Skip to main content

Commons Chamber

Volume 940: debated on Thursday 1 December 1977

The text on this page has been created from Hansard archive content, it may contain typographical errors.

House Of Commons

Thursday 1st December 1977

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Private Business



That the Standing Order of 6th August 1976 relating to the nomination of members of the Committee of Selection be amended by leaving out Mr. Donald Stewart and inserting Mr. A. J. Beith.—[Mr. Walter Harrison.]

Crown Agents

Return ordered,

of the Report by the Committee of Inquiry appointed by the Minister of Overseas Development into the circumstances which led to the Crown Agents requesting financial assistance from the Government in 1974.—[Mrs. Hart.]

Return ordered,

of the Statement by Her Majesty's Government on the Report by the Fay Committee of Inquiry on the Crown Agents.—[Mrs. Hart.]

Return ordered,

of the Report by the Advisory Committee on the Crown Agents (the Stevenson Committee), 24th March 1974, being Annex V to the Statement by Her Majesty's Government on the Report by the Fay Committee of Inquiry on the Crown Agents.—[Mrs. Hart.]

Oral Answers To Questions

Agriculture, Fisheries And Food

Green Pound


asked the Minister of Agriculture, Fisheries and Food what are the latest figures available for the percentage effect on the overall price of food and the retail price index of adjusting the value of the green pound to bring it into line with the price of the £ sterling; what steps he is taking to protect the consumer against this sort of movement; and if he will make a statement.

It would require a devaluation of about 23 per cent. to bring the green pound fully into line with the current market rate used for calculating MCAs. The exact effect of a change of this order cannot be predicted but I estimate that it might eventually raise retail food prices by between 5 per cent. and 6½ per cent. on average and the retail price index by between 1¼ per cent. and 1½ per cent. I have made it clear that the timing and extent of any change must be judged against the national interest as a whole including the impact on the cost of living.

I omitted to tell the House that fewer and shorter supplementary questions and briefer ministerial replies—I am not referring to the one that we have just heard—help us to reach more Questions.

Will my right hon. Friend take the opportunity of pointing out to the housewives of Britain that they will have to face price increases at the beginning of the year anyway because of the transitional arrangements with the EEC? Will he make it clear to our partners in Europe and to the farming interests in this country that under no circumstances will he consider any devaluation of the green pound?

I made the position clear to the housewives on 17th February, in answers to questions from my hon. Friend the Member for Newham, South (Mr. Spearing) and the hon. Member for Banbury (Mr. Marten), and on various tedious occasions afterwards. Of course the transitional steps will mean a gradual increase in prices, not necessarily on 1st January. Thanks to the butter subsidy, which the Opposition chided me for achieving, increases will be spread over a longer period.

Is the right hon. Gentleman aware that the disparity between the green pound and the real rate is one of the greatest single factors promoting the export of cattle from this country for slaughter abroad? Does he not agree that the many people who condemn the export of cattle should welcome a readjustment in the green pound?

The connection between those two points is rather remote. I suspect that those who object to the export of live animals do so for compassionate reasons. If one were to devalue the green pound it would assist certain elements in agriculture, but I have to achieve a balance in the national interest.

Does the right hon. Gentleman agree that the time has come to devalue the green pound by 10 per cent. if confidence is to be restored in the beef and pig sector of the agriculture industry?

If I did agree with the hon. Member, I certainly would not say so at this time. I cannot imagine anything that would have a greater effect on speculation. I am willing to listen to hon. Members' advice. I get a great deal of advice. The right hon. Member for Yeovil (Mr. Peyton) suggests that I devalue by 7½ per cent., the hon. Member for Cardigan (Mr. Howells) says 10 per cent. and my hon. Friend the Member for Cannock (Mr. Roberts) says zero.

When my right hon. Friend goes to Europe for discussions will he say why the green pound and the pigmeat MCAs are different? When will the Commission come forward with proposals on the pigmeat MCAs?

Yes, because the question of pigmeat MCAs concerns not so much the value of the green pound—or the green franc or the green lire, because they are involved in this as well—but on the method used to calculate the MCAs. We have been pressing the Commission on this for some months now. I am glad to say that at the last council we were supported by the French and Italians, and I hope that between the three of us we can move the Commission more speedily.

May I say how glad I am that the Minister is on his way to recovery, though I doubt whether this is the right place in which to complete recovery? I hope that he will, however.

Will he confirm that according to his own calculations devaluation of the green pound by 7½per cent. would result in an increase in the cost of living index of about a half per cent? In assessing the national interest will he give proper place to the fate of the livestock producer whose interests ultimately will have a sharp impact upon the consumer, which is the group that the Minister affects to look after?

I thank the right hon. Member for Yeovil (Mr. Peyton) for his kind remarks. I feel a lot better as I see these old familiar faces all around me.

As for the substantive part of the question, I have said that this is a question of balance between the interest of the consumer and the interest of the producer. That is the difficulty. I have tried to do a quick mental calculation, and I do not think that I am wrong to within half a per cent., that on food prices it is a figure of about 2½ per cent. Of course the effect on the RPI can be calculated by multiplying that by roughly a quarter.


asked the Minister of Agriculture, Fisheries and Food if he will make a statement about the value of the green pound.

The difference between the representative rate for sterling and the market rate used for the purpose of calulating monetary compensatory amounts is now £1=1·30696 units of account, giving an applied MCA percentage of 28·9. I continue to keep the rate for the green pound under review.

Is the Minister aware that the reply will be received with great disappointment by the pig and beef sectors, and will he tell the House what he is going to do to help the livestock producers over the next three months?

I was trying to answer the question as factually as I could. A number of factors are moving somewhat in the livestock producer's favour. There has been, as there always is at this time of year, an increase in the home market for beef. It happens that at this time there is an increase in exports of Irish beef to this country—an increase which the Irish themselves did not believe would happen. Their calculations were for a drop in production, not an increase, let alone an increase in exports. The fact is that food costs will probably drop a little further, and the target price during the winter will increase.

Is it not true that the grain crop in this country in the current year has increased to 17 million tons for the first time—an all-time record? Against this background, is it not nonsense for Conservative Members continually to claim that the farming community is hard pressed?

Certain parts of the farming industry are in difficulties, and it is no use denying it. Other parts are doing very well. I have to tread very carefully on the question of a record harvest. I was chided by Sir Henry Plumb and by various members of the Conservative Front Bench for daring to say that there might be one.

Does the Minister recognise that while he maintains this very large differential, distortions are being set up in the market which will not be in the interests of the housewife in the long run?

That is one of the factors that have to be watched. I have always said that we have to keep an absolute balance on the matter of the green pound. It is no good taking a specific sector while, at the same time, ignoring the fact that many of the imports that the housewife needs come in a good deal cheaper than they would otherwise. If I am to be both Minister of Agriculture and Minister of Food, as I must be, I must keep the balance.

Has my right hon. Friend considered publishing a table containing the possible price variations and inflation variations associated with our revaluing the green pound, so that, for example, 1 per cent. upwards would mean so much on inflation, so much on consumer prices, so much on wage demands, and so much unemployment? It would clear our minds if we could have that information.

If my hon. Friend would care to table a Question, I shall see what I can do.

Will the right hon. Gentleman identify the large sections of the livestock industry which he thinks are doing particularly well at the moment? My hon. Friend the Member for Louth (Mr. Brotherton) mentioned beef and bacon, but he did not mention milk or dairy products. Will the right hon. Gentleman take the opportunity to say what will happen to dairy products after the end of the year?

I could, but I will not, because I am not yet in a position to do so. As the right hon. Gentleman must be aware—none more so—this has been an extremely good year for milk yield, and it was that which I had particularly in mind when I tried to isolate those parts of the livestock industry which I thought were doing not so well. As to pigs, there is difficulty with processing, but for the pig producer the position is undoubtedly improving.

Non-Milk Fats Products


asked the Minister of Agriculture, Fisheries and Food on what grounds he withdrew his opposition to the proposed new Community regulations enabling the manufacture and marketing of products containing non-milk fats to be restricted.

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

My right hon. Friend has always objected to any proposal to restrict the manufacture and marketing of products containing non-milk fats. There is now no such implementing proposal on the table.

I thank the Minister for his reply. It seemed likely that the Council of Ministers would approve this regulation, and I am pleased to hear the Minister's denial of it.

I am glad that the hon. Member is satisfied with our assurance. We believe that the best approach is to reduce surpluses and not to restrict the freedom of choice of food manufacturers and consumers generally.

Common Agricultural Policy


asked the Minister of Agriculture, Fisheries and Food if he will use his influence in the Council of Ministers in Brussels to modify the common agricultural policy on the lines set out in the proposed common food policy.

The Food and Drink Industries Council's proposal for a common food policy is a useful contribution to discussions on the common agricultural policy. Its main aim of bringing about a better balance between producer and consumer is in line with the objectives that I have consistently pursued.

Does the Minister agree that to produce surpluses to buy into intervention is no longer adequate in the present marketing context? Does he further agree that some other method, be it by way of quotas or targets, is in the interests of the consumer, the food processer and, ultimately, the primary producer?

I said that I thought that the Council's report was interesting. Where I differ from it is precisely in respect of these production quotas. I think that they are a bit too rigid. I have always thought that the real way to tackle surpluses in the Community was through the end price. It is by producing food at a price that people can afford to pay that one avoids structural surpluses

In the context of my right hon. Friend's continuing efforts to get better sense in to the CAP ill he try to persuade the Council of Ministers to give more urgent attention to the need to recalculate the pig meat MCAs, in view of their drastic and critical effect on the processing end of the industry and the very real threat to jobs which is bound up with that?

I am glad that my hon. Friend the Member for Hemel Hempstead (Mr. Corbett) has made this point, because it is vital. It seems that if one is to come into disagreement, as one must, there should at least be no disagreement on the method of calculating the MCAs, and the fact is that the method now adopted is outrageously wrong.

Is the Minister aware of the proposals for CAP reform as set out by Professor Marsh in the Centre for Agricultural Strategy report? When does he expect to be able to comment on that?

I think that I might try now. Basically they are very interesting proposals. Professor Marsh skates round one difficulty when he talks about a common trade policy. It is all very well to say that, but how are we to get the Nine to agree? How are we to get Germany, which lives on high prices, and the United Kingdom, which is on a much lower basis, to agree on a common trade policy?

Common External Tariff


asked the Minister of Agriculture, Fisheries and Food what action he is taking to ensure that the Community's common external tariff is lowered to allow easier entry of foodstuffs, such as manufacturing beef and honey, of which inadequate supplies are produced within the Community.

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

The reduction of tariffs on foodstuffs is one of the objects of the current GATT multilateral trade negotiations. My right hon. Friend the Minister hopes that it will be possible to achieve significant reductions on the Community's tariffs in return for reductions in the tariffs of other countries. Importation of manufacturing beef into the Community is covered by the balance sheet arrangements which permit specified quantities to be imported at a reduced rate of levy.

I thank the Minister for his reply, but may I emphasise one point? To move away from beef and honey, is he aware that there are other areas where we are about to face fairly hefty increases in import duty—for example, on mandarin oranges? Can he give the House any idea what representations have been made to avoid that, particularly since 95 per cent. of these imports come from Spain, which is seeking entry into the Community? It seems ludicrous.

The hon. Gentleman will be the first to recognise that one consequence of Spain's coming into the Community would be the eventual elimination of these tariffs and levies. I agree that there are far too many of them on products coming into this country as a result of Community arrangements. The Government are continuing to strive to have them reduced.

Does my hon. Friend not agree that it would have been much better to try to modify the impositions by the Common Market upon us before we went in? Does he not think it is rather cynical for those who voted for use to go in now to complain about the consequences?

I do not think that it would be appropriate for me to reopen the issue of our membership of the Community. However, my hon. Friend and I are agreed on a broad range of changes which we must endeavour to achieve now that we are in the Community.

Does the Minister agree that the sudden ending of the standstill agreement will result in the duty on mandarin oranges rising from 7½ per cent. to 22 per cent? Will he say what action he is taking with our Community partners to deal with this situation to ensure that the housewife can still get mandarin oranges at a reasonable price?

I can assure the hon. Member that all of our Community partners are aware of our intense opposition to that type of levy and to many other levies and tariffs, which, on occasions, apply to commodities coming into this country of which there is very limited production in the EEC, where they are out of season anyway.



asked the Minister of Agriculture, Fisheries and Food how many badgers he expects to be killed under the powers given by the Diseases of Animals (Badgers) (Control Areas) Order 1977; and what steps he is taking to ensure that the minimum number of badgers are killed, and that the maximum safety precautions are taken when hydrocyanic acid gas is used.

I am afraid that it is not possible to make such an estimate, but gassing is restricted to sets used by tuberculin-infected badgers and their contacts. It is carried out by specially-trained teams of Ministry staff operating under a code of practice containing detailed safety instructions.

I thank my hon. Friend for his answer. Is he certain that no other methods of containing the spread of these diseases are possible, apart from the extermination of the badgers?

I recognise that my hon. Friend has raised an issue that is of considerable concern. I can assure him that we should not have embarked on this course if we were not convinced that it was the only way to reduce the level of tuberculosis infection in the local cattle population and also in the local badger population.

Will my right hon. Friend recognise that the county that I represent suffers especially from this problem? Will he please publish all the evidence that he has to suggest that it is the badgers which are carrying and transmitting this disease? There is a great deal of concern in Gloucestershire about the whole problem.

Yes, I am happy to give my hon. Friend that assurance. Last November we published and placed in the House of Commons Library a report on all the evidence and work that had been done to date. Another report is in preparation and will be published very shortly. I assure my hon. Friend that every step that we have taken in this area has had the support of the consultative panel, which includes representatives of the Nature Conservancy and also leading animal welfare experts.

Fishing Quotas


asked the Minister of Agriculture, Fisheries and Food what progress has been made in negotiations between Norway and the European Economic Community regarding fishing quotas.

There have so far been two rounds of consultations about reciprocal fishing possibilities in 1978. Considerable progress has been made on the allocation of the shared stocks in the North Sea, but no quotas have yet been decided upon for stocks in the Norwegian Arctic region. These are being discussed in conjunction with quotas for Norway from stocks occurring exclusively in member States' waters. Further consultations are to be held shortly.

Is the Minister aware of the necessity for urgency in this matter? In Fleetwood we have two trawlers tied up, with the men unemployed, and there are many more in Humberside. Does he agree that it is essential to get agreement on the quotas, so that we know for the future what the supplies will be?

I recognise the urgency of this matter. From the consultations that we have had so far, it seems likely that agreement can be reached on the division of the shared stocks for 1978, but we want to make sure that the United Kingdom gets a share of the available fishing opportunities which is comparable to the contribution that we are making to the Community resources.

Has my right hon. Friend noticed that Norway, by the simple expedient of staying out of the European Economic Community, has obtained a 200-miles exclusive fishing zone, whereas we have not yet obtained one of 50 miles?

I think that my right hon. Friend will want to pay tribute to my right hon. Friend the Minister of Agriculture for the contribution that he has made so far in ensuring that the national interests are looked after.

National Farmers Union


asked the Minister of Agriculture, Fisheries and Food when he will next meet the President of the National Farmers Union.

I have no specific plans, at present, for a meeting with the President of the National Farmers Union but I keep in close touch with the union on matters of concern to agriculture.

When the Minister next meets Sir Henry Plumb, will he dissociate himself and his Government from the remarks of another Minister, the hon. Member for Greenwich (Mr. Barnett), who said recently that he was in favour of the public ownership of land because the individual farmer is not to be trusted to maintain the long-term fertility of the land?

The proper person to whom that question should be addressed is my hon. Friend the Under-Secretary of State for the Environment. There is no reason why I should answer a question that relates to something that I do not believe was in fact ever said.

Will the Minister consider meeting the Newdeer and Turriff branches of the National Farmers Union in Scotland, and discuss with them the dreadful fall in livestock prices in the North-East of Scotland in recent weeks, which they attribute, perhaps rightly, to the imports of subsidised Irish beef? Will the Minister review the position in respect of the rate of variable premium and consider whether the ceiling is now adequate for the market conditions?

I think there is a difficulty in this sector, and not only in regard to Scotland. Perhaps it applies more to Wales, for largely historic reasons. The marketings plus the exports have come at the same time. I believe that the matter will be looked after fairly well during the winter months, but I shall keep the position very closely under review to ensure that that is so.

Reverting to the question of my hon. Friend the Member for Kidderminster (Mr. Bulmer), may I ask the Minister whether he has read the report of what his colleague in the Government said? Does he recall that the report was written by Mr. Jim Murray, who was at one time a Labour parliamentary candidate, and that the words in the report were in quotation marks? We want to know from the Minister today whether he personally agreed with what his colleague in the Government was supposed to have said—that the public ownership of land was justified because individual farmers could not be trusted to look after the long-term fertility of the land.

I will deal with the substantive part of that question, but I was anxious that the House should know that it is absurd to ask one Minister to deal with remarks, however phrased, made by somebody else. For example, if I were to deal with all the remarks made by the hon. Gentleman, I would be in a very sorry state indeed. I said that I would deal with the substantive part of the question. As to the fertility of farmers, surely what is meant is the fertility of farmland. I do not think that I dare raise a voice about the fertility of farmers.

Will my right hon. Friend tell the House a little more about the inquiry which he has asked his noble Friend Lord Northfield to undertake into the ownership of farm land? Was one of the reasons for setting up the inquiry the genuine fears in parts of the industry about the increasing investment by financial institutions in agricultural land, because they are interested not in agriculture but in a potential profit from the land?

My hon. Friend has made a point on this subject which is worth considering. The question of who works the land—whether it is the owner, the tenant farmer or the worker who works for either of them—is a very different one from the question of who owns the land. The Northfield Committee was set up to consider whether the whole structure of agricultural land acquisition militated against the proper farming of the land in question.



asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the future of the Potato Marketing Board.


asked the Minister of Agriculture, Fisheries and Food what is the position concerning the development of a potato régime within the common agricultural policy.

Proposals for an EEC régime for potatoes have been under discussion in Brussels since early in 1976. Our objective is to achieve a cost-effective solution satisfactory to both producers and consumers. The producer interests have recently published proposals for price stabilisation arrangements which we regard, in principle, as providing a satisfactory basis for the United Kingdom in the longer term, subject to further consideration of their financial implications. These proposals envisage a continuing need for a central marketing authority such as the Potato Marketing Board in Great Britain and we hope they can be accommodated within an acceptable EEC régime.

Does my right hon. Friend accept that the disappearance of the Potato Marketing Board, like other marketing boards, would be an unmitigated disaster for both producers and consumers and that it would be one of the most unpleasant consequences of going into the EEC? Will he assure the House that if these proposals go ahead the Government will make sufficient funds available to ensure that they do not founder for lack of cash?

I remind my hon. Friend that we said that the guarantee for this this year would continue. The long-term future of the Potato Marketing Board will depend on the part that it will play in an effective EEC régime. It is important to maintain the essential functions of the Board to protect both the producer and the consumer.

Is the Minister aware that farmers generally aim to make their cropping arrangements for the following season by the end of November in respect of the purchase of seed potatoes, fertilisers and the setting of acreages, and that the uncertainty that prevails at the moment is bad from the point of view of next season's potato production? When will that uncertainty be ended?

There is uncertainty in a number of commodities in agriculture, as we all know. The right hon. and learned Gentleman, in all fair-mindedness, will recognise that my right hon. Friends did not play any part in the make-up of the transitional arrangements that are responsible for this situation.

Notwithstanding the negotiations and the last answer, will the Minister take steps to ensure that prices are given to our farmers in good time for next season's planting? Does he realise that otherwise there could be a shortfall due to this considerable uncertainty?

We certainly understand the difficulties, and we shall do our best to help farmers. These matters will feature in the price review which is now under way.

Horses And Ponies (Exports)


asked the Minister of Agriculture, Fisheries and Food how many horses and ponies were exported live to Denmark in the period 1st January 1977 to 1st July 1977.

A total of 70 horses and ponies were exported to Denmark during this period.

Is the hon. Gentleman aware that there is a great deal of strong public feeling about the export of animals on the hoof for slaughter? When does he expect his departmental inquiry to report? Does he agree that the minimum levels laid down in 1973 for the export of horses are now completely out of date, because values have changed considerably?

I cannot agree with the hon. Gentleman on the latter point. I have looked at this matter again. Because horse prices were so high when these values were fixed in 1973, they are still effectively preventing the export of horses for slaughter.

On the first point, I assure the hon. Gentleman that the review is well under way and that it will be concluded early in the new year.

Is my hon. Friend aware that the export of live animals for slaughter over the last 10 years has got worse, not better? I suggest that the safeguards are entirely inadequate and that something must be done in response to the public outcry against this bad traffic.

There have been some improvements in the European context. The export of live animals from this country is carried out under much more restrictive arrangements than was previously the case. It was in response to the real concern expressed by my hon. Friend that my right hon. Friend set up the present inquiry.

Australia (Minister's Visit)


asked the Minister of Agriculture, Fisheries and Food whether he will make a statement about his visit to Australia.

I paid an official visit to Australia in August and September at the invitation of the Australian Government. I had an opportunity to see something of Australian agriculture at first hand and to have talks with Australian Ministers. We were able to discuss many problems of mutual interest.

Does the right hon. Gentleman recall that when the Prime Minister of Australia came to this country in the summer he said that no less than one-third of dairy farmers in Australia had been driven out of business because of our entry into the EEC and that no less than 80,000 head of beef cattle had been shot and their carcases destroyed because they could not gain access to these markets? On his visit to Australia, did the Minister glean any evidence that would lead him to the view that we might be able to get some of this food in future if we lowered import duties and levies?

I certainly saw that in the Commonwealth of Australia there was still available a supply of various kinds of food which this country had been traditionally accustomed to receive. Part of the Australians' complaint, if I read it correctly, was that while they knew that our going into the EEC might reduce their market, the fact was that export restitutions on EEC foodstuffs going out of the Community tended to destroy what other markets they might have. I am sure that our policy of trying to get greater liberalisation for imports of food from temperate climates — particularly from our old Commonwealth partners—in the multinational trade negotiations ought to play its part.

Did the Minister have talks about the problems of sheepmeat imports from Australia? Is he in a position to tell the House what might happen next year with regard to the possibility of new arrangements for the trade in sheepmeat between third countries and Community countries? Will he make a statement to the House now?

As the hon. Gentleman knows, there is as yet no proposal from the Commission that we are in a position to discuss with a view to obtaining a sheepmeat régime for the future. Such a proposal will no doubt be put before us fairly soon. There is one basic point to be extracted from the hon. Gentleman's question on which I hope the whole House will agree—namely, the absolute necessity of safeguarding the entry of New Zealand sheepmeat.



asked the Minister of Agriculture, Fisheries and Food what recent representations he has received on behalf of the British pigmeat industry; and what reply he has given to such representations.

There have been continuing discussions with the National Farmers Union in the context of the annual review. I have met representatives of the Bacon and Meat Manufacturers Association and have urged them to support me in my representations to the Commission on the unfair way monetary compensatory amounts are calculated in this sector.

Is the Minister aware that bacon curers are currently losing about £4 per bacon pig cured and that that is not in anyone's interest, least of all the long-term interest of the British housewife?

I do not know the exact figure, but the economic position of bacon curers is bad. I should not have thought that it was in the interests of the economics of the country as a whole, either, and that is all the more reason why we should press on with trying to obtain a change in the calculation of the MCAs. As I said in answer to an earlier question, we now have the French and the Italians with us on that matter.

As the contraction of the meat manufacturing and bacon curing industries will cause widespread unemployment in those industries, will my right hon. Friend agree to co-ordinate the opposition in the EEC to the present system of MCAs? I understand that both France and Italy are in a position similar to ours. Will he therefore try to coordinate this opposition to force the Common Market Ministers, at their December meeting, to alter the MCA set-up?

The question will certainly come up at the December meeting. The House need have no fear of that at all. It is right that not only the Government but the industry should now be coordinating their efforts.



asked the Minister of Agriculture, Fisheries and Food if he will take steps to ban the use of snares.

My right hon. Friend the Minister has no powers to do so; but in its advisory work on control of pests, my Department is at all times concerned to prevent avoidable suffering caused by snares, or unintended risks to other creatures.

Parliament would have to give the Government such powers, but I can assure the hon. Lady that we recognise that this is a form of pest control which should be used only in very exceptional circumstances. The problem is that in some cases there are no satisfactory alternatives.

Foodstuffs (Imports)


asked the Minister of Agriculture, Fisheries and Food what further steps he proposes to take for easier access into the United Kingdom for efficiently produced foodstuffs from outside the EEC in accordance with the resolution of the House of 16th March 1977.

I refer the hon. Member to the section on the reform of the common agricultural policy in the letter of 30th September 1977 from my right hon. Friend the Prime Minister to the General Secretary of the Labour Party, copies of which are available in the Library of the House.

Following on the principle enunciated earlier by my hon. Friends the Members for Uxbridge (Mr. Shersby) and Dorset, West (Mr. Spicer)—who have now seen the light about the folly of the CAP, albeit only with regard to mandarin oranges—can the Minister explain why in the case of hard wheat, which is available in plentiful supply on the world market at £75 a ton and which is not produced in the Common Market, we have to pay £37 a ton import duty, which can only put up the price of bread in this country?

There are a number of requirements of the CAP that we shall have to work on. I do not think it can be done immediately. I say that quite clearly. It will be done over a period of a few years. The question raised by the hon. Gentleman is undoubtedly one of the factors that we shall have to deal with. It is a very important one indeed.

Can my right hon. Friend confirm the report that large quantities of the butter which was sold cheap to the Soviet Union have now been sold back to Italy at a large profit to the Soviet Union?

I cannot confirm the report, because it is being investigated and no one yet knows the truth of it, but the fact is that the real sin lies in exporting butter at 17p a pound, or whatever it is, to Eastern Europe when many people within the Community would like cheap butter. It was for that reason that I got the butter subsidy.

Animals (Exports)


asked the Minister of Agriculture, Fisheries and Food what action has been taken to implement the O'Brien Committee Report on the Export of Live Animals for Slaughter.


asked the Minister of Agriculture, Fisheries and Food when he expects to conclude his review of the export of live animals from the United Kingdom.

The main recommendations of this report were that a permanent ban on the export of animals for slaughter was not justified and that the animals' best protection lay in the introduction of common European welfare regulations. The Government, with the approval of the House, decided in January 1975 that sufficient progres had been made in Europe and in improving national surveillance and controls to justify the resumption of the trade to those few countries which had adequate welfare safeguards.

As my hon. Friends are aware, my right hon. Friend the Minister announced in July a review of the developments in the export of live animals since its resumption, and I expect this to be completed early in the new year.

I do not thank my hon. Friend for that reply at all. Will he say why it is that after so long excuses are still being made for the continuation of this horrible traffic? Some of us are getting sick and tired of the excuses being made for not taking adequate and immediate action on this matter.

My hon. Friend may not be thankful for my reply, but he will at least welcome the fact that my right hon. Friend is setting up an inquiry into the matter. I am hopeful that the results that will come out of that inquiry will respond in some way to my hon. Friend's concern.

Will my hon. Friend give an asurance that when this review does become public we shall have a chance to debate it in the House?

My hon. Friend will recognise that that is a matter for the Leader of the House, but of course there will be a great deal of interest in the outcome of this review.

Can the Minister say how many prosecutions there have been for breaches of the regulations on the export of animals? Is he satisfied that those who are responsible have upheld the regulations and are doing so properly?

The hon. Gentleman would be well advised to await the outcome of the review, when we shall be able to bring all this information together.



Is my right hon. Friend aware that if he visited my constituency he would discover the resentment and bitterness expressed not only by firemen but by many of my constituents who support the legitimate demands of the firemen? Many of us on the Government side of the House feel that a settlement is not only possible but is now becoming an urgent necessity.

I would expect to find some bitterness. Indeed, I have detected it myself when I have been picketed or demonstrated against by firemen in many parts of the country. But I hope that my hon. Friend will tell his constituents that there will be equal bitterness and resentment or even greater bitterness and resentment, if, as a result of settlements which spread through the economy, we were to have much higher unemployment, much higher prices and a return to the inflation of two years ago.

It is for this reason that we are taking the stand that we are. As to a settlement, I agree with my hon. Friend that the concern of the firemen is genuine. There is no reason why a number of elements should not be put together in this dispute to form a settlement. There is the long-term formula that I have discussed with the firemen and the possibility of underwriting it. There is the prospect on hours. There is the guaranteed phasing in of a settlement, and there is the 10 per cent. that the firemen have been offered immediately. I see no reason at all why this should not be put together to form a constructive settlement on which the firemen should return to work.

If the Prime Minister cannot go to Garston will he go to Bootle and tell the firemen there that he disapproves entirely of their action in picketing the accommodation of the soldiers who are employed fighting fires in Liverpool and who are paid considerably less money than are the firmen?

The Fire Brigades Union national executive has indicated to all its members that it does not wish picketing to take place in the places where soldiers are.

As the hon. Gentleman does not seem to be up to date with the situation, I can tell him that the local Fire Brigades Union has withdrawn its pickets from that area. Perhaps the hon. Gentleman will make the appropriate correction.

On the subject of inflation, how can my right hon. Friend persist in his arguments in view of the high level of unemployment throughout the Western world and also in Britain? How can he say that inflation is still fuelled by excessive demand? Would it not be better to have higher wage awards in order to increase demand and thereby reduce unemployment?

My hon. Friend is putting words into my mouth. I did not say that excessive demand was the cause of this at all. What I am saying, and what is not sufficiently appreciated, is that especially in manufacturing industry, on which we depend so much, the level of comparative wage settlements is of very great importance for competitive purposes. In the United States today settlements are taking place at 8 per cent., in Japan they are 8·8 per cent., in the Federal Republic 7 per cent., and in France 12·4 per cent. Therefore, 10 per cent. settlements in this country are by no means out of the way. We shall lose our competitive position and create greater unemployment unless this is fuly recognised. My hon. Friend would be doing a far greater service if she were to put this across to her constituents.

How can the Prime Minister expect to have the support of the country in pursuing his policies when he cannot even control his own Back Benchers?

With regard to my hon. Friend the Member for Sheffield, Brightside (Miss Maynard) I have always proceeded on the basis that the Lord loveth whom he chasteneth. On the whole, I think that she prefers me to the right hon. Gentleman.

Ministers' Newspaper Articles


asked the Prime Minister what advice or instructions he as Prime Minister has given concerning the publication of newspaper articles by members of his Government.

Ministers are not debarred from contributing to a newspaper on occasion for the purpose of supplementing other means of informing the public about the work of their Department.

Was the Prime Minister told that I let his office know, in order to enable him to compose an unambiguous answer, that this question arose from an article in The Guardian by the Under-Secretary of State for Employment? In this article the Under-Secretary opposed any return to free collective bargaining. In view of the article, and the reported remarks of the Chancellor of the Exchequer, is the Prime Minister still committed to free, unfettered collective pay bargaining?

I was very grateful to the hon. Member for telephoning my office this morning, although somehow I do not think he did so in order to help me. I understand that this article, or what has now been turned into an article, was a speech that my hon. Friend made to his constituency Labour Party general management committee. Even Ministers are entitled to talk about these matters to their constituency parties.

As for free collective bargaining, I ceased to worship that 10 years ago. [Interruption.] Yes, I went to the TUC Congress and said it there. I do not think that collective bargaining is the means of obtaining justice and fair play in this country, but at the moment I do not know a better system.

The hon. Member might look at the points that I looked at in the Under-Secretary's speech. It has always been my position that
"no real advances are possible without TUC backing and direct involvement".
In saying that, my hon. Friend was pointing out that arising out of the present difficulties and discontents there must be continuing discussion about the ways and means of improving the system.

If there is no justice in collective bargaining, will the Prime Minister publish an article explaining what justice there is in a pay policy that discriminates against the most vulnerable workers in the public service, such as the firemen, or those in the private sector who are most susceptible to Government sanctions, and leaves the most powerful workers alone and unscathed? Is it not time now to end this anomalous and iniquitous policy—

I am not sure that my hon. Friend is not reinforcing my view about the difficulties, weaknesses, ills and evils associated with the present system. Its advantages—the main advantage is one that I wish to see the trade union leaders practise this year—lie in moderate wage claims. They do not have to claim excessive increases. In future there will be public discussion, and the Chancellor also is entitled to a little thinking about one of the major problems facing this country at present. We might have a little more thinking from the Opposition Benches on this matter. Their total lack of policy on such things was exposed in the Financial Times yesterday.

Will the Prime Minister say whether he agrees with the Chancellor's thinking? If Ministers are advocating a phase 4 pay policy, and if the Chancellor is actually suggesting it, unless the Prime Minister repudiates it the House has no alternative but to presume that this is now the pay policy of this Government.

The right hon. Member for Cambridgeshire (Mr. Pym) is doing very well in his capacity as a substitute. I am afraid that I simply will not be pinned down by the right hon. Member or by anybody else on what future pay settlements will be in the autumn of 1978. I have enough to do to get through the autumn of 1977 first. However, in relation to next year, I can say that if we have moderate settlements to look forward to—and we already have some in a number of areas—we can be certain that the retail price index will be so much lower next year that there will not be the same incentive to claim exceptional wage increases. There is no reason for the right hon. Gentleman to conclude that any decisions will be taken yet, or that there are likely to be any about the future of pay policy in the winter of 1978. I say that so that I can spare the hon. Member for Cornwall, North (Mr. Pardoe) his supplementary before he asks it.

Prime Minister (Engagements)


asked the Prime Minister if he will list his engagements for 1st December.

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

Will the Prime Minister have another go at clearing up the very messy situation left after the Chancellor talked with the Manifesto Group last night? If the Prime Minister does not like free collective bargaining, as he has told us today, will he continue with what Mr. Gormley calls "the most involuntary voluntary policy"?

The guidelines were published in the White Paper last July, and that is what we are adhering to. I shall not condemn anyone in this House—not the Chancellor nor the Under-Secretary for Employment, not even the hon. Member for Chingford (Mr. Tebbit)—[Interruption.] Perhaps I shall exempt him, after all—for trying to think ahead about the way in which we can get a rational approach to wages in this country without having excessive settlements that are likely to lead to inflation.

The Prime Minister may rest assured that I was not going to ask him about phase 4, because I am much more concerned about phase 3. Will he accept that if the present rate of wage settlements in the private sector continues as for the remaining part of phase 3 up to July 1977, the rate of price increases will rise very rapidly in the second half of 1978? What is he doing to enforce the guidelines in the private sector?

I do not think that we can draw that conclusion. I believe that only 3 per cent. of wage earners in this country have made settlements. Many are waiting to see what happens. I was told yesterday and the House will have read about what I million local authority wage earners were saying about a current dispute. A great many people are waiting. It is not right to suggest that there will be a great excess. Nobody can say that, when such a small proportion have settled. It is the Government's responsibility, within budgetary limits and in other ways, to try to prevent people in the private sector from saying that they did it because the Government did it.

Will the Prime Minister take the opportunity of having a word with the German Minister of Labour who is visiting London this week and others like him, such as the right hon. Member for Leeds, North-East (Sir K. Joseph), who are implacably opposed to the temporary employment subsidy? The Prime Minister should tell them that Britain intends to continue with the TES because of its importance to the textile and clothing industry.

There is no doubt that in the middle of a world recession it would be absolutely idiotic to follow the suggestions of the right hon. Member for Leeds, North-East (Sir K. Joseph) who says that all rescues and subsidies are harmful. I have never heard a more stupid expression in the 33 years that I have been in this House.

In view of the motion on the Order Paper by the hon. Member for Ormskirk (Mr. Kilroy-Silk) and other Labour Members about the Government's sanctions policy, and their attack upon it, will the Prime Minister seek from the House a legal basis for his 10 per cent. pay policy and for his sanctions, neither of which have such a legal basis?

Why do the Government not suggest an institution such as the National Board for Prices and Incomes to operate alongside their voluntary pay policy?

I think that the experience of the Prices and Incomes Board in the past shows all too clearly that this kind of institution cannot operate without the full consent and support of those who intend to control or take part in it. That is why I have always insisted that whatever the difficulties in a democratic society like ours, we shall not succeed without the support of the trade unions in these matters. That is why my efforts at the moment have been bent on winning public and trade union opinion to our side. What is more, we are holding it remarkably well.

Originally the Government's guideline were 6 per cent. on wage rates and 10 per cent. on earnings. Are they now 10 per cent. on wage rates and 15 per cent. on earnings?

No, Sir. The Government's original guidelines were 10 per cent. on national earnings, and settlements well within single figures. We would like to retain that situation.

Business Of The House

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

The business for next week will be as follows:

MONDAY 5th DECEMBER—Supply [2nd Allotted Day]: debate on a motion to take note of the First to Tenth Reports from the Select Committee on Public Accounts in Session 1976–77 and the related Treasury Minute and Northern Ireland Memorandum.

Motion relating to the Sheriff (Removal from Office) Order.

TUESDAY 6th DECEMBER and WEDNESDAY 7th DECEMBER—Further progress in Committee on the Scotland Bill.

At the end of Tuesday, motion on the Amendment of Units of Measurement (Hydrocarbon Oil etc.) Order.

At the end of Wednesday, motion on EEC Documents on Energy Policy, R/77 Nos. 1955, 1959, 2347, 2348 and 2594, and a motion on EEC Documents on Nuclear Policy, R/77 Nos. 1901, 1956 and 1958.

THURSDAY 8th DECEMBER—Motions on Northern Ireland Orders on Emergency Provisions and Criminal Law, and on Appropriation, Electricity Service (Finance), Rates, Agricultural Wages, Supplementary Benefits and Road Races.

FRIDAY 9th DECEMBER—Private Members' motions.

MONDAY 12th DECEMBER—Supply [3rd Allotted Day]: the House will be asked to agree the Civil and Defence Votes on Account and the Winter Supplementary Estimates.

There will be a debate on a subject to to be announced later.

Perhaps I may add, Mr. Speaker, that, subject to progress of business, it will be proposed that the House should rise for the Christmas Adjournment on Friday 16th December until Monday 9th January 1978.

Is it not a most extraordinary situation that when the Prime Minister goes next week to speak to the other Heads of Governments in the EEC he will protest that he is using his best endeavours to get the European Assembly Elections Bill through the House? Has not the Leader of the House triumphed, because apparently there will be no endeavours at all next week to advance that Bill? How on earth can the Leader of the House justify the Prime Minister's position? Of course, the Leader of the House can justify his own position, but I do not see how that can apply to the Prime Minister, who is supposed to be using his best endeavours.

The most extraordinary aspect of the situation is the right hon. Gentleman's excitement.

If the right hon. Gentleman is not excited after all, we have restored the status quo. If he is a little patient, he will see that we are proposing to make fresh progress with the Bill before Christmas. [HON. MEMBERS: "Which Christmas?"] This Christmas. We are making some progress today. We shall see what happens to the Bill, but we hope that we shall be able to make good progress before Christmas, and no doubt we shall be able to discuss next week the important question that was raised by the Leader of the Opposition.

The Government keep pretending that they intend to use their best endeavours, but that is not true. Nothing is happening at all. One cannot have a best endeavour, or even an endeavour, when one does not seek to make progress on a Bill but goes ahead with other matters. Let me put this to the right hon. Gentleman without any question of my becoming excited: if the right hon. Gentleman proceeds in this way, the blame for not meeting the target date on direct elections will lie entirely on the Prime Minister and the Leader of the House.

I understand the right hon. Gentleman's sensitivity, if not excitement, on this subject. No doubt that will be one of the aspects that will crop up in the debates we shall be holding on Tuesday of the following week. I hope that if we proceed then, I shall have the right hon. Gentleman's congratulations on the success of my best endeavours.

Will my right hon. Friend consider holding before Christmas a debate on the proposed plan by British Airways to buy foreign aircraft to replace the present fleet? If he cannot arrange a debate, will he ask the Secretary of State for Trade to make a statement in the House?

I understand the interest of the House and of my hon. Friend in this matter. I cannot promise a debate unless there is an opportunity through some of the various ways that are open to hon. Members before Christmas. No doubt there will be a statement, if that is thought desirable by the House. I emphasise that there are other opportunities for discussing these matters before we depart for Christmas.

Since the Deputy Leader of the Opposition has made it clear that the Opposition are keen to use every means possible to help to obtain direct elections—[HON. MEMBERS: "No."] I understood the right hon. Gentleman to say that the Opposition were displaying their best endeavours. Since this enthusiasm is being displayed, will the Leader of the House undertake, if possible, to try to obtain before Christmas the decision of the House on the system of election for the European Assembly?

It would be sensible for the House as a whole, in view of the controversies that surround this matter, to settle that matter before Christmas. We are prepared to take steps to try to ensure that that happens, and the arrangements can make that perfectly possible.

In view of the great anxiety felt in all parts of the House, will the right hon. Gentleman arrange an early debate on the steel industry?

I am second to none in this House in my interest in the steel industry, and I know that that interest is shared by many hon. Members. I cannot promise a debate before Christmas on the matter generally, but it is a matter that at some stage will have to be debated thoroughly in the House.

Will my right hon. Friend say how soon the House will debate the Town and Country Planning General Development (Amendment) Order 1977, on which there are already motions tabled by hon. Members on both sides of the House—motions pointing to the serious effects on conditions in our towns and, potentially, in the countryside?

I cannot promise a debate on that matter before Christmas, but we shall examine the opportunities that are open. There are other opportunities for debate, apart from those provided by the Government.

With regard to a matter that is far more important than legislation on European elections, namely the Northern Ireland business on Thursday, will the Leader of the House use his best endeavours to ensure that a business motion is tabled to permit the House to extend the time for such debate up to three-and-half hours on the Appropriation Order?

I shall do my best to ensure that we have adequate time for that debate. We have reached agreement on these matters on previous occasions in the interests of hon. Members from Northern Ireland, and indeed of hon. Members in all parts of the House. I hope that we shall be able to take a similar course next Thursday.

Is my right hon. Friend aware that I share his enthusiasm for the direct elections Bill but that it is strongly rumoured that there is a possibility of a Merchant Shipping Bill being introduced if we get the direct elections Bill through quickly? Can he give an assurance that if that legislation comes forward, it will be introduced in this House and will contain no penal clauses to which trade union hon. Members might find objection and which would spoil an otherwise perfectly acceptable Bill?

I shall not comment on what my hon. Friend said about penal clauses. I understand the representations that he, other hon. Members and trade unionists have made on this subject and proper account will be taken of them. The Merchant Shipping Bill figured in the Queen's Speech. We could not give an absolute guarantee that we would get it through this Session, but it is very high on the list of measures that we should like to get through and the speedier the House can be in dealing with some other matters, the better will be the chances of proceeding with the Merchant Shipping Bill.

Will the right hon. Gentleman have second thoughts about the business for next week? On the face of it, the business looks not just stupid but utterly ridiculous. Here we are, in the Government's expression, looking inwards to our island problems of Scotland and Ireland—but not daring to look overseas to Europe. Are the Government so half-hearted in this matter?

If there is any absurdity here, it is in the hon. Gentleman's comments. We are debating today the Bill to which he referred. We shall be debating it again before Christmas. So it is absurd to suggest that the House is not getting plenty of time to proceed with the Bill. We may have to have further time later. It is much shorter than some other Bills. It is absurd, when we are discussing the Bill today, to suggest that we are not giving attention to it.

My right hon. Friend seems to have promised all but two and a half days of the available time before Christmas, but could he find one day in the last week before the Christmas Recess or in the first week after our return for a debate on the Services Committee's report on secretarial and research services, bearing in mind the constraints of the financial year which may necessarily delay any scheme that is approved?

I cannot promise that debate before Christmas, but I promise that we shall have it at a fairly early stage after we return. We are committed to it and it would be wrong for the House to delay the matter. I believe that the House should have the chance to approve or disapprove the report—I trust that we shall approve it—before the new financial year starts so that we can operate in the way suggested in the report.

Will the right hon. Gentleman give an assurance that when the House debates the rate support grant order we shall have a full day's debate and not a half day as we had last year?

In view of my right hon. Friend's answer to the Leader of the Liberal Party, can he undertake that if progress in Committee on the direct elections Bill is not very fast during the two days already promised, he will consider assigning a third day before Christmas?

I do not know about assigning a third day if we are to carry out our obligations on other subjects, including, for example, a debate on the rate support grant order. However, there is another method by which my hon. Friend's request might be met, namely the suggestion of the Leader of the Opposition last week. That could be considered. It is much better for the House to proceed with the debate today and see how that progresses and then make up our minds about how we approach the matter the week after next.

Will the right hon. Gentleman ensure that a full one and a half hours is given to the Prayer against the Town and Country Planning (General Development) Order in which there is considerable interest inside and outside the House? Will he also ensure that the debate is held on the Floor of the House and not in Committee?

Is it not extraordinary that when the Conservative Party professes to be using its best endeavours to get the direct elections Bill through, it has not thought it worth while to impose an effective Whip today?

As my right hon. Friend knows, I never like to inquire too closely into the delicate matter of whipping on either side of the House.

Has the right hon. Gentleman had the chance to study Early-Day Motion No. 105 in my name on the urgent need for a settlement of the firemen's pay dispute? Will he concede that this is a constructive motion, and will he find time for the House to debate the dispute, because I believe that some useful ideas will be forthcoming from all parts of the House?

[That this House, fully aware of the desperate need for the settlement of the firemen's pay dispute, urges Her Majesty's Government to call an immediate joint meeting composed of employers' representatives from the local authorities, Government Ministers and officials of the Fire Brigades Union to discuss the ending of the dispute based on a formula comprising: (a) immediate payment of 10 per cent., (b) reduction of the standard working week from 48 to 42 hours per week, (c) payment of substantial compensation for personal injury or loss of life, and (d) during the three years 1978 to 1980 to increase the basic pay of a qualified fireman to not less than the average male industrial wage plus 10 per cent. and this level to be maintained from 1981 onwards.]

I am not sure whether such a debate would be the best way of dealing with this matter. We had a debate on the subject under our emergency procedures a week or two ago. That was the right way to proceed then. We shall have to see what develops.

Will my right hon. Friend arrange a debate on the misuse by the Government of discretionary powers granted under the Industry Act and other measures which were specifically designed to sustain and maintain employment, but which are now being used to threaten workers who have negotiated agreements above 10 per cent?

I do not accept what my hon. Friend says about the misuse of such powers by the Government. I refer him to the answer given by my right hon. Friend the Prime Minister a few minutes ago.

Has the right hon. Gentleman seen the Early-Day Motion in my name and the names of 70 right hon. and hon. Members from both sides of the House concerning legal aid to handicapped persons against whom Government Departments have made appeals? In view of the statement of the Attorney-General that the Government are unwilling to extend legal aid to t these people, will he arrange an urgent debate on this topic?

[That this House deplores the fact that when the Secretary of State appeals against an award to a handicapped person, an award that has been confirmed by the Medical Appeal Tribunal, the legal costs of the Secretary of State are met out of public funds whilst the handicapped person, no matter how impoverished, is not entitled to any form of legal aid, and urges the Government to take immediate action to remove this intolerable burden upon handicapped persons.]

I certainly appreciate the importance of this matter. I know that the right hon. Gentleman is raising one aspect of it in an Adjournment debate during the week. What he has proposed is a more elaborate proposition than the matter that he may be raising directly. There are opportunities before the recess for hon. Members to raise exactly this sort of matter. Some hon. Members—I do not include the right hon. Gentleman in this category —sometimes underrate the possibilities that exist for them to raise some questions.

Is the Leader of the House aware that there will be considerable disappointment inside and outside the House that he has not seen fit to give us the right to make a decision whether Sheriff Thomson should have the right to come to the Bar of the House and that the right hon. Gentleman has put the debate on at an hour that is not appropriate to its constitutional importance and has given no indication that he is prepared to extend the time to allow more hon. Members to discuss this matter thoroughly? Should not Sheriff Thomson at least have as fair a trial as he has given others in the Sheriff Court?

I suggest that the debate should be extended until midnight. That is some extension. However, I say to the hon. Gentleman and all others concerned with this matter that Parliament has laid down the statute under which the dismissal of a sheriff in Scotland can take place. That was incorporated in an Act passed through the House in 1971. The Secretary of State has abided exactly by the procedures laid down in that Act. The debate will be taking place in exactly the form laid down in the 1971 measure.

Order. There is a statement and a Standing Order No. 9 application to follow. I shall call one more hon. Member from each side of the House.

Is my right hon. Friend prepared to find time to discuss the behaviour of publicly-owned industries which provide services to the general public and which seem to be neglecting the social aspect of their responsibilities? One example is the proposal of the Post Office to abolish the 2p call in public call-boxes and to substitute a 5p call, which would make life very difficult for many pensioners and others on low incomes.

I appreciate the general importance of the matter raised by my hon. Friend, particularly in the preamble to his question. It is undoubtedly a matter that could be raised during one of the various times allotted by the House for such matters. It could be raised before the Christmas Recess.

If the level of pay settlements is to reflect the level of unemployment and inflation in this country in the next nine months and if, as the Prime Minister says, 80 per cent. of working people support a level of pay increases not above 10 per cent., can the Leader of the House arrange for a statement to be made on how the Government intend to get over the problem that most trade union leaders feel bound to ask for substantially more than 10 per cent. in a way that will be detrimental to their members?

The hon. Gentleman raises a general economic question that has figured in debates that we have already had in this Session. No doubt it will figure prominently in many of the economic debates that we shall have throughout the rest of the Session.

On a point of order, Mr. Speaker. I apologise for interrupting, Mr. Speaker, and I do not want to question your decision to limit questions on the business to 10 minutes to 4 o'clock. However, the Leader of the House has totally surprised the House by announcing that the House will not sit in Committee on the European Assembly Elections Bill next week. In those circumstances, would it not be reasonable to have a few more comments on this subject to register the disapproval of the House?

On a point of order, Mr. Speaker. I raise the same point, but from a different point of view. I see that there is a motion on the Order Paper that we should go on until any hour tonight. As I shall be one of those who will go on until any hour tonight, would it not be appropriate to get in a few more questions now, as it is we who will suffer? I think that this is an issue of fairly big importance as a general principle. Questions should be allowed to go on for a little longer if the House is subsequently going on for a long time.

I must be fair to the House and let the hon. Gentleman get to his subject of direct elections.

Is the right hon. Gentleman aware that we on the Opposition Benches appreciate his forthcoming response to the Leader of the Liberal Party, when he indicated that he thought it would be useful and a good idea if the House decided the method of election to the European Assembly before Christmas? The right hon. Gentleman will be aware that the only way in which that can be done is by tabling a motion to take Clause 3 out of time. Will the right hon. Gentleman indicate when he intends to put such a motion on the Order Paper?

If I may be permitted to reply to the right hon. Gentleman—I do not know whether he was raising a point of order—the only way in which the matter can be dealt with before Christmas is not as the right hon. Gentleman describes. After we have seen how the debate proceeds today, it may be evident when we come to the matter the week after next that we shall be able to have a debate without any special motion being tabled.

It could perfectly well happen. I do not know whether the Opposition Chief Whip has issued a threat. I do not like to hear such words emanating from the right hon. Gentleman. He has almost threatened that it will not happen. The way in which debates develop does not depend solely on propositions made by the Government. If it becomes evident that there is no chance of settling the matter before Christmas, I shall consider seriously the proposition that the Leader of the Opposition put forward last week. However, I think that it is much better for the House to proceed in the way that I have described. I shall consider the other proposition if we are not to settle the matter in the way I have outlined. Whatever view may be taken by the House, whether it is against the proposition of the regional list or for it for example, I believe that there would be considerable advantage for the House as a whole if a decision could be reached before Christmas.

On a point of order, Mr. Speaker. My right hon. Friends on the Opposition Front Bench keep on pressing for speed on this issue—

Order. Will the hon. Gentleman address his point of order to me? His Front Bench colleagues are not my responsibility.

I apologise, Mr. Speaker. My Front Bench colleagues keep on presing for speed on the European Assembly Elections Bill. Do you think, Mr. Speaker, that you can somehow bring your pressure, which is considerable, to bear upon the Europeans to cause them to make up their minds about the pay of these Members? I ask that question—[Interruption.]—because the Minister has said—this is not a silly point—that we must decide that issue before the Bill goes through.

Order. The hon. Gentleman has been here a long time and he knows that he has got away with two sentences more than he should have been allowed to utter.

On a point of order, Mr. Speaker. If I may, I wish to refer back to the point of order raised by my hon. Friend the Member for Harrow, East (Mr. Dykes). Of course, I do not wish to question your ruling, Mr. Speaker, that business ques- tions should come to an end when you said. However, I am sure that you must now be aware, Mr. Speaker, that there is a growing dissatisfaction on both sides of the House about the way in which the business of the House is conducted. To allow no more than 20 minutes of effective questioning of the Leader of the House on the way in which the business is to be arranged for the coming week, and for weeks ahead, is. I suggest, to prevent expression of the deep dissatisfaction on the part of many hon. Members, with the result that the real views of hon. Members are not being heard on the Floor of the House. I ask you, Mr. Speaker, to consider whether it should not be normal practice to allow, as long as there are hon. Members willing to ask question, at least an hour and a half for business questions on Thursday.

On a point of order, Mr. Speaker. You said, Mr. Speaker, that you would allow one more question from each side of the House. After that you allowed my right hon. Friend the Member for Cambridgeshire (Mr. Pym) to ask a question urging that another day should be wasted on a Bill that no one really wants—in spite of all the fuss and noise that is made about that Bill. As you allowed your own ruling to be broken by one, Mr. Speaker, I wonder whether you would allow a counter-balance by another question being put from an hon. Member who does not want to see the time of the House wasted.

On a previous occasion I indicated that when I say I shall take one more question, or two more, from either side of the House, that is not counting the Front Benches if they wish to intervene again. As for the length of time given for questions, I fear that if we allowed an hour and a half under the conditions that the hon. Member for Essex, South-East (Sir B. Braine) suggested, the time would be filled—and the questions would not all be about the business for the following week, which is technically what we are discussing.

Crown Agents

With permission, Mr. Speaker, I wish to make a statement about the Crown Agents.

I am today publishing the report of the committee which I appointed in 1975, under the chairmanship of His Honour Judge Fay, to
"inquire into the circumstances which led to the Crown Agents requesting financial assistance from the Government."
These terms of reference involved the committee in detailed examination of events which were complex and spread over a period of years. I am most grateful to Judge Fay and his two colleagues for the impressive way in which they carried out this heavy task. Their report is of the greatest value and the Government and the Crown Agents accept the report as a fair and searching investigation into the facts.

Simultaneously, I have published a statement giving the Government's reactions to this report. Annexed to the statement is the report of the earlier inquiry into the Crown Agents under the chairmanship of Sir Matthew Stevenson. This report is relevant to the events described in the Fay Report, and is quoted in that report. The Government have therefore decided, with the agreement of Sir Matthew Stevenson and his colleagues, that it is now right to publish the earlier report. I have, of course, consulted the right hon. Member for Bridlington (Mr. Wood) and the Opposition on this matter.

Hon. Members will no doubt be studying all these documents, and I do not want to go over the ground again now. But the House will expect me to mention the salient points. First, the Fay Report shows that a serious state of affairs was allowed to develop over the years up to 1974. As a result, the Crown Agents incurred losses which are likely to prove to be over £200 million. As the Government statement says, we accept the report's conclusion that there were serious shortcomings on the part of the Crown Agents, and that Departments and other outside agencies contributed to the failure to prevent losses.

These losses have led the Government to emphasise on several occasions that they stand behind the Crown Agents.

A Government grant of £85 million was made in December 1974, and we shall be ready to put proposals to Parliament as and when further assistance is necessary. As a result, the Crown Agents' overseas principals need not fear that any part of the funds that they entrusted to the Crown Agents will be lost.

I must stress that the Crown Agents' traditional functions played no part in causing these heavy losses, nor have they been harmed by those losses. The losses arose solely from
"an unwise decision to operate as financiers on own-account",
to use the words in paragraph 422 of the Fay Report. That course of action has now been decisively reversed. The Government statement summarises the corrective action that my predecessors and I have taken since 1974 in respect of defects in the relations between the Crown Agents and Departments which the report identifies as major factors in the disasters.

There was uncertainty over the Crown Agents' status and relationship to the Government. These have been defined. The Government were receiving wholly inadequate information on the Crown Agents' affairs. New arrangements now ensure that we get full and regular reports. Whereas there was insufficient control or direction by Ministers, clear directives now exist, and I am consulted by the Crown Agents on all major policy decisions. I am therefore confident that nothing like the events described in the report could ever happen again. I lay great stress on this, because the Crown Agents' future in providing valuable services to their principals depends on it.

However, we cannot leave past events there. The question of responsibility for what went wrong needs more specific investigation than the Fay Committee was able to give it. The Prime Minister is therefore setting up a Committee of Inquiry under the Chairmanship of Sir Carl Aarvold with the following terms of reference:
"In the light of the Report of the Fay Committee to assess the nature and gravity of any neglect or breach of duty by individuals which may have occurred in the Crown Agents, the Ministry of Overseas Development, the Treasury, the Bank of England and the Exchequer and Audit Department."
That inquiry will mark the end of a sorry chapter in the Crown Agents' long and otherwise distinguished history. Looking to the future, I am confident that under their present Board the Crown Agents can maintain and develop their traditional services soundly and successfully, to the benefit of all their principals.

As the Minister implied, her statement and the three public reports are not only of great importance but are extremely complex. She and the House will readily understand that it would be difficult to give a detailed reaction to them now. Nevertheless, it is surely important to get the matter into perspective without minimising the gravity of mistakes made over the last few years.

I should like to reinforce what the Minister said about the growing success of the traditional services of the Crown Agents, which have expanded in range during the last two or three years. It is well known that the Crown Agents provide a good service to under-developed countries and serve over 100 Governments and 200 public authorities. It is right that much of the credit for this success should go to the present chairman, Mr. John Cuckney, and his management team. I therefore suggest that a sharp distinction should be made between the success of the traditional services of the Crown Agents and the sad story that has arisen from the decision that the Crown Agents made in the 1960s to operate as financiers on their own account.

These so-called own account activities have been—as the Fay Report said—a saga of incompetence and inaction. It arose largely from the failure of the Crown Agents to adjust to their modem rôle and conditions. The Crown Agents are not properly accountable in the sense that a statutory authority is accountable in terms of financing and its way of carrying out business. I understand that the Government view is that this requires legislation to put it right. I do not want to make any commitment on that for my side of the House, because many of us have a distaste for legislation. Will the Minister say whether it is the Government view that there is a need for legislation?

I wish to ask a question about the use of taxpayers' money. The statement indicated that the accumulated losses of the Crown Agents were more than £200 million. How long does the Minister expect that it will take the Crown Agents to carry out a complete disinvestment policy in secondary banking and in property? Has the £85 million grant been fully utilised? Can the Minister say more specifically whether further taxpayers' funds may be required to eliminate the deficit and whether, in future, those funds will be recoverable in loan form?

The Minister made a point about the establishment of a committee of inquiry. That is a major decision. Will procedures enable full safeguards to be provided for individuals against whom allegations may be made? Will the Committee be held in public? This is a matter of great importance to the individuals concerned because it appears that it will be an administrative rather than a judicial committee.

I should finally like to ask the Minister, in view of the great importance of her statement today, to pass on to the Leader of the House our view that there should be a debate on these matters as early as possible.

I am grateful for what the Opposition spokesman has said about the importance of the traditional rôle of the Crown Agents and for his full recognition that this rôle has been increasing in its value to other countries—not only to the richer developing countries but to some of the poorer ones. I am most grateful for that because probably the whole House would want it to be made clear that in looking at the disaster of these own-account activities of the Crown Agents we are aware of—and here I endorse entirely what the hon. Gentleman said—the success of the board under Mr. Cuckney. We now have enormous confidence in him and his board.

We believe that legislation is needed. As can be seen from the statement, we now have a set of directives and working arrangements that are totally accepted. However, they are not actually enshrined in legislation and we believe that they should be. We want to legislate as soon as possible, but until then we are content that we have the arrangements in a secure enough form to make everything work with full accountability.

As for how long it is likely to take for the Crown Agents to disengage from some of their disastrous own-account activities—with some of which they are still involved—there is a full account in the Fay Report on that. However, I know that the Opposition spokesman and hon. Members have not had time to read it because we had to publish the report as a Return to the Commons and therefore there has been no opportunity for the report to be studied since 2.30 p.m.

Answering the hon. Gentleman, the length of time required varies. In respect of the Australian involvement it will take some time, and it is right that it should, because a better result may be forthcoming because of that. The time needed varies according to the investments.

As for the grants, there is an £85 million grant and a £50 million Bank of England standby. The £85 million is now intact and has not been drawn upon, but we have no doubt that eventually it will be needed. Certainly, if any further money were needed we should come to Parliament for permission to use further taxpayers' money, but it is difficult to know now what the situation will be.

The Committee will be an informal one, sitting in private. There have been similar inquiries in the past.

The Fay Committee was asked to look into the events leading up to this enormous catastrophe of the Crown Agents. It was not asked to consider what steps the Government might or should take in relation to particular individuals involved in the Crown Agents, or in any of the Departments involved. This inquiry will be concerned with those matters. It has a dual nature. There are some people who will need to have their credentials cleared, to have their innocence established, and there are others against whom it may be that this inquiry will say that some form of disciplinary action might have to be taken. This needs to be inquired into. That is why the Government came to the view that this should take place.

The inquiry will sit in private. Anyone attending it will have the right to take with him either a legal adviser or any other person he wishes. It is not a formal inquiry under the 1921 Act. We shall see how best to deal with its conclusions when we receive them.

Will my right hon. Friend remember that some of us who, in the course of public duty abroad and since, have regularly advised the developing countries to use the Crown Agents, will look for even greater affirmation by Ministers of the guarantees and services which these developing countries can expect to find in the Crown Agents in future?

I entirely agree with my right hon. Friend. When I visit developing countries who have not hitherto used the services of the Crown Agents I find that they are ready to do so and that the Crown Agents' reputation among their overseas principals stands extremely high.

While congratulating the right hon. Lady on the decision to publish these documents and to continue her inquiries, may I ask her to be good enough to bear in mind the point of view, which I think is finding increasing acceptance in this House that the remedy to these matters lies not in a succession of inquiries but rather in establishing in this House a better form of control of expenditure? Is she aware, concerning the Exchequer and Audit Department, that the whole House has total confidence in its ability as an audit department—

—but that what is needed is to provide this House with a better investigative tool, to which end that Department should be greatly strengthened?

The right hon. Gentleman will recall that I was sufficiently anxious about the accountability to this House of the Crown Agents as to seek to give evidence to his Select Committee. My offer was not accepted because it was traditional to receive evidence only from civil servants and not Ministers. I accept that. This question of public accountability is the kernel of the whole situation. One of the problems was that before we took steps to remedy the relationships between the Crown Agents, the Ministry of Overseas Development and Parliament, the accounts of the Crown Agents were not laid before Parliament. Had they been laid before Parliament, something would have happened more rapidly, and there would have been greater knowledge of what was happening. This is the crux of the matter.

Will my right hon. Friend accept congratulations on her personal perseverance in bringing this sorry tale to a full exposure? Is she aware that one sentence in this admirable report, in paragraph 327, reads oddly because it says that no one could have known in November 1973 that the skies were about to open and the deluge to fall, although that was the very month in which the former Conservative Minister responsible was told publicly in the House of Commons that there was a scandal here which was waiting to blow?

Is my right hon. Friend also aware that, although this report has exposed a large number of culprits in the story, there is one culprit which does not get blamed in the report, and that is the House of Commons? Does she recall that the House of Commons had a Committee which initiated an investigation of the Crown Agents, with great difficulty, as a result of my right hon. Friend's action and mine with the assistance of the Conservative Member for Norfolk, North-West (Mr. Brocklebank-Fowler) in December 1973? Yet that same Committee, in May 1974, when it could have done tremendous work, decided quite irresponsibly to suspend its investigations.

I can confirm what my hon. Friend says, up to the point of May 1974, when I was no longer serving in the Department. I well remember the efforts some of us made in the preceding period to have a full investigation made by the Select Committee on Overseas Development. I confirm that entirely. I am grateful to my hon. Friend for what he has said about my rôle in the matter. There is one other aspect with which I know he will agree since he was one of the hon. Members who played, with great distinction, a part in the exposé of the Crown Agents which led to the setting up of the Fay Committee. In the Committee's report there is talk of a catastrophe and it is said, talking of the time when the Crown Agents had extended themselves in their "own account" activities to the point of capacity,

"It had been a time of euphoria in the fringe banking and property speculation world."
Land investment, land speculation, was a fashionable speculation at the time but in a different economic climate it was to prove a major embarrassment. Of course it is this which basically led to the catastrophe.

If the Minister considers, as she apparently does, that it is necessary and desirable that the financial functions and operations of the Crown Agents should continue and be preserved, may I ask her to say what steps she is now prepared to take to deal with the defects and anomalies which are so well identified and commented upon in this report?

When the hon. and learned Gentleman has the time to read the Government statement he will see appended to it—and it takes up quite a lot of space—all of the statements that have been made to the House of Commons on the subject of the Crown Agents over the past two years. The hon. and learned Member may be interested to know that during the period 1909 to 1973 only 18 parliamentary Questions were asked in this House on the subject of the Crown Agents. That gives the background flavour of the concern of the House and the responsibility of the Crown Agents to it.

The hon. and learned Member will also find appended one of the statements which I think was made in July 1974 in which I gave a directive to the Crown Agents to disengage from property. He will find other statements that make it clear that, despite the fact that we have not yet got legislation, remedial action has been taken. I am quite convinced that in the relationship between the Crown Agents and myself and Parliament we have now got the correct accountability which ensures that this kind of thing can never happen again.

Will my right hon. Friend confirm that this is one of the biggest Establishment scandals of all times and that this gang who ran the outfit known as the Crown Agents made the train robbers look like petty thieves? Is it not high time that my right hon. Friend came to the conclusion—unlike the one she has given us today—that she ought to get these guilty people into court instead of setting up another secret committee in which the elitist group can get together again for a considerable period of time in the hope that many of the guilty people will disappear?

Will my right hon. Friend answer the other question which I have put to her many times before and which relates to the Crown Agents? When are the Government to tackle William Stern, who had £40 million worth of Crown Agents' money, taxpayers' money? When will they make sure that he is put into bankruptcy, as he should be, like other people who fall into disrepute in the way that he has?

My hon. Friend knows, because I answered a question from him a little while ago in relation to Mr. William Stern, that there are full details of all his involvements in the Fay Committee Report. The Crown Agents have taken the formal steps necessary prior to the institution of legal proceedings that could ultimately lead to a bankruptcy petition against William Stern. The Crown Agents have gone as far as they appropriately can at the moment. There is no doubt about the concern everyone has about furthering these proceedings, if that is what is ultimately decided.

As to the rest of what my hon. Friend says, the Director of Public Prosecutions has studied the Fay Report, the supplementary report and the report which is mentioned in paragraph 73. Proceedings are being taken against one person. On the question of exchange control offences, these are still under investigation, and everything that can possibly be done in this context by the Director of Public Prosecutions is being done. Of course, some of the people who worked for the Crown Agents are no longer within that body—

—and they are not thought to be liable to criminal proceedings. There are, however, possibilities for civil proceedings in some cases. Everything that should be done in terms of the law is being done.

I invite the Minister of State to reconsider the form of inquiry. The choice of chairman is admirable, but the Royal Commission on Tribunals of Inquiry, the Salmon Report, stated that this sort of inquiry could lead to many injustices. A whole number of departmental officers and officials are referred to in the terms of reference, and what worries me is that with this type of inquiry, rumour breeds on rumour, the whole thing is done in secret, and those called before the inquiry do not know what it is all about. One ends up with the difficulty that there will be a real risk of injustice. I ask the Government to reconsider the type of inquiry that is to be set up.

The right hon. and learned Gentleman will recognise that this has been the subject of the most careful consideration by the Government. There were various possible ways of inquiring further into whatever arises from the Fay Report in terms of individuals. It was only after the most careful consideration, and with full consultation with my right hon. Friends the Attorney-General and the Lord Chancellor and the Civil Service Department, that in the end, by balancing the pros and cons of different forms of inquiry, we came to the conclusion that this was the best form of inquiry.

We felt it was important that it should be in private, partly because some of the individuals concerned will want to establish that their rôle in the matter does not call for any condemnation whatever. The publicity attached to a public inquiry could lead to people against whom one would not wish to level any criticism being brought through this process. On the other hand, where there might be a possibility of neglect or omission of duty we thought it was best that the proceedings should be in private. There will be two other members of the inquiry, neither of whom will be civil servants.