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Commons Chamber

Volume 932: debated on Tuesday 17 May 1977

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House Of Commons

Tuesday 17th May 1977

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Before I instruct the Clerk to read the titles of Private Bills, I draw the attention of the House to the fact that Private Business has been printed on the Order Paper immediately before the Orders of the Day and not, as is customary, before Questions.

Private Business

Australia And New Zealand Banking Group Bill

Order read for consideration of Lords amendments.

Lords amendments to be considered upon Thursday.

London Hydraulic Power Bill

Order for consideration read.

To be considered upon Thursday.

West Midlands County Council Bill Lords

Order for Second Reading read.

To be read a Second time upon Thursday.

Oral Answers To Questions

Education And Science

Green Paper


asked the Secretary of State for Education and Science when she expects to publish her Green Paper on education.


asked the Secretary of State for Education and Science when she intends to publish the Green Paper incorporating conclusions on the great debate on education.

The Secretary of State for Education and Science and Paymaster-General
(Mrs. Shirley Williams)

I have been much encouraged by the interest shown by all sections of the community in the issues discussed during the recent debate. The series of consultations with organisations and individuals has now been completed, and I hope that the Green Paper will be published later this summer.

Does the Secretary of State agree with the general desire to achieve a closer relationship between the education system and industry? Does she accept that one of the difficulties is that so few teachers have real and practical working experience of the outside world? Will the Green Paper take up and deal with the suggestion that entrants to the teaching profession should have a period outside the teaching profession before they take up their jobs?

That matter has been discussed in the consultations with various organisations following the regional conferences. In addition, there are a number of schemes to give serving teachers a period of experience in industry, although it is brief.

Has my right hon. Friend reached the conclusion that the country can ill afford the present degree of diversity in local authority arrangements, in terms both of the records of student progress within schools and of the diversity of the curriculum, bearing in mind the increased mobility of parents?

My hon. Friend has moved into the most difficult area of all. There is no doubt that some of the diversity and innovation that decentralisation makes possible is very valuable. The Green Paper will address itself to the problems of mobility and to how those problems can be solved without abandoning the decentralised system.

May I congratulate the Secretary of State on making off with another article of Opposition educational clothing in her proposed conference on comprehensive schools at York? I hope that the shortcomings and achievements of these schools will be highlighted in the Green Paper. May I also express the hope that we shall have an announcement in the Green Paper about a return to national standards of literacy and numeracy? I hope that we shall have the opportunity of an early debate soon after the publication of the Green Paper.

I am a daily reader of the Labour Party manifesto but I am not so frequent a reader of the Conservative programme. On 17th September, the day after I was appointed Secretary of State, I announced to the assembled Press my intention to hold a conference on comprehensive schools. I was not aware at that time that it was Conservative policy to do so. I suspect that it was not. My conference is to be about the best practices in comprehensive schools with a view to extending them everywhere. The Tory Party conference, as I understand it, is to inquire into whether there should be comprehensive schools. It will therefore serve a different purpose.

School Transport


asked the Secretary of State for Education and Science if she plans to make a statement on school transport.

My right hon. Friend is considering with the local authority associations what changes might be made in the present unsatisfactory arrangements for school transport.

Does the Minister realise that many parents living within the statutory limits, or just within them, are facing grave problems as transport costs increase? Is she aware that parents in rural areas are especially affected? Does she accept that there has been too long a delay? When will she be prepared to devise a satisfactory scheme?

I am aware of the problems facing parents in these areas and I am anxious to see them resolved. The local authorities see administrative difficulties in any new scheme for change. At present we are exploring with them to see how they might most easily be resolved.

Parliamentary Democracy


asked the Secretary of State for Education and Science if she will take steps to encourage the study of parliamentary democracy within educational establishments.

I regard it as important in a democratic society that young people should be given a clear understanding of the functions of central and local government and of the part played by Parliament and other elected assemblies in the government of the country. It is, however, for the local education authorities and the schools and colleges themselves to consider what provision should be made for such studies.

As parliamentary democracy, for all its faults, is something that we have to preserve, particularly as it is likely to come under increasing attack. I think, in the years ahead, will not the Secretary of State see to it that more effort is put into this subject in educational establishments, particularly bringing out the fact that Parliament should dominate the Government of the day?

I repeat that this is primarily—and I believe that the hon. Gentleman would agree that it ought to be primarily—for the local education authorities and the schools themselves. But the Politics Association has devoted much attention to this matter. We have given a small pump-priming grant to it for this purpose.

I wonder whether the Minister has thought of expanding that activity to include specifically education on the operations of the Assembly, the Commission and the other bodies of the European Economic Community.

I am not certain that that would be so acceptable to the hon. Gentleman's hon. Friend, the hon. Member for Banbury (Mr. Marten), but I agree with the hon. Gentleman.



asked the Secretary of State for Education and Science what reply she has made to representations from the National Union of Teachers about the level of education spending in Oxfordshire.

The level of education spending in Oxfordshire is a matter for the local authority to determine, and it is to the authority that the NUT's recent representations have, quite properly, been made. I understand that a meeting took place last month between members of the National Union of Teachers and representatives of the Oxfordshire authority.

Does the Secretary of State accept, however, that a certain confusion has been created in the county by the contrast between her informal remarks—I think on two occasions during the last year—about the need to maintain education spending in Oxfordshire and the action of her colleague the Secretary of State for the Environment, which has forced the county council, through the rate support grant, not only to introduce substantial economies but to raise the rates by 40 per cent. more than the national average? Will she now use her influence to dissuade the teaching profession from taking strike or other action, which would only harm the service that it is trying to protect?

The hon. Gentleman will know that I have made clear on more than one occasion that the Government would regard the very highest priority in local government expenditure on education as being the maintenance of pupil-teacher ratios. In the last few weeks Oxfordshire has, in practice, found another £250,000, which arose unexpectedly as a result of a mis-estimate of the effect of the Burnham negotiations for teachers, with the result that a substantial number will be able to be retained. I hope that it will be possible to retain more of those at present under threat.

Does my right hon. Friend agree that at a time of very severe cuts in public expenditure, and more especially in education, many authorities—Tory authorities in particular—are going far beyond what they should do? Will she therefore take steps to try to curb them from carrying out these cuts in order to help other aspects of conduct by taking more and more money from education?

I follow my hon. Friend by saying that I am worried by the fact that in some local authority areas education does not have the priority that I believe it should have. That is particularly true where there is what is sometimes called corporate management. However, the Government have made it as clear as they can that their first priority is the maintenance of the pupil-teacher ratios, and that will continue to be their position.

Is the right hon. Lady aware that for several months before the recent county council elections the teachers attracted headlines in all the local newspapers attacking Oxfordshire County Council and that when the results of the elections were declared it was clear that that campaign had had no effect, because the Conservatives won 61 out of the 69 seats in the county?

Is the Secretary of State aware that if there are cuts in Oxfordshire most people will consider that they are due to the results of her Government's policies on the rate support grant, which this year was cut in Oxfordshire by 8 per cent., as compared with 4½per cent. for the rest of the country? For the last three years Oxfordshire County Council has done worse than any other authority in this respect, due to her Government trying to move money from Conservative-controlled country authorities to the Labour-controlled city authorities.

I would take the hon. Gentleman's strictures a little more seriously if it were not the case that there had been a very substantial increase in local authority expenditure for independent places, for no good reason that I can discover.

Colleges Of Education (Ponteland And Fenham)


asked the Secretary of State for Education and Science whether she has completed her consideration of the recent representations she has received about the future of the Northumberland College of Education at Ponteland and St. Mary's College of Education, Fenham.

No, Sir. My right hon. Friend intends to consider together all the representations about the future of these and other colleges when the process of consultation with local authorities and other bodies is completed. She hopes to announce her decisions on them in June.

Can the hon. Gentleman assure us that his right hon. Friend takes into account the considerable documentary evidence about educational deprivation in the North-East which has been presented by one of the colleges? Will he consider how much worse the situation could be if the services of these two colleges to local State and Catholic schools were withdrawn? Will the Secretary of State do her best to ensure that even with the reduced intake these two colleges have a future rôle?

We shall take account of the evidence arriving from many deputations—I have seen 27 so far, with five to come—as well as documentary evidence. We shall look at both of the colleges in the North-East and give them due consideration. We shall give them the same consideration as is given to all colleges in the country.

Will the hon. Gentleman accept from one who accompanied one of the many deputations that my particular deputation was very grateful to him for his courtesy and the consideration he showed? Will he further continue to consider, as I know he has done so far, the importance of maintaining the one Roman Catholic teaching college—the training college at Fenham—in the North-East? Will he recognise, through his efforts—I know that he is making them to the best of his ability—to maintain this college of education, the importance of religious teaching in schools?

I am grateful for what the hon. Gentleman has said. I do my best with the delegations and I shall bear in mind that the removal of this college would remove a Catholic teacher training college from the whole of the North-East. However, I do not think that the House would expect me to prejudge what my right hon. Friend will be saying in one month's time.



asked the Secretary of State for Education and Science when she last met the Chairman of the Advisory Board for the Research Councils.

I had a full discussion with Sir Frederick Stewart on 21st April.

Is the Secretary of State aware of the continuing widespread concern at the further cuts in the science budget for the year 1977–78, to the tune of some 3 per cent.? Is it not doubly unfortunate that these cuts coincide with an increase in the number of science students and an increase in the potential for high energy physics?

Let me say right away that there has been, as the hon. Gentleman will know, a considerable shift in the pattern of expenditure by the research councils, and I am satisfied that they have increased their expenditure on students, for the reasons that the hon. Gentleman has given. I might also add that I understand that the Royal Society is shortly to mount a series of schemes to support teams of scientists working on new projects, in particular including able young scientists who might otherwise not have an opportunity. However, I shall keep the closest possible eye on this matter, because I believe that it is very important to give our able young scientists opportunities in the future.

Teachers' Meals


asked the Secretary of State for Education and Science what steps she is considering to reduce the £23 million cost of subsidising teachers' meals in schools.

Teachers exercising supervision during the midday break perform a valuable service and it would be wrong to consider in isolation the cost of subsidising their meals. The consultative document sent to local authority and teacher associations, among others, invited suggestions and comments by the end of May on how economies in the school meals service could best be made. It is our intention to offer guidance to local education authorities in the light of the response to this document, probably towards the end of the summer.

I welcome the prospect of guidance, which will save an enormous amount of money which is so desperately wanted for other parts of the education system. However, could not the Minister give this a bit of a heave, because every week that goes by more and more money is wasted down this particular gullet? Is she aware that this point has been raised with me not only by those who wish to see greater expenditure in other parts of the education system but by others, including teachers, who think that this is unnecessary benevolence on their part?

I know that there are those who contest the need for the school meals service still to exist. I do not agree with them. If the cost of providing school meals, which I think are necessary, were transferred from our budget elsewhere—

If teachers are performing duties, they have a right under the 1968 agreement to receive a meal. We do not question that right. However, we like to be assured that the agreement is being kept in the spirit as well as in the letter.

Does my hon. Friend agree that school meals are an important social service and that they are increasingly regarded by many educationists as not being in the sphere of education at all, there being an attempt to withdraw them from education and make them a real social service? Will she take note that many people are deeply worried about the future increased charges for school meals, which could prevent many children from having a meal at midday?

I am aware of the suggestion that the school meals budget should be transferred to a a different Department. I do not think that that would automatically lead to an increase in the money available generally for education. Like my hon. Friend I regret that we have been forced to raise the price of the meal, but it is still heavily subsidised.

If the money is to be allocated to anyone, would it not be better if it were allocated to the parents, who would then be able to decide whether to feed their children at breakfast, at teatime and during the holidays rather than having school meals during term time?

Perhaps the hon. Gentleman has not taken the point on board—namely, that school meals are provided on school premises to allow children to be fed while they are at school. Merely to give money to the parents is not a way round that problem.

Will the hon. Lady bear in mind that, although these meals are technically free to teachers, the teachers receive them in return for supervising the children's breaks? If the teachers withdrew their services in this respect we should be involved in heavy additional expenses or we should have to abandon the school meals service.

Secondary Education (Selection)


asked the Secretary of State for Education and Science what percentage of local education authorities are now operating selection-free secondary education.

There are 22 local education authorities, about 23 per cent., in England which no longer operate any selection process whatsoever for entry to their secondary schools. Another 19 per cent. have no selection for maintained secondary schools, and a further 57 per cent. are partially reorganised on non-selective lines.

Although this may represent an improvement over the position of a few years ago, is my hon. Friend seeking any additional powers from the House to ensure that the aim of the Government of establishing non-selective secondary education is achieved?

Will the hon. Lady take note of the fact that the county council which wrote to her regarding the establishment of a sixth form college in Lancashire, which published the letter the day before the county council elections, was soundly beaten when the citizens of Lancashire made their views clearly known on this aspect, which relates to the Question but more particularly to Question 10, for which the hon. Member concerned was not present?

Will my hon. Friend bear in mind the words of the hon. Member for Brent, North (Dr. Boyson) in 1972 when writing in the Black Paper "Crisis in Education", when he acknowledged that grammar schools and comprehensive schools could not exist side by side? Is she aware that the hon. Gentleman wrote that in those circumstances comprehensive schools were little better than secondary modern schools? Will she press ahead to ensure that we have a comprehensive system rather than comprehensive schools with the best creamed off from them?

I entirely agree with my hon. Friend. That is one article of the hon. Gentleman's clothing that we are pleased about.

Does the hon. Lady accept that selection within schools will be inevitable for as far ahead as we can see, even if there is not selection between schools? Will she give an undertaking that none of the schemes of enforced comprehensivisation will be allowed to damage the good schools still in existence?

It is our intention not to damage any schools but to make all schools thoroughly good and satisfactory. I do not accept that selection within schools is an automatic necessity.

Does the list of authorities include counties such as Cambridgeshire which, while having largely non-selective systems of their own, still take places at independent schools? Does that not mean that further action is required by my right hon. and hon. Friends?

As I think my hon. Friend knows, this is a matter that we are dealing with in another way under Section 5 of the Education Act 1976. We are asking local authorities to justify their need for places at independent schools.



asked the Secretary of State for Education and Science what steps she is taking to encourage the study of engineering at school and in further education institutions.

My right hon. Friend is altering the awards arrangements and is examining the possibility of a scholarships scheme with the aim of attracting more able students into engineering and other courses of value to industry. The University Grants Committee, the Council for National Academic Awards and the Technician Education Council are reviewing the structure and content of engineering courses with the needs of students and industry in mind. In the schools my right hon. Friend attaches greater importance to improving the teaching of mathematics and physics than to the development of engineering as a separate subject.

Is the hon. Gentleman aware that for several months both myself and members of his own party have been trying to get the Secretary of State and Ministers in the Department of Industry to release to hon. Members the most effective document and the best analysis of the problem, which is the result of a joint working party from various Departments on education, industry and management? Will he explain why, given the great debate, only Members of Parliament seem to be excluded from seeing the document, which is not secret in any sense as so many others have access to it? Will the hon. Gentleman at least release the statistical appendices so that we may see the terms of reference and hard information, which will enable us to debate effectively what he is doing?

The document is to be published. I welcome the initiative that the hon. Gentleman is taking. This is not a party political matter but is something the nation needs.

Is my hon. Friend aware that in recent years in areas of inner city deprivation, such as Brent, South, where there are excellent schools of engineering, a large gap has grown between the apprenticeship schemes offered locally by engineering firms and the graduates who emerge from the colleges? Will my hon. Friend have discussions with Ministers in other Departments in an attempt to bridge the gap between what is done in the education sector and what is being done in apprenticeship schemes in engineering factories?

I think that the number of vacancies is more a matter for my right hon. Friend the Secretary of State for Employment. However, I appreciate the point that my hon. Friend makes. Steps are being taken both nationally and at local level to ensure that the gap is narrowed.

In view of the importance of encouraging better attitudes to engineering among students in higher education, is the hon. Gentleman satisfied that the priority given by the Science Research Council to the sponsoring of engineering exercises and research projects in universities is sufficient compared with other scientific projects?

Yes, I am satisfied, but we are always looking at ways in which the links between universities, polytechnics, schools and industry, especially in respect of engineering, can be strengthend.

Does my hon. Friend agree that the greatest scope for increasing both the numbers and the quality of recruitment to the engineering profession lies with girls? Is he aware that there is still a great deal of prejudice, both in industry and schools, against the adoption of engineering by girls as a profession?

I think that there is prejudice, and it worries me. One of the difficulties, too, is that girls do not realise the possibilities that may well be open to them in the engineering professions in future. That is something in which there should be co-operation between industry and education.

Is the Minister aware that the Engineering Employers' Federation is gravely concerned about the lack of knowledge and interest in secondary schools concerning engineering and commerce? Although the federation recognises that it could have done more to bridge the gap and to improve knowledge, may I ask whether the Minister accepts that it would be a good thing if teachers could get out into industry and commerce as part of their course before qualifying as teachers so that they do not go straight from school to college and from college back to school?

In reply to a previous Question my right hon. Friend agreed that the more experience a teacher can have, the better. This is one of the aspects that will be discussed in the Green Paper.

Teaching Companies


asked the Secretary of State for Education and Science what steps she is taking to increase the number of teaching companies.

The Science Research Council and the Department of Industry have already launched five programmes and two more will be announced shortly. At least six universities and polytechnics are preparing further proposals in co-operation with interested companies.

I am grateful for that answer. While one welcomes any encouragement which can be given to these schemes, does not the right hon. Lady feel that the five pilot schemes already undertaken will do little more than pay lip service to the real need for a better understanding among students in higher education of the problems and aspirations of industry? In particular, will she now consider having discussions with and giving encouragement to a wider range of companies than the five which are undertaking the schemes, so that, if the pilot schemes should prove successful at a later stage, teaching companies can be created on a wider scale much more quickly?

I said that two more would be introduced shortly. The present intention is to launch four new programmes each year. Since consultations on the scheme were completed only last year, that is not an unreasonable rate of progress. Obviously, we hope to learn something from the schemes now in practice. In addition to this scheme, there are also Science Research Council awards made jointly with industry and there is the discussion on the industrial scholarship scheme that we have talked about on another occasion.

Will the right hon. Lady help the House and tell those such as myself who are ignorant what a teaching company is? Is it a name gimmick or does it really mean something?

I think that the closest parallel would be with something like a teaching hospital. The idea is that, as part of the course of study, a young man or woman at university or at a polytechnic will engage in work at his or her own level within a firm, so that he or she can see in practice how research is applied.

Would not my right hon. Friend agree that, while it is important to develop and encourage engineering in our universities and colleges, we need to maintain the present balance, because the philosophy of the Conservative Party, which is clear from its statement—

Order. It was only last week that the House asked me to see that questions were more relevant. That was a supplementary question on the previous Question, was it not? We are dealing with teaching companies now.

Yes, Sir. The question of teaching companies is still related somewhat to the matter that I am raising, which is that the Secretary of State should take the opportunity to say that the balance in education between the humanities and engineering should be maintained, instead of accepting the philosophy of the party opposite and going in one direction.

My hon. Friend's ingenuity is a tribute to his education. The teaching company is concerned with those who are already choosing to study engineering and management. Its purpose is to make their studies much more directed to the real world, which I think is not a point of disagreement between the parties.

Rising Fives


asked the Secretary of State for Education and Science if she will advise local education authorities to make maximum provision for the admission of rising-five children to primary and infant schools.

It is for local education authorities to decide how to use their statutory powers to provide education for children below compulsory school age. But we have already advised authorities that rising fives may be admitted where there would otherwise be vacant places and the extra call on resources is insignificant.

Is my hon. Friend aware that the Conservative-controlled Lancashire County Council is severely restricting the entry of rising fives, not on the ground that there is a shortage of accommodation or of teaching staff but to save a paltry sum in the provision of school meals? Is she further aware that the same authority is allocating £3 million towards the upkeep of private schools within the county? Does she not think that that is disgraceful?

As my hon. Friend knows, we have already expressed our disapproval of unnecessary take-up of places at independent schools. I was not aware of the grounds advanced for Lancashire's policy on rising fives. I am grateful to my hon. Friend for the information.

Is my hon. Friend prepared to put further pressure on Lancashire County Council? After all, in many areas of Lancashire not only are children who are rising five not taken into schools—they are even being turned away now—but there is a severe shortage of nursery school places. This is placing a severe burden on working mothers as well as depriving young children of worthwhile education.

I shall make some inquiries about my hon. Friend's comments. As he knows, it is a matter for the local authority concerned on what grounds and to what degree it admits children, even where there is a shortage of nursery school places. But I shall look further into the matter.

Would it not be a good idea, while we are on the subject of advising local authorities, if the Minister had a word with the Minister for Housing and Construction so that there could be a synchronisation of housing plans and the building of primary schools, which are a necessary adjunct to such expansion?

Is my hon. Friend aware that the failure of the expansion of nursery schools, plus the halt in the admission of rising fives in many local authority areas, coupled with the failure to expand the provision of day care for children, means that we shall see a mushrooming of private provision for all sections of pre-school children? Does she not think that it would be a good idea if the DHSS and the DES got together on an integrated service for the pre-school child?

It has for some time been the intention of both the DHSS and my own Department to make some joint provision, and we are discussing such matters at the moment. However, I must remind my hon. Friend that over 50 per cent. of four-year-olds were receiving some form of educational provision in January last year, the latest date for which figures are available.

Student Grants


asked the Secretary of State for Education and Science what are the latest figures available for the numbers of students who receive mandatory and discretionary grants; how this proportion has changed over a recent convenient period; and what steps she is taking to make a higher proportion of grants mandatory.

In 1975–76 there were about 56,000 discretionary major awards and 324,000 mandatory awards. In 1970–71 the comparable figures were 66,000 and 294,000 respectively. My Department, in conjunction with the local authority associations, will shortly be making a survey of local authority practice with regard to discretionary awards and my right hon. Friend will review the position when the results are known.

Does my hon. Friend accept that, although the whole House welcomes the steps which the Government are taking, there is now an urgent need to tighten up on the provision of discretionary awards and that thousands of students or would-be students are already fearful of what will happen with the election of so many Tory-controlled county councils, which will be very unwilling to give some of these much-needed discretionary awards?

I appreciate the need for urgency. As I have told the House, we are having a survey. Before action is taken, we must know the facts, and we are expecting to know those facts during this summer.

Is the Minister a strong supporter of the Open University? If he is, is he aware that, because of the heavy cut-back in public expenditure and the pruning of expenditure which local authorities have had to undertake on the Government's instructions, the Open University is suffering and that many people who rightly seek discretionary grants are unable to get them because the counties do not have the money?

I am a great supporter of the Open University. I am somewhat surprised that the hon. Gentleman is a great supporter of increased public expenditure.

Can my hon. Friend or anyone else explain to me how it is that the Conservative Party, while advocating and pressing for enormous cuts in expenditure, gets very annoyed when we make any cuts in expenditure?

Training Opportunities


asked the Secretary of State for Education and Science if she is satisfied with the training opportunities in further education establishments.

Yes. The further education service provides a wide and flexible range of courses in response to the country's economic needs and the needs of the individual.

What discussions are going on between the DES, the Department of Employment and the Training Services Agency to expand the training opportunities at colleges of further education, particularly in such areas as Calderdale in West Yorkshire, where there is no skillcentre in the immediate vicinity?

Discussions are going on between both Departments. As for Calderdale itself, if my hon. Friend will write to me I shall be able to explain the position more fully to him.

What is the present position of pupils between the ages of 15 and 16 who are no longer benefiting from time at secondary school? Are they now allowed to go to a college of further education to complete a further year of their education?

No, Sir. There are link courses between schools and colleges of further education, and very valuable they are, but for full-time education in a college of further education a pupil needs to be 16.

Gifted Children


asked the Secretary of State for Education and Science what proposals she has for encouraging the development of gifted children.

I am concerned that everything possible should be done to identify and meet the special needs of these children, but there is nothing that I can add at present to the answer I gave to the Question from the hon. Member on 15th March.

Does not the Minister agree that the Government's failure to announce a specific programme to help gifted children confirms our view that the Government are primarily interested in keeping down education expenditure rather than increasing it?

No, I do not accept that. It is a singularly silly remark, particularly as I recently told the hon. Gentleman that a special working party was considering the problem of gifted children. We expect it to report in May and we are expecting to have a conference on this subject in November.

Will my hon. Friend explain how it is that when we measure the achievements of gifted children by the numbers admitted to Oxford or Cambridge, or eventually to the Foreign Office, so many gifted children seem to have gone to publc schools rather than to State schools?

I think my hon. Friend is pointing to the conflict that is present in people's minds between children who have genuine intellectual gifts—who are about 2 per cent. of the population—and those who are intellectually privileged.

Would the Minister care to define the term "gifted children" and tell us where gifts begin and where gifts end?

As the hon. Member may know, there is a substantial body at work on this subject which defines what it regards as outstandingly gifted, and it is generally acknowledged that there is on the whole only a small percentage of such children in the population.

Will my hon. Friend accept from me that the term "gifted children" as used by the Conservative Party refers tot he elitism that Conservatives have always practised? Does she not agree that in comprehensive schools the teacher-pupil ratio is very good at the topmost level and that there is remarkable scope in the education of our gifted children even to the point where some of them become ambassadors, for instance?

Tameside (Legal Costs)


asked the Secretary of State for Education and Science whether the total cost to public funds of the legal proceedings in the Tameside case are yet known; and if she will make a statement.

The costs have not yet been determined. The matter is still under negotiation between the Treasury Solicitor's Department and the legal representatives of the Tameside local authority.

Is it not clear that the total cost of these proceedings is in excess of £25,000? Since in the judgment of the House of Lords it was stated that the predecessor of the right hon. Lady had misdirected himself fundamentally, ought not the costs to be paid by the Minister personally?

It is not my understanding that it is yet known what the costs are, and I therefore cannot comment on the hon. Gentleman's observations.

Is the Minister aware that this huge cost to the Exchequer, which could be better spent on books and stationery in schools thoughout the country, was caused not by anything that Tames-side did but because Tameside was sued by the Department on wrong legal advice?

Parental Contracts


asked the Secretary of State for Education and Science what representations she has received about her proposal that there should be a form of written contract between each parent and the school which its child attends.

What I had in mind was not a contract as a legally enforceable document but an undertaking on both sides. My Department has so far received 11 letters from members of the public, and comments have also been made by various educational organisations.

Will the right hon. Lady admit that the proposal is quite absurd and that the deafening silence that we have received about that proposal since it was made now means that it is dead and buried?

The proposal is not absurd. Something similar exists in other Western European countries, and it is extremely important to get a much closer relationship between parents and the schools. Until this moment, I did not think that this was a party matter.

Gce Examinations


asked the Secretary of State for Education and Science whether she is satisfied with the present grading system for passes of O-level examinations.

The conduct of public examinations is in general a matter for the independent examining boards. The Schools Council is, however, responsible for advising the Secretary of State on major questions of examinations policy, as for example when changes in the grading system are envisaged. The present O-level grading system was introduced in 1975, on the Council's recommendation, and while there may initially have been some misunderstanding of the new grades among employers and others I know of no reason to suppose that this is still the case.

I thank the Minister for that reply. Is she not aware that many industrialists are confused by the various grades of O-level examination? Would it not be better for there to be a standard O-level examination to denote average accomplishment?

I doubt whether that proposal would be educationally supported. In any case, it is open to industrialists to ascertain what is the usual standard attained by these grades.

On a point of order, Mr. Speaker. Would you be good enough to use your influence with the Prime Minister to place in the Library every Tuesday and Thursday a list of his engagements, so that we can get rid of a lot of this rubbish on the Order Paper?

I shall undertake that if the hon. Gentleman undertakes to raise his points of order in future at the end of Questions.

Overseas Representation


asked the Prime Minister whether he has received the report of the CPRS on overseas representation.

The report is still in draft. I expect to receive it shortly.

When my right hon. Friend receives the report, will he give an assurance that, whatever response he makes to the rumoured recommendation that we should streamline our overseas representation, he will resist any recommendations to reduce the BBC Overseas Service, which many believe to be a most effective means of transmitting Britain's point of view and which is also most helpful in giving impartial information to those who are living under régimes where censorship of the news is a practice?

I have not yet seen the report and, therefore, I am not aware whether it contains any recommendations of that nature. I would say to my hon. Friend that from my previous experience as Foreign and Commonwealth Secretary I know that the Overseas Service of the BBC is very much valued and is listened to by a variety of overseas leaders in other countries. We should therefore have to give serious consideration before it was cut down.

Is the Prime Minister aware that rumour has it that the report criticises the cut-back in the British Overseas Trade Board's activities? Does he not agree that it makes nonsense to cut back this service if, as he has stated in the House, exports are a priority?

Again, I must say that these are rumours and that I do not know what the report contains. It would be better to read it and see what case is made, if any is made, about the overseas trade service and its future.

Will my right hon. Friend mind if I twist the Question and link it to Question No. Q1 and ask—

Order. Only last week the House asked me to see that supplementary questions were relevant to the Question on the Order Paper.

This is relevant, Mr. Speaker. Has my right hon. Friend received representations from overseas people that, maybe when he goes home at night to his home and his wife, he should route himself via the Phipps Ward of the South-Western Hospital and see there what can be done for disabled persons from overseas?

That is a blatant example of where the House has asked me to see that questions are relevant.

Prime Minister (Speech)


asked the Prime Minister whether he will place in the Library a manuscript of his remarks on inflation made in Tunbridge Wells on 30th April 1977.

Does the Prime Minister recall that in that speech he said:

"We are now winning the battle against inflation"?
As inflation, on the Chancellor's formula, was 8·4 per cent. in September 1974 and after two and a half years this Government had got inflation up to 19·9 per cent., why should anyone believe him?

I do not know whether that question is worth answering. Any question which ends "Why should anyone believe him" hardly deserves an answer, because no one would believe it anyway. Therefore, I wonder why I should bother to reply. The answer I have given regularly is that the forecasts and the policies that have been carried through show that there will be a turndown in the rate of inflation, which will continue during the second half of this year and the first quarter of next year. That is a forecast that I accept because it is genuinely based. I invite the hon. Gentleman to believe it, too.

Does my right hon. Friend agree that two of the major factors in inflation are Britain's membership of the Common Market and the devaluation of sterling? Will he therefore issue an ultimatum to the Common Market that unless it scraps the CAP Britain will get out? Will he comment on the Bank of England's handling of sterling, because it is refusing to allow it to reach a higher level than it is at the moment?

No, I do not think that I can comment on the last part of the question. I believe that that would take too long. We cannot deal with an important issue of policy of that sort in answer to a supplementary question. The answer to the second part is "No", because I do not believe that delivering an ultimatum to the Common Market in that sense would serve any particular purpose.

Was not my hon. Friend's point about not believing the Prime Minister a perfectly fair one, since the performance of the Chancellor of the Exchequer and other Ministers on inflation has been a long series of terminological inexactitudes?

Inflation is declining and will continue to decline. Since the period of the pay policy—and I take it that, whatever they may think about the future, the Conservatives accept these figures, which I have explained on a number of occasions—[Interruption.] It makes me wonder whether the Conservatives ever listen. Because of the events last autumn, we are in a period of a temporary bump—

A bump can go both ways. If I were to hit the hon. Gentleman, he would quickly become concave, but he could equally become convex. There is no reason to doubt that if the forecasts are borne out—and no one has cast doubt on them yet—inflation will turn down. We should not discourage the people, nor should we discourage the negotiations which are going on about the future of pay policy. The future of all the country is bound up in winning this battle. The Government have taken some tough decisions on it which have resulted in considerable loss of popularity. That we have to with-stand. But I see no reason why the Opposition should not admit that these policies are necessary if the country is to avoid hyper-inflation, and I should be glad if they were to do that once in a while.

Does my right hon. Friend agree that the large number of frenetic attacks recently by the Opposition suggest that they at least accept that the turn-round is coming?

It is worth noting that last Friday there was published news of record trade figures, although it did not receive too much space in some portions of the Press. The whole House will welcome the surplus of £111 million on current account. That turn has come sooner than was anticipated and it follows a surplus and a small deficit in the previous two months. In the last quarter, therefore, this country has been running a surplus on its balance of payments. This is associated with considerable strength of sterling and follows a fall in interest rates which was followed by a reduction in mortgage interest rates. Let us acknowledge some of the things that are going right.

Is the Prime Minister aware that in each of the last three years the Prime Minister of the day or the Chancellor of the Exchequer—or both—has given the House and the country an indication that inflation would fall, but that it did not fall in any of those three years? Why should the right hon. Gentleman's statement today be accepted more readily than the statements made previously?

I think that the right hon. and learned Gentleman is incorrect in his recollection. The rate of inflation was halved between 1975 and 1976 and I would hope that it might be halved again. I am not sure whether it will be. If the right hon. and learned Gentleman does not wish to believe the forecasts, that is his right, but let us wait and see what happens.

Does the Prime Minister accept that, even for those of us who hope that the rate of inflation is falling, forecasts of the rate of inflation are an extraordinarily chancy business? Is he aware that a fall is by no means as certain as he indicated this afternoon? Would he say that unless the Government are successful in obtaining a severe and stringent pay policy his forecasts will inevitably be proved wrong? Are the Government doing anything like enough to obtain that pay policy?

I would put it the other way round and say that a further round of pay policy will help us to get inflation down. I would not put it the way the hon. Gentleman does, namely, that if we do not get it, everything has failed.

I am very happy to find myself in agreement with my hon. Friend. I described what I believe to be the real position. The impact of the current pay policy under phase 2 will be felt during the second half of this year and the first part of 1978, because agreements are only now being entered into and these will last until May 1978. If sterling maintains its strength with the policies we are following, I can say with a reasonable degree of confidence that the forecasts are acceptable. I do not rely on them, but it is fair to say that I hope they will come true.

West Midlands


asked the Prime Minister when he next plans to visit the West Midlands.

Since the Prime Minister cannot visit the West Midlands, will he explain to the people there the logic of his Government's position whereby one set of people—the judiciary—are criticised for carrying out their duties while another set of people—the Post Office workers—are to be legally exempted from the consequences of failing to carry out theirs?

I am not aware of any criticism of Her Majesty's judges. I understand that there was a historical exegesis which my right hon. Friend the Leader of the House entered into when addressing a trade union conference. Frankly, I do not think that he went far enough. He should have said something like this: that the

"trade union organisations",
"being enmeshed, harassed, worried and checked at ever step and at every turn by all kinds of legal decisions".
If only my right hon. Friend had used Sir Winston Churchill's language, I might have been more in agreement with him.

Is my right hon. Friend aware that many Labour Members will be disappointed that he has no plans to visit the West Midlands? Is he further aware that we need an urgent and positive approval of British Leyland's plans, including the new Mini, in the interests of the economy both of the West Midlands and of the United Kingdom as a whole?

I am well aware of the importance of British Leyland's investment future. I understand that the matter is now being studied, but I am not aware of the exact position that discussions have reached. I shall, however, convey my hon. Friend's comments to my right hon. Friend the Secretary of State for Industry.

May I return to the supplementary question asked by my hon. Friend the Member for Walsall, North (Mr. Hodgson)? I do not know which reports the Prime Minister has read, but is he not aware that, according to some which purport to be verbatim, the Lord President's remarks went further even than the question of the trade unions? I shall paraphrase what he said since I am not permitted by the rules of order to quote, but I intend to give an accurate representation of the words used. The right hon. Gentleman said that if the freedom of the people of this country had been left to the fairmindedness of judges, we should have precious little freedom in this country. That is meant to be a paraphrase from The Guardian. I believe it to be accurate and I believe that the comment should be wholly repudiated. It was a totally disgraceful remark to have made.

I am satisfied, as one who has been a trade unionist all his life, that my right hon. Friend was referring to the attitude of judges to the trade union movement in the past. Let me remind the right hon. Lady, if she is unaware of the history, that after the repeal of the Combination Laws men were sentenced and transported to Australia, and that in the middle of the century there was a judgment by the courts—[HON. MEMBERS: "Which century?"] I am referring to the last century, which is what my right hon. Friend was referring to. In the middle of the nineteenth century there was a judgment by the courts which pretty well left it to any trade union official to abscond with the funds. There was the Taff Vale Railway case in 1901, and then there was the Osborne judgment. The right hon. Lady and the Conservative Party had better understand that the trade union movement knows where it stands on these matters.

Is the Prime Minister aware that I think his remarks will satisfy very few people in view of some of the other comments that have been made in the past by the Lord President in this House about Her Majesty's judges? Therefore, may I ask the Prime Minister whether he and every member of his Government have total confidence in the impartiality of the judges and value their total independence?

The judges of today were not referred to by my right hon. Friend. [Interruption.] I shall answer the question in my own way and in my own time. As I said, my right hon. Friend did not refer to the judges of today in his remarks, and any attempt to try to suggest that he did is totally false. Anybody who knows the history of the trade union movement and the relation between it and the courts knows the situation. As to the position of today, my right hon. Friend was casting no reflection on judges at all. That was made clear by the Lord Chancellor in the House of Lords yesterday and I make it clear again today. This is really just another red herring—

But this is the sort of thing that we shall get more and more from now on.

Does the Prime Minister agree that one of the most fruitful and important aspects of the sovereignty of this House is its right to alter the existing law as established by the decisions of the courts at any time? This is one reason why a Bill of Rights is incompatible with the free constitution of this country.

Yes, I understand that, and I agree with the right hon. Member for Down, South (Mr. Powell). What was encased in the examples I quoted, and it is burned deep in the hearts of trade unionists who have been brought up in the movement, is that it has been Parliament that has had to be brought in on every occasion in order to deal with interpretations of the law that the judges have given.

I revert to the original Question. Will the Prime Minister have second thoughts and go to the West Midlands to discuss with those who voted Tory and who are employed in the car industry how it was possible to do so? It should be borne in mind that had it not been for a Labour Government there would not be a car industry at all in the West Midlands.

Yes, I would be ready to do that if I went to the West Midlands. I would also point out that the present temporary hon. Member for Walsall, North (Mr. Hodgson) has a singular lack of understanding of the trade union movement.

Hydrogen Bombs (United Kingdom Development)

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

"the Government's development of new hydrogen bombs".
In The Guardian today there is a report headed "UK H-Bomb Plans Go Ahead". It states that scientists at Aldermaston are working on a miniaturised H-bomb and a new Polaris warhead. In today's Daily Mail there is another report under the headline "Mulley Confirms New H-Bombs". In this report the Ministry refuses to confirm or deny reports that the Government are trying to beat the expected ban on all nuclear tests, including underground tests. This statement follows a report occupying the front page of yesterday's Daily Mail headed "The Secret H-Bomb Race—Britain Acts to Beat Carter Ban." It states that the test at Nevada of a highly advanced H-bomb prototype has been advanced by several months and is expected soon.

Presumably this test was to have been kept secret and was to have been made without previous announcement to the House, as with earlier tests. I wonder why it should be secret. There is, unfortunately, reason to believe that the British Government are, in fact, planning a further test explosion at Nevada. When the former Secretary of State, the right hon. Member for Barnsley (Mr. Mason), was asked for an assurance that there would be no more tests, he refused to give it.

The matter is urgent because the negotiations between President Carter and Mr. Brezhnev to stop all nuclear test explosions are now under way, and their prospects may well be damaged by such a test. Also, it undermines and conflicts with President Carter's current declared aims.

The matter is also urgent because it is not now possible to put down a Question either to the Prime Minister or to the Secretary of State for Defence that will be answered for at least a month.

Finally, the matter is important. No issue that we discuss could be more important. It is vital that detente should be extended, and such a development of new nuclear weapons increases international tension and undermines the Non-Proliferation Treaty. A practical step towards stopping the fatal nuclear arms race is to stop testing. Prohibiting tests helps to prevent the invention, development and manufacture of new weaponry, because what is the value of a new weapon that cannot be tested?

This is important to every country, but particularly so to Britain, because we are a small thickly-populated territory. We are a sitting duck and could not use this suicide weapon because we should be wiped out in instant retaliation. [HON. MEMBERS: "Too Long."] Mr. Speaker controls the proceedings of the House—nobody else. I have sought to stick strictly to the rules of the Standing Order.

Also these plans, apart from contravening Labour Party policy, are contrary to the Government's election pledge that there would be no new generation of nuclear weapons. If we are not bent on such a course, why are we carrying out tests? Nuclear weapons are not like cheese; they do not need testing to see

Division No. 140]


[3.40 p.m.

Abse, LeoCrowther, Stan (Rotherham)Gould, Bryan
Anderson, DonaldCryer, BobGourlay, Harry
Armstrong, ErnestDavies, Bryan (Enfield N)Graham, Ted
Ashley, JackDavies, Ifor (Gower)Grimond, Rt Hon J.
Ashton, JoeDeakins, EricGrocott, Bruce
Atkinson, NormanDean, Joseph (Leeds West)Harper, Joseph
Bagier, Gordon A. T.Dempsey, JamesHarrison, Walter (Wakefield)
Beith, A. J.Doig, PeterHatton, Frank
Benn, Rt Hon Anthony WedgwoodDormand, J. D.Horam, John
Boyden, James (Bish Auck)Douglas-Mann, BruceHoyle, Doug (Nelson)
Bradley, TomDunnett, JackHuckfield, Les
Butler, Mrs Joyce (Wood Green)Ellis, John (Brigg & Scun)Hughes, Mark (Durham)
Campbell, IanEnglish, MichaelHughes, Roy (Newport)
Canavan, DennisEvans, Ioan (Aberdare)Hunter, Adam
Carmichael, NeilFaulds, AndrewIrving, Rt Hon S. (Dartford)
Carter-Jones, LewisFinsberg, GeoffreyJay, Rt Hon Douglas
Cartwright, JohnFletcher, Ted (Darlington)Jenkins, Hugh (Putney)
Clemitson, IvorFoot, Rt Hon MichaelJones, Barry (East Flint)
Cocks, Rt Hon Michael (Bristol S)Forrester, JohnJones, Dan (Burnley)
Coleman, DonaldFreeson, ReginaldJudd, Frank
Cook, Robin F. (Edin C)Freud, ClementKaufman, Gerald
Cox, Thomas (Tooting)Garrett, John (Norwich S)Kelley, Richard
Crawford, DouglasGilbert, Dr JohnKilroy-Silk, Robert
Crawshaw, RichardGinsburg, DavidLambie, David
Cronin, JohnGlyn, Dr AlanLestor, Miss Joan (Eton & Slough)

whether they have gone stale. For these reasons and many others I ask for the Adjournment of the House.

The hon. Member for Salford, East (Mr. Allaun) was good enough to give me notice before mid-day that he intended to move the Adjournment of the House under Standing Order No. 9.

The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the Government's development of new hydrogen bombs".
As the House knows, it is for me to decide not the importance of the issue but whether an emergency debate should be granted. Under Standing Order No. 9, I am directed to take account of the several factors set out in the order but to give no reason for my decision.

I have listened carefully to what the hon. Member has said, but I have to rule that his submission does not fall within the provisions of the Standing Order, and, therefore, I cannot submit his application to the House.

Statutory Instruments, &C

Motion made, and Question put,

That the draft Pool Competitions Act 1971 (Continuance) Order 1977 be referred to a Standing Committee on Statutory Instruments, &c.—[ Mr. Snape.]

The House divided: Ayes 130, Noes 1.

Lewis, Kenneth (Rutland)Pardoe, JohnTuck, Raphael
Lewis, Ron (Carlisle)Park, GeorgeUrwin, T. W.
Luard, EvanParry, RobertWainwright, Richard (Colne V)
McCartney, HughPerry, ErnestWalker, Terry (Kingswood)
McDonald, Dr OonaghReid, GeorgeWard, Michael
McElhone, FrankRoderick, CaerwynWarren, Kenneth
MacFarquhar, RoderickRodgers, George (Chorley)Weetch, Ken
Marshall, Dr Edmund (Goole)Rodgers, Rt Hon William (Stockton)Welsh, Andrew
Mellish, Rt Hon RobertRoss, Stephen (Isle of Wight)White, Frank R. (Bury)
Mitchell, Austin Vernon (Grimsby)Sedgemore, BrianWhitlock, William
Morgan, GeraintSheldon, Rt Hon RobertWilliams, Alan Lee (Hornch'ch)
Morris, Alfred (Wythenshawe)Sillars, JamesWilson, Alexander (Hamilton)
Morris, Charles R. (Openshaw)Smith, John (N Lanarkshire)Wilson, Gordon (Dundee E)
Mudd, DavidStallard, A. W.Wilson, William (Coventry SE)
Newens, StanleyStewart, Rt Hon DonaldWrigglesworth, Ian
Noble, MikeStewart, Rt Hon M. (Fulham)
Ogden, EricStrauss, Rt Hon G. R.TELLERS FOR THE AYES:
Orme, Rt Hon StanleyTaylor, Mrs Ann (Bolton W)Mr. Peter Snape and
Page, Richard (Workington)Thompson, GeorgeMr. Alf Bates.
Palmer, ArthurTinn, James


Thorne, Stan (Preston South)
Mr. Dennis Skinner and
Mr. George Cunningham.

Question accordingly agreed to.

Business Of The House

Motion made, and Question put,

That, at this day's Sitting, Standing Order No. 3 (Exempted business) shall apply to the Motion relating to EEC Energy Policy with the substitution of Twelve o'clock or two hours after it has been entered upon, whichever is

the later, for the provisions in paragraph (1)( b) of the Standing Order.—[ Mr. Snape.]

The House proceeded to a Division

Mr. BATES and Mr. SNAPE were appointed Tellers for the Ayes, but no Member being willing to act as Teller for the Noes, Mr. SPEAKER declared that the Ayes had it.

Question accordingly agreed to.

General Elections (Limitation Of Expenses)

3.55 p.m.

I beg to move,

That leave be given to bring in a Bill to limit expenditure by political parties and other organisations connected with general elections; to provide for the publication of income and expenditure of such organisations incurred in connection with general elections; and for connected purposes.
Most of the discussion about the finances of political parties in recent years has been concerned with their incomes. That is understandable in some respects, and the Houghton Report showed huge discrepancies in the incomes of political parties. In 1975 the income of the Conservative Party was about £6,290,000. That of the Labour Party was around £2,950,000, while that of the Liberals was about £863,000. It is right and proper that we should be concerned about the incomes of political parties, but in terms of the possible influence on voters expenditure is more important than income.

If we examine the expenditure of the political parties we find some strange anomalies in existing controls, particularly at General Elections. One anomaly, to which I particularly wish to draw the attention of the House, exists between the expenditure that can be made by candidates in their constituencies and the expenditure of the national party organisations.

It has long been accepted—for nearly 100 years—since the Corrupt and Illegal Practices Prevention Act of 1883—that there should be strict control over the expenditure by candidates in individual constituencies. As far as I know, nobody seriously objects to that. The need for that is self-evident. One cannot have a fair election in a constituency unless there are controls over the candidates' expenditure. At the same time, although we control local expenditure in constituencies, there is no control whatsoever over the amount that the parties and their supporting organisations can spend at a national level during a General Election campaign. This leads to all sorts of ludicrous anomalies.

In my own constituency it would mean, for example, that if an advertisement supporting the Conservative Party appeared in the Tamworth Herald, it might be liable for declaration by the Tory candidate as part of his campaign to be elected in my constituency, because the Tamworth Herald circulates in that area. If, on the other hand, the advertisement appeared in the Daily Express or the Daily Mail, urging people to Conservative as part of that party's campaign, it would not be subject to any kind of control.

I can never understand why the Tory Party bothers to advertise in the Daily Express or the Daily Mail. It seems to me that the Tories get more than they could reasonably expect free. However, this is considered to be a normal part of a national election campaign. It is a serious anomaly about which the House should be concerned.

Another anomaly concerns the support and fringe organisations that back political parties. I am thinking here particularly of organisations such as Aims of Industry, which in 1974 had an income of £607,000, most of which was used for promoting the Tory cause in two General Elections. If this were done at a local level, if an organisation in a particular constituency threw large sums of money behind a particular candidate in the hope of getting him elected, that would obviously and unarguably be part of the candidate's election expenditure and be subject to controls. However, there is no control at national level over the expenditure that organisations such as Aims of Industry may use on behalf of particular political parties.

There are only two consistent positions that hon. Members can adopt in relation to the Bill. One of them is my view, which is that there should be controls both locally and nationally. The other attitude is that there should be no controls whatsoever. I should not like to hear anyone defending that point of view, although it is at least consistent.

The present position, whereby there are controls over candidates locally but no controls nationally, is absurd—particularly as, although some of us like to think a lot of our capacities at certain times, the outcome of a General Election is now universally recognised as being far more determined by the national expenditure and national campaign of the parties than by individual campaigns in individual constituencies. We may regret that, but it is a fact. The swing is fairly consistent throughout the country and we know which seats are vulnerable if there is a swing to one party or the other.

I hope that the principle of controlling national expenditure is one that commends itself to the House. The only problem is how to do it. My proposal has at least the virtue of simplicity. At present, if a party puts a candidate in all 635 constituencies, the total allowable for all candidates to spend, assuming that each spends the maximum, is about £1 million. My proposal is that the amount that parties may spend nationally should be half that amount, so that the figure would be about £500,000.

That figure has a number of virtues. It would not be that different from what the parties have spent in recent elections. In October 1974 the Tories spent about £600,000 and the Labour Party a little less than £500,000. It also has the strong advantage of being linked to local expenditure and would therefore automatically change when we changed local expenditure.

The strongest advantage of all is that by setting it at a fairly low level we should prevent our General Elections being involved in the sort of ballyhoo and obscene expenditure that is associated with, for example, American presidential elections. I hope that everyone would wish our election expenditure to be limited in this way. The Bill would also provide for the proper publication and auditing of party accounts—we have to do this in our constituencies—and would mean that expenditure by fringe organisations supporting political parties would be included in the party accounts and subject to the maximum figure of about £500,000.

This is the main concern of the Bill, but there is one other proposal that, although it is related, could be considered separately. I wish to see the deposit that candidates have to pay at General Elections increased from £150. That figure was set when deposits were first introduced in 1918 and it has not been changed since.

There are only two positions that can be adopted on this issue. Either we get rid of the deposit or we raise it to a more realistic level—we can argue about the precise amount—bearing in mind the value of money now compared with 1918. I am aware of the suggestion that increasing the deposit would penalise certain sorts of candidates who might not have the requisite funds and some of the smaller parties, but £150 is extremely good value as a deposit for a General Election campaign.

A candidate gets a lot of benefits for his £150. There are television and radio coverage and free postage. I am surprised that commercial organisations have not taken advantage of this before. There are 100,000 electors in my constituency and the £150 deposit means that a candidate can get a delivery to every elector for 0·15p each. That is pretty good business for any organisation backing a particular cause. A candidate also has the great advantage of receiving free copies of the electoral register, for which many commercial organisations would be grateful. It is time that the deposit was increased and the proposals in the Bill would make for fairer elections in this country and would help the democratic process.

Question put and agreed to.

Bill ordered to be brought in by Mr. Bruce Grocott, Mr. Ivor Clemitson, Mr. Joseph Dean, Mr. Geoff Edge, Mr. John Garrett, Mr. Bruce George, Mr. Kevin McNamara, Mr. J. W. Rooker, Mr. Terry Walker, Mr. Ken Weetch and Mr. David Young.

General Elections (Limitation Of Expenses)

Mr. Bruce Grocott accordingly presented a Bill to limit expenditure by political parties and other organisations connected with general elections; to provide for the publication of income and expenditure of such organisations incurred in connection with general elections; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 15th July and to be printed. [Bill 120.]

Orders Of The Day

Local Authorities (Restoration Of Works Powers) Bill

Order for Second Reading read.

On a point of order, Mr. Speaker. I wish to draw your attention to the fact that the Explanatory and Financial Memorandum says that the Bill will not have any additional financial or manpower effect on local authorities and that no additional Exchequer expenditure is involved. It clearly will have an additional manpower effect on local authorities, because additional men will be employed to deal with the additional works outside the boundaries of the authorities concerned.

It will almost certainly result in additional financial effects as well, because it is well known that operations of this sort result in considerable losses being made and, in due course, they will attract rate support grant. Consequently, there will also be considerable Exchequer expenditure as a result of the Bill.

I know that the memorandum has no statutory force, but, as there will be additional Exchequer expenditure, it is unreasonable that there should not be a Money Resolution on the Order Paper, and it would not be in accordance with precedents if the Bill proceeded until there is such a Money Resolution. No such resolution appears on the Order Paper today and no preparations have been made for one.

I seek your guidance, Mr. Speaker, as to the statutory effect of the words on the front of the Bill. It is clear that they are thoroughly misleading, and it is wrong that a Bill should be presented with the claim that there will be no manpower and financial effects when clearly there will be. I know that these words have no statutory force, but the House should be protected from straightforward misrepresentation of this sort. The House should not proceed to give a Second Reading to the Bill until these matters are put right.

I am obliged to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) for the way in which he put his point of order. It is similar to one that we had a few weeks ago, and I ruled then that a Money Resolution was not necessary on Second Reading. This is a matter for the Chairman of Committees when the Bill goes to Committee, and the matter can properly be raised at that time.

I am not responsible for the words on the front of the Bill, but those who are will have heard what the hon. Gentleman has said.

4.8 p.m.

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

The purpose of the Bill is to restore to 25 district councils in England and Wales power to do certain kinds of work by direct labour. When the Local Government Act 1972 was passed, these authorities, quite by accident, were prevented from doing work within their boundaries on functions which were transferred to county authorities—mainly highways and education. When the problem was discovered, Statutory Instruments were made temporarily restoring the works powers of these authorities under Section 254 of the Local Government Act 1972.

The temporary orders expired on 31st March this year and none of the 25 authorities may continue to carry out work that it had previously been empowered to do. The only exception is the completion of agreements signed before that date.

The substantive clause of the Bill simply makes permanent the temporary orders. It would make no sense to disrupt working arrangements.

I believe that the whole House will recognise that this is a necessary and sensible measure. Unless it is enacted speedily, there might be unnecessary redundancies in these organisations, and their efficiency could be impaired.

While the Bill is essential, it is far from being a comprehensive measure of the kind needed to produce the proper framework within which direct labour organisations should operate. The Government had intended to introduce such a measure. The parliamentary situation prevented our doing it, as hon. Members know, and gave rise to the statement from my right hon. Friend the Prime Minister on 23rd March in which he undertook on behalf of the Government that
"The Local Authorities (Works) Bill will be confined to the provisions that are required to protect the existing activities of direct labour organisations, in the light of local government reorganisation"—[Official Report, 23rd March 1977; Vol. 928, c. 1308.]
It is sad that some Opposition Members should have opposed our original intentions without really knowing what the proposed Bill contained. It would have removed unnecessary restrictions on undertaking new construction work by direct labour organisations for neighbouring local authorities and for housing associations and new towns in the locality. I say "unnecessary" because it seems to me ludicrous that a local authority or another public body should be precluded from using a local DLO if that is the most efficient way of getting the work done.

In a similar vein, we would have allowed DLOs to do improvement and maintenance work on private houses in the housing action areas and general improvent areas in neighbouring authorities. It often makes sense for rehabilitation to be carried out by one organisation in such an area. We would have allowed them to work for other public bodies for the same reason—efficiency.

The extension of powers would have been tied closely to new arrangements for accounting, charging and tendering. These would have implemented statutorily the recommendations in the Chartered Institute of Public Finance and Accountancy report of June 1975 and, indeed, would have gone further. We intended to include repairs and maintenance in the accounting requirements. The DLO accounts would have been separate.

On a point of order, Mr. Speaker. I do not know whether you have been following what the Minister has been saying, but he is telling the House about a Bill that is not before the House. He is going on at great length about a Bill that he wanted to introduce but that the Prime Minister would not let him introduce. The Minister is saying absolutely nothing about the Bill that he is introducing.

Perhaps I was not giving the full attention that I ought to have given, but on a Second Reading debate we are allowed to go a little wider and state our feelings about what should be in and what is not in a Bill.

Thank you, Mr. Speaker. What is more, if I may say so, the hon. Member for Chingford (Mr. Tebbit) could not have been listening as closely as you were, Mr. Speaker, or otherwise he would have heard me describe the objective of the Bill in my introductory remarks.

Further to the point of order, Mr. Speaker. The Minister is saying what he thinks should be in the Bill, but he is the person who has introduced it. Surely it is wrong for a Minister to introduce a Bill and then criticise it strongly for not being the sort of Bill that he wants to introduce.

Order. The right hon. Gentleman does not lose his rights as a Member by being a Minister.

I am much obliged, Mr. Speaker. Indeed, if I may say so through you to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), I was not complaining about what is in the Bill before the House today. I was describing in outline the kind of Bill that the Government would have liked and had intended to introduce to the House had it not been for the parliamentary situation preventing us. If I may say so, such a Bill will be introduced in due time into this House. I shall come to that point later on.

As I was saying, we would have gone further than the Chartered Institute of Public Finance and Accountancy report of June 1975 and included repairs and maintenance in the accounting requirements. We would have required that the DLO accounts would be separate. We would have enabled charges to be made on a firm price basis—rather than being linked to actual costs as at present—so that the extent of profits and losses would be known. We would have ensured that all appropriate overheads were taken into account, including a return on capital employed. A local authority would have been under a duty to avoid making a loss, and we would have taken powers to close down activities where an organisation failed consistently to meet the financial objective.

Will the Minister tell us whether the Government intend to introduce these sorts of conditions into the Bill by amendment or by statutory order? There are fears about the inefficiency of some direct labour organisations.

I shall deal with that question, but let me say straight away that the Bill before the House, in implementing the undertaking of my right hon. Friend the Prime Minister of 23rd March, precludes any such move, because it is confined to the simple issue that was announced to the House in that statement and cannot cover any other matters. It is my regret, as I am indicating, that we have not been able to introduce the broader Bill, but I live in hope that we shall have the good sense to deal with such legislation in due time.

I was referring to the ideas with which we should have liked to deal.

I shall complete this passage, if I may, and then I shall gladly give way in due time, if the hon. Gentleman will keep a close eye on me and listen carefully and attentively to what I am saying.

We would also have required local authorities to produce a report each year on the activities of their direct labour organisations so that their performance could be judged wisely. We would also have enabled DLOs to be set up as separate trading bodies so that their competitiveness could be demonstrated without the difficulties in comparison which would remain even if the CIPFA recommendations were implemented. This provision would have been the basis, too, of sponsoring building workers' co-operatives on a commercial basis, which I believe to be essential to the future health of the construction industry and, indeed, industry generally in our country.

These things are not in the Bill. The Minister regrets it, but he appears to be in dispute with his right hon. Friend the Prime Minister over this. Has the Minister tendered his resignation to the Prime Minister as this Bill is totally out of sympathy with his own publicly declared intentions and views?

The hon. Gentleman has got it wrong again. I am fully in support of what is before the House, and it would have been included in the more broadly based Bill had we had the opportunity. I am not out of sympathy, obviously, in wishing to make sure that the accident of the Local Government Act 1972 is avoided, which is what we have done by the temporary provisions and orders in the last 18 months to two years, provisions which this Bill seeks to make permanent. The hon. Gentleman has got it wrong again.

I hope that I have said enough about the ideas that we had intended to incorporate in the more broadly based Bill to demonstrate that what we had proposed was sensible and reasonable. That could hardly be said of the attitude of some Opposition Members and some of their colleagues who control some of the local authorities in the country. They seem to have only one attitude to DLOs—to close them down, to destroy established organisations and to sack their staff.

I say to them that even if they are correct—and some of their criticism of DLOs is undoubtedly correct to a degree, but nowhere near the degree they have expressed—they have a responsibility when they are in local government. If they claim that their DLOs are inefficient, it is their job to make them efficient. Whatever their party, councillors are elected to do that, and it is the responsibility of their colleagues in this place and elsewhere to express that view.

For our part, in Government we shall go on, through my Department's working party, to work out sound procedures for direct labour organisations, some of which already, partly through our influence, have begun to adopt good accounting and tendering practices. The working party has so far concentrated on procedures for new construction, for publication of reports on performance and for competitive tendering. I hope that this part of the work will be completed by the summer.

By around the turn of the year we expect to complete similar work on repairs and maintenance which the Chartered Institute of Public Finance and Accountancy has also been studying. The institute hopes to publish its findings in the summer. Had the original Bill to which I have been referring been introduced and passed, we would have phased in the new powers with the new disciplines. Action will be limited without legislation, but we shall take whatever action lies open to us to improve the scope and efficiency of DLOs.

Direct labour organisations account for about 8 per cent. of all construction output. Most of it consists of repairs and maintenance. They employ about 173,000 people. Thus, although they are not by any means a major part of construction, the promotion of efficiency and sound practice in them would be a useful contribution to the efficiency of the industry as a whole.

Many DLOs have already given good service to their local authorities and have been of great financial benefit to the ratepayers. Such matters never reach the Press. Successful DLOs do not make good journalistic copy. District auditors' reports, for example, are often quoted to point out failings. But district auditors often point out savings that DLOs achieve. That is not to be seen published in the Press or debated or mentioned in this House. There are frequent examples of DLOs having to take over jobs when firms have gone into liquidation and the authorities have been unable to find others to take their place.

I shall give one or two examples to illustrate what I have said. On two major road contracts in the North-East, worth £4½ million, the contractor went into liquidation with the work barely started. The county DLO stepped in and completed the contracts within the original competion dates, thus avoiding a delay of at least six months if another contractor had been engaged. Not only was there no additional cost to the Department, but at least £400,000 was saved by not employing another contractor.

In another case a district auditor found that the final costs on 25 highway maintenance projects carried out by a DLO averaged 5 per cent. more than the estimate. That is the kind of figure that would have appeared in the Press. But acceptance of the next lowest tender from a private contractor would have cost another £500,000, or 19 per cent. more than the final DLO cost, including the 5 per cent. overspent. That kind of information does not get published in its proper context.

In yet another instance an authority did not have sufficient finance to accept the lowest tender of £200,000 from a private contractor for a school project, so the DLO undertook the work and completed it at a cost of £110,000; thus the authority saved £90,000. Incidentally, in that case, if the private contractor had done the job, it would have appeared that his operatives were twice as productive as those of the DLO as this type of calculation, which appears in official and published statistics, is based on the valuation of output rather than on the actual quantity of work done.

Can the Minister tell me how many direct labour organisations make a commercial return on the capital invested in them?

I am not sure whether the hon. Gentleman was present when I described the kind of legislation which we had originally intended. If so, he will recall that I said that that was one of the points with which we wished to deal in the Bill that we were unable to introduce because of the parliamentary situation. There are no requirements to impose conditions for a return on the capital invested. However, we wished to do just that, among other things, in the Bill that we could not introduce at this stage.

I was not asking whether there were any requirements, but whether the Minister could indicate any such commercial success.

The hon. Gentleman has not taken my point clearly enough. There are no such requirements, so examples cannot be quoted. We had intended to take action to remedy that situation in the Bill that Opposition Members and their colleagues in the industry and the Press opposed so vigorously, despite the explanation that we sought to give. However, I agree with the hon. Gentleman's implication. I regret that, as a result of the sustained campaign over many years, which aroused great prejudices about our intention's, we were unable to do what the hon. Gentleman would have liked us to do.

The instances that I have quoted are not exceptional. There are many examples of efficient DLOs in addition to those I have mentioned and there is plenty of evidence that they give good value for money. Direct labour organisations also have a creditable record as good employers, especially in providing training opportunities and, like the better private contractors, maintaining continuity of employment even when times are difficult.

It ill becomes certain people in the construction industry to criticise DLOs for inefficiency in the way that the rather wild campaigning has suggested in recent months. As I said in the Supply debate on the construction industry on 2nd May, there is enormous scope for improvement in the efficiency of the industry as a whole, in its building operations and in its financial structure. I forbear to list examples of the industry's failures, but public sector clients are often left picking up the pieces. I do not gloat over these failures. They are exceptions. They are not the general rule, but they are significant failures. I want something done about them. In the meantime, perhaps certain people in the industry might do better to concentrate on putting their own house in order than to waste vast sums on expensive advertising campaigns against DLOs.

I remain convinced that it is right for us to provide DLOs with a framework which allows closer comparison between them and private contractors by not only proper accounting and tendering procedures, but more freedom to use their valuable resources more flexibly and thus more efficiently. It remains our intention to legislate on these matters, but the parliamentary situation means that we must wait for another day. Today we are confined to this small but essential measure. I commend it to the House.

4.26 p.m.

First, I declare an interest. I am a consultant to a group of construction companies in the West Midlands.

I listened with interest to the Minister for Housing and Construction, who has advanced some way towards our point about the CIPFA recommendations, although he still has a long way to go.

I should point out that Conservative-controlled local authorities—they are now very much in the majority—which have direct labour organisations will see that they are efficient. I am urging upon them, and receiving a constructive response, that they should as far as possible adopt the CIPFA recommendations. The Minister will know better than I do that some of them need legislation. In certain circumstances, where authorities deem that the direct labour organisations are not doing a reasonable job, they may choose to close them down. That is their prerogative. I should not wish to stop them doing that.

The Minister quoted some examples of efficient direct labour organisations. My hon. Friend the Member for Basingstoke (Mr. Mitchell) was trying to make the point—I am sure that the Minister appreciated this, because he referred to a 5 per cent. return or whatever the figure was—that unless there is an ongoing CIPFA accounting procedure, unless we know the proportion for the chief executive, the personnel officer and everyone else, it will be difficult to get any meaningful figures of efficiency for DLOs. That is the problem facing all of us.

The Federation of Civil Engineering Contractors has made its views on the Bill perfectly clear. It says that the
"Bill is a step in quite the wrong direction. The fact that it is a very small step ought not to be enough to save it."
The National Federation of Building Trades Employers says that
"the members of the NFBTE feel that the Bill must be defeated"
and they are
"adamantly opposed to this Bill."
I have a letter today from the Opposition Leader on the Burnley Council, one of the districts affected by the Bill. Councillor Wilson writes:
"My overriding reaction to the Bill is an emphatic 'No': more especially until a method of realistic commercial accounting is introduced to the Works Department. Time and time again when a 'tender' has been received, and accepted by the Labour Group, we are subjected to estimates for extra items of equipment required for the project. Our direct works spokesman is at present preparing a detailed brief on one current contract with a view to obtaining the true cost to the Authority upon its completion.
The obvious concern regarding the right to work outside the Borough boundary is again fiscal. Should one group of ratepayers subsidise or receive support from another group?"
The history of this measure is interesting. A more comprehensive Bill, about which we have heard a great deal today, was promised by the Minister on 14th July last year. We certainly had a pretty clear indication of what was in it, because the Under-Secretary, whom I am glad to see present, gave a good trailer on 19th September in Scarborough, in a speech which was widely reported in the construction and building Press. Therefore, all of us had a very fair idea long before the Queen's Speech, about what would be in the Bill. I do not think that the Under-Secretary would retract a word of what he said then.

The Bill was forecast in the Gracious Speech on 24th November. As the Minister said, there were to be major extensions of powers for direct labour organisations. Certainly at that time there was very little talk about the CIPFA recommendations or much tougher accountancy. I read the hon. Gentleman's speech, and I recall many times in the House when I urged the Minister and the Under-Secretary even simply to endorse the CIPFA recommendations and was comstantly referred back to the working party that had been set up.

On 25th February a Press conference was fixed for the introduction of the comprehensive Bill, the bigger Bill. I understand that invitations were sent out but were suddenly cancelled on the evening of 24th February. That Press conference was cancelled because the Government at that stage had abandoned the Bill. I am sure that that is right and that the Minister knows that it is right.

That was a full month before the Lib-Lab pact and the Prime Minister's statement. As the Minister was honest enough to say, the parliamentary situation then was such that there was no majority in the House for that comprehensive Bill. The Liberals, the national parties and one or two Labour Members, as well as my own party, were adamantly opposed to the Bill, and so it died then. Let this point be quite clear. It was nothing to do with the Lib-Lab pact, which was perhaps the funeral rites over a Bill that had already been killed.

Does not my hon. Friend think that as well as he and I, and all our right hon. and hon. Friends, the Liberal Party would not have objected to adding on to the Bill the implementation of the CIPFA proposals? Is it not rather strange that the Bill we are considering does not contain powers for tightening up financial discipline? I stand to be corrected by the two Liberal Members present, but does not my hon. Friend feel that the Liberals would have welcomed the introduction of the disciplines and would not have objected to their being in this Bill?

I am grateful to my hon. Friend, who has anticipated something I intend to say in a few minutes.

As there appears to be agreement among the Minister, myself, the hon. Member for Isle of Wight (Mr. Ross) and, I suspect, most hon. Members, that we need at least the CIPFA disciplines, would it not be possible to introduce them? I can promise a safe passage on behalf of my party, and I believe that the Liberals would do the same. This would be extremely helpful. Perhaps we can explore that in a few minutes, but the grunts coming from the Under-Secretary make me suspect that it does not meet with his entire approval.

I am grateful to the right hon. Gentleman for putting me right on that.

The House will have to consider this matter. In the meantime, it should note that it was on 14th October 1975, some time ago, that the working party was set up by the Minister to review the operations of direct labour organisations. I have consistently criticised and shall consistently criticise that group. I have described it as a hung jury. That is what it was. If it had had on it representatives of outside interests, the construction industry and free enterprise people, it would have been more worth while.

When we have consistently questioned the Minister about CIPFA, that group has been called in aid. The right hon. Gentleman and his hon. Friend have said that we must wait until it has reported. If I understood the right hon. Gentleman correctly today, he said that it will report in the summer, and I believe that that is correct. I presume that the report will be published and be available for all to see, but I do not know, for we have never had that matter cleared up. Does this mean that the possibility of having legislation to improve the accounting will be delayed to take account of what the group says? Will what it says have any effect upon the larger Bill, which is at present dead and buried but which might be resurrected one day?

As for the Bill, I must first tell the Minister that it was presumably possible to extend by further Statutory Instruments what were interim arrangements under the Act reorganising local government. Indeed, if there were particular problems it was possible for any one of the 25 authorities to bring forward a Bill under the Private Bill procedure. Having looked at the Statutory Instruments, I see no obvious connection between the 25 local authorities concerned, except that a majority of them are still Labour-controlled. In the current local government scene, that is remarkable.

In addition, it is clear that the Statutory Instruments and the Bill do, albeit in a small way, extend, or continue the extension of, direct labour in those 25 authorities. There is a problem when we are talking also about former county borough boundaries. These are nearly dead and gone and will be more nearly dead and gone in the years ahead, so I question whether it is wise to refer to them in such legislation.

The extension of construction powers for local authorities outside their own boundaries is certainly now finally established in a Bill, as opposed to a purely interim order. That was mentioned in the letter to me by the councillor from Burnley.

For these reasons alone we should be unhappy about the Bill, but it goes much further. There is the whole question of the accountancy, which the Minister dwelt upon at some length and which other hon. Members will no doubt wish to mention. Here at least was an opportunity for something to be tidied up. I question the way in which the Government have done their tidying up in relation to direct labour. Apparently all hon. Members agree that the present accounting principles and procedures are totally wrong. The building industry has said that in many cases fair competition is not the order of the day and that local authorities award considerable contracts without having any other kind of tender.

There are also all the various CIPFA recommendations—the importance of the contracts being put out to competitive tenders; the importance of adopting the same standards in dealing with contracts carried out by direct labour and those carried out by independent factors; the importance of valuation by an independent quantity surveyor of the value of work performance; and, something which the Minister mentioned and about which I agree with him, the importance of establishing direct labour departments as separate trading organisations so that the ratepayer and the local people can see—and, I hope, quickly, not having to wait two or three years—exactly how efficient or inefficient the organisation is.

The Minister was right to deal only with new construction. We still await the maintenance proposals. I believe that the above items and many others mentioned by CIPFA could have been introduced in this Bill. I see no reason why not. After all, there is a fair degree of time. The devolution talks are going on, and the House is not exactly overburdened with legislation. All parties are agreed upon the need for proper and fair accountancy. The vast majority of local authorities are Conservative-controlled, so it can be seen that we are not trying to be beastly to the right hon. Gentleman's party. I ask him to ask his right hon. and hon. Friends whether it is not possible, on this measure if nothing else, to have this element of agreement about accountancy, and then at a later stage we can look at the question of accountancy procedure for maintenance. This is a fair and reasonable offer which I hope the other parties may be prepared to go along with.

Why is it, then, that the hon. Gentleman's party—not so much the hon. Gentleman, but his party and others associated with it—spent so many months campaigning vigorously against our proposals when we had placed clearly on the record in speech, correspondence and statements in various quarters what our intentions were in the original Bill in relation to CIPFA? We could have had the common ground then. Why is the hon. Gentleman now, having campaigned against that Bill and having virtually compelled us to withdraw it, calling on us to join him on common ground?

The common ground was CIPFA. It was not on the major extension of direct labour proposed in the Bill and as outlined by the Under-Secretary of State at Scarborough. Such common ground will never exist. The common ground between us is on accountancy, as it is between the Government and the Liberal Party. We were asked to find common ground, and we found it on the accountancy aspect. Let us limit it to that. The Conservatives and, I believe, the Liberals, and also some hon. Members opposite, felt that the extension proposed in the Bill could not be supported. I ask the Minister to bear in mind also that two of the three local authority associations are on record in recent weeks as being opposed to any extension of direct labour at present. I am not speaking in total isolation. The Association of County Councils and the Association of District Councils are on record with their opposition.

Let us assume that we lived in a perfect world and had an accountancy system which made certain that direct labour was efficient, competitive and everything else flowing from that, and that by every yardstick possible it was shown that direct labour was worth while; would the hon. Gentleman still oppose it?

There is perhaps a fundamental philosophical point between us. The first thing to remember, as I am sure the right hon. Gentleman does, is that we have an interest as representatives of the ratepayers, who may have to pick up the tab if things go wrong. I understand that the Government wished for a major extension of direct labour powers by authorities of all kinds, including—although it has not appeared in the Bill—power for the Minister in certain circumstances to allow direct labour organisations to do all kinds of things for the private sector. We oppose that because we take the view that, at the moment, local government has more than enough to do with the things that no one else can do.

The right hon. Gentleman says "Oh", but the fact is that, under the present Government, the local authorities have more than enough to do. They are being denied resources. Yet there are great pressures on them to carry out all sorts of statutory duties and obligations. We do not believe that there is a great abundance of talent in local government waiting to do jobs that the private sector can not only do itself but in most cases can do very much better. That is the first and fundamental point on which we disagree.

Secondly, we are not naive enough to suppose that the Government's proposals are designed merely to get more efficient direct labour organisations. I have quoted on various occasions Labour spokesmen and Labour documents showing that the main aim of extending direct labour is to get a major public stake in the construction industry. We happen to be opposed to that. That is another important reason for opposing such a comprehensive Bill. No doubt that is also the view of the Liberals and other parties, but they must speak for themselves. We are not to be taken down that path.

We shall, however, at any stage, join the Government on the question of improved accountancy. But the Government have never shown us their proposals. It was rumoured that there were to be skeleton proposals which would be filled in by order later. Their proposals may be introduced in stages, but we simply do not know. I shall be happy to have discussions about the matter. It is not unknown for me to have discussions with Ministers in the Department of the Environment and to improve Bills thereby. It happened last summer.

Is the hon. Gentleman prepared to say that he is opposed in principle to all direct labour organisations on ideological grounds, whatever the merits and however well difficulties could be overcome?

I am not prepared to say that. I have never said it, as the hon. Gentleman knows. I am opposed to any extension of the present system, which is one of the reasons why I shall vote against the Bill. I am in favour of much tougher accountancy procedures because fair competition is essential for the free enterprise industry, and we ought have proper accountancy procedures in the interests of the ratepayers, the people who have to pick up the tab at the end of the day.

Does not my hon. Friend agree that, while direct labour organisations have the ability to raise capital—and working capital, too—at non-commercial rates and with a total guarantee, buttressed by the Government at the end of the day, they can never in reality be fairly compared with other organisations in the private sector that do not have those advantages?

I accept that point, which is important. I was interested to hear the Minister say that the Government have in mind something that we, too, have in mind—the power to close down direct labour departments consistently making losses. As my hon. Friend has hinted, local government cannot go bust as such. There will always be someone, be it the Government, through the rate support grant, or the ratepayer, to bail it out. That is the difference between direct labour organisations working for local government and nationalised industries, and free enterprise contractors.

We have been talking about these CIPFA recommendations for two years. The Government say that they are prepared to do something about it—but not apparently in this Bill. We do not know when they will do something about it. They had their opportunity to do so in this Bill or in a separate measure with all-party agreement. Such proposals would take relatively little time to get through the House. That opportunity is still open to the Government.

Of the 25 councils covered by the Bill, a number have unfortunate records in recent times with direct labour. I am not sure that we shall achieve a lot by swapping experiences. The Minister gave examples of where direct labour organisations were doing well. I have pointed out the difficulty of knowing whether they are doing well unless there are proper accountancy procedures.

I can quote the example of Liverpool, where a landscaping and road-widening scheme valued at £450,000 went to Liverpool's direct labour organisation without any kind of competition. Surely the right hon. Gentleman cannot accept that sort of situation. There is another example in Gateshead. There, a housing improvement scheme by direct labour, with an agreed completion period of 80 weeks, actually took 156 weeks. Surely that is not something that the Minister would wish to go along with. These are examples taken from some of the 25 districts. There are many horror stories about direct labour. There may be success stories. But until we have proper accountancy, we shall not know the true extent of just how bad or good they are.

Therefore, we believe that the Bill, although admittedly in a marginal form, puts on a permanent basis an extension of direct labour. We believe that the Minister has forgone a good opportunity to bring in new accountancy procedures. Had he done that, the Government would have gone some little way towards restoring the vast amount of ground that they have lost with the construction and building industry. As they are not prepared to do that, we believe that the Bill in its present form is unwanted, unnecessary and unhelpful, and I ask the House to reject it.

4.48 p.m.

I was Minister of Public Building and Works in 1968, and, therefore, the sponsoring Minister for the construction industry. I take that industry seriously, and I got to know it well. I certainly do not condemn—and I do not know any hon. Friends who do—the building and construction industry in a wholesale way. The vast majority of the people in it are honourable men. The firms are desperately anxious to ensure good relations with the Government of the day, whatever their political persuasion. They are crying out for long-term planning of work.

I learned some interesting figures at that time. I shall always remember them, and I think that they more or less still apply today. Over 50 per cent. of the entire output of the building industry is obtained from the Government and over 90 per cent. of the entire output of the civil engineering industry is obtained from the Government. If, then, the Government of the day are by far the largest client of the entire building industry, it behoves the Government to be a good client, and if they want the building industry to work for them, their contracts must be of the sort that will bring out the best in the industry.

I am trying to assist the right hon. Gentleman. He should be talking of the public sector, which is slightly different from the Government as it involves other clients, including local authorities.

I agree. The Government do not build a single house. That is done through local authorities and county council which go to Government for various aids, such as the rate support grant. Therefore, the Government have the final word.

I always wanted to see a universal construction system which brought out the best for the client and for the local authority. For example, the Government are bad payers—or I should say that local authorities and county councils are bad payers. They do not pay as quickly as they might. Half-way through a contract they should hand over 50 per cent. of the sum due and settle their bills soon after a contract is completed.

One of the biggest problems for private enterprise is a shortage of money. I know that I might appear to be dealing with mundane matters. I am not anti-private enterprise. That would be foolish. There are some famous firms in the private sector that none of us could do without. They are honourable firms and employ trade unionists. This is why I find the attitude of the Opposition to direct labour bewildering. They are so bitter about this subject.

It has come shining through that the Opposition, if they had their way, would introduce a Bill to make it illegal for any local authority to employ direct labour. That came out in the speech made by the hon. Member for Ashford (Mr. Speed). Anyone who was not a Member of the House would find it hard to believe that the hon. Member thought that there was any good at all in direct labour.

If the hon. Member for Chingford (Mr. Tebbit) intends to say anything good about direct labour I shall be frightened to death. The Opposition challenge the concept of the accountancy system.

Let it be clearly understood that there are few people who believe that local authorities could exist without some direct labour workers. It would be absurd if all minor maintenance involved calling in private contractors. The right hon. Member must accept that it is difficult to organise fair competition between a public sector organisation that cannot go bankrupt and a private sector organisation that can and that has only one chance.

I understand that the hon. Member for Ashford argued that the ratepayer had to pick up the tab. I respect that argument. If it can be shown that a local authority, by the advent of direct labour, can do a particular job cheaper and better than private enterprise, I sincerely say that that local authority should be allowed to employ direct labour because in that instance direct labour has been proved to be cheaper and better. I see that the hon. Member for Chingford is nodding his head in agreement. We are coming nearer to what I want to see established.

I have lived in that part of London where direct labour matters a great deal. I was also Minister of Public Building and Works and I have seen the situation from close quarters. Direct labour began in the early 1920s. One of the pioneers was that great predecessor of mine, Dr. Alfred Salter. He began to employ people to relieve his own local employment problem. No one could work for direct labour unless he lived within the boundaries of the borough. That direct labour organisation made its own paving stones, for instance. But the idea of any local authority starting from scratch and trying to implement a direct labour force is dangerous today. No direct labour force can be efficient unless it has full use of the machinery that is essential for any good building work. Cranes, cement mixers and the whole paraphernalia of construction work machinery are required. The capital expense of setting up such equipment is enormous.

I am not one of those who say blindly that all local authorities should go for direct labour, willy-nilly, when there are many qualified building constructors who are willing and able to do the job. How ever, it is unfair that local authorities who possess all the necessary machinery should not be allowed to develop direct labour.

I find it hard to understand what the Tories are thinking on this matter. The hon. Member for Ashford said that local authorities have enough to do in coping with the terrifying cuts in public expenditure made by this Government. He said that they were unable to do a number of things because of that. But if the Tories were in power I believe that the cuts would be more severe. Everyone knows that they are completely dissatisfied with the cuts and say that the Government have not gone far enough. Some of my hon. Friends have also attacked the Government for going as far as they have gone.

Looking back at the activities of the Department of the the Environment, I believe that it has done well to salvage what is left. It comes ill from the Opposition to talk about cuts in public expenditure.

The right hon. Gentleman must not misinterpret me. I was not criticising the Government for cuts in public expenditure. I was saying that at a time when local authorities are grappling with so many difficulties because, for instance, the rate support grant has been cut back, it is a bit much to expect them to use their expertise on activities that the private sector can handle better than they. I was saying that they should concentrate instead on trying to make the social services work.

If the hon. Member is saying that it is unwise for local authorities without the necessary machinery, and because of the problems caused by the cuts, to set up direct labour organisations, I agree with him. At this moment that is right. However, I am not talking of that type of authority. With so many authorities under the control of the Tories I doubt whether any direct labour organisation will get off the ground.

My experience of direct labour is that it has been a credit. It has done a first-class job, not only on maintentance but on construction work. I know that the Opposition view is that direct labour should do all the rough work. All that the Opposition can do is to criticise and sneer at direct labour and slam it if a wallpapering job is not well done. When direct labour has been allowed to build new construction, it has done it well.

When I was Minister, one or two direct labour organisations were shut down because they were inefficient and incompetent. Many private enterprise organisations are inefficient and they lose contracts. We told the local authorities concerned that they would not be allowed to build new buildings under direct labour as long as their methods remained inefficient. In the original Bill there was no intention by the Government of the day to compel local authorities to set up direct labour departments. This Government's intention is to allow local authorities to have direct labour organisations if they can prove that they are justified and that their accountancy procedures are good.

The hon. Member for Ashford is whistling in the wind if he thinks that there will be any move towards direct labour because of the Bill. The Explanatory Memorandum states:
"The Bill restores, and gives permanent effect to, provisions in three orders under the Local Government Act 1972…".
In other words, the provisions were already there prior to 1972. We are now allowing local authorities to do what they were allowed to do previously.

What are we making all this fuss about? It is absolute rubbish. Once again, the Tory Party and Tory Members have hung their hats on this one sort of peg, to make a deliberate attack on direct labour, as though it is some foreign element from abroad.

I know that one may go fairly wide on the Second Reading of a Bill, Mr. Speaker, but I promise not to go too wide. However, why do the Tories so hate State ownership? It is something owned by Britain.