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Commons Chamber

Volume 932: debated on Thursday 19 May 1977

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House Of Commons

Thursday 19th May 1977

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Private Business

Australia And New Zealand Banking Group Bill (By Order)

Order for consideration of Lords amendments read.

To be considered upon Wednesday next at Seven o'clock.

London Hydraulic Power Bill (By Order)

Order for consideration, as amended, read.

To be considered upon Wednesday next at Seven o'clock.

City Of London (Various Powers) Bill Lords (By Order)

Read a Second time and committed.

Emu Wine Holdings Limited And Subsidiary Companies Bill Lords (By Order)

HERITABLE SECURITIES AND MORTGAGE INVESTMENT ASSOCIATION LIMITED BILL [ Lords] ( By Order)

Orders for Second Reading read.

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

West Midlands County Council Bill Lords (By Order)

Read a Second time and committed.

Oral Answers To Questions

Agriculture, Fisheries And Food

Intervention Prices

1.

asked the Minister of Agriculture, Fisheries and Food what proposals he made at the recent meeting of Agriculture Ministers of the EEC to rationalise the Community's intervention prices for skimmed milk and butter.

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

Our main objective in the Council of Ministers was to keep the price increases to an absolute minimum in order to discourage excess milk production in a manner which did not prevent efficient producers in the United Kingdom and elsewhere from increasing their share of the market for milk and dairy products in the Community.

Does the Minister agree that there is a need to rationalise the approach of the Community's agriculture policy in order to allow for variations in the cost of production in individual countries? What proposals did the Government put forward at the meeting or what do they have in mind to put forward at subsequent meetings?

The hon. Gentleman will know that the system of green currencies means that the prices paid to producers in various countries are different. In the vast majority of countries, the decision on this year's price-fixing has meant a fall in real terms in the producer's milk price and this should help to reduce the structural surplus. The United Kingdom butter subsidy was an important step towards disposing of the surplus sensibly.

My hon. Friend referred yesterday to butter ships. Is there any chance of having these butter ships operating off this country to the advantage of our consumers?

The measures that we secured at the Council, which involved a substantial butter subsidy for United Kingdom consumers, are an important step in the right direction and are probably better than butter ships.

Whatever may be the wish, does not my hon. Friend agree that the increased cost of the food package, according to Press reports, is 400 million units of account? Will he confirm that figure and comment on reports in the Press on Wednesday that the long-term future of the green currencies is in doubt? If those reports are true, will not this increase prices still further?

The increase in the Community budget was a result of the changes made to the Commission's original proposals. One major element in this increase was the decision that all non-delivery premiums to encourage dairy producers to cease production were to be wholly financed by FEOGA. There are only proposals in relation to the green currencies. No decision has yet been taken.

Common Fisheries Policy

2.

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on progress in renegotiating the common fisheries policy.

9.

asked the Minister of Agriculture, Fisheries and Food what is the current position of the renegotiation of the common fisheries policy.

I refer the hon. Members to the statement I made yesterday.

I congratulate the right hon. Gentleman on obtaining international recognition of conservation zone in the North Sea and elsewhere, but is he aware that this country's distant-water industry is virtually killed and that the inshore industry is likely to follow the same path unless we get an exclusive zone of 50 miles? These views were put strongly to Mr. Gundelach at Hull recently. What action is the Minister taking?

The whole question of the fishing industry is vital to this country. That point was made to Mr. Gundelach not only on his visit to Hull but by a deputation from Scotland which saw him a few days ago. We have reiterated that fact ourselves and intend to go on doing so, particularly at the Fisheries Council meeting which has been called for 27th June.

Can the right hon. Gentleman give us an assurance that at the next Council meeting the Government intend to stand firm on the need for an exclusive fishing zone of 50 miles, because this is so important for the inshore fishing industry of this country, not least in Devon and Cornwall?

We have made our position clear and I hope that at the Council meeting next month we shall be able to put on the table absolutely definite proposals. I have no doubt that they will be fully in accordance with the wishes of the fishing industry.

Is my right hon. Friend aware that the simple and straightforward demand for extending control over a 50-mile limit would have the overwhelming support of both sides of the House and the country as a whole? Does he recognise that were it not for the fact that the Conservative Party has taken us into the EEC, control would have been extended to 200 miles?

I do not want to go over old battles at this stage. It seems that there are new battles ahead. However, my hon. Friend has put forward an important point which must be recognised again and again. What we must do is to claw back something that was given away. That is a difficult and tough task to achieve, but it is an achievement that we hope we shall be able to realise.

Is the right hon. Gentleman aware that we welcome the frequent reports that he makes to us on these matters and that we appreciate what he is doing? Is he aware that the Scottish fishermen who went to Brussels at the beginning of the week are boiling with rage over the negative attitude of the Common Market towards what they regard as their just claims? Does he recognise that their temper is not helped by the report today that Norway is cutting the quotas available for United Kingdom vessels, thus imposing even further strains and difficulties on the Scottish fishing fleet?

I thought that the Scottish fishermen behaved with absolute distinction. Everyone commented on the tremendous way in which they presented their case. Even if they are boiling with rage, they put their case reasonably. I pay my tribute to them.

The issue that the hon. Gentleman has raised in respect of Norway is representative of the whole difficulty of the position in which we now find ourselves. As regards distant-water fishing and the fact that we are not in negotiation alone, clearly that is a matter that has to be taken into account when we come to review fishing within the waters that are under our sovereignty and jurisdiction.

Will the right hon. Gentleman consider putting before the House of Commons before he goes to Europe the proposals that he intends to put before the Council of Ministers? Is he aware that the House would be interested to know whether his proposals will contain any reference to the closing—perhaps permanently—of some of the breeding grounds and the banning of methods of fishing that are simply plain greedy?

The points inherent in the right hon. Gentleman's question are extremely sound. They are points that we have made and will continue to make. Certainly I should wish to give the House as clear an indication of what I have in mind as it is possible to give. I shall do my best to ensure that the House is kept fully informed.

Sheepmeat Exports

4.

asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the access of sheepmeat from the countries of Great Britain to the EEC.

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

I recognise that the cessation of national import arrangements in the EEC could be beneficial to our sheepmeat trade, but in spite of these barriers United Kingdom exports to the EEC have increased by some 50 per cent. since accession.

Is the hon. Gentleman aware that feeling is running quite high among sheep farmers in Wales that the Minister and the Government are not putting up the sort of fight that they should be mounting for a regulation on sheepmeat in the EEC? At least, they are doing nothing comparable with what the Irish are doing. In future, will the hon. Gentleman put up such a fight?

I think the House will know that we have made our position very clear. There are four basic points. First, we want to safeguard producers and ensure that there is confidence in respect of production. Secondly, we want to ensure that there is a regime which provides reasonable prices for consumers. Thirdly, we want to ensure that British exports can continue and increase. Finally, we want to ensure that there can be the possibility of continued access for New Zealand.

Will the Government keep in mind the interests of all parts of the United Kingdom and not only those of Great Britain?

Yes. I think that that is apparent in the general guidelines I have just spelt out.

Are not the barriers that the French are putting up disobeying the de Cheysson judgment in the European Court? I may not be right about that, but if that is so will the Minister consider doing what everybody else seems to be doing in the Common Market—namely, taking the French to the European Court?

I think the hon. Gentleman will be aware that the French are already being taken to court by the Irish. Although we recognise some of the undesirable effects of some of the features of the French import arrangements, especially as we are the largest exporter of sheepmeat in the Community, we want to achieve a solution that will safeguard the interests of all countries.

Food Additives

5.

asked the Minister of Agriculture, Fisheries and Food what representations he has received from consumers about the removal of artificial colour from manufactured food; and if he will make a statement.

The Food Additives and Contaminants Committee is at present carrying out a full review of our regulations controlling the use of colouring matters in food. The committee has received representations from consumer organisations, and these are being taken into account along with those from other organisations. The committee is making good progress with this complex review, but it is too soon yet to say when the report will be published.

I thank my hon. Friend for that reply. In the meantime, in view of the growing public and medical concern about the vast amount of artificial colouring in food, all of which is expensive and unnecessary and none of which is really healthy, will he consider initiating discussions with food manufacturers with a view to trying to phase out artificial colouring, at least from baby food and food that is mainly consumed by children?

I agree with my hon. Friend's basic contention that this is a matter for particular concern as it affects food consumed by babies and children. The committee is giving special attention to this matter. I reassure my hon. Friend by pointing out that the committee is free at any time during the review to draw attention to any colourings that it would like removed forthwith.

Will the committee be considering the regulations that at present prevent his Department from publicising a good deal of the information made available by food manufacturers on food additives? Will he bear in mind that there are about 35,000 additives of different sorts and that the United States has banned the use of Brown FK, which is used in 99 per cent. of kippers and in many other sweets and food products in this country? Will he consider giving early consideration to this matter when the subject comes up for review when the EEC directive permitting its use ends next year?

I shall bring that point to the attention of the committee. I think the hon. Gentleman will agree that the committee has a high standing not only in the United Kingdom but internationally. I am sure that he will respect its findings and judgment.

Milk Marketing Board

asked the Minister of Agriculture, Fisheries and Food when he will next meet the Chairman of the Milk Marketing Board.

Is the right hon. Gentleman aware that when he meets Sir Richard Trehane or his successor he will be told in plain terms that the dairy farmers are totally dissatisfied with the price determination that he has recently announced? Will he explain to Sir Richard or his successor, and to the House, how there will be a mere 5 per cent. increase to the farmer between now and the end of the year when the dairy farmer has had to meet additional costs amounting to 20 per cent.? is he not aware that our dairy farmers could make a substantial saving to our balance of payments if they produced more milk?

I am certain that the guaranteed price for milk was the right guarantee to give in the circumstances up to the end of the transitional stage, As the hon. Gentleman must be aware, the question of what happens after 1st January is still to be played for. I hope that I shall be able to make an announcement in the near future. When dairy farmers consider the situation, they will have to take into account the final position—namely, what happens after 1st January. I should think that that is the factor that is concerning them most. I hope to end that uncertainty as soon as possible with something that I hope will be worth waiting for.

Will my right hon. Friend confirm that for over 40 years the Milk Marketing Board has provided good value for consumers and producers alike without subsidy or surplus to any degree? Will he explain why the board may have to face a court action in the European Community about its existence? If that is the case, does he understand that it explains why some of us think that the CAP is quite detestable? Will he make this clear to his follow Agriculture Ministers when he meets them in Brussels?

As for the Milk Marketing Boards, I very much share my hon. Friend's view—I think it is a view that the whole House shares—of the great value they have been to this country. I believe, incidentally, that they could be of great value also to other countries if they cared to adopt the system, as I told the House a few weeks ago. I cannot remember when it was. [An HON. MEMBER: "Last week."] No, I think it was before that. I have spoken to Mr. Gundelach and I have his assurance that he is investigating sympathetically the whole situation. I was encouraged to notice that in his speech at Cirencester last week he twice said and underlined that he had become convinced of the value of our Milk Marketing Boards.

What confidence has the right hon. Gentleman that he can overcome the stiff-necked opposition of the bureaucrats of Brussels to the Milk Marketing Board as a national institution cutting right across the whole purpose and objective of the EEC?

Confidence in stiff-necked bureaucrats, wherever they may be, is something that requires a lot more patience, perhaps, then some of my hon. Friends and some Opposition Members possess. But we shall certainly do our best to overcome the reactions of any stiff-necked bureaucrats who may stand in the way of something that is, quite frankly, a sensible and valuable arrangement.

Will the Minister appreciate that everyone on this Bench realises the difficult job that he has to do vis-à-vis Europe? But will he assure the House that the Milk Marketing Boards are sacrosanct and will not have their rights traded away as part of some larger deal or package?

As long as I am Minister, I have not the slightest intention of trading those rights away.

Is my right hon. Friend aware that not only the producer, important as his task is, is concerned with the Milk Marketing Board, but that many thousands of workers in the milk industry in this country are looking to the Milk Marketing Board for the continuance of their jobs? They are very concerned indeed and very worried. I speak with authority as an ex-trade union officer who used to organise those people. Will my right hon. Friend give assurances to those workers that the Milk Marketing Board will not be allowed to be disbanded by the despots in Brussels and that the security of these workers in the milk industry will continue?

I have on many occasions assaured the House, and I willingly reassure the House today, that it is my intention to fight to victory—I was going to say to the end—for the Milk Marketing Boards. I not only accept my hon. Friend's point about those who work in the industry. I also accept the absolutely vital necessity of preserving the liquid milk round.

Will the Minister be able to tell the present Chairman of the Milk Marketing Board that he has been telling his colleagues in Brussels that we need to extend milk marketing boards within Europe? Secondly, will he bear in mind that some of us feel that all the experience and wisdom of the present Chairman of the Milk Marketing Board should be used in the future, even if he retires from the board now?

I am grateful to the hon. Gentleman for the tribute he has paid to the Chairman of the Milk Marketing Board. I have tremendous admiration for him. He has done a very good job. As to extending the boards to other countries, particularly to countries inside the Common Market, I absolutely agree with the hon. Gentleman. It seems to me to be an experience that we have which could be of use to other countries.

Before the Minister meets the Chairman of the Milk Marketing Board, will he recall what my hon. Friend the Member for Macclesfield (Mr. Winterton) said earlier—that it is absolutely crucial to clear up the important matter of what the milk price will be after 1st January? Will he undertake that he will have made an announcement before he meets the Chairman of the MMB? Will he understand that otherwise it is nonsense to make the sort of statement he has been making—that the milk price which he announced recently only for the next seven months will mean expansion under the White Paper targets, which clearly it will not?

I do not agree with the hon. Gentleman on his deductions, but I absolutely agree with him on the urgency of making a statement about the months that will follow transition. There is only one reason why I cannot give the hon. Gentleman the undertaking for which he asks. That is, that I am quite likely to meet the Chairman of the Milk Marketing Board very shortly—it may be as I walk out of the House on this occasion. What I will undertake is to make a statement at the earliest opportunity.

Potato Plantings

7.

asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the level of plantings of potatoes for the coming season.

It is too early to make a firm forecast of the level of potato plantings, but the present indications are that the 1977 target area of 210,000 hectares will be achieved and may be exceeded.

Why was the Minister so slow in announcing this year's guaranteed price? Does he appreciate that many farmers had already planted before the announcement? Does he further appreciate that this price is considered to fall below the general level of production costs and that most farmers have completely lost confidence in him over this?

The hon. Member will be, or should be, aware of the complications of this review as we come to the end of transition. I remind him that, as I have just said, a great deal of confidence has already been shown by the plantings to date. We are satisfied that the target will be achieved. The hon. Gentleman will be aware also of the fact that the new price is 16 per cent. above last year's level and that this takes into account costs since then.

The Minister has said a lot today and in the debate last week about the future of the Milk Marketing Board. It is of great concern to potato farmers, because they also have a marketing board. What is the future of the Potato Marketing Board?

As the hon. Gentleman knows, this matter is under consideration, but we still want to make sure that in the new régime which may follow the end of transition it is recognised that the confidence of the producer to plant the required acreage and to achieve the target at a reasonable price will be fundamental.

Has my hon. Friend recognised that many potato producers are deeply concerned about the possibility that the Potato Marketing Board might be wound up as a result of our commitment to Europe? Will he make a clear statement, as his right hon. Friend has just done on the Milk Marketing Board, that there is no intention whatsoever of doing this? If he does, it will meet with very considerable approval on the part of those who produce potatoes in this country.

My hon. Friend will be aware of the fact that we have made our policy on boards of all sorts dealing with hops, milk and potato marketing very clear. We want to maintain the essential functions which a board should pursue. As to the matter of future confidence, we have said that a price guarantee will be fulfilled for the coming crop as a whole.

Food And Drink Manufacturing Industries

10.

asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the means of representation to the EEC Commission available to the food manufacturing industry.

Yes, Sir. The United Kingdom's Food and Drink Industries Council plays an active part in the Commission for the Food and Drink Manufacturing Industries, which is the trade body that the EEC Commission consults on matters of interest to these industries.

Yes, but does the Parliamentary Secretary realise that some of us think that he does not really understand the very grave difficulties of some of the food manufacturers, particularly concerning pigmeat, sausages and bacon? Will he see that far better representation is made on their behalf in Europe on these matters as we do not want to see the destruction of that very big and important industry?

I agree that it is a very big and important industry and contributes in a very major way to the United Kingdom balance of payments. With regard to pigmeat, the hon. Gentleman will recognise that the Government are doing everything they possibly can in this connection. We hope that the draft regulations may form a basis for solving that particular problem.

Is my hon. Friend aware that, unlike Opposition Members, we believe that he understands the problems of the food manufacturing industry, and we would like to see rather more discussion openly of the purely negative taxes which are consistently being applied by the EEC to all forms of food manufacturing, whether it be isoglucose or any other form of manufactured food? My hon. Friend is protecting the interests of the consumer. Will he explain to Opposition Members that it is part of their task to support him in this?

My hon. Friend is on a fair point. As for the proposed isoglucose levy—and I wish to point out that we were the only member State which pressed this—although the Government were successful in reducing the maximum levy to 50 per cent., we are still opposed in principle to any isoglucose levy.

Council Of Ministers

11.

asked the Minister of Agriculture, Fisheries and Food when he next expects to attend a meeting of the EEC Council of Agriculture Ministers.

On 20th and 21st June. The Community Agriculture Ministers are, however, to have an informal meeting in London next Tuesday.

Until such time as the CAP is completely scrapped, could not some of the smart Alecs who sold us down the river in the Common Market steer some of these German butter boats up the Forth or Clyde so that some of our own impoverished housewives can get their share of this butter mountain comprising 6,000 tons of cheap butter, which has been distributed by these ships to a total of 3 million passengers?

I think that the better way of handling the matter would be to see that the butter mountain is consumed inside the nations of the Community. One very good way of doing this might be to have a butter subsidy to enable the consumer to obtain the butter at a very much cheaper price. That method of dealing with the problem would appear to be a very much better way of handling the matter than to have 3 million men and women each grasping two kilograms of butter in their hot little hands.

Is the Minister aware that Commissioner Tugendhat said that there must be a more effective way of representing the taxpayer and the consumer in the settlement of agricultural prices? Will he convey to the next meeting of Agriculture Ministers that that view has widespread support in this country, even though a dwindling band of Euro fanatics would seek to deny it?

Something on the lines of that view has already been conveyed to my colleagues in the Common Market Council of Agriculture Ministers. On the subject of Commissioner Tugendhat, there are other items of which perhaps neither the hon. Gentleman nor I would wholeheartedly approve.

When my right hon. Friend meets the Council of Ministers, will he point out the grave apprehensions of Members on all sides of the House about EEC policy, intervention and directives? Does he not agree that those of us who pointed out these misgivings before we entered the EEC were in the minority but now comprise the overwhelming majority?

I think that by now the House must be well aware of my feelings about the common agricultural policy—feelings which, I am glad to say, I share with a growing number of hon. Members throughout the House.

Is the right hon. Gentleman aware that the aims of the CAP remain absolutely acceptable and respectable? [HON. MEMBERS: "Oh."] The problem is that those aims have been too widely forgotten. The right hon. Gentleman has missed many opportunities of putting matters right. [HON. MEMBERS: "No."] Without requiring advice from Hon. Members below the Gangway, on the Government side, I wish to ask the right hon. Gentleman how he reconciles his advocacy of a butter subsidy now with the Government's recent decision to abolish food subsidies.

One of the major purposes on the butter subsidy seeks to achieve one of the amendments of the CAP which the right hon. Gentleman asked me to undertake. I may have missed opportunities in the past. During the next seven years or so I intend not to miss any other opportunities.

As for the butter subsidy, one of its main purposes was to chip away at helping to destroy the butter mountain. There is no butter mountain in this country, nor is there a liquid milk lake or a structural surplus in this country, and the right hon. Gentleman should know that.

Will the Minister answer the question: how does he reconcile his advocacy of a continuing butter subsidy with the decision of his Cabinet colleagues to abolish food subsidies?

Perhaps I had better explain the matter twice. There is no food structural surplus in this country. The aim of the butter subsidy was to chip away at the butter mountain—[Interruption.] The hon. Member for Westmorland (Mr. Jopling) can conduct his own seminar standing up in due course, but he cannot do it sitting down. As for the butter mountain or any other structural surplus, I believe that the best way of getting rid of such surpluses is at the price end—and that is by seeing that it is consumed within the Community. I repeat that there are no structural surpluses of food in this country. Therefore, the food subsidy is not of that major immediate importance.

Sheepmeat Régime

12.

asked the Minister of Agriculture, Fisheries and Food what progress has been made towards the establishment of an interim sheepmeat régime within the EEC.

The Council of Agriculture Ministers has not reconsidered the proposals for an interim sheepmeat régime since October 1976, although technical discussions have continued.

Is the Minister aware that the news that so little activity is taking place is most disappointing? Will he appreciate the problems of those who produce fat lambs if they do not know whether the French market will be open? Will he give some assurance today which will give confidence for the future, and will he press the matter more urgently than he appears to be doing at present?

We recognise the urgency of the situation. In the beginning we were not very happy about the régime coming into effect at all, but I appreciate the hon. Member's point. He will be aware that production methods in marketing in the Community are diverse, which adds to the problem. In the meantime, the Government have given renewed confidence to the industry in respect of increases in the wool and fat sheep guarantees.

Is the Minister aware that as long as there is no sheepmeat régime there is an unfair discrimination in favour of the original Six and a strong levy on sheepmeat for new entrants? Is it not grossly unfair that in what is called a common agricultural policy there is not a common policy to all the Nine but preference given only to the Six?

The hon. Gentleman will be aware of our policy aimed at liberalising trade within the Community. We are the largest importer, exporter and consumer of mutton and lamb, and we want to ensure that there is freedom for our people to export to the Community if they wish to do so. I would also point out that home consumption is a major factor at the moment.

Food Production

13.

asked the Minister of Agriculture, Fisheries and Food, in the light of the outcome of the recent EEC negotiations, if he is satisfied with progress in implementing the policy set out in the White Paper "Food from Our Own Resources".

The outcome of the CAP price negotiations is a good one for our producers, who have every reason to look forward with confidence. With reasonable weather, I expect to see a major recovery in production this year and good progress in line with the aims in "Food from Our Own Resources".

Is the Minister aware that his reply will be received with surprise by the farming industry? In the light of the recent EEC negotiations, does he not realise that what is required in this country is a move aimed at bringing the green pound more into line with the value of the pound sterling? Does he not agree that if the green pound is not brought more into line with the value of the pound sterling there will not be sufficient money available for investment in the British farming industry?

I cannot accept the hon. Gentleman's observations. If we take into account the increase in the common price and the small devaluation of the green pound, and above all the two transitional steps, it is clear that the support prices effected by the CAP settlement were raised adequately to meet the needs of producers in the forthcoming year.

Does my hon. Friend agree that the basic contradiction we face in seeking to expand the dairy industry is that the end price creates surpluses in Europe and at the same time inhibits production here? Does not the right way forward lie in reducing levies on imported cereals in order to reduce costs to our producers?

The Government are in favour of more liberal policies on cereals, but there would have to be some protection on the lines that existed before we joined the Community.

How can the Minister make such complacent expressions of hope for future agricultural expansion when we have seen in the Ministry's own figures a tremendous decline in the numbers of young animals coming into breeding herds in the beef, dairy and pig sectors?

The hon. Member is far too pessimistic. He and others are too heavily influenced by the severe drought last year. If we have reasonable weather in the forthcoming season, the situation should improve.

Which sectors are up to the target set in the White Paper "Food from Our Own Resources" and which are not? Does the Minister accept that falling food production figures are directly related to the price package that he negotiated in the EEC?

Since the hon. Member comes from Angus, he may not be aware sufficiently of the enormous impact of last year's drought. Every agricultural commodity was adversely affected by the drought. The major factor in increased agricultural costs was the drought.

Pigs (Price Calculation)

14.

asked the Minister of Agriculture, Fisheries and Food what representations he has received from the Confederation des Organisations Professionels Agricoles requesting a recalculation of the monetary compensatory amounts in respect of pigs.

The praesidium of the confederation has made no representations to the Council during the period of the United Kingdom Presidency requesting such a recalculation. In its reactions to the Commission's proposals on the fixing of prices for certain agricultural products for the marketing year 1977–78, however, COPA notes that the United Kingdom delegation had indicated that it could not accept any increase in the basic price for pigmeat in the absence of a satisfactory solution on the method of calculation of the monetary compensatory amounts for pigmeat.

Is it not depressing that COPA, notwithstanding that until quite recently it had the distinction of having Sir Henry Plumb as its chairman, has not shown itself to be more alert to the problems of the British pig farmer? Does not the situation highlight the fact that where we have national difficulties they should be susceptible to national solutions?

I find myself in a great measure of agreement on this point, particularly in the pigmeat sector and also in the dairy sector.

Does my right hon. Friend accept that when Commissioner Gundelach came to Cirencester recently he gave little encouragement to Gloucestershire farmers that the Commission was prepared to act on the difficulties experienced by pig farmers in this country? Is he aware that hon. Members on this side of the House who are conversant with the problems of farmers would give him all the support he needed to take further unilateral action if the negotiations, which are still six weeks away, were not successful in helping the pig industry?

I am grateful for the support I have received for the measures necessary to help our own pig producers. The recalculation of the pigmeat mcas will come up as a proposal and will be on the agenda at the meeting on 20th and 21st June.

The fact that the Commission is making a proposal at last is welcome, but will the Minister explain, since he agrees with my hon. Friend the Member for Oswestry (Mr. Biffen), what he intends to do about it?

As the right hon. Member must be aware, I have introduced unilateral aid for pig producers which is being challenged in the courts. An interim injunction is due to be heard either tomorrow or in the next few days. Clearly, in the first place we must await the result of the court hearing. Secondly, the Government have given some consideration to what might happen in any event.

The whole House accepts that the Minister and his colleagues have worked very hard for the pig producers. Does not the right hon. Gentleman agree, however, that unless there is a chance of the unilateral action being accepted this would be a good and sensible time for him to make an honest and apposite statement and to level with the pig farmers, who are desperately worried about their financial future?

I am aware of what the hon. Member has said. When there is something absolutely definite to say, I shall make as clear a statement as I can in the House to help pig farmers to plan their future.

Will my right hon. Friend resist the move coming from the Commission automatically to readjust mcas irrespective of the subject being discussed? Does he not agree that if mcas can be triggered off by figures that bear no relation to the individual product we shall be in very great trouble?

The proposals to which my hon. Friend refers are not those which will come before the Council in June. It is expected that they will come up sometime in October. One of the interesting features about the proposals for the meeting on 20th and 21st June is that they suggest a different method of calculating green currencies based on all the currencies of the Nine. That is something which my hon. Friend the Member for Southampton, Test (Mr. Gould) has advocated on more than one occasion. It will be interesting to see what view the Council takes on that.

Prime Minister (Engagements)

Q1.

asked the Prime Minister if he will list his official engagements for 19th May.

Before I reply, I remind the House that in accordance with the recommendations of the Procedure Committee I am not grouping indirect Questions in the first 10, of which today there are seven. But this is, of course, a transitional policy.

This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others.

Before his Cabinet meeting this morning, was my right hon. Friend able to act on the commitment that he gave, with other Heads of Government, on 8th May to take action to eliminate improper practices in trade and international commerce? Has he been able to examine the allegation about the British Leyland affair which appears in today's papers? Will he authorise an inquiry and assure the House of his intention to supervise any action that is needed in that matter?

I am grateful to you, Mr. Speaker. I did not want to anticipate anything that you might say. I understand that there is a Private Notice Question on this matter.

As for international action. I did not refer to Leyland or to anybody else in this particular connection. That is a matter for my right hon. Friend the Secretary of State, if he is called to make a statement later.

I remind the House of the statement made by the Chief Secretary to the Treasury when it was made clear that
"The Government will accordingly be pressing in appropriate international organisations for measures to be taken wherever possible to deal with this evil."—[Official Report, 18th May May 1976; Vol. 911, c. 1214.]
That statement of Government policy—and there is much more to it—preceded the Downing Street Summit. I therefore pressed at the Summit with the United States and other countries, for references of this sort to be incorporated. It is a matter which properly causes grave concern so far as the general policy of the Government is concerned. We do not tolerate such practices and they must be rooted out, although a heavy responsibility rests upon the host countries themselves.

As this matter will be dealt with later, may I raise with the Prime Minister a question which is causing concern to hon. Members on all sides of the House? As it is nearing the time when the arrangements for the Commonwealth Prime Ministers' Conference must be finalised, can the Prime Minister say whether he has yet reached a decision about whether President Amin will attend that conference? In asking him that question, may I make it quite clear that my right hon. and hon. Friends and, I believe, many other hon. Members—although I cannot speak for them—feel that it would be utterly repugnant if President Amin were to attend the conference? We feel that that is the view of the British people as a whole.

I am obliged for the way in which the right hon. Lady framed her question. As she knows, this is a matter which is of very great concern to the Government. As I indicated some weeks ago, we have been giving careful and continuing consideration to this matter. Indeed, in conjunction with certain Ministers I gave consideration to it again this morning. As the House knows, Her Majesty's Government broke off diplomatic relations with President Amin a year ago. The latest evidence from the International Commission of Jurists confirms us in our view that we were right to have no relations with that régime, although we have nothing but good will for the people of Uganda.

As regards making an announcement on Her Majesty's Government's position, I should be grateful if the right hon. Lady would not press me to do that. We should like to choose any moment when we have to make a statement that we think would be in accord with the best interests of the Commonwealth as a whole—although, having said that, I want to make it clear that any decision that is taken will not be one in which I wish to involve other Commonwealth members. It will be for Her Majesty's Government to reach a conclusion on this matter.

During my right hon. Friend's discussions with his colleagues today, will he do his best to expedite the introduction of a Bill for direct elections to the European Parliament, which was promised us in the Queen's Speech?

I fear that I have no further statement to make on that matter at this particular moment. As soon as there is something that can be said, an announcement will, of course, be made.

Order. The hon. Gentleman has made a bit of a short cut—although it might save the time of the House.

Q2.

asked the Prime Minister if he will list his official engagements for 19th May.

The hon. Gentleman would have been right last week, but not this week, because under the new arrangements I now have to say to him "I refer the hon. Member to the reply that I gave earlier today to my hon. Friend the Member for Peterborough (Mr. Ward)."

Are the Government preparing to increase defence expenditure by 3 per cent. in real terms?

No doubt the hon. Gentleman has seen the communiqué that was issued about the intentions of member Governments of the Alliance from 1979 to 1984. No doubt he will also have noted the qualifications that are related to that proposal. It will be the qualifications that will have to be taken into account as well as the commitment when the 1979 budget is considered.

Will my right hon. Friend confirm this afternoon that it is still the Government's intention to legislate on industrial democracy in the next Session of Parliament?

The discussions now taking place with the CBI and the TUC have not reached the advanced stage that I had hoped on this matter. It is the Government's desire that we should be able to legislate on this matter, but we need to clear the ground first, and so far we have not been able to do so.

Has the right hon. Gentleman had time today to consider the extraordinary reports that have suggested that non-NUJ journalists may in future be barred from Press conferences at the Labour Party conference or at Labour Party headquarters? Although these are not matters for which the right hon. Gentleman is answerable to the House, will he make it clear that there will never be any such power at a Press conference that he gives as Prime Minister?

No, Sir, I have not seen the reports, nor had I heard of them. I saw a report about the TUC; I did not see any other report. If that was what the right hon. Gentleman was referring to, yes, I saw that; but I have not seen any other reports. If it is the TUC, I would agree with the right hon. Member for Lowestoft (Mr. Prior) that in the first instance it is probably better that the TUC itself should sort this out. I would rather agree with him—although he did not actually say this, but I guess that this is the implication of what he had in mind—that we shall not clear these things by making ex cathedra statements at the Dispatch Box.

Q4.

asked the Prime Minister if he will list his official engagements for 19th May.

I refer the hon. Member to the reply which I gave earlier today to my hon. Friend the Member for Peterborough (Mr. Ward).

Has the Prime Minister read Press reports of his speech at Great Yarmouth yesterday? Will he confirm that it is still the Government's intention to seek a single-figure percentage rate of increase in wages in phase 3?

I did read the reports. I regret that they were not full enough to indicate to the country at large that I received a standing ovation from the trade union delegates at the end of my speech. However, on the substance of the speech, while the Chancellor of the Exchequer and others are in discussions with the TUC I should prefer not to go into further details about the exact arrangements that the Government would like to see.

Will the Prime Minister confirm that a vital element in the success of an incomes policy is firm price control? Will he take every opportunity to expose the double standards of the official Opposition and explain to people that the right hon. Lady the Leader of the Opposition and many of her acolytes on the Opposition Front Bench are against price controls yet they leap to the Dispatch Box, with their eyes blazing with insincerity—[Interruption.]—to complain about price increases?

There is no doubt that the best way to restrain increased prices and increasing prices is to keep down the rate of inflation. [Interruption.] That is what the Government's policy is based on. We attack inflation as the source of all these evils. As regards prices, I have no reason to depart from the estimate that I have often given at the Dispatch Box about the future course of prices in the next eight or nine months.

Will the Prime Minister find time today to reprove the three Ministers who took time off from their duties, a most unfitting action, to go and join a picket line?

No, Sir. I should have thought that the hon. Gentleman would go and do the same thing. With his past history as a member of Her Majesty's Forces and a very gallant officer, I would expect him to stand for decency and fair play in relations between men and management.

Has the Prime Minister had a chance today to read the reports this morning which have set out the conditions under which the Liberal Party now wishes to encourage the trade unions to conclude an agreement with the Government on a phase 3 wage policy? Will he tell the House whether this agreement to which the Liberal Party now refers was in fact included in the original discussions that it had with the Government when it concluded the agreement of support earlier this year? If that was not the case and if such discussions were never included at that time, is it not something to be deplored that the Liberal Party now wishes to include this further element as a condition on which it is prepared to support the Government in the future?

I regret that I have not had time to study these matters. However, it is open to the Liberal Party, and, indeed, any other party in the House, to raise many matters with the Government as to the best way in which they think that phase 3, or anything else, can be conducted. I shall be happy to meet them and discuss matters with them.

Reverting to the Prime Minister's answer to an earlier question, are we to take it that the Government's view on how to reduce inflation is to reduce inflation?

Yes, Sir. Broadly, I think that that is right. I hope that there is no disposition in any part of the House to challenge my statement that if inflation comes down prices will not go up so fast.

Will the Prime Minister take time among his official engagements to shed a tear over the demise of the devolution Bill for Scotland and Wales—[An HON. MEMBER: "Crocodile tears."]—be they crocodile tears or not—and will he tell us when he intends to reintroduce a measure for devolution for Scotland?

Discussions have been conducted by my right hon. Friend the Leader of the House with the other parties, including the Scottish National Party. Those discussions, I hope, are now coming to an end.

Never, Mr. Speaker. It would not even cross my mind.

However, as I think the House and all the parties know, my right hon. Friend offered discussions to all parties in the House. If any party chose not to take up that offer, that is not my right hon. Friend's responsibility. But there will be a review of the conclusions of these negotiations in due course.

With regard to inflation, does the Prime Minister agree that, although most trade union leaders have been moderate, the demands by one or two for 30 per cent. wage increases are as irresponsible as the daily demands by Conservative Members and that it would be as damaging and dangerous to concede those demands as it would be to concede the demands made every day by Conservatives?

I made the position clear at the TSSA conference which I visited yesterday that wage claims or settlements in the region of 30 per cent. by those who have the industrial muscle would certainly make it almost impossible, if not impossible, for us to reach the kind of inflation levels that we seek for this country next year. It is right to point out to the House that the progress made with regard to the decline in interest rates is probably of even greater significance than some increases in pay in relation to real standards of life for the people.

British Leyland

(by Private Notice) asked the Secretary of State for Industry if he will make a statement on the approval by the Chairman of the National Enterprise Board of payments by British Leyland to individuals contrary to the stated policy of Her Majesty's Government.

The Government are totally opposed to any form of bribery or corruption. The Government will not tolerate any cover-up of these matters. The House will have seen that the National Enterprise Board has today stated that no such letter as is alleged by the Daily Mail to have been sent by Lord Ryder exists. I myself have not discussed any of the matters alleged in this Press report at any time with Lord Ryder or corresponded with him about them.

I have spoken to Lord Ryder today and asked him to return to London immediately to take charge of the inquiries which the National Enterprise Board and British Leyland are setting in hand. I have asked the NEB to report to me urgently the outcome of these inquiries and I shall then consider what further statement I can make to the House.

Is the Secretary of State asserting that all the allegations published this morning in the Daily Mail are incorrect? Recognising the different practices in different countries and the painful dilemma presented to trading organisations in some countries abroad, is the Secretary of State totally contradicting the allegation, as described in the Daily Mail this morning, that he has approved any such practice by the NEB? Will the Secretary of State answer?

What I said is that the NEB has put out a statement today and has told me that no such letter exists. That is where I want to leave it. I have asked Lord Ryder to come back and take charge of this inquiry and in due course I want to report further to the House.

The right hon. Gentleman has asked about my own personal position and whether I "nodded it through", as it says in the Daily Mail today. The answer is that I have not nodded anything through. I reject and repudiate such practices. I could never in any conceivable circumstances give them my approval or even discuss them or consider them except to repudiate them. I have never discussed them with Lord Ryder or anyone else or corresponded with him or anyone else about them.

Is my right hon. Friend aware that if this letter is proved to be a forgery—and we have no reason to think otherwise—this whole knocking campaign against British Leyland will be seen to be not just a campaign on the part of the Daily Mail but yet another of a whole series of deliberate slanders against the Government and their Ministers?

What I am saying—and what I am going to stand by today, intending to go no further—is that the NEB has put out a statement that no such letter exists. I have asked for inquiries to be made. I have asked Lord Ryder to take charge of them, and in due course I shall come to the House again and report.

Would the Secretary of State not agree that it might be fairer to him, to the NEB and to British Leyland if there were to be a proper judicial court of inquiry into this matter so that people could see the facts for themselves? Should not this be done in a proper open way rather than through an internal departmental inquiry?

What we have to do in the first instance is let the inquiries within British Leyland and the NEB proceed. In due course I shall consider the matter further and report to the House.

While one can understand the Secretary of State endorsing Lord Ryder's decision to return and take responsibility for these matters, as he has to do under the NEB guidelines, can the Secretary of State assure us that Lord Ryder was returning of his own volition and was not instructed to do so by the Secretary of State?

I discussed the matter with Lord Ryder over the telephone a short time before I came into the House. I informed him as a matter of courtesy that, as is natural, a Private Notice Question had been put down. I said that there was a great deal of speculation about the matter and that it would be in his best interests if he were to come back and take charge of the inquiries. It was not a question of asking him to come back. I think he was all set to come back in any case.

Two major statements are to follow as well as the Business Question. There will obviously be a further report to the House on this matter. I therefore propose to call just one more hon. Member from either side.

Despite the obvious unsuitability, if the report is correct, of Lord Ryder continuing as Chairman of the NEB, can the Secretary of State give the House an assurance that this episode will in no way prejudice the Government's consideration of future allocations of public funds for the new Mini?

Without making any comment on the first part of the question, the future funding of the long-term plans of British Leyland does not arise out of this Private Notice Question. I hope to report to the House on the matter in the near future.

Does my right hon. Friend agree that this is one further example of the various organs of the Press in this country trying to take advantage of all sorts of claims, which are usually proved absolutely untrue, in order to attack public enterprise? Does not my right hon. Friend also agree that this alleged type of practice is very much the type of private enterprise commercial practice? If we are to look into this matter, should we not conduct a full inquiry into the whole practice of the multinationals with regard to this type of thing?

On the first part of my hon. Friend's question, I do not want to go any further than I have gone at present, on the basis that I have asked for inquiries to be made and that in due course I shall want to look at the evidence and report to the House. My hon. Friend asked about international practices. The Government made their views firmly known on 18th May last year in the statement made to the House by my right hon. Friend the Chief Secretary.

Business Of The House

May I ask the Leader of the House whether he will state the business for next week?

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

Yes, Sir. The business for next week will be as follows:

MONDAY 23RD MAY—Debate on the Report of the Annan Committee on The Future of Broadcasting, Command No. 6753.

Motion on the code of practice on disclosure of information to trade unions for collective bargaining purposes.

TUESDAY 24TH MAY—Supply [20th Allotted Day]: A debate on job opportunities for young people.

Motion relating to statements of changes in immigration rules.

WEDNESDAY 25TH MAY—Second Reading of the Patents Bill [Lords].

At 7 o'clock, the Chairman of Ways and Means has announced opposed Private Business for consideration.

THURSDAY 26TH MAY—A debate on airport policy.

Proceedings on the Statute Law (Repeals) Bill [Lords], which is a consolidation measure.

FRIDAY 27TH MAY—Consideration of Private Members' motions.

Afterwards, the House will rise for the Spring Holiday until Monday 13th June.

Will the right hon. Gentleman confirm that the Bill on direct elections will be published before the House rises for the Whitsun Recess?

I am afraid that I cannot give the right hon. Lady that confirmation. [HON. MEMBERS: "Oh."] I can add nothing to what was said on the subject just now by my right hon. Friend the Prime Minister.

Does the right hon. Gentleman expect that we shall ever see Hansard again, let alone next week?

I fully acknowledge the serious inconvenience for the House of this matter, but I am very glad that yesterday, thanks to the efforts made to deal with the matter and thanks to my hon. Friend the Minister of State, Civil Service Department, a settlement was reached and that the services will be speedily restored to the House.

If the Bill is not to be published, will the right hon. Gentleman make a statement saying why, because we understood that the Government were using their best endeavours on this matter?

I shall pass the right hon. Lady's request on to my right hon. Friend the Prime Minister.

When may we have a statement about progress towards the independence of Zimbabwe?

There may have to be further statements on that subject in ensuing weeks, but I have no proposal for a statement next week. Of course, my right hon. Friend the Foreign Secretary is in touch with the matter all the time.

Does not the Leader of the House agree that it is desirable that when there is a Bill to change the constitution—which is what the devolution Bill does—it should be published before a recess so that all hon. Members can discuss the Bill with their constituents before returning to Westminster to debate it?

I understand the point of the hon. Gentleman's request, but I have nothing to add to my reply to the Leader of the Opposition.

Is my right hon. Friend aware that on Tuesday evening the House was allocated two hours to consider several important EEC energy documents? Is he aware that of that time more than 70 minutes were occupied by speeches from four Front Benchers, and that a large number of Back Bench Members were unable to speak? Will my right hon. Friend look at this whole question of time allocation, and, given the interest in the subject, may we have a debate on energy policy fairly soon?

I indicated on a previous occasion that I though that there should be a further debate on energy at a fairly early stage, but I cannot promise time for it in the near future. As for the time taken up by Front-Bench speakers, I understand that this is an inconvenience for hon. Members, but there is a difficulty generally about the discussion of EEC matters. We are doing our best to meet the requirements of the House on the matter.

Given the incredibly late publication of the direct elections Bill, will the Leader of the House say what progress he expects to make with the Bill, whenever it is published, before the Summer Recess?

I can add nothing to what has been said by my right hon. Friend the Prime Minister. I acknowledge the interest of the House in this question. The earlier the Bill is published, the more likely it is to get through, but I can go no further than what I have said.

Will my right hon. Friend give the House an early opportunity to debate the future of the port sugar refining industry in view of the concern being expressed by sugar workers? Is he aware of the current dispute on Merseyside arising out of the present situation? Is it not time that the House discussed this important question?

I acknowledge the importance of the matter, but I cannot promise a debate next week. I know that my hon. Friend and others have been making representations to the Minister concerned about it.

Will the Leader of the House say whether it is administrative and printing difficulties or political difficulties within the Cabinet which are impeding the direct elections Bill?

It would be extraordinary for me to refer to any political difficulties in the Cabinet and I am sure that the hon. Gentleman would not expect me to do that in anything more than a general sense. It is not a question of printing difficulties either. There are problems to be overcome, and for that reason I have nothing to add to the original answer I gave to the Leader of the Opposition.

The debate on job opportunities for young people next week is to be welcomed. Will my right hon. Friend say whether, in view of the important submissions being made by the Manpower Services Commission, the Government will set out in the debate their intentions for implementing these proposals?

I cannot say whether there will be a full declaration of the Government's policy on this matter. However, my right hon. Friend the Secretary of State for Employment has taken a special continuing interest in the matter and has been eager that the report should be brought forward and debated as soon as possible. He will give his views in the debate. The report is most important and obviously commands great national interest.

May we have next week a ministerial statement on a matter reported in the Press yesterday, namely, the Government's decision to pay considerable sums of money to advertise in the Communist Morning Star?

I do not know whether any question of a public statement on this matter arises. The Government are applying the same rules as they have always applied to the question of advertising in different journals.

Will my right hon. Friend indicate which of next week's items of business he intends to get rid of in order that we may discuss the recent report by the Select Committee on Nationalised Industries on the rail industry?

I acknowledge the ingenuity with which my hon. Friend has put his question. I have considered how we might be able to arrange a debate to suit his purpose, although I cannot promise it for next week. However, given his ingenuity I should not be surprised if he was able to make a speech on the subject in debates on a number of items next week.

In view of the welcome and evident haste with which Lord Ryder is attending to the allegations against the commercial practices of British Leyland, will the right hon. Gentleman say whether he hopes that it will be possible to have a further Government statement on this matter next week?

I do not know whether it would be desirable or necessary to have such a statement. Obviously that would depend upon what has been said by my right hon. Friend the Secretary of State for Industry today and on the discussions which follow. However, if there is a need for such a statement the time will be made available.

Has my right hon. Friend seen Early-Day Motion No. 328, which stands in my name and which is also sponsored by two Conservative Members, one Liberal and one Welsh nationalist concerning the disastrous Grunwick strike? Is he aware that we had a debate on this matter in the House before Christmas, urging observance of the rule of law by the management, and that my right hon. Friends from the Front Bench joined me on the picket line at the factory at 8.30 this morning in an endeavour to get the management to accept the rule of law? Can the House now discuss it from that point of view?

[That this House, believing that conciliation is better than confrontation, urges the management of Grunwick Processing Laboratories Ltd. to accept the rule of law as embodied in the Employment Protection Act 1975 and to implement without further delay Report No. 19 of the Advisory Conciliation and Arbitration Service made under Section 12 of that Act by getting round the table with the trade union concerned, which has already accepted the principle of arbitration.]

I note my hon. Friend's request for a special debate on the matter. He has raised it on a number of occasions, including in the Easter Adjournment debate. I hope that even at this late stage the employers will take account of what has been said in the House and will respect the rule of law in this matter.

Order. I propose to take two more questions from either side. There is a tremendous interest in the major debate today as well as in the two statements which are to come.

Will the Leader of the House say whether there will be an opportunity next week to debate the Government's decision on the next tranche of Government funds to be released to British Leyland?

There will be no such opportunity next week, but obviously there are frequent opportunities to discuss such matters in the House.

May I refer to the question by the right hon. Member for Down, South (Mr. Powell)? Can my right hon. Friend indicate that in future efforts will be made to avoid such stoppages and that, for example, we shall not be faced with the prospect of losing rooms down below through some sort of unofficial organisation taking over? Will he indicate what is happening about that?

My predecessor in office indicated a year or so ago what were the emergency operations that could be used in the House if we were faced with a breakdown in the normal system for providing Hansard and other facilities. The House at that time accepted the necessity for those emergency operations, and what has happened this week has shown that they were required.

None the less, I fully accept what my hon. Friend has said—both in the representations that he has made in this House and in others that he has made to me—that there are many aspects of this matter which require further consideration. Certainly we are prepared to do that. But I believe that the whole House can rejoice, as I certainly rejoice, that the immediate dispute has been brought to an end and that work is being resumed. I am sure that all of us accept that. But I quite agree that there are further matters to be considered to try to ensure that we avoid these difficulties in the future.

In view of the Lord President's personal commitment to uphold the freedom of the Press, may we expect next week a statement about the decision of the Trades Union Congress Press office to discontinue giving information to the BBC industrial correspondent, Mr. John Hosken, following his resignation from the National Union of Journalists?

That is not a matter of Government responsibility. In view of the first part of the hon. Gentleman's question to me personally, as one who was responsible for the passage through the House of Commons of the legislation affecting these matters I must tell him that we did not introduce legislation which favoured or disfavoured the closed shop in journalism or anywhere else. What we did in this matter was what we had promised—to restore legislation affecting this question as it had existed prior to 1971.

My right hon. Friend will recall that at the time of the BP bribery payments in Italy I was, unfortunately, unable—and I had no support from the Conservative Party—to convince him of the need for time to debate this issue. Now that such allegations are raised again in relation to another matter, could my right hon. Friend assure the House that when inquiries have been completed the House will be given an opportunity to debate the central issues involved?

My hon. Friend has perfectly properly raised this matter on a previous occasion. It was from this side of the House that pressure came for a debate on that matter and my hon. Friend did not at that time have any assistance from hon. Members opposite. My right hon. Friend the Secretary of State for Industry has indicated the Government's absolute opposition to any form of corruption.

Police (Pay)

With permission, Mr. Speaker, I wish to make a statement on police pay.

When pay policy came into force in July 1975, the general rule was that all subsequent settlements were subject to the limits laid down, but police pay was increased by an average 30 per cent. from 1st September 1975, under an agreement reached in June 1975, and specially protected by the transitional arrangements provided for in the first round of the pay policy. That agreement increased the weekly pay of the federated ranks by amounts ranging upwards from £10 a week; and under the White Paper the agreement had to be regarded as a first round settlement, displacing the £6 a week which was all that would have otherwise been payable.

At a meeting of the Police Council last July, the official side offered increases for the federated ranks to come into effect from 1st September 1976 in strict accordance with the guidelines for the second round of the pay policy: increases of 5 per cent., with a minimum of £2·50 and a maximum of £4 a week. The staff side rejected the offer. The Police Federation asked the official side to join in making representations to the Government for the payment of increases of £6 a week, on the ground that the previous year's agreement had been a commitment from before the introduction of the first round of the policy. The official side did not feel able to associate itself with representations for what it regarded as a breach of the pay policy. The Police Federations for England and Wales and for Northern Ireland, though not the Scottish Federation, thereupon withdrew from the Police Council.

Informal discussions have since continued with the Federations both on the question of pay and on the question of negotiating machinery, and my right hon. Friend the Prime Minister, with my right hon. Friends the Secretaries of State for Scotland and Northern Ireland and me, had a meeting with representatives of the Federations on 7th March last.

On the question of pay, the Government, with the agreement of the official side of the Police Council, have not departed from the principle that there can be no breach of the second round of the pay policy, but we have discussed possible commitments for future improvements in fringe benefits, subject to pay policy. An offer which, as my hon. Friend the Under-Secretary of State told the House on Monday, represented the limit to which we could go was put to the Federations on 25th April. The Federation for England and Wales informed me on 9th May that it regarded the offer as wholly inadequate, adhering to its position that the federated ranks had been denied an increase under the first round of the policy.

Thus discussions with the Federation have regrettably reached an impasse.

In the second round there was no room for flexibility for any organisation and thus acceptance of the offer made on 25th April would leave outstanding many of the problems to which the Federation's representatives have drawn attention in recent discussions. They argue that police pay has fallen significantly behind the relationship to outside pay levels recommended by the Royal Commission in 1960, and they consider that we should be taking account of the way in which the pressures on the police have increased since that time—for example, as a result of the increase in crime and especially in crimes of violence.

I cannot commit myself at this stage to what it will or will not be possible to do for the police in the next round of pay policy, the guidelines for which have still to be decided, but my hope is that the guidelines will offer scope for greater flexibility, and I am anxious that we should not be prevented from considering what may be possible in future by an indefinite continuation of the present impasse.

I am also very conscious of the problems of members of the police service whose pay has not been increased since September 1975. I am reluctant to contemplate their having to wait for a further period of weeks or even months before receiving increases due to them since 1st September 1976.

I therefore propose as soon as possible to make and lay regulations under Section 33 of the Police Act 1964 to increase the pay of the federated ranks of the police service in England and Wales by 5 per cent., with a maximum of £4 a week, with effect from 1st September 1976. My right hon. Friends the Secretaries of State for Scotland and Northern Ireland propose to make similar regulations for the police service in Scotland and Northern Ireland. All the bodies represented on Committee C of the Police Council will be furnished with drafts of these regulations before they are made.

I also propose to proceed with the establishment of an inquiry to review the negotiating machinery for police pay. I have already circulated to all the bodies concerned, including the Federations, draft terms of reference for this inquiry, and I hope that we may be able to make very early progress with this. The Federations have also proposed that there should be a review in the rather longer term of their rôle, functions and constitution. I have told them that I am in principle prepared to set up such a review.

The steps I have announced this afternoon are in the best interests of the police service and of the country and will make it possible to bring to an end the present unhappy and unsatisfactory state of relations between the Police Federations and the bodies represented on the official side of the Police Council, so that we can all turn our attention to the more constructive question of what to do for the future in the next round which for the police begins in September 1977.

Does not the right hon. Gentleman agree that by this drastic action in imposing a settlement he is clearly risking straining police discipline and loyalty far further than this Government would dare to do with any other group? Is it not particularly sad that the order which he proposes to lay is confined to the bare bones of a stage 2 settlement and offers none of the various fringe benefits which were discussed within the pay policy during negotiations and for which my hon. Friends and I have consistently pressed?

Would he confirm that the increase will be backdated to 1st September 1976, which would put some extra money now into the pockets of hard-pressed police officers and their families?

In addition to the various constructive proposals and inquiries which he has offered for the future, would not the Home Secretary agree that it is essential, in the interests of the protection of our citizens in future, that we now make certain that in future pay negotiations we properly reward our police officers for the outstanding service they perform for our nation?

I said that what I was doing was with effect from 1st September 1976. The money will be backdated to that date.

Regarding what I am doing about police discipline, the difficulty is that last July the negotiating machinery broke up. This matter concerns not only the Government, but the local authorities, which provide about 30 per cent. of the money. The negotiations would have been better if all concerned had been involved.

Fringe benefits within the pay policy—an increase in annual leave allowances, the removal of certain restrictions on pensionable age payments and the introduction of and scope for an on-call allowance—were under discussion, but were turned down. All that I am able to do is to operate a strict phase 2 policy.

As I said in my statement, all the bodies represented on Committee C will be furnished with drafts of the regulations before they are laid. That was the way in which the 1964 Act was conceived by the Home Secretary of the day. I was in Opposition at the time and recall it well. I am carrying out the law as it was passed in the House of Commons. The method of pay negotiations for the police is completely different from the pay negotiation methods for private industry and for other grades in industry

Will my right hon. Friend tell us why this could not have been done before? Does he accept that many police representatives whom I have met will appreciate what has been done today and will expect further advances in future?

Will he give special consideration to fringe benefits, because they are important from the police point of view?

There was complaint that I had done it today. If I had done it within the last six or seven months, I imagine that the outcry would have been much greater. There has been no negotiation. The pay negotiating machinery has broken down. I do not accept the situation, but I understand why it has arisen. Bearing in mind that phase 3 for the police starts on 1st September this year, which is a different date from that for other bodies, if we are not careful, when everybody else is negotiating phase 3 the police will miss out again. I wanted to get into a position to be able to talk about their real problems. However, in phases 1 and 2 there could be no exception. We had to stick to the policy. But that is not the only reason for the problems that we have had.

I understand full well the Home Secretary's difficulties. I have a great deal of affection for him personally, but I believe that he is playing with fire.

Does the right hon. Gentleman accept that the Joint Central Committee of the Police Federation is a democratically elected body, more representative of the police service than this Government are of the nation? On what authority does he feel entitled to stuff down the throat of this elected body a settlement which, on behalf of the whole service, it has already rejected as being totally inadequate to the needs of the service?

Is the Home Secretary aware that on the last occasion that any Government attempted to do that to an elected group of men, it happened to be the police? My predecessor as adviser to the Police Federation—the present Prime Minister—said that it was wholly unacceptable.

What further proposals has the right hon. Gentleman regarding phase 3? How has it been possible to increase the pay of firemen in Northern Ireland and of workers at Windscale in Cumberland during phase 2? Was it simply because they have the power to strike and the police service has not?

On the last point about Northern Ireland, that was one particular group of firemen. I was at the Fire Brigades Union Conference yesterday. I did not find the rest of the firemen asking for extra money on the ground that firemen in Northern Ireland had been given some. That increase was specifically because of the other problems which arise for firemen in Northern Ireland. Something had to be done about that. If I had been Secretary of State for Northern Ireland, I would have done it. The fire brigates did not say that all firemen in the United Kingdom ought to be treated in the same way.

At Windscale, only a small number of people was involved in terms of normal negotiation. I have consulted my right hon. Friend the Secretary of State for Employment and I understand that it did not break pay policy. We had to stick to phase 2.

If the Opposition believe in a free-for-all in which there are no arrangements for phases or anything of that kind they will find that policemen and the public sector in general come at the bottom of the pile in those arrangements. There have been questions as to what happened in the past. I understand that the Government of the day did then what I am doing now—and only for widows. My right hon. Friend the Prime Minister said that if the Government could do that for a small group, they could do it for the whole. I know that the hon. Member for Bury St. Edmunds (Mr. Griffiths) will object to what I have done, speaking on behalf of the police, but I have to take a wider view. I believe that this is right. In my view, the police will miss out unless we enable ourselves to look at their problems in the next phase.

Of course the negotiating body for the police is democratically elected. I am not stuffing this proposal down anybody's throat. Just as in the Elementary Education Act 1870 there was a Cowper-Temple clause which said that one did not have to have religious education, I shall have a clause put in—if necessary, named after the hon. Gentleman—which will allow any policeman to say "No, I do not want the pay".

Will the Home Secretary recognise that, although it is right that policemen and their families should have in their pockets sums which are not in dispute, this settlement will in no way remove the deep grievance about the £6 and whether it ought to have been replaced by the £30? Since this matter will come up in phase 3 negotiations, how does he envisage those negotiations being carried out, given the atmosphere which now obtains and the fact that the machinery is not operating?

The atmosphere cannot be worse than it is now in terms of negotiation. I hope that is not a threat from people who are not involved.

I am interested in what the hon. Gentleman said on the first point. Coming down from Bridlington last night, I heard on the radio that the Liberal Party wanted a stern incomes policy from which there was no movement in any shape or form. The first thing that it does today is to ask me to depart from that policy.

My right hon. Friend referred to the Fire Brigades Union. The police do not belong to the Trades Union Congress. As the Police Federation is likely to vote for affiliation to the TUC and, because of the present discontent, to vote also for the right to strike, does my right hon. Friend agree that, although many policemen will accept these proposals, they will not get rid of the discontent? In view of the discontent and the fact that the Police Federation will probably vote for affiliation to the TUC, what is the Government's attitude? Will they encourage it? Personally, I believe that they should.

I take my hon. Friend's point about the discontent, because it is present. It is also present amongst many other groups of workers.

I understand that an Act that was put through the House by the previous Administration in 1963 or 1964 allows the Police Federation to affiliate to other organisations. It is not for the Government to say whether an organisation can affiliate to the TUC. I understand that it is not a matter of knocking on the door and saying "Here we are." It is a question whether the organisation, in terms of its rules and regulations and so on, meets certain criteria. I doubt whether the Police Federation, as organised now, would meet those criteria.

I have made my view clear on the right to strike. I do not deny that that has a bearing on this matter. But, given the history of the police and the work that they do, I believe that they would be wrong to get involved in strike action for pay. I accept that it is the job of the Government of the day to see that the police are compensated for this, bearing in mind how strike action relates to professionalism and so forth. From 1960 onwards all Governments are to blame when it comes to the implementation of the Royal Commission precepts. We must look at this, but it cannot be done in phase 1 or phase2.

Can the Secretary of State explain how the Government are able to provide fringe benefits for the seamen in order to get around the incomes policy but are so intransigent with the police? In relation to the review of the police negotiating machinery, is he aware that this was promised last September? Why has there been this period of complete inactivity?

There has been no inactivity on my part. We have had submissions from the Police Federation last week on their views on the members and terms of reference of the negotiating body. These are being looked at. On fringe benefits. I do not accept that the seamen's award broke phase 2. I have a list here of the fringe benefits which we discussed and which were turned down. I put to the constituent members of the Police Council that it would have to be a straight phase 2 agreement.

While agreeing with the Home Secretary about the unwisdom of police contemplating strike action, may I ask whether he is aware that he is the police authority for the Metropolitan Police who have to work longer hours, are worse paid, and have less leave than any other comparable police force in Western Europe or North America? If we allow that situation to continue we shall put in jeopardy our reputation for policing in this country.

I understand that, but I do not accept the hon. Member's analogy. I accept that inflation has eroded pay for everyone and that differentials have been altered as a result of a strict pay policy. One of the differences between the Metropolitan Police and police forces in the provinces is that the latter have the problem of very little overtime. On the other hand, the Metropolitan Police get an enormous amount of overtime. I would be the last person to justify that situation in terms of take-home pay and rent allowances, which are not taxable and are higher in the metropolitan area. I do not accept what the hon. Member says. However, I agree that we should do something about the general situation and I hope that in phase 3 we can make a beginning.

I propose to call only those hon. Members who were on their feet at that moment.

The Home Secretary has not answered the questions about fringe benefits. Would he say a word about pensions?

Fringe benefits in phase 2 of the pay policy were not in any way major benefits. There were certain fringe benefits for which there was a commitment subject to the pay policy under phase 2. We are not pre-empting phase 3 and we were discussing fringe benefits with the police. Since I have been in the Home Office, despite the cutbacks in estimated public expenditure, we have reached a position in which we are spending half a billion pounds in real terms on law and order in general, and an enormous amount of that goes on police pensions and fire service pensions. I am not complaining about that, nor am I saying that police pensions are perfect. I am merely pointing out that an enormous amount of extra money that I spend goes on police pensions.

In the Home Secretary's own words, the police will still feel as if they are at the bottom of the pile after this unfair settlement is imposed upon them. How much longer will this Government tolerate a situation in which the Police pay is 20 per cent. below the national average male wage? The Royal Commission said that police pay should be 4 per cent. above the national average. Will the Home Secretary find it in his heart to do something about stage 3 before next week, otherwise a decision may be taken in anger by the Police Federation which we shall regret in years to come?

Maybe I shall regret it more than anyone else as I am the one who has to go to the Police Federation. If there is to be a pay policy, it is absolutely vital that in respect of stages 1 and 2 we should stick to the rules. Pay policy has played a major part in the economic policy of the last couple of years. I can say nothing about stage 3 at the moment, but in talking with my Cabinet colleagues about stage 3 I feel that it would be very much better to have the police views about stage 3 instead of their talking about stage 1. We have had their views in the past, but they should be talking about stage 3 now, as all the other unions are doing.

Has the Home Secretary considered what effect his statement will have on the Police Federation conference beginning on Tuesday? Does he not think that it is far more likely now than before that the police will vote for the right to strike? If they do, what reaction can we expect from the Home Secretary?

I have already indicated that I believe that police forces and the right to strike do not go together. If that is not the view of the police, so be it. In this country we would have to consider it and find out whether it was a majority view. I do not attend many trade union or professional body conferences—by the very nature of my job. I could have left this statement until after the conference next Wendesday, but I thought that it was more honourable to make it beforehand. Hon. Members should consider the fact that it would have been much easier for me to have left it.

For the future, will the Home Secretary accept on behalf of the Government the principle of the Willink Report, namely that the police should have a premium of 4 per cent. above the national average industrial wage?

Governments of all persuasions gave their view on this. I cannot pre-empt phase 3. I understand the position of the police and the job that they do in this country. What was not possible for phases 1 and 2 may be possible in phase 3 in this respect. It may be, as I discovered at the Fire Brigades Union conference yesterday, that changing responsibility means changing methods. A former Commissioner of the Metropolitan Police said to me that the police would have to decide whether they were more interested in boot allowances or in becoming a professional body. [HON. MEMBERS: "Superficial."] It is not superficial and that man knows more about the police than do hon. Gentlemen opposite. This is what is involved in pay negotiations over the years.

Local Government Finance

With permission, Mr. Speaker, I wish to make a statement. The Government's response to the Layfield Committee's Report on Local Government Finance is published this afternoon as a Green Paper. Copies of the Green Paper are available in the Vote Office.

As the House will recognise, there are no quick or simple solutions to the problems of local government finance. We have, however, come to firm conclusions on a number of the issues raised in the Layfield Report, conclusions which will nevertheless need further detailed consideration. On other matters raised by Layfield we have narrowed the choices and made provisional proposals which will need further public discussion before we can determine what is the right course to follow.

Our main conclusions are as follows. First, we reject the Layfield Committee's basic argument that an improved relationship between central and local government can be achieved only by adopting either a system of strong central intervention or a system under which local authorities would be permitted a substantial increase in the scale of local taxation and thus to manage their own affairs with less control from central Government. The Government see central-local relations in a different light—neither centralist nor localist, in Layfield terms. They consider that the responsibilities involved in the provision of local services are inevitably shared.

Local autonomy must be preserved and encouraged, but at the same time central Government must fulfil its economic responsibilities and ensure that its policy interests in locally provided services are safeguarded. The Government intend, therefore, to strengthen the present financial machinery to enable central and local government to fulfil their rôles more effectively.

Secondly, we are not convinced that it would be right, as the Layfield Committee suggested, to add local income tax to existing rates as an additional source of local revenue. But we agree with the Layfield Committee that the various other local taxes which have been suggested to supplement local rates—including local sales tax, local motor vehicle fuel duties and local payroll tax—have serious disadvantages, and we do not propose to pursue them.

We also agree with the Committee that it would be wrong to abolish domestic rates. We consider that to do so would be to impose unacceptable burdens on national taxation. It would mean increasing the basic rate of income tax by 4½p in the pound, or increasing the standard rate of VAT from the present 8 per cent. to 14 per cent.

Our third conclusion is, however, that the rating system needs substantial reform. We propose, therefore, to end the current rental basis for domestic properties. In its place we propose to adopt capital valuation. The impact of the change will be tempered by transitional measures and there may be a need for some more permanent modifications. Agricultural land and buildings will remain de-rated. Changes will be made to some other parts of the rating system to help small business in particular and to bring the system more into line with present-day circumstances.

Our fourth conclusion is that local authorities should be freer to determine their own priorities for capital expenditure. We therefore propose to discuss with the local authority associations a new system whereby, within general policy guidelines laid down by central Government, approvals would be given for capital expenditure on programmes rather than on projects.

Our fifth conclusion is that we should strengthen the machinery for helping local authorities and their electorates to obtain greater efficiency and value for money. Efficiency is a matter primarily for local authorities, but the Government will see that more comparative and other value-for-money studies are undertaken. An independent advisory body will be set up to consider general audit matters.

Our sixth conclusion is that Exchequer grant should continue to be the most important source of revenue for local government and it should be distributed mainly as a block grant. But the form and method of distribution of the grant is the most important of those matters on which we believe there should be further and wider public debate.

We all would, I think, acknowledge that the present rate support grant system has defects and the Layfield Committee did discuss a new system—the unitary grant—which seems to us to go a long way to removing those defects. But the local authority associations have all told me that they are opposed to unitary grant, which seems to them to have grave defects. The question of unitary grant or alternatively of amendments to the present RSG system needs further discussion. Until these consultations have been concluded, the Government will not come to conclusions about the form and method of distribution of Exchequer grant.

In framing the Green Paper we have had four aims in mind. First, we seek to maintain and enhance the independence of local government; secondly, we seek to improve and encourage greater accountability of local government to its electorate; thirdly, we seek to establish an effective and proper degree of Government central control over the total of local government expenditure; last, but not least, we seek to make fairer and more equitable the methods of local taxation.

We now propose to hold urgently detailed consultations with the local authority associations on those matters on which we have reached general conclusions. We are also anxious to have discussions with the associations and to hear the views—by the end of September—of other interested organisations and individuals on the other important matters in the Green Paper.

This statement relates only to England and Wales. The detailed application to Wales will need to be considered in the light of the implementation of Government policy on devolution and the need to consult the Welsh Assembly. My right hon. Friend the Secretary of State for Scotland is making a separate announcement about these issues as they affect Scotland.

Finally, I regret to say that, owing to the industrial dispute at Her Majesty's Stationery Office, printed copies of the Green Paper will not be available for hon. Members until the middle of next week, but typescripts are available now in the Vote Office.

Will the right hon. Gentleman recognise that the only proposal of consequence announced today is that the present unsatisfactory system of domestic rates, based on rental values, is now to be based on an even more unsatisfactory system of rates based on capital values? Does he not recognise the seriousness of paragraph 6.17 of his Green Paper, which admits not only that will the more expensive house bear a heavier burden regardless of the income of the occupier but that the cheapest houses will also be disproportionately hit?

Has he understood that his proposals are therefore specifically designed to single out for adverse treatment the inner urban area, the first-time buyer, the lower income groups and the council tenants? May I ask the right hon. Gentleman to confirm that it must follow that the anomalies of his proposed capital valuation system must become the basis for water rating?

Will the Secretary of State understand that the rating proposals that he has put forward are quite unacceptable to the Opposition, who believe that his announcement about rates, particularly in an economic climate of high inflation and high income taxes, will simply make the present bad system worse?

The hon. Gentleman's response and his questions to some extent surprise me. He says that there is an unsatisfactory system of rates. I think that all hon. Members on both sides of the House can level accusations and criticisms at the rating system. That is easy enough, but to say that there is no improvement in prospect by changing from what is now accepted as an outmoded method—it must be outmoded, because there is no serious basis of information on which a rental assessment can be made for domestic rates—and that the present system is to be preferred to a shift to capital values is very surprising. It is not the view of virtually all those who have seriously studied the prospect of changing from rental to capital value.

All that I can say about the hon. Gentleman's comment on the impact of the changes is that it is far too early for him to deliver himself of that categorical judgment.

We are saying in the Green Paper that that might be the effect on the more expensive and less expensive houses, but it is untrue to say that it would necessarily have an adverse effect on poorer areas, including the inner cities, because it is the distribution of grants rather than the actual method of assessment of rates that determines whether those areas will do well or badly in terms of local authority distribution.

The hon. Gentleman says that the change is not acceptable to the Opposition. He has a duty to his party and to the House at least to make plain, if he says that the whole system is unacceptable, what he would wish to put in its place.

Will my right hon. Friend look again at the proposition that the domestic rate should be levied on capital value? Does not he agree that some people living in highly valued residences find it hard to make both ends meet, whereas others living in less highly valued homes could probably more easily afford to pay a higher rate? Will he look again at income as the best basis for levying rates?

I am not persuaded that incomes form the best basis for levying rates. I believe, on the balance of information that we have, that the advantage lies in moving to a capital system and away from a rental system, which is totally losing contact with reality. But, of course, if there are problems of the kind that my right hon. Friend fears, we have already made plain that we would have transitional arrangements, and, if need be, we could build in certain brakes and stops upon adverse movements should they be revealed.

Looking back to

"…unhappy, far-off things And battles long ago",
my recollection may be inaccurate, but was not the substitution of capital assessment for the hypothetical rent basis contained in Part IV of the Local Government Bill of 1948, and subsequently abandoned?

The right hon. Gentleman has an enviable memory of legislation in this respect. His experience is longer than mine. There was probably more historic reality behind the attempt to assess rates on rental values in 1948 than in 1977.

Is the Secretary of State aware that the Liberal Party sympathises with him about the problem of trying to make changes in the method of raising local government finance? It is a tangible problem. We regret that the Layfield Committee did not take on board our ideas about site valuation, largely because of the effect of the Community Land Act.

Is the Secretary of State aware that we also reject the idea of centrally collected taxes, because that would mean the end of local government as we know it, and that many of those who are high in local government also reject that idea? We agree with the Secretary of State that a system based on capital values would be better than the present system, but we regret that the right hon. Gentleman has turned down local income tax without further consideration. We welcome his remarks about the rate support grant, a system which many hon. Members believe goes much against the rural areas.