there are some Questions down for my right hon. Friend the Secretary of State for Scotland about this matter next week, and dare say that my right hon. Friend will be able to reply to the hon. Member for Halesowen and Stourbridge (Mr. Stokes) then.

Can my right hon. Friend tell us in general terms how the talks on devolution are proceeding, especially in view of the news which reaches us from Plaid Cymru that the party has called upon its Members not to have talks with my right hon. Friend?

I am prepared to have talks with anyone who is prepared to have talks with me. I am even prepared to talk to my hon. Friend the Member for Bedwellty (Mr. Kinnock) whenever I get the chance. So far, the discussions seem to be proceeding quite amicably. I cannot add anything further about their progress, but certainly we are trying to have them as speedily as we can. As soon as I can report to the House about them, I shall do so.

How many Early-Day Motions have been given time for debate in the period that the right hon. Gentleman has been Leader of the House? Is he aware that there are now a number of Early-Day Motions which have massive support from the Back Benches? Is it not time that at least one of them was debated?

I shall find out the answer to the hon. Gentleman's question. But I am sure that the hon. Gentleman and every other hon. Member who follows the way in which business in this House is conducted will appreciate that many Early-Day Motions, even if they are not themselves actually debated, affect the actions which Governments take and the debates in this House. Some of them are incorporated in other debates. The Early-Day Motion serves not only the purpose of asking for an early debate but also that of indicating opinion throughout the House.

Will the Leader of the House recognise that many people in Scotland will be deeply disappointed that there is no mention in the business for next week of a Referendum (Scotland) Bill? Can he say when such a Bill is likely to come forward? I remind the right hon. Gentleman that, with the break for Easter coming up, he and his Government should be aware of the Ides of May, which is 3rd May, the date of the local government elections in Scotland. If there is not a Referendum Bill before us by that time, his party will be in very bad trouble in Scottish local government.

As I have said to those with whom I have had talks about it when representations have been made on the subject, we have not slammed the door on the proposition for a referendum on the Scotland and Wales Bill. But, in general, our attitude is that we believe that any pre-Bill referendum would have great difficulties about it. We do not believe that the questions which could be put would be precise. We think that it could cause confusion rather than remove it. Therefore, we are extremely doubtful whether such a proposition would be welcomed.

Is my right hon. Friend aware that every Member of Parliament who has spoken about compensation for vaccine-damaged children believes that there should be an independent inquiry into the effects of vaccines? Everybody has been critical of the Government's handling of this important matter and the immunisation programme is now being damaged. Can we have a debate on this subject as soon as possible?

I cannot promise an immediate debate on the matter, but that does not mean that we do not recognise the importance of the subject and the views expressed in various parts of the House.

The right hon. Gentleman will recall Early-Day Motion No. 217 which I mentioned last Thursday, and which is signed by over 130 hon. and right hon. Members, dealing with the payment of gratuities to those serving in the Royal Air Force and Fleet Air Arm. The right hon. Gentleman said that an announcement would be made in the defence debate. Will he confirm that? Does he not appreciate that if the Government go back on their promise concerning gratuities it will be regarded as despicable and utterly dishonest?

[ That this House believes that any attempt by Her Majesty's Government to disclaim the obligations to pay the gratuities promised on retirement to Royal Air Force and Fleet Air Arm air crew who were enlisted on short-service commissions, would be a flagrant breach of contract and grossly dishonest; and calls upon the Minister of Defence either to confirm immediately that the Government has every intention of honouring the undertakings given to these men, or failing this to resign his office forthwith.]

I have nothing to add to what I said to the hon. Gentleman and others on this subject at an earlier stage. A statement will be made soon.

Will my right hon. Friend find time for the House to debate pay policy and dividend control, especially in view of the fact that Arnold Weinstock and others are able to escape dividend control and income tax to the tune of £278 million and when Lord Thorneycroft, the Chairman of the Tory Party, can, in another capacity as Chairman of Trust Houses Forte, make an announcement that directors of that firm will receive an extra £240 a week pay arising out of the group's recent profits?

All these subjects and the whole matter of pay policy, and whether it is or is not being applied to some members of the community, will be in order for debate in our discussions on the Budget.

Has the right hon. Gentleman noticed Early-Day Motion No. 222, which has been signed by 170 Members in all parts of the House? Does it not indicate a general disenchantment with the quality of our debates on foreign affairs, and will he consider as a matter of urgency a debate in this House to enable us to consider methods by which we can discuss foreign affairs in a more constructive way in future?

[ That this House, dissatisfied with the infrequency and nature of debates on Foreign Affairs, urges the Government to set up a Standing Foreign Affairs Select Committee whose Reports should be 43bated in the House within 30 days of publication.]

I do not know that there should be any condemnation of last Friday's debate on foreign affairs. I did not participate in it, but I gather that it was a good debate. What the hon. Gentleman and others are asking for is the establishment of a Select Committee on Foreign Affairs. I know that there has been pressure for such a Committee for many years. It is not a novel suggestion, but I still think that there are considerable objections to it. I also think that there are considerable objections to the general proliferation of Select Committees dealing with many subjects. Indeed, a total of 300 Members of the House now serve on Select Committees. If we increase the number of those who serve on such Committees, it may further injure debates in this House. That is one of the problems we face.

Did my right hon. Friend notice the report of the arrest in Moscow yesterday of Mr. Anatoly Sharansky? Is he aware of the widespread fear that this may lead to a return to the days of the Stalinist era of the "doctors' plot"? Therefore, will he arrange for an early debate on the forthcoming Belgrade meeting or some method of discussion that will enable hon. Members, and especially those who seek detente, to express their horror at this terrifying trend?

I understand the strong feelings in all parts of the House about human rights. I agree that it would be a good idea if we were to discuss these matters. My right hon. Friend the Foreign Secretary referred to this matter generally in his recent speech to the House, and the question was discussed by my right hon. Friend on his visit to Washington.

Will the right hon. Gentleman say when the White Paper on direct elections will be published? Is it not time that that happened? Furthermore, is it not also time that we debated the astonishing mess over the Sunday trading laws?

On the first matter mentioned by the hon. Gentleman, I cannot give an exact date, but I do not think that he will have to wait too long.

On the second matter, I shall have to examine any suggestion of an "astonishing mess "that may have arisen in this connection. I cannot promise a debate on the matter to remove that problem immediately.

In view of the fact that 250,000 men are now unemployed in the construction industry, and since that industry faces serious problems, is it not time that we had a full-scale debate on the problems of the construction industry so that we may deal with these urgent and vital matters?

I agree with my hon. Friend that these matters connected with the construction industry are urgent and vital. Representations on the subject have been made to my right hon. Friend the Chancellor of the Exchequer, and I have no doubt that that is one of the important matters that will figure in the Budget debates.

Will the right hon. Gentleman in the foreseeable future consider finding time for a full debate on broadcasting policy? Are not the imminent publication of the Annan Report, the possibility of an increase in the BBC licence fee, and the current controversy over the BBC's handling of Northern Ireland matters three very good reasons for having such a debate?

I agree that there should be a debate on the Annan Report, which should appear fairly soon. That surely is the best way to deal with the first two matters mentioned by the hon. Gentleman.

Will my right hon. Friend consider giving time for a full-scale debate on unemployment in view of the latest figures, instead of having regional debates on unemployment which are unsatisfactory when compared with the total situation?

I agree that the House needs to debate these matters. We have had some debates on regional aspects of employment, and I am sure that there is legitimate pressure from my hon. Friends for further debates on a regional basis. However, I also believe that the whole economic situation as it affects unemployment must be debated, and that is bound to be a major feature of the Budget debates.

May I press the right hon. Gentleman about Thursday's business and the motion on the ruling by the Chairman of Ways and Means? The ruling and the motion are extremely important matters for the House of Commons. I appreciate that circumstances in relation to the Bill changed after the ruling was given. I also appreciate that the Leader of the House is fulfilling an undertaking he gave in honour to my right hon. Friend the Member for Farnham (Mr. Macmillan), but I am right in saying that discussions are taking place on this matter, which is important in regard to the procedures to be adopted in future. I very much hope that the right hon. Gentleman will continue the consultations and will not necessarily proceed with the motion on that day unless and until the discussions are completed.

It is right for the House to proceed to that debate partly because the request was made for such a debate. The motion was tabled in the names of several leading Members on both sides of the House, and I gave answers at an earlier stage that a debate was to be held. I do not think it right that a motion of that character should be left on the Order Paper for any length of time.

My hon. Friend suggests that the motion should be taken off the Order Paper. But it is not my motion. It was tabled by other hon. Members. If they want to take the motion off, that is their responsibility. I believe that it is right for the House to debate the matter and that that debate should proceed on Thursday. That does not mean that we shall not have discussions.

In view of the fact that there is mounting frustration and apprehension in this House and in the country at certain EEC Commission directives which sound almost like commissar directives and which will have a deleterious effect on this country, flowing from the effect of the common agricultural policy, may the House have a full-scale debate on the subject so that we may examine the developments flowing from our accession to the Community and the effects of policies adopted in that period of time.?

There was a debate in the House on Wednesday on a very important aspect of our policy and we have had a number of debates on individual matters. There will be more such debates next week. I am prepared to consider a further debate on the way in which the House discusses Common Market directives or proposals or, indeed, our whole relationship, because I have always acknowledged that we have not yet found a proper solution to these problems.

Will the right hon. Gentleman try to find time for a debate on the Shackleton Report on the economic future of the Falkland Islands, bearing in mind particularly the fact that these people are totally British and are utterly dedicated to this country? Is he aware that a number of hon. Members on both sides of the House are unwilling to see them handed over to alien totalitarian rule?

The whole House shares the hon. Gentleman's feelings about the rights of the people in the Falkland Islands and this was recognised by my right hon. Friend the Foreign Secretary in his statement. I am not excluding a debate, but if I were to agree to all proposals for debates from hon. Members it would not be possible for us to fulfil our obligations on Supply Days when, as I have indicated, we have been meticulous in ensuring that we do.

May we have a debate on the SUITS-Lonrho affair which appears to be a shot-gun marriage of convenience between the unacceptable face of international capitalism, in the form of Tiny Rowland, and the unacceptable face of Scottish capitalism, in the form of Sir Hugh Fraser, who also gives vast financial contributions to support the unacceptable face of Scottish nationalism?

I am always willing to accept any invitation from my hon. Friend and as soon as possible I shall follow him to the grisly portrait gallery that he has described.

Can the right hon. Gentleman help us on a small procedural matter and explain whether the vote at the end of tonight's debate should be regarded as a purely procedural matter or as an expression of the House's opinion on the Government's White Paper on public expenditure?

Will the right hon. Gentleman be able to find time for a debate next week or the week after on Early-Day Motion No. 234 in the name of his hon. Friend the Member for Chorley (Mr. Rodgers) and 24 others of his hon. Friends?

[ That this House believes that the proposed increase in gas prices places an intolerable burden on ordinary working people, and since it has been imposed in defiance of the Price Code calls into question the whole of the Government's prices strategy and therefore calls on Her Majesty's Government to freeze gas prices at their present level for six months, and to allow future increases in nationalised industry prices only in strict conformity with the Price Code.]

Not only my hon. Friends but everyone else will look with proper suspicion at a request for a debate from the hon. Gentleman.

Because of past experience and obvious evidence. I do not think that my hon. Friends will be eager to respond to an appeal from the hon. Member for Chingford (Mr. Tebbit).

If the hon. Gentleman would like me to enlighten him on the procedure of the House, I shall be glad to take him aside one day and give him some proper tuition.

In view of the improving economic situation, will my right hon. Friend discuss with his right hon. Friends the possibility of bringing forward proposals before the recess to reduce the rate of unemployment? Can he also give an indication when we may expect a statement on the broadcasting of our procedures?

There was a parliamentary Answer a week or two ago about the broadcasting of our proceedings and I have nothing to add to it. I doubt whether we shall be able to have a debate in the immediate future, but the Government wish to proceed as quickly as possible to get the broadcasting apparatus in operation.

My right hon. Friend the Secretary of State for Employment made a statement a week or two ago and dealt with many important aspects of the unemployment problem. The general question of employment will be a central feature of the debate on the Budget, which will last for several days.

Order. From now on, I shall call only those hon. Members who have been seeking to catch my eye since we started business questions.

Can the right hon. Gentleman indicate when the House will have an opportunity to consider the Second Reading of the Police (Scotland) Bill, which was first published in November? Will he confirm that this is another Bill that the Government are hoping to drop quietly because of the opposition that it has aroused?

Dropping Bills quietly is not so easy. It is an art that takes some cultivation. I can assure the hon. Gentleman that this is not one of the Bills on which I am trying my practised hand.

As the Prime Minister has confirmed on his return from Washington that the refusal to allow Concorde to land in New York is an abrogation of a treaty between the British Government and the United States Government and has told us that President Carter feels unwilling or unable to do anything to implement the treaty—

On a point of order, Mr. Speaker. The hon. Member for Christchurch and Lymington (Mr. Adley) is treating us to a speech about his opinions of Concorde. What has this to do with the business of the House?

The hon. Gentleman could have jumped up 20 times this afternoon with similar points of order.

Will the Leader of the House ask either the Foreign Secretary or the Secretary of State for Trade to make a statement to the House about the unwillingness or inability of President Carter to uphold treaties that were freely entered into by the British Government and the United States' Government, as this may have widespread further implications for other agreements between the two Governments?

The Prime Minister indicated in replies before he went to Washington and on his return that this matter had to be raised in a way that was likely to be most effective. I am sure that the House is confident that my right hon. Friend raised it in the best way.

In view of the enormous amount of money that we have to spend on importing timber and the disastrous decline in planting in the private sector, is it not time that the right hon. Gentleman gave us the debate on forestry for which the hon. Member for Ludlow (Mr. More) asked at least a fortnight ago?

There has been a parliamentary Answer on this subject and I have already communicated with the hon. Member for Ludlow (Mr. More). The answer is an interim one and does not take the matter much further. I appreciate the desire for a debate on this subject, but I ask the hon. Members for Galloway (Mr. Thompson) and Ludlow to consult the Answer that was given recently.

Has the right hon. Gentleman seen Early-Day Motion No. 170 in my name and those of some of my hon. Friends? Would it not be opportune for the House to debate this issue before the price rise on 1st April?

[ That this House deplores the double standards implicit in the Government's intention to waive the provisions of the price code in order to impose an 11 per cent. tax on the price of domestic gas from April next, noting in particular the low priority given to the interests of the consumer and the need to reduce the cost of living.]

I do not accept the hon. Gentleman's description of the situation, but this matter can be discussed in the debate later today.

When will the House have an opportunity to debate the findings of the Bullock Report?

Neither of the Bullock Reports has been dropped. I shall be happy to provide time for debates on both of them as long as I do not get too many objections from too many quarters that I am interfering with the sort of debates that some hon. Members opposite desire.

Will there be a statement by the Secretary of State for the Environment next week on the implementation of the development land tax and the Community Land Act, as the administrative costs of the tax now equal its revenue and the Act was effectively killed by the Treasury before Christmas?

I do not accept what the hon. Gentleman says, but I shall look into the matter to see whether there is anything in his remarks. I do not expect that there will be a statement.

As we rush towards broadcasting the proceedings of the House, can the right hon. Gentleman give me an assurance that he will not trespass on Cromwell's Green to put any equipment of the BBC or anyone else there, and that it will be reserved for its rightful owner?

I quite agree with the hon. Gentleman. There are better ways in which the House can provide the broadcasting for which it has voted than by desecrating Cromwell's Green. As I have told the hon. Gentleman in reply to his correspondence, if anybody is to be put next to Cromwell it should be John Lilburne.

Royal Assent

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

  • 1. Consolidated Fund Act 1977
  • 2. Covent Garden Market (Financial Provisions) Act 1977
  • 3. Aircraft and Shipbuilding Industries Act 1977
  • 4. Roe Deer (Close Seasons) Act 1977
  • 5. Anglian Water Authority Act 1977
  • Public Expenditure

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

    4.1 p.m.

    The public expenditure plans which we are debating this afternoon, as set out in Volumes I and II of this year's White Paper, are designed to achieve a better balance in the economy—essential after a period of years when expenditure had grown much faster than the economy—and, whilst consolidating the improvements we have made in the social field, to give top priority to industry. This inevitably has to mean a lower priority for other expenditure programmes.

    I share the concern of many of my hon. Friends that this has meant that in some fields where we would desperately like to find additional resources we have had to postpone further improvements, and in some cases actually make cuts, although I think it is fair to point out that the changes are made against a background where spending has risen over 10 per cent. in real terms in the last three years. Expenditure on programmes such as social security, housing and health and personal social services still increased in real terms this year.

    With the urgent need to move resources into industrial investment and exports and the repayment of debts, those increases could not continue, and in the next two years there had to be cuts in some programmes. I shall want to deal a little later with the major point made by the General Sub-Committee of the Expenditure Committee about the allocation of the cuts. My right hon. Friend the Financial Secretary will deal with matters raised during the debate. But it is right that I should now deal with the point raised by my hon. Friend the Member for Chorley (Mr. Rodgers) and others of my hon. Friends on gas prices. There is a serious underlying question here which the House should consider: how much nationalised industry investment, or public expenditure for that matter, should be financed by borrowing, how much should be financed by taxation, and how much should be financed by the reduction of other public expenditure. Those are the issues we face in considering this problem.

    It may be helpful if I first give the House some of the facts. The gas industry's debts at the end of 1975–76 stood at about £2¼ billion. In 1974 and 1975 there were heavy losses, of over £40 million and just under £30 million respectively, arising largely from policies of the last Conservative Government, which resulted in total subsidies to the nationalised energy industries and the Post Office of £1,181 million. That is something which I am sure the Leader of the Opposition recognises. I assume that the right hon. Lady supported it at the time.

    For a few years there will be a breathing space as regards the amount of capital required by the gas industry, but then there will be some very heavy further borrowing to prepare for the further investment for the gas industry of the Brent field. Therefore, I do not think it unreasonable that we should consider reducing a burden of debt of the size I have described. But any given level of borrowing—£100 million here—must be considered together with the other ways in which one might deal with the matter. The crucial problem is whether to raise tax for it, cut other public expenditure or cut investment in the nationalised industries.

    In real terms, gas prices fell between 1970 and 1976 by nearly 20 per cent., compared with increases of more than 20 per cent. in electricity prices and 10 per cent. for coal. That is just one other factor that must be taken into consideration in deciding our priorities on the question of where and how we raise a particular sum of £100 million.

    I have noted my hon. Friends' motion. I ask them in return to note the facts I have described this afternoon and to recognise the serious and difficult problem we all face in considering priorities in expenditure. Whichever way we look at those priorities, I am convinced that the broad changes we have made are not only essential for economic, financial and industrial reasons but are right for social reasons, because to continue to spend more than we earn is a recipe for disaster that would eventually destroy the social fabric of our society.

    Nevertheless, we know that many of the people whom we represent—[HON. MEMBERS: "Oh"]—whom all of us represent—want substantial increases in expenditure on many public services. They are often supported most vocally in particular demands by the same people who demand bigger and bigger cuts in public expenditure in general. Some of the most vocal are not infrequently found on the Opposition Benches. But—and we should not be too surprised—the same people who ask for higher public expenditure invariably also want large cuts in direct taxation. They cannot have both. At present, if we are honest with ourselves, we must admit that our constituents' choice would be for income tax cuts.

    Given the growth of public expenditure and the consequential reduction in net take-home pay that there has been in recent years because of low rates of economic growth, I do not believe that it is necessarily to take a populist view to accept that our constituents are right and that there must be a shift in the balance. I should like it to come from higher economic growth, but we should be very foolish to assume that in advance.

    The right hon. Gentleman has put forward a most important proposition, that tax cuts are preferable to higher public spending at this time. How can those of us who wish to support him in the Lobby in that proposition achieve that object and defend him against those who do not agree with him? How will the matter be determined by Parliament on this occasion?

    If I am looking for someone to defend me against my hon. Friends, I am not sure that I should necessarily choose the hon. Gentleman as the ideal person. I leave it to him to decide. Knowing his independence, I am sure that he will make up his mind how to vote this evening after listening to me and other speakers in the debate, regardless of the three-line Whip that there may or may not be on his side of the House. [Interruption.] Opposition Members should not be so surprised. I do not know why they are making so much fuss about a petty procedural point. We shall be voting on the Adjournment tonight. It is not unknown for the House to vote on the Adjournment.

    The right hon. Gentleman has repudiated my offer of support. Does that mean that if I now want to vote against him I vote for the Adjournment of the House or against it? Will the right hon. Gentleman tell me which way he will vote, so that I know how to vote?

    I shall let the House have my views as to how I shall vote a little later. I have noted the hon. Gentleman's independence of his own Front Bench and that he intends to listen and vote in accordance with his conscience and what he thinks is right. I am sure that it will be helpful, and I will not repudiate his support in the Lobby if he wishes to join me there tonight. I will be happy to have him with me, provided that he is there in support of all my policies.

    If my right hon. Friend is to argue about this business of the nature of the motion, will he remind the Opposition that more often than not on their Supply Days they table a motion only for the Adjournment of the House and not a substantive motion at all?

    1 am obliged to my hon. Friend. I am not trying to be difficult with the Opposition. I am sure that they want to get on and debate the serious problems of public expenditure which I believe we are talking about, whatever the motion.

    Regrettably, in looking ahead to where we see public expenditure and the economy generally going, we do so after what was in economic terms inevitably a disappointing year, not only for us but for the world as a whole.

    Although there were signs towards the end of the year that growth was picking up again, the pace of expansion after the first quarter was generally below the rate needed to increase employment. In many industrial countries unemployment was higher at the end of 1976 than it had been at the beginning. The fall in the sterling exchange rate and the slowing down of world trade during 1976 checked the progress that had been made in reducing the large deficit in our external payments. The fall in the sterling exchange rate, by raising the cost of our imports, cut consumers' expenditure and so reduced activity further. We had to take action to ensure an improvement in our external account and to make certain that industry could obtain the funds it needed on reasonable terms.

    That was the background against which my right hon. Friend the Chancellor of the Exchequer announced on 15th December a stabilisation programme, extending over two years, to bring the economy back into balance. The reductions in public expenditure plans for 1977–78 and 1978–79 then announced were a central part of this programme. They were painful cuts to make at a time when unemployment was high, but the restoration of confidence was imperative if we were to avoid the danger of a massive fall in employment.

    On the basis of that stabilisation programme, we were able to agree with the International Monetary Fund a standby credit of $3,900 million and to arrange a drawing facility with the Bank for International Settlements to protect sterling from the danger of withdrawals of official balances. The transformation in both the external and the domestic financial markets in the last three months has been dramatic. However unpalatable the measures themselves were, there was widespread recognition of the need for them. There can be little doubt that without them unemployment would have been even higher.

    I have noted the Early-Day Motion standing in the name of my hon. Friend the Member for Bristol, North-West (Mr. Thomas) and the names of others of my hon. Friends, in which they seem to disagree with our general policy. I also note that they recognise that certain policies we are pursuing are not always in line with what the TUC "Economic Review" recommended, and that is true. But it is equally true that the TUC "Economic Review" also says that
    "There was no real alternative to seeking financial support from abroad if the pound was to be protected against continuing downward pressure, the consequences of which would have been even more difficulties on the balance of payments and even more unemployment"
    We have won the immediate battle for confidence—

    I am surprised at the right hon. Lady. I thought that she would have been delighted that the pound was stable.

    I am delighted. Therefore, why does not the right hon. Gentleman put his policies to a direct vote in the House?

    The right hon. Lady is becoming obsessive. We are debating public expenditure, and we want to debate it seriously. I hope that she will be interested in a serious examination of the problems, which is what I am trying to do.

    Will the right hon. Gentleman explain why, if it is so bad for the pound to fall, we understand that the Bank of England is holding it down?

    There are a number of reasons why I think it would be bad for the pound to fall at the present time.

    Who is holding it down? I am not sure whom the hon. Gentleman has in mind. The pound at present is stable. I find that satisfactory, and I gather that the Leader of the Opposition does as well. I note that the hon. Member for Wolverhampton, South-West (Mr. Budgen) does not.

    I believe that we have won the immediate battle for confidence, but we need to create the conditions in which a sustained expansion is possible to bring us back to full employment. I think it is now widely recognised that the present problem of unemployment cannot be solved by reflation of demand of the kind that was used by Governments in the 1950s and the 1960s. The situation in the 1970s is a good deal more complex, and we are all aware of the disastrous lessons of the last Conservative Government's attempt to reflate.

    The answer to unemployment must be sought more fundamentally in a continued effort to bring down the rate of inflation and to strengthen the productive side of the economy. It is not something that the Government on their own can produce. Nor is it something that will automatically come about as the North Sea oil flow eases the balance of payments constraint that has never been far away throughout the post-war period. Rather must the answer to unemployment be sought in partnership with management and labour, and, since the problem of unemployment is common to all industrial countries at the moment, it must be sought in partnership with other Governments. All this is now, I think, widely recognised and accepted—although not everywhere, I have noticed.

    Of course, public expenditure cuts must inevitably entail some unemployment, either directly or indirectly. But we have taken action to offset the impact in the coming year. The employment measures announced in December at the same time as the reductions in public expenditure programmes should provide rather more jobs in 1977 than will be lost as a result of the cuts. I recognise, however, that this is far too narrow a way to look at the relationship between these cuts and unemployment. If we had not taken resolute action to restore confidence and ease the pressures in the financial markets, the effects on employment would have been catastrophic.

    I turn now to the question of controlling public expenditure. I know that my hon. Friend the Member for Nottingham, West (Mr. English), the Chairman of the Expenditure Sub-Committee, views these matters seriously, as do other hon. Members. It is no good drawing up elaborate spending plans without the determination and means of ensuring that the planned total is not exceeded. We have that determination, and the introduction of cash limits and the development of the contingency reserve into an operational instrument of control have enabled us to make great strides this year.

    The contingency reserve regime is strict. We do not allow additional expenditure to count against the contingency reserve until we are fully satisfied that offsetting savings are not to be had. The cash limits for 1976–77 announced in Cmnd. Paper No. 6440 will be adhered to. Only a very few exceptions are being made.

    It would, however, be foolish to pretend that these improvement will guarantee success. Some public expenditure is not so readily controlled. In this context I refer to local authority expenditure. The point is still not always taken that the Government do not have the direct control here that they exercise over their own spending. We have, therefore, tried to bring out more clearly than before in Part I of the White Paper the differences in control arrangements and in the extent of the Government's responsibility for management of this expenditure.

    If it is the case that local authority expenditure is much harder to control than central Government expenditure, why is it that in the cuts that the Chancellor sought to make 60 per cent. will fall on local authority expenditure, 30 per cent. on Government expenditure and the rest on public corporations?

    I should never have given way to the hon. Gentleman in the middle of the point I was dealing with, which concerned local authorities and the operation of the cuts between capital and current account, on which the Committee of which the hon. Gentleman was a distinguished member reported. We have tried to bring out more clearly in the White Paper the extent of these problems.

    An annual rate of growth of 10 per cent. at the time of reorganisation in 1974–75 has been cut to about 21- per cent. in 1976–77. Given the growth since the war, as most people who know about the problems of local authorities will recognise this is a considerable achievement. As the White Paper points out, over most of the post-war period local authority expenditure has grown faster than public expenditure programmes as a whole. It is right to add that it would be grossly unfair to blame that growth simply on profligate local authorities. Much of the growth came in response to demographic demands and demands for constant improvements in local services. We should remember that a great deal of that demand stems from legislation passed by this House, usually without dissent from those who rush to criticise local authorities.

    The situation is now very different. As table 3 brings out, during the last two years total local authority expenditure has declined slightly both in absolute terms and as a proportion of public spending. The White Paper envisages a further small decline during the next two years.

    Control in this area is due in no small measure to the excellent work of councillors and officials on the Consultative Council on Local Government Finance. I gladly pay tribute to them. They do not enjoy cutting public services any more than I do, but they have recognised the need for this. Their co-operation has made it possible to improve considerably arrangements for monitoring the course of local authority spending. Thus, when returns of local authority budget plans received last spring indicated the possibility of substantial excess spending in 1976–77, we were able to take early action to cut back this overspending.

    In 1976–77 also, the cash limits imposed for the first time on most Government grants to local authorities have restricted the addition for pay and price increases and have provided an important new discipline on local spending. For the most part, local authority current expenditure has not been affected by the reductions in programmes announced last July and December. Even so, plans for 1977–78 still involve a small reduction in current spending in constant price terms.

    The White Paper that we are debating today is about the Government's expenditure plans in volume terms. For 1977–78, however, we must harden these figures into firm control totals. I shall be laying another White Paper before the House in the near future setting out cash limits on Government expenditure in 1977–78.

    Any fair-minded observer will accept that the initiatives we have taken on cash limits and in developing sophisticated new arrangements for monitoring expenditure have brought public expenditure in Britain under more effective control than it has been for many years.

    Will the Minister tell us how the assumption on the rate of inflation is fed into the fixing of cash limits?

    We start from the volume figures in the White Paper and then take various assumptions about the pay and price increases expected in 1977–78. In the case of local authorities, wages are a considerable part of the calculations. We know the major part of the increase because much of the local authority wage increases come into effect in November. That is only a comparatively small item as a proportion of the total increase in 1977–78. The wages element enters into the addition that one must make for inflation. Some explanation of this has been given to the Select Committee and it will be further enunciated in the White Paper that we shall publish soon.

    Will my right hon. Friend be good enough to tell us the precise figure? He mentioned the inflationary figure that is injected, and wages and salaries. Local authorities are faced with other kinds of purchases. The increases in the prices of those purchases have rocketed in the capital programme.