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Orders Of The Day

Volume 941: debated on Wednesday 14 December 1977

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Consolidated Fund Bill

Order for Second Reading read.

Motion made, and Question proposed, That the Bill be now read a Second time.

Bbc Radio Services

7.58 p.m.

I wish to raise the subject of the BBC's local and overseas radio services. I appreciate that it may be inconvenient to some people—particularly to the Government Front Bench—because these two subjects fall within the scope of two different Departments, the Home Office and the Foreign and Commonwealth Office. This administrative inconvenience could be got rid of by the restoration of the post of Minister for Broadcasting, which I am not advocating.

Nevertheless, notwithstanding the difficulties that could arise, I feel that it is right that local and overseas radio services should be debated simultaneously, because the three facets of sound broadcasting—local, national and overseas—emanate from the same source—the BBC. It is important to recognise that each of the three facets provides interconnection and technical and material support for the other two. Therefore, a debate on these two aspects—local and overseas radio services—is not entirely inappropriate.

First, I should like to express some views on the Annan Report in so far as it concerns local radio services. This matter was discussed in the House on 23rd May. The House will recall that the Annan Committee was forbidden by its terms of reference to deal with BBC external services. They were outside its scope of reference. All that the Committee could do was to take cognisance of that fact. Due to the shortage of time and because I was not fortunate in catching Mr. Speaker's eye, I did not take part in that debate.

BBC Radio Leicester was the first local BBC radio station to be established, and it has been the pioneer of local broadcasting. Those of us who have been associated with local radio for nine or 10 years have built up a case history of its operation. We have formed our own judgments without having the benefit of a report such as that produced by Lord Annan and without being told what to think. We have lived with local radio in Leicester and we have formed our own opinions, as have our constituents.

A few months ago, hon. Members representing the City and County of Leicester and Rutland formed an all-party committee to consider the Annan Report and its implications for BBC Radio Leicester. Many letters were received and most praised the rôle that BBC Radio Leicester is playing, not only in entertainment value but in its valuable social work.

I remind the House that Leicester has a large immigrant population. This has been a problem, and it still is at times. Several of the letters that we received stressed the value of the work that BBC Radio Leicester is doing in community relations, which is a special and difficult area. Several letters stressed with real force what the radio station has been and is doing to unify the communities which comprise many thousands of people from different ethnic backgrounds.

I shall mention some of the most important letters. One came from the Leicester Diocesan Youth Committee, which expressed full support for local radio as it is at present constituted. It stressed the value of the work that BBC Radio Leicester is doing to provide important access to the air to the community and the youth services in Leicester city and county.

The Oadby and Wigston Borough Council unreservedly supported BBC Radio Leicester. It wished to see the continuation of community radio as it has been established by BBC Radio Leicester. The importance of community work was the theme and thread which went through all these letters.

The National Federation of Business and Professional Women's Clubs of Great Britain and Northern Ireland wrote to me supporting the efforts of BBC Radio Leicester. It not only stressed the work of the radio station on community relations but said that BBC Radio Leicester was an essential part of contemporary society in Leicester today.

There were many other letters to which I shall not refer in detail. They included a significant letter expressing unanimous support from the Leicestershire Association of Parish Councils and others from the Hinckley and Bosworth Borough Council and the Harborough District Council.

Many criticisms—most of them unfounded—are made of local radio stations. These criticisms have been made in particular about BBC local stations and they refer to the content of the advisory boards which administer the stations. Each BBC local radio station has a local broadcasting council. Some critics say that these councils consist of middle-aged people with middle-class backgrounds who are out of touch with reality.

I thought it might be helpful for the House to know that the view expressed by the hon. Member who sits for a county seat and with whom it is a pleasure to disagree on many other matters, is a view that is universally held by those of us who represent Leicester city constituencies. The unanimous response of the public is that they feel the same way. We are grateful to the hon. Member for Harborough (Mr. Farr) for raising this matter. We feel exactly as he does. BBC Radio Leicester has avoided becoming a monopoly of the media and public comment. We should like to commend the hon. Member for Harborough.

I am grateful for that intervention, but I have only just begun my speech. The hon. and learned Member for Leciester, West (Mr. Janner) has committed himself to supporting me. I only hope that I can live up to his expectations. If I cannot, I hope that he has an opportunity to retract his support later.

Criticisms have been made about the format of local broadcasting councils. They have been said to comprise fuddy-duddies who are out of touch with reality. BBC Radio Leicester has a typical local broadcasting council consisting of 17 member. Some of them may be middle class but I thought that we lived in a classless society. Some of them are definitely middle-aged, but there is an enterprising blend of youth and occupations from all walks of life. I find this refreshing.

A number of the members of the council are in their twenties. Mrs. Root is a housewife in her late twenties. She is married to a train driver, I hasten to add. Mrs. Burnside has two young boys and is a supervisor in the hosiery industry. She is a member of a co-operative young wives' group and is also in her late twenties. Mr. Ramon Patel is about 35 and married, with two children. He was born in India. Mr. Douglas Burton is aged 55 and is married, with two daughters and one son. He is a toolmaker and an active trade unionist. There are also a number of members of the council who own small businesses. Mrs. Cook is married, with two sons and she and her husband run a small knitted fabric firm in Sileby. The Council contains representatives of the Church, of education and of the local authorities. I should have thought that that was an admirable blend.

I stress that in Leicester the general opinion of ordinary people, not just of politicians, is that in BBC Radio Leicester we have a good thing. It is an institution that has served the community very well and has provided a service of news, information and entertainment which is popular with its audience. It makes a genuine contribution to democratic, social and cultural life. It is entirely independent. Its programme content is not influenced by considerations of advertisers. Because it does not rely on advertising revenue, it does not need to maximise its programmes in favour of pop music, and it can cater more for speech programmes and for minority interests. It is efficient, because it shares its service with the national network with mutual benefit to both branches of the Corporation.

BBC Radio Leicester uses the BBC for training, for financial processing and for legal advice. National radio in turn benefits from Radio Leicester's news-gathering operation. It is not an expensive service. It and the other 19 local BBC radio stations cost the licence payer about 38p a year. The local station benefits from the BBC's long tradition of independence from political manipulation and outside control. Both performers and staff benefit from opportunities offered by an organisation as wide and diverse as the BBC.

Before the hon. Member moves on from the virtues of Radio Leicester, will he accept that the reputation of that station has been greatly enhanced by the decision of its manager to advertise, with other people, his belief in the need for good community relations? Will he compare that with the apparently conflicting view of those who operate Radio Bristol in bringing about disciplinary action on one of their reporters, Mr. Julian Dunn, who sought recently to protest against the activities of the National Front and who now seems to be suffering the consequences of that at the hands of those who control Radio Bristol? Is that not in sharp contrast to the recent actions of those who control Radio Leicester?

I thank the hon. Member for his intervention. I cannot speak for Radio Bristol, but I can speak for Radio Leicester, since I am a regular listener. I believe that its conduct on this and other matters of social responsibility has been exemplary.

I was dealing with some of the benefits that Radio Leicester has bestowed on the neighbourhood. Local radio is a form of devolution, and, whether or not we like it, devolution is in the air today in many forms. It could be said that local radio was a form of devolution which provided a service drawn from the grass roots for the benefit of local people, which is undoubtedly what the local people want.

These conclusions lead me totally to reject recommendation 20, on page 476 of the Annan Report. My personal experience tells me that the Annan Report has got it quite wrong. It advocates the establishment of a new local broadcasting authority which I and many other people believe would be a wasteful, unnecessary and undesirable duplication of services.

The other facet that I wish to raise concerns the BBC's overseas services. I am aware of the recent publication of the review of overseas representation. It is fortunate that we are having a debate on this subject tonight because this is the first opportunity that the House will have of expressing opinion on the CPRS Report as it affects overseas representation and external broadcasting.

The document is impressive in size and its recommendations, in paragraph 13.7, on pages 226, 227 and 229, are most interesting. But the most important aspect to me are the tables on pages 226 and 227, giving total programme hours. It is interesting that since 1950 the BBC has declined in the external broadcasting league from first place, with 643 hours per week, to fifth place, now, with only 719 hours per week, a marginal increase for the BBC compared with massive increases by other countries. The top two nations in 1975 were the United States and Russia, each with over 2,000 hours per week, to fifth place now, with only formed since 1950. The other nations in the top 10 include Egypt and Albania, which have increased their external broadcasting from virtually nothing in 1950 to very close to our figure today. That trend indicates that by 1980 we shall have slipped further down the table.

Another point in the CPRS Report relates to audibility, which is dealt with on page 229, paragraph 13.17. The recommendations in paragraph 13.19 contain a list of projects which are described as essential or desirable to be put in hand at an early date. Paragraph 13.21 contains a number of alternatives, of which one is that the present coverage of BBC external broadcasting should be maintained. I cannot understand—here I disagree with the final recommendations in the document—why no consideration was given to expanding broadcasting time abroad. When it conducted the review the CPRS had four alternatives of possible action. None of these included the possibility that total external broadcasting hours should be increased.

I should have thought that with English becoming more and more the language of world discussion and with nearly all the nations of the world rapidly increasing their own external broadcasts, one of the options that should have been considered was the possibility of an increase, if only limited, in BBC external services.

I believe that the BBC World Service is generally valued and respected wherever it is heard abroad. It is the voice of Britain abroad, which many millions throughout the world are anxious to hear, either in English or in some other tongue. To millions—and by no means only those of British origin—it is the voice of common sense, moderation and impartiality, and they are anxious to hear it. It is a universally respected voice, even by our competitors abroad. The content of the BBC World Service—I have listened to it abroad a good many times—is generally unrivalled. The trouble is that it is no longer a powerful voice which can be listened to without unreasonable difficulty abroad.

For the last two or three years, when travelling abroad, I have taken in my luggage a quite powerful British-made Hacker short-wave radio. It has often caused considerable difficulties with weight restrictions at airports. That radio should be able to get me the BBC World Service more or less wherever I am in the world. It is probably as good a radio as, or a better radio than, any which would be available in the country in which I am using it to listen to the BBC. Yet, even with this first-class radio, I have on many occasions had great difficulty in getting reasonable reception.

Last year, for example, I took my Hacker short-wave radio to the eastern coast of Canada, where I tuned in whenever I could to the BBC news broadcasts. They were not broadcasts that one could guarantee to receive and if one is unable to receive a news broadcast regularly at a certain hour there is a tendency to lose interest in the station transmitting it. In this instance the difficulty was not so much that of static but rather because it was crowded out by more powerful and closely adjacent foreign stations.

When I was in the Far East this year I kept a log of my efforts to listen to the World Service of the BBC in places such as Korea and Hong Kong. On quite a number of occasions I had to note in my log that on the three shortwave bands in which the BBC World Service was broadcasting to that part of the world, reception was either almost totally inaudible or of very poor quality. When those conditions arise, a listener, however devoted he may be to hearing the excellent quality of the BBC World Service, will not bother to try to get it, if, for reasons beyond the BBC's control, there are other foreign stations broadcasting on wavelengths very close to those of the BBC, causing reception to be bad.

Other countries in which reception should, I thought, have been better, are Iceland and Israel. I kept a log when I was in those countries.

Very often the BBC World Service is inaudible to listeners abroad, and we have to face the fact that radio transmissions throughout the world, whether local, national or overseas, are becoming more competitive. New nations with new radio stations are crowding the ether, and chaos is resulting. I hope that the Minister, will be able to tell us why we cannot strengthen the voice of the BBC World Service in its transmissions overseas and why we cannot broadcast on more frequencies instead of the two or three which operate at present. Those who, like myself, want to hear the BBC World Service, would then be able to switch to another wavelength which was free of interference in time of need.

In our national BBC services could we not strengthen our transmissions, particularly after dark? Why must we still have an early close-down of BBC national services? After quite an early hour, if one wants a transmission in English, it is necessary to tune in to Radio Luxembourg. Why is it that after dark in the Midlands foreign Continental transmissions can be received more clearly than those of the BBC?

Finally, why cannot greater use be made of VHF for local transmissions? Why is it that in Britain only 25 per cent. of the VHF band is used for radio transmissions and 75 per cent. for police and local authorities work, whereas in most other countries the reverse is the case?

I am well aware that in the debate on the Annan Report on 23rd May the Home Secretary said that the period for consultation in relation to the future of broadcasting was due to end at the beginning of July. I hope that the White Paper or the Green Paper, which the right hon. Gentleman is understood to be preparing, will take account of what is said in the debate tonight.

8.26 p.m.

I will not follow the hon. Member for Harborough (Mr. Farr) to any great extent on the first part of his speech. Indeed, his speech was to some extent a pantomime horse. The first part galloped across the stage in the measured tones of BBC local radio, documented carefully and precisely, and interrupted occasionally by shrill squeals of pleasure from my hon. and learned Friend the Member for Leicester, West (Mr. Janner), who is obviously not aware of the fact that our debates are not yet being broadcast on the radio. Everything that the hon. Gentleman said in the first half of his speech may well be true of Radio Leicester, and I shall say a word or two about that in a moment. The latter half of the pantomime horse kicked out rather vigorously and, I thought, with some effect. I agreed with a lot of what the hon. Gentleman said.

I want to devote the burden of my few remarks largely to the report of the Central Policy Review Staff—the so-called Think Tank—and to the dangers that lie in this line of approach to our external services.

Wherever in the world we are situated—and I include the so-called free societies, the pluralist democracies, of Western Europe—broadcasters, because they are operating at the sharp end of the communications spectrum, are constantly under threat. What they do is a matter of controversy. Controversies within society, where the consensus is fractured, as well as controversies between States, inevitably tend to become also controversies and disputes within broadcasting.

My hon. Friend the Member for Sowerby (Mr. Madden) referred to the producer who had been disciplined by Radio Bristol, and he may raise that matter later in the debate. It gave rise to serious concern, since few of us expect the broadcasting media in this country, the public authorities in particular, to take the posture that they are neutrals between the racialist and the anti-racialist. I shall not stray beyond the rules of order, but we have seen another example today in the vexed area of race relations. We have seen the great Tate and Lyle consortium going to the High Court to get an injunction to take off the air Mr. Anthony Thomas's documentary programme about South Africa. When a corporation can spend that kind of money on propaganda to discredit a programme and produce affidavits secured in the circumstances in which they were—

Order. The hon. Gentleman will recall the rules governing sub judice.

I apologise, Mr. Deputy Speaker. I shall not continue about this matter. But I remind the House that the broadcaster is always under threat and the injunction that has taken that programme off the air should remind us of that fact.

On a point of order, Mr. Deputy Speaker. With respect, I feel that one ought to question the application of the general rule on sub judice merely because someone has applied for an injunction. That certainly would be a serious extension of the rule which is always applied by Mr. Speaker. I do not know whether my hon. Friend wants to pursue this matter, but I certainly would not accept that for the rest of this debate this case must be ruled out because someone has applied for an injunction.

It may be that what the hon. Gentleman said is correct. But once the date of the hearing has been set, the case becomes sub judice.

I apologise, Mr. Deputy Speaker. I shall withdraw my remarks, because I understand that the injunction has been granted by the court. I shall not continue to discuss it today. I am sure that the House will have an opportunity on another occasion to do so.

I want to revert to the subject of this debate, namely, the BBC service. I want to say a brief word about the Annan Report in relation to local radio. What the Annan Report actually said about local radio and what it is supposed to have said in the mouths of some of its detractors are rather different matters. The report was particularly concerned with two problems of local radio, given that many excellent services have been initiated by the BBC.

The first was the problem of cost and of licensing—not necessarily being able to stretch in times of high inflation to cover all the services which the BBC was endeavouring to cover.

The second consideration before us was the need to allow the development within local radio—this cheap, exciting, novel, flexible medium—of new methods of community radio. We thought that the great duopoly of the BBC and the commercial broadcasting organisation was not capable of doing that. That is why we wanted a new organisation to do it. That is why we thought and hoped that BBC local services would be absorbed in that and that non-profit-making trusts would be running the kind of station that we now have in Radio Leicester.

All those admirable people mentioned by the hon. Member for Harborough would then not be involved merely as a sort of advisory body brought in from time to time to give their view about programmes, but could be directly involved as a body running the station as a nonprofit-making trust. That was the idea that Annan floated, and I believe that it is worth considering and taking further. I hope that the BBC, locally and nationally, will also consider giving it a run and will consider the possibility of affiliate status for some of its existing programmes.

One thing that my hon. Friend should say to the House when replying to the debate relates to cost. This concerns the BBC licence fee. At the moment the BBC is in a position where the licence fee is effectively becoming a kind of annual subvention. If the BBC could plan triennially or quinquennially, it would have a measure of independence.

I started on the Annan Committee as an opponent of the licence fee. I believed that the time would probably come when it would be replaced by a grant in aid. I accepted that it was regarded by many people as unfair and that it was unpopular with many of our constituents. I believed that we should come clean about this.

But among many people there is the belief that the licence fee gives independence. Sometimes when something is believed to be of such importance it becomes a fact. But if the BBC is now on such short commons that it has to go from year to year with the Home Office setting the licence fee, where is the independence? Where is the possibility of the BBC continuing to run the whole range of services which it does at the moment? If it is probable, therefore, that the BBC cannot run all these services in the future, it may be that local radio is one area that we should set free to be run by a different kind of authority and financed in other ways. That is all I wish to say about local radio.

I turn to the CPRS Report. I have probably been set up already as a member of the Annan Committee, and I am known to hon. Members here as someone who is not an uncritical admirer of the BBC, although I am a firm and passionate believer in public service broadcasting. I hope that it will come very strongly from me today to my hon. Friend and to officials of the Foreign and Commonwealth Office when I say that I regard much of what is in the CPRS Report as mischievous in terms of the effect that it will have upon BBC coverage abroad.

This is where I come squarely to agree with what was said by the hon. Member for Harborough. The CPRS Report asked a number of questions, and I think that we should pose them back at the CPRS. Is it right that we should not broadcast to those who now have free societies—in other words, to the democracies of Western Europe? Is it right that we should be broadcasting news services rather than an impression of Britain and British culture? Is it right to broadcast to some of these areas for only a few hours each day and, more importantly to stop completely for eight hours at a time out of the 24?

All these matters are what the CPRS comes round to recommending, and it recommends them at a saving of about 10 per cent. in costs for the services but at a cost of about 40 per cent. of the overall services of the BBC externally.

I am sure that hon. Members will agree that a slashing of 40 pe cent. of the services of the BBC externally would be a serious blow to the country. It is not a matter of the BBC and its reputation, It is the fact that world-wide these services have a high reputation. They are listened to by audiences running into millions. They rely on round-the-clock reliability in terms of the presence of the service as well as the nature of the transmissions.

I accept the weaknesses referred to by the hon. Member for Harborough about short-wave transmissions. It is a factor which is built into them because shortwave transmission is unreliable unless one is careful with it. But the presence of the service round the clock is greatly apprecited by millions of people. It is a very good national investment and one that we should keep. We should not think of cutting back on it in the way suggested in this report.

I want to deal with one or two sentences in the report. It says that too much of the output of the services is in English. We know something of the English services because many hon. Members tune in to them. They find the broadcasts of the external services of the BBC dispassionate, fair, detailed and, in some respects at least, competing with and possibly occasionally superior to the domestic services. So that we can speak as "domestic consumers" about the success of the English language service. But the CPRS says that there is too much of this.

The CPRS also says that we are broadcasting too much not only in English but in the vernacular to the developed free world and that, Heaven help us, 13 per cent. of the output of the BBC in the vernacular is transmitted to non-Communist countries in Europe. It suggests that we should scale that down a bit. It says:
"It has been put to us that not all countries in non-Communist Europe are completely stable politically and for that reason the BBC should continue to broadcast to some of these countries. We do not accept this argument. We doubt whether the BBC has any influence on the political development of these countries and that if they did fall prey to political extremism it would not be difficult for the BBC to resume broadcasting to them."
I want to quarrel with that on at least three grounds. I take the example of just one country, Portugal. We know that broadcasts in Portuguese are important in Portugal because of the arguments which have been going on in the Portuguese service about the nature of what is being broadcast, and that reflects adequately the measure of the interest that there is in Portugal.

Portugal, acording to the CPRS recommendation, would be deprived, as would Spain, of the evening transmission. That transmission would be scrapped. The overall burden of the report is that services to Spain and Portugal should be greatly reduced.

Suppose that happens in the present state of Portugal; the Government have fallen and there is a danger now—I do not want to exaggerate—of some kind of backlash by the extreme Right, whose forces are still active. Equally, there is a possibility of totalitarianism from the Left. It is possible that Portugal will dissolve into some kind of chaos in the near future.

Likewise, democracy in Spain is in its infancy, and it faces severe provocations and problems. If the worst happens in those countries—and I pray that it will not—is the CPRS really serious in saying that it would not be difficult to resume broadcasting? Does it know what is involved in recruiting broadcasters to get the service together? It is not something that one can turn on and off like a tap. In a successful service there is a cadre of experienced broadcasters, and it takes years to train people to that standard.

The CPRS approach is too frivolous when one considers the influence of news broadcasts to these parts of the world. The BBC is widely and highly regarded in Spain and Portugal. My hon. Friend the Member for Penistone (Mr. Mendelson) has been to Spain for the Council of Europe and he will bear out my opinion.

As the hon. Member knows, there is a whole host of countries in Western Europe where democracy is balanced on a knife edge. Greece and Turkey are examples. I think that it is utterly deplorable to consider abandoning broadcasting services because there is a form of rapport that broadcasters establish with an audience, and that cannot be turned off like a tap and then switched on again the next day. The hon. Member knows that better than I do.

That is the point that I have been trying to make in my halting way.

The upheaval within Bush House when a service in the vernacular is to be stopped is extraordinary. I worked at Bush House in the early 1960s and we were told that the Thai service was to be stopped. A few months later Foreign Office decisions were taken and we were asked to start the service again. But one cannot just get it started the next day. When democracy is balanced on a knife edge and the Government may fall, it is the next morning that the service is wanted, and had it been available in the previous six months, democracy might not have toppled fatally off that knife edge.

The report goes on to say that it is not merely Western European services that should be cut back in this way, but that vernacular services should be looked at and weeded out—a winnowing out of languages. I mentioned the Thai service of some years ago. The report says that Tamil and Nepali services should be dropped. It regards the Tamil service as "marginal", yet it is listened to by 50 million people in more than one country on the Indian sub-continent. This service serves people in both the functioning democracies of what was the British Commonwealth of Asia—Sri Lanka and India. In Sri Lanka democracy has been maintained without a break, as it has in India with just one interregnum. To suggest that this service should be discontinued is frivolous.

Another service that the CPRS wants to drop is the Somali service. This reveals extraordinary maladroitness of timing—a characteristic of the report. The Somali broadcasts are crucial at the moment because of the war between Somalia and Ethiopia, and this area is the cockpit of Africa. The great Powers are involved and the régime itself is wavering in its opinions between the forces of the Western democracies and those of Eastern Europe.

It is suggested in the report that this service is marginal. Yet it is listened to by the Somali President himself and people all over Somalia. I think that the House requires from the Government tonight an assurance that in matters like this we shall not follow the CPRS.

The BBC's external services should be maintained. The argument that they can be cut by eight hours a day betrays sublime indifference to the clock. People are listening while getting up, having breakfast, or in the quiet of the evening, often in countries with tropical climates, at different times of the day. If Bush House goes off the air at 8 o'clock Greenwich Mean Time and goes on again an hour later, that does not mean that people in countries where it may be blazing noon will alter their living patterns and tune in to the one service that may be left to them. The dawn service in Arabic would be removed. The evening service to the Iberian Peninsula, and our service to East Africa, which is not strong on the transmission front, would be scaled down. The voice of the BBC in a country such as Uganda is of the essence.

I regard these proposals as wholly unacceptable. I do not believe that we can allow the impression to go abroad that the Government are maintaining this part of the CPRS Report. The hon. Member for Harborough stole a line from me by referring to Radio Albania. The report says that we shall fall from fifth to seventh place. The fact is that we shall fall below Albania and North Korea in the league table of external broadcasting.

To reduce the BBC external services to below the levels of Radio Tirana would be the final insult to the finest external broadcasting service in the world. The Minister should either say himself or guarantee that the Foreign and Commonwealth Office will say very soon that there is no intention whatever of agreeing with the kind of cuts recommended in the CPRS Report.

8.46 p.m.

I thank the hon. Member for Harborough (Mr. Farr) for providing the opportunity for this debate. I believe that I was the first Member to have an Adjournment debate concerning local radio, in the late 1960s, in relation to Radio Leeds, which covers Bradford, in my constituency. Although Radio Leeds remains perhaps the best of all local radio stations. I have no doubt that Radio Leicester is also very effective.

However, the main burden of my remarks is not about local radio. I wish to address myself principally to the external services of the BBC. Like my hon. Friend the Member for Derby, North (Mr. Whitehead), I am conscious of a curiosity here. Whereas internal services come under the Home Secretary, external services come under the Secretary of State for Foreign and Commonwealth Affairs. I do not entirely see the justification for this. The BBC itself is independent and, as far as I am aware, it does not take detailed instructions from the Foreign Office. In the Labour Party we have a Home Affairs Group, of which I have the honour to be chairman. By decree of the parliamentary party, all broadcasting and communications come under the Home Affairs Group.

We have the irony today that we have a Home Office Minister to reply to the debate, and the Labour Party Home Affairs Group is interested in it because it is supposed to be a home affairs matter, but the central issue affecting broadcasting today relates to external broadcasting, which comes under the aegis of the Foreign Office, and no Foreign Office Minister is present. There is a case to be investigated for the removal of external affairs broadcasting from the Foreign Office to the Home Office, little as I normally favour adding to the empire that already exists in the Home Office.

The reason why I want to talk about external affairs broadcasting is that I believe that perhaps the greatest work for truth and freedom in the world today comes from the BBC's external services. That is a very bold claim. However, against the background that, according to the International Press Institute, only 30 of 144 member nations of the United Nations permit complete freedom of information, a country such as ours which boasts of its freedom of information ought to step into the gap and supply the truth, supplying detached and impartial information about what is going on in the world to the other 114 nations which are not allowed by their Governments to have uninhibited freedom of information and impartial news.

That is a challenge which the external services of the BBC have largely taken up in the past. It is a great tribute to our country that we have financed the service which is doing that remarkable job.

To bear that out I refer to a letter which I recently had from the assistant to the Bishop of Karachi in Pakistan, who used to be Provost of Bradford Cathedral. He wrote to the Bishop of Bradford about the BBC external services, and the Bishop of Bradford passed the letter on to me. He had just heard the dire news that the Central Policy Review Staff document, the Berrill Report, was advocating cuts in the BBC overseas service. He wrote as an Englishman who had recently gone to Pakistan to work, and, talking about the disturbances in Pakistan in the earlier part of this year, he said:
"the BBC was the only agency to report the facts and was listened to by the vast majority in English and in Urdu."
He went on to say that Mark Tully, the BBC's reporter in Pakistan at that time,
"was spoken of by all. He became almost a national hero".
That was at a time when political leaders were in prison and people were, no doubt, hungry for a detached voice on which they could rely. That voice was provided by the BBC.

The writer of this letter makes a further plea for British expatriates living abroad, who, he says, if they were to be deprived of the BBC overseas service would be
"at the mercy of whoever controls the local radio in their countries".
He says that in Pakistan, for example, there is no difficulty in receiving broadcasts from Radio Peking, from Russia and from other countries, but in Pakistan
"We listen to them for amusement and sometimes for serious comparison with reports from the BBC."
Further, as an expatriate, he emphasises how British communities abroad enjoy such things as sports reports, cultural programmes, talks and so on. Plainly, he speaks for a large number of people abroad when he expresses the hope that Members of Parliament will stand up and object strenuously to any suggestion of cuts in the overseas services.

Recently, there was in this building a man who had just arrived from the Soviet Union, the distinguished Russian astrophysicist, Kronid Lubarsky. He and his wife had emerged from the Soviet Union, he was a dissident, and he had served time in prison. He came to this Palace as the guest of the parliamentary committee on human rights. When talking to us last month, he said that the great informer in the Soviet Union was the BBC. He told us how many people listened to it, and how important it was that that work should continue. That is an absolutely clear example given by a man who ought to know of the importance, to seekers after truth and to those who hold the lamp of freedom high, of the external services of the BBC.

We hear arguments in the House about military and air forces expenditure and so on, but the external service staff of the BBC is an army of a different kind. It is an army providing freedom of information with an air of detachment, seeking simply to make people think and to tell them as even-handedly as possible what is happening in the world. That is the kind of army which we can all support and which requires extra expenditure. What is the sub stratum of the report of the CPRS? It is based on an assumption that no British Government will spend more but will want only to spend less, and given that cardinal assumption the committee looked around for cuts.

However, it will be a disgrace to the British Government and people if this extremely worthwhile job ceases. If people are denigrating British services more than ever now, in Britain and abroad,. there is one service that Britain provides abroad—the external service broadcast—that keeps Britain's name and reputation high. Dictator's apart, nobody says derogatory things about the BBC external service. It gives Britain a high reputation all over the world at a time when our reputation has crumbled or stands less high than it used to stand in certain areas. This is an area in which the Government should be prepared to spend money.

The extra sums of money involved are not great. However, it is no use having a splendid BBC external service broadcast if people cannot hear it and, as the report makes clear, fewer people can now hear what the BBC puts out—excellent though it may be—because our transmission equipment is no longer what it was. What will it cost to put it all into order and to modernise it in all the desirable ways? The answer is a once-and-for-all expenditure of £52 million. Whether one regards that as a lot or a little depends on the importance that one attaches to the external service broadcasts. In my view, a £52 million once-and-for-all expenditure to put our transmission equipment into first-class repair and to give it enormous extra power for the next 10 years is worth while.

What else is involved? The report says that it will involve a 79 per cent. annual increase in transmission costs. That sounds enormous, but when we investigate and find that the cost in 1975–76 was £3·9 million, we find that we are talking about approximately another £3 million a year being required to refurbish and repower the entire machine in terms of getting people to hear it.

The service does so crucially important a job for freedom, tolerance and truth that the Government should find the money. We do not need reports working on the basis that the Government and Parliament are so narrow in their view and so short-sighted that they must be looking for cuts. There must be no cuts in this area.

It is interesting that in Saudi Arabia 73 per cent. of the population listen to the BBC. In Thailand, which is close to China, the audience for the BBC external service is 50 per cent. higher than that for Radio Peking. Where else does a Western European Power have that kind of access and influence? What sort of impression does the service make on the Saudi Arabians, the Thais, and even people in this country? It affects the products that they buy because they say that we are honest people and trying to be fair, and so must be a good country—and that not only the country but the products must be good. They believe that our institutions are worth copying because this is the sort of radio service that we produce Accordingly, if we are interested in human rights and in spreading honest information, we have to support the external services of the BBC.

Apart from the reasons that my hon. and learned Friend has put forward, even in crude commercial terms the costs which he has postulated are peanuts compared with the cost of advertising which would presumably be necessary if the external services were abandoned in the way that my hon. and learned Friend fears and many of us would strongly resist.

I agree. In view of the poor effect and quality of the advertising of British commerce, when we have a ready-made weapon of this kind we should use it. Furthermore, the report concedes that an increasing amount of air time is used to spread the word about British products. The BBC is consciously seeking to arouse interest overseas, through its radio programmes, in British products, and this is a very good thing.

The report says that we should slash the number of hours of broadcasting and manage with eight instead of 24. We do not have the times of foreign radio stations. The Radio Times does not give their times of broadcasting. Consequently, one takes a chance. If I turn on the radio and that station is not broadcasting, I get fed up, and when it is broadcasting two hours later I am either listening to something else or not listening at all. I accept what the report does not accept, namely, that we have to have 24-hour broadcasting or broadcasting for a very long period. If the broadcasting time is cut by two-thirds, the BBC will lose not two-thirds of its audience, but seven-eighths. It would be interesting to have figures on what happens when such a situation occurs.

The burden of my argument is that the tradition and high quality of BBC broadcasts must be maintained at all costs. Even to those who see the world in terms of a cold war this must make sense. The sort of honest broadcasting done by the BBC is worth a division of soldiers in propagating the cause of freedom and parliamentary institutions such as those that we have.

I do not believe that we have an obligation to broadcast the truth solely to Communist countries. This is another underlying characteristic of the report. If we believe in democracy, we should spread the truth and the habit of thinking independently to dictatorships of any kind. The idea in the report that we have to broadcast only to Communist dictatorships is ridiculous. I agree that we should broadcast to these dictatorships, but we should also broadcast to dictatorships of all stripes and teach them the habit of critical thinking.

I am sorry that I have gone on for so long. There are other matters that I should like to touch on, for example, the timidity of the BBC in relation to the Labour Party's National Front broadcast. I agree with the News of the World that the BBC could have taken its courage in its hands and allowed references to the previous criminal convictions of people who put themselves before the public as important political figures asking for public support.

I am not saying that the BBC domestically is free from complaint. I remember a programme called "Open Door" when the BBC gave a party political platform to a front organisation for the National Front for half an hour of unadulterated National Front propaganda

It showed it twice, and it had no right to do so, because there is no provision for National Front party-political programmes. That is what that programme was, in fact.

Order. I have to draw the hon. and learned Gentleman's attention to the fact that what he is now discussing is out of order, because he is now dealing with the National Front and what we are dealing with is BBC local and overseas radio services.

I accept that, Mr. Deputy Speaker. I shall depart from that point.

None the less, having made those points about the BBC, perhaps I may say that for all its services it requires more money. I believe that it is difficult for the BBC to manage on the licence fee, some of which goes to local radio. External broadcasting, I ought to say, is not financed out of the licence fee, to the best of my knowledge, but comes from a Foreign Office allocation, so it is rather a different matter. But certainly the BBC needs more money.

The fact that I have just criticised the BBC does not mean that overall I do not think that it does a good job. I think that it does a good job, that it ought to be encouraged and that we ought to see that it has the money to do the job.

9.6 p.m.

I should like, first, to put on record my gratitude to the hon. Member for Harborough (Mr. Farr) for initiating the debate. I am sure that other hon. Members appreciate his action in doing so. He has just left the Chamber for a moment, but he has listened to all of it up to just now. He opened the debate with a most interesting survey of his two subjects. It is fortunate, and a matter of good luck for all of us, that this should have been the first subject in the Ballot, because we are, indeed, dealing with a most important subject.

Secondly, although I am normally very quick to request the presence of a Foreign Office Minister, I am not the least bit disappointed that the Minister of State, Home Office is representing the Government on the Treasury Bench this evening. Although I intend to address my contribution mainly to the subject of the overseas services of the BBC, I profoundly believe that this matter does not affect the Foreign Office alone; it concerns the whole Government. Where the interests of the whole Government are concerned, I am perfectly satisfied that the Minister of State is well capable of looking after those general interests, so everything that we say to him on this subject is directed to the proper source.

I also think that the Home Office, being in a crucial position in respect of our broadcasting services, must be interested in some of the aspects of the work that the BBC does, even though the funds for the external services are supplied by the Foreign Office.

Before I come to the part that I want to concentrate on, I should like to follow the hon. Member for Harborough in his own sequence of events in saying something about local radio services. The excellence of the Leicester radio station is known well beyond the confines of the city of Leicester and its environs. I listened with great interest to what the hon. Gentleman had to say about his own local radio station, but it is well known that Sheffield also has a local radio station. Indeed, it is one of good quality. As far as I am able to follow the London services, I think that the variety introduced into London broadcasting by the BBC local radio station has been of great value in recent years and has made a very important contribution.

Although the hon. Gentleman naturally concentrated a great deal of what he had to say on the excellence of the station in Leicester, I think that perhaps in various degrees what he said can be applied to many of the other stations. I particularly stress one point made by the hon. Gentleman when he said that as the Leicester BBC station was not dependent upon advertising revenue, it did not have to spend so many long hours broadcasting merely popular music; it could concentrate more on the spoken word.

We should not accept from the BBC—indeed, it is not guilty of this fault—or from the commercial radio stations the easy, facile argument that because many people want to listen to pop records 24 hours a day that justifies a public body being given power to broadcast those pop programmes under licence approved by the Government and this House, because that is the easiest way of making money or attracting listeners.

Together with a number of other hon. Members I recently attended a meeting organised by commercial radio owners. The meeting was held under a propaganda slogan "A public service without having to pay for it". When we asked questions after seeing a propaganda film, we were asked "Who are you to argue if people want to listen to pop music all the time? If they want it, we shall give it to them". That argument would justify almost anything being put out on the radio.

It is important that local radio stations emanating from the BBC should be sufficiently well-equipped and financed not to have to compete with any other station either to provide the cheapest possible service—because in this case cheapest is not best—or to have to show enormous listening figures to achieve their ends. The kind of policy that I should like to see the Government applying to these stations would give precedence to the representation of local culture and interests. Local interests are important, because they express local culture. For example, I think that we have a right to expect, on local radio in Sheffield, special broadcasts dealing with the major economic interests of the region. I should like to see the appointment of a specialist on the steel industry to broadcast on Radio Sheffield. Therefore, on a Monday morning we would hear not only snippets of local news but information from somebody well-versed in the steel industry. Furthermore, a similar expert could be provided in a coal area or a textile area—a man who was familiar with the local industry.

The general question "Do you want to have more and more people on the radio talking about local literature and local songs?" is designed to belittle the demand for broadcasts of local importance. I believe that people want to hear about local matters which are of cultural interest to them, and activities connected with local cultural events. The change would not happen overnight, but as time went on we would be able to build up local broadcasting services that would reflect the great industrial traditions of the United Kingdom.

I need not labour the point, because I know that it will commend itself to the Minister. I believe that these matters should be developed and that the BBC should be entitled to call for additional funds to support them. I do not go along with the complaint by the BBC that the Government are unreasonably restricting services because of agreements about licence fees for a limited period.

I have a certain understanding for the Government's attitude. I think it can be justified. Of course, it is natural that the BBC should want to have a five-year or 10-year programme. In the longer run that would be desirable. On the other hand, we must consider the timetable that is ahead of us. I can see the Government properly justifying this temporary decision. I expect that the Minister will tell us that there were practical time reasons for the decision. I should not be especially upset to go along with that. However, I do not think that I should be satisfied if the Government advanced temporary reasons and did not at the same time tell us that they had a long-term policy that would enable the BBC to feel secure to develop services over a longer period. The Director-General is right to say that such extensions and general policies cannot be planned on a 12-month period alone.

I turn to the external services. I must begin with a confession. The chairman of the body that produced the report, Sir Kenneth Berrill, was with me at college. I have known him all my life, but I hasten to add that I had no influence on him at any time when we were together. He was a year ahead of me. He was extremely brilliant. He was the outstanding scholar in his year. Far from my influencing him, if anything he influenced me. However, I am surprised at some of the conclusions in the report.

I hope that the impression will not be created that the chairman of the inquiry is a narrow-minded man. He is anything but that. As is well known, he is a man of the widest possible culture and knowledge. He is one of the most brilliant men in our public life. He has a great many interests that would shut out any narrowness in his concepts. There must be special reasons within the recesses of the inquiry and the team with whom he worked that produced some of the conclusions that I think are astonishing.

Like other hon. Members who have spoken, I am profoundly dissatisfied with some of the report's conclusions. I do not want to add very much to the details that we have heard already as they have been so excellently introduced. They were introduced by the hon. Member for Harborough and taken up by my hon. Friends, including my hon. Friend the Member for Derby, North (Mr. Whitehead), who is a considerable specialist on these matters.

I point out to my hon. Friend the Minister of State some of the considerations that must apply. I fear that on occasions it might be possible for the Government to be somewhat misled by mere audience research. In dealing with the effect of the external services, I commend to my hon. Friend the proposition that absolute figures should not be decisive. In many cases it is not merely a matter of numbers—it is not a simple transfer of an audience figure in this country for domestic services to an audience figure somewhere else.

I have often found that whatever the total number of listeners in a foreign country to the external services of the BBC, the composition of those who listen regularly includes a large percentage of the opinion-makers in that country. That has been my invariable experience.

My hon. Friend the Member for Derby, North referred to the visit that I made to Spain earlier this year to write a report on the Spanish political situation. I do not know the total number who listen to the BBC services in Spain—the Government probably have the figure—but among the listeners are a number who occupy significant positions. As I was about to write a political report I met a great many of them in all political parties and in many sections of the local population.

I found that the percentage of listeners in significant opinion-making positions in Spain was extremely high among those who listen to the BBC services. That is the first point—that mere figures cannot be decisive.

Secondly, I want to make a special plea for services in the English language. The considerations in favour of using the English language have not been properly stressed in the report. It must be realised that we are talking not about propaganda for English. But France has a budget to advance the French language. That budget is higher than the total budget of the BBC's external services and is much higher than the £52 million mentioned by my hon. Friend the Member for Derby, North. By the decision of the French Cabinet, often under the personal leadership of the President of the Republic of France, large sums are spent on furthering interest in the French language. I am talking not about that kind of policy, although it could be justified, but about something more indirect but at the same time enormously important.

Large numbers of people in practically every country, no matter what its internal régime, look to broadcasts in English not only as a guide to news, which is the main purpose of the BBC's external services, but as a means of acquiring proficiency in the English language. We are therefore achieving two purposes. I am referring not to the quarter-of-an-hour English by radio on the BBC's external services but to the total output in English that is used consciously by people in all walks of life to acquire proficiency in the English language. It need not be argued that that is to the good. Indeed, it goes beyond that.

My third proposition, which I commend to the Minister, should gain support from the Secretary of State for Trade. Business men often find it easier to conduct business in a language that they understand. That is a matter of fact. Many British firms—in many cases somewhat belatedly—are now employing people who can speak foreign languages. In years past many firms were not keen on doing that. We now see the process in reverse. People who have acquired proficiency in the English language, partly by English by radio and partly by listening to the BBC's external programmes, supplemented perhaps by a local course in English, often find it easier to do business in the English language.

This matter is imponderable in many ways. It cannot be measured directly. There are no facts and figures at the end of each year. But, taking one year with another, I am convinced that it is an important factor and that it will repay further expenditure.

I could add to those practical reasons other reasons of equal importance why the BBC's external services ought to be extended.

I am sure that my hon. Friend would also wish to stress that, following the signing of the Helsinki Final Act, some countries, particularly the USSR, ceased jamming the BBC's overseas broadcasts. Therefore, the number of people who listen to this service will increase in years to come. That is another reason why we must strengthen that aspect of the BBC's work.

I fully agree with my hon. Friend, I have not adduced any particular foreign policy reasons—although they are tremendously important and directly relevant to the Foreign Secretary's budget—because I wanted to concentrate on aspects which are not often mentioned, and those aspects go beyond departmental interest. However, I am pleased that my hon. Friend made that intervention. Anyone looking at the international scene will know that a great deal of the work that has been done in the post-Helsinki period has been in English. People have been listening to the broadcasts on the decision of the Final Act and its interpretation. Many fruitful developments which have taken place and been encouraged by the Government and the people of this country are due largely to their having become known in the first place by English language broadcasts.

I turn to the question of broadcasting in other languages. The report has serious shortcomings. It is far too rigid to say that we should broadcast only to Communist countries and to developing countries, with certain exceptions. The report says that it does not make much sense to broadcast to countries with a properly developed democratic régime. That is a short-sighted and narrow view.

As a constant visitor to France, I found it astonishing that during the early years of the Gaullist régime, over a period of about 12 years, all radio and television opinion that was not approved by the Gaullists in France hardly got a look in. There was a major strike by French television and radio reporters which lasted over three weeks and which had a lot to do with the censorship of those who did not agree with the régime. During that period, people were very interested in BBC broadcasting. I did not believe the situation at first, so I checked it. It was not as if there was no informed opinion in France. Of course there was—one heard it on the boulevards. Everyone knew what was going on, and there was nothing that the BBC could tell the French that they did not know already. People knew what was going on, but they could not broadcast because the authorities would not let them.

It is short-sighted to say that because a country has a democratic system there should be no BBC broadcasts. When I visited the Federal German Republic during the recent terrorist incidents, I found that people were quoting to each other the opinion of the BBC on the situation. That was less astonishing but it was interesting and worth while.

We know that this country has its financial problems and that choices have to be made, but I hope, in view of the arguments that have been advanced tonight and that are being advanced in the country and abroad by many well-informed people, that we shall find in the Home Office a firm friend of the BBC's external services. I hope that we can count on the support of the Home Office, in co-operation with the Secretary of State for Foreign and Commonwealth Affairs, in persuading the Cabinet not only to retain these services but to extend them.

9.29 p.m.

The Consolidated Fund Bill traditionally is the way in which hon. Members draw attention to particular problems. It is customary and almost unvarying for the Minister to start with a phrase expressing how glad he is that the matter has been raised and what a great service the hon. Member concerned has done. My trouble tonight is to convey by nuances that I am not taking a conventional attitude. The debate has been most valuable and interesting.

I regret that the hon. Member for Harborough (Mr. Farr) is not in the Chamber to hear the beginning of my reply. No other Opposition Member is in the Chamber. That creates a difficulty because if I turn to face my hon. Friends behind me I shall be in trouble with you, Mr. Deputy Speaker. But the aspect would be less wooden, or less leather, than it is because I have to face the front.

The debate has divided itself into two very distinct facets of the problems of the services provided by the BBC. I believe that the balance could have tilted the other way in consideration of this problem. But I do not disagree with, and nor do I quarrel with, the emphasis put on the world services of the BBC, and I start my speech by dealing with that.

As my hon. Friend the Member for Penistone (Mr. Mendelson) says, though the responsibility is that of my right hon. Friend the Foreign Secretary, this is a matter of complete Government responsibility and it is of concern to the whole Government. Since we are dealing with our subjective impressions of the external services, may I say that the thing I like about those services when I hear them is the way in which they put British news and the place of Britain in the world into proper perspective? When one listens all the time to domestic news one sometimes gets a false impression of what is happening in the world, and not the least benefit of these services is that they put that into perspective by drawing the world into the framework.

Therefore, there can be and should be no doubt by hon. Members of the high esteem in which the Government hold the external services, and of their high reputation. If there were any doubt about that high reputation, the speeches by hon. Members on both sides of the House tonight have underlined the fact that it exists.

The arguments in the debate have divided into two categories, yet the one category shades into the other. The first question is that of the CPRS Report. The purpose of these reports is to challenge conventional wisdom and draw reactions. If that is the yardstick, the report we are considering certainly succeeded admirably in its purpose this evening. It has drawn a very sharp rejoinder, but a very interesting and well-informed rejoinder, to many of its points. When the CPRS reports we are of course obliged—and it would be utterly wrong if we were not—to consider what it says. I must emphasise, however, that there has been no acceptance by the Government of the report. We are considering the matter and the Foreign Secretary will announce the decision to the House in due course.

Clearly, however, the Foreign Office has been listening to the debate both this evening and in the House and country generally since the report was issued. I can, therefore, assure hon. Members that no decision will be taken by my right hon. Friend without the most careful study of all points that have been adduced here and in editorials and articles in newspapers and magazines about this problem.

The report has done a service to us in the sense that it has pointed out that one can provide the best theoretical broadcasting service in the world but if it is inaudible or is audible only with the sort of sophisticated equipment which is beyond the budget of those who are listening in the countries to which the broadcasts are directed, the effect will be largely nugatory.

Studies have therefore, been made through the Foreign and Commonwealth Office, and with the co-operation of its posts overseas, into the question of the audibility of BBC reception. Clearly there are certain factors that we shall never be able to change. My hon. Friend the Member for Derby, North (Mr. Whitehead) pointed out that there is some inherent disadvantage in short wave reception, and that weather conditions play a large part in radio reception. But it is true that the main reason for problems is that some old equipment and equipment of insufficient power is being used by the BBC for its external services.

I followed with care the globe-trotting odyssey of the hon Member for Harborough. He mentioned two countries in particular in which he thought that reception of the BBC World Service was bad. Questions have been asked in the last 10 days about Iceland, and our embassy reports that there are good audibility levels there. In fact, it reports that the reception is very good. In Israel the reception is said to be more variable but frequently good. The power is adequate, and the chief cause of any interference with reception is atmospheric conditions.

As to the question of insufficient power, to which the hon. Member for Harborough referred, it is not, as he suggests, merely a matter of having more powerful transmitters, because the strength of generation is the subject of international agreement. It would therefore be against the conventions which Britain has signed merely to elevate unilaterally the output of the transmitters. But there are, obviously, measures that we can take to improve audibility. Work has started in Cyprus, Masirah, Singapore and in the United Kingdom in order to improve audibility.

My hon. and learned Friend the Member for Bradford, West (Mr. Lyons) asked about comparative costs. We accept the figures which are contained in the report. He put a very powerful case for saying that those figures are completely acceptable as a measure of Government expenditure when we come to weigh against them the benefits we derive in so many ways. These were added to by my hon. Friend the Member for Penistone. I repeat that the Government are considering this and the other recommendations. There is no acceptance of the CPRS Report and no disposition on the part of the Government to do other than come to the House to announce their decision in the light of the fullest appreciation of what has been said both here and elsewhere.

The hon. Member for Harborough also mentioned the problem of inaudibility in Korea and other parts of the Far East. As he will know, until comparatively recently the main Far East site for transmission for the BBC external services was in Malaysia. That site has recently been denied to us by the Malaysian Government and we have had to move elsewhere. We have found a smaller site in Singapore, which is one of the places where new transmitters are being developed. That may well improve service to the Far East. I cannot guarantee that it will cover Korea, because that is a had area for reception of BBC radio, and we acknowledge that. But I hope it may be helpful to reception in the Far East generally. Masirah, which will now have new transmitters, will be taking on the broadcasting to the Indian subcontinent.

There is a desire to improve the audibility of the service. That is being carried out in the full knowledge that many people in many countries follow the external services regularly and set great store by their ability to receive those broadcasts.

I repeat that it will largely nullify the effect that we hope to make if the broadcasts can be heard only by the comparatively few people who can afford highly sophisticated equipment. We are trying to aim at the sort of general audience that my hon. Friend the Member for Penistone mentioned, rather than at any narrow socio-economic class.

With regard to local radio, I point out, as my hon. Friend the Member for Derby, North has said, that there are many more people who quote what someone has said about the Annan Report than who quote the report itself. We would do less than justice to a committee which sat for two-and-a-half years if we dismissed out of hand its consideration of local radio. There is a problem here. After publication of the report we allowed some three months in which representations could be received, as the hon. Member for Harborough said. We hope to introduce the White Paper in the New Year. That White Paper will make the Government's proposals for local radio clear.

I believe that at present there are 20 BBC local radio stations and 19 commercial stations under the aegis of the IBA. What Annan suggested was that it would not be possible—in the present climate both of economics and the congestion of the air waves—for both to develop simultaneously.

The Committee therefore suggested a new local broadcasting authority which would take on local radio among other duties. It said that it should be financed by advertising or that it should be operated by non-profit-making trusts. We would be wrong to ignore that aspect of the Committee's recommendations.

Since the Annan Report was published, we have received about 2,000 letters on the subject, of which 1,300 have been about local radio and have largely been in support of BBC. These letters, along with a petition of about 60,000 signatories which was organised by BBC local radio in favour of the local stations, have been fully read and understood. The Home Secretary, for one, expressed himself as being impressed with the loyalty which these stations have generated.

My hon. and learned Friend the Member for Leicester, West (Mr. Janner) had the opportunity during a previous Question Time of putting this to my right hon. Friend who in turn put in his plug—if I can use that lather crude joke in this case—for Radio Leeds. But where some people outside the House—I do not accuse any hon. Gentleman of doing this—have gone wrong is that they appear to suggest that it is BBC local radio or nothing and that this was the alternative that was posed by Annan. It was not.

Two problems immediately suggest themselves when we are considering whether the BBC or, indeed, the present independent network should carry on with its expansion. In order to expand drastically its local radio services, the BBC would either have to divert its resources from other developments within the national network or obtain more money through licences. On the other hand, with regard to independent broadcasting, there may be some problem of coverage, such as we experience with some of the independent television companies, where the notion of commercial viability contradicted, or appeared to contradict, the needs of community broadcasting in some of the more sparsely populated regions in the country.

I have clearly in mind the experience of Wales, West and North, a television company that could not attract the advertising revenue and went out of existence. That is clearly a problem if independent broadcasting were to extend itself.

Clearly, I cannot anticipate the White Paper. I do not think that hon. Gentlemen would expect me to do so. What I do say is that the Government's proposals are not so far advanced that they can ignore what has been said tonight. They will not ignore what has been said.

One point which my hon. Friend has not touched on is the financing of the BBC fees. Is it to have an annual licence fee—which is effectively what it has got—or are the Government thinking in terms of a longer period of phasing with regard to financing?

If I may propound John's Law, it is that an intervention almost immediately precedes the point that was to be dealt with next. I wish to deal next with the question of the licence fee.

I have in mind what my hon. Friend said, and I see the problem which arises with only an annual extension of a licence. But I agree entirely with my hon. Friend the Member for Penistone that there are certain economic objectives and imperatives which in the short run militate against a more desirable factor which is, obviously, to guarantee revenue to a public service over a longer period so that it may have more assurance in undertaking ventures.

The decision on the annual renewal of the licence and the level of the licence fee was taken in the light of present economic conditions, and I expect that the White Paper, when it is published, will deal with the longer-term financing.

The hon. Member for Harborough referred also to the early close-down of services on local radio. Clearly that is a matter for the BBC and its management of its programmes. It has to match its expenditure with its income, although I take the point made by my hon. Friend the Member for Penistone that, above all, broadcasting should not be reduced to the highest common audience factor and that it should cater for local interests and minority tastes if it is to maintain the high level of which it is capable.

In a very restricted financial position, the BBC has to consider how many people are up after midnight or two o'clock in the morning. I suggest that an audience of 635, which is the number of hon. Members of this House who regularly seem to be up until 2 a.m. or 3 a.m., is probably no justification for extending the hours of broadcasting. However, the BBC must judge that in the light of its experience.

I have listened with great interest to all the suggestions which have been made on both legs of this broadcasting subject. If I have failed to answer any of the questions which have been raised, I undertake to do so by letter to the hon. Members concerned. We have understood the points which have been made and we sympathise with many of them. They will be taken into account in the decisions on broadcasting which we shall have to make on both counts in the coming year.

Trade Policy (Multi-Fibre Arrangement)

9.48 p.m.

At this time of the year, most people are turning their thoughts to the festive season. It appears from the empty state of the Opposition Benches that most right hon. and hon. Members, despite their constant declarations of interest in the textile industry and international trade, have gone off to stir their Christmas puddings and stuff their turkeys.

I have a recurring nightmare that my Christmas party will consist of an unending dialogue with my hon. Friend the Under-Secretary and my hon. Friends the Members for Sowerby (Mr. Madden), Nelson and Colne (Mr. Hoyle) Bury and Radcliffe (Mr. White), and Oldham, East (Mr. Lamond), because every Christmas, Easter and summer we have a debate of some kind about textiles, and tonight is no exception.

The subject for debate is not simply textiles; it is the Multi-Fibre Arrangement and international trade in general. At the outset, I must make it clear that although in previous years my hon. Friends and I have been critical of the Government's attitude towards international trade in the textile industry, that is not the case this year. We see my hon. Friend the Under-Secretary in the guise of Santa Claus rather than Scrooge.

For many years now we have campaigned to reach a satisfactory level of imports of textile goods. We do not come to criticise the Government; we come to praise them, because the situation now is almost satisfactory.

There are one or two points that I wish to press on the Minister, but no one can deny the fact that the Government have accepted the advice not just of the unions and employers in the industry but of my hon. Friends and myself. We have fought the good fight through the EEC and through the mandate that the Government accepted and the Community accepted subsequently. This has been pushed forward in a firm manner in the international negotiations that have taken place.

We are not the only supporters of that situation. Mr. Edmond Gartside President of the British Textile Employers' Association, speaking in my constituency and quoted in the Burnley Evening Star, said,
"This present Government is the first of either party for very many years which is doing a good job for textiles."
He was referring not simply to the Multi-Fibre Arrangement but to the assistance that has been passed to the industry in other ways.

Before I talk about the Multi-Fibre Arrangement we must understand the situation that is facing the industry now. We are still in a critical position in the short term, and it will be some months before the Multi-Fibre Arrangement will have a substantial effect on employment in the industry.

The carded yarn situation is the most critical in the whole industry. In June, stocks of carded yarn were 65 per cent. up on normal levels, and by October had reached 73 per cent. above normal levels. We have a serious problem developing in that sector of the industry and a number of redundancies.

Within the cotton and allied textile areas alone we faced the loss of 3,000 jobs between October last year and October this year. My hon. Friend the Member for Nelson and Colne is at this moment fighting hard to preserve 350 jobs in the Courtauld factory in his constituency. The crisis continues.

Many textile employees may get a Christmas card from the Government saying that the Multi-Fibre Arrangement has been signed, sealed and delivered, but they will have to enjoy it during an extended holiday because we have extensive short-time working over Christmas. Had it not been for the temporary employment subsidy there would be many more of my constituents unemployed. This year at 30th September, 73,000 workers in the textile industry as a whole had their jobs supported by the TES. Thus, we are talking tonight about an industry that still faces a very critical situation and is dependent very much for the restoration of confidence among employers and workers on the successful renegotiation of the Multi-Fibre Arrangement.

We all know the background to the arrangement. The present arrangement, which expires at the end of the year, was negotiated between 1973 and 1975. It was seen by the Government as being the answer to the textile industry's problems, but it was a comprehensive network of controls and the quotas were established at a level that took no account of the recession that has since taken place in the domestic textile market. It is still a story of continuing growth of import penetration and unemployment among textile workers.

We see the present substance of the negotiations as being successful in dealing with the situation provided that one or two minor points are cleared up before the final signing next week. I understand that the present situation means that 25 or so bilaterals have been negotiated and agreed with the main supplying low-cost countries. I am sure that the industry would accept that the levels of imports are satisfactory, but a number of points remain to be settled.

For example, we now have no agreements with India, Pakistan, Brazil or Egypt. Certainly the first three of those countries, India, Pakistan and Brazil, are substantial and significant suppliers of textile goods to this country, and any relaxation of the mandate must be opposed at all costs. Mr. Christopher Tugendhat, a member of the European Commission—Opposition Members should recall him—speaking in Rochdale on 14th October, said:
"The Commission estimates that every thousand ton increase in the Community's deficit in cotton thread means a loss of 160 jobs in weaving. For every additional thousand ton deficit in cotton cloths there is a loss of 160 jobs in spinning and 300 in weaving. And every increase of a thousand tons in the deficit of shirts and blouses means 160 redundancies in spinning, 300 in weaving and 12,000 in manufacturing."
It is against that kind of statement that we have to place the present level of imports from the countries in question, particularly Brazil, India and Pakistan.

With cotton yarn, for example, last year Brazil exported 265 tonnes to the United Kingdom, and this year until October it exported 697 tonnes. India exported 6,200 tonnes last year and by October this year had exported 3,844 tonnes. Pakistan exported 348 tonnes last year and this year until October had exported 374 tonnes.

In woven cotton cloth, last year Brazil exported 578,000 square metres to the United Kingdom. This year up till October it exported 1,195,000 square metres. Last year India exported 173,478,000 square metres of cotton cloth and this year until October 135,173,000 square metres. Pakistan last year exported 65,954,000 square metres and this year until October exported 58,893,000 square metres.

With figures of that size, even a relaxation of a fraction of 1 per cent. in the mandate would mean the loss of a substantial number of jobs in the textile industry in the North-West. What I must argue to my hon. Friend the Minister is that even the disappearance of the textile industry in the North-West would do little to resolve the problems in the economies of those three countries. Many people would argue that Brazil should no longer be counted as a developing country because it now has a sophisticated economy. The Government must make sure that the mandate that has been carried with 25 or so countries is maintained throughout the rest of the negotiations with the four outstanding countries. Only in that way can we avoid a substantial loss of jobs.

The second area of concern in regard to the Multi-Fibre Arrangement is the transitional arrangements, which, as I understand it, were not agreed by the British Government but were thrown in by the EEC. There are two elements to the transitional arrangements. For goods covered by the existing quotas, it is my information that the industry accepts that it is normal practice to allow these in against this year's quota, and it is not particularly concerned about this. But there is an entirely new element in the situation. Because of the network of controls proposed, covering a wide range of commodities and a wide range of countries, it is proposed in the transitional arrangements, I understand, that new goods shipped before the end of December this year and arriving before the end of March next year will not be counted against the 1978 quota.

If anything is designed to lead to the greyhounding of goods, as it is called, into this country, stirring up problems which, in the present critical state of the industry, could not be withstood, it is that recommended transitional arrangement. I must tell my hon. Friend the Under-Secretary of State that the industry and the Members of Parliament concerned are totally opposed to it, and we hope that he will oppose it with every fibre in his body.

Another problem will be created by certain anomalies which will develop. Many products—for example, Indian yarn—are currently subject to United Kingdom quotas. I understand that under the new arrangement they will become subject to EEC quotas. Does that mean that because a product is subject to an EEC quota it will have the three months' period of grace in which goods can be sent into this country without their being counted against the 1978 level? What will happen when these quotas change from being United Kingdom quotas to being EEC quotas?

Third, we are concerned about documentation. One of the problems with the original MFA was that, whereas we set up a fine network of controls, my postbag and the postbags of my hon. Friends soon showed that there was considerable evasion. We found examples of free cycling of textile goods within the European Community, and we found examples—recent examples, I should add—of manufacturers or importers in Paris offering for sale on the British market duty-free goods which came from alternative sources. Like the little boy behind the Dutch dam, my hon. Friend and his Department have put their fingers in the breach whenever this has happened, but very often before they managed to do that the damage was done. We want a system of documentation which will ensure monitoring of free cycling and ensure also that where there are new sources or new products the breach is filled immediately so that damage cannot be done.

That is how we view the MFA and the main problems which will arise—the four countries which have not settled, the proposed transitional arrangements, and documentation and control to ensure that the new agreement will not be evaded. I hope that my hon. Friend the Under-Secretary of State will give us some assurances tonight, and I hope also that my right hon. Friend the Secretary of State will carry with him to Europe a firm commitment backed by all of us concerned on this side of the House, by the trade unions and the workers involved and by the manufacturers, and will stand absolutely firm on these outstanding questions as well as on the Multi-Fibre Arrangement as a whole.

The debate is about wider trade matters, too, and now is an appropriate time to talk about some of these, because the textile industry is unique in only one respect in trade in that it is the first. In terms of import penetration, the textile industry has merely led the way in the present high levels of imports coming in. Many other industries are threatened. The footwear industry in my constituency has an import penetration now over 50 per cent. Much the same applies to the car industry, the electronics industry and so on.

The feature which many of these industries have in common is that they are based on high technology with easily transferable skills. In spinning and weaving, for example, Britain has often led the way in technology. In my constituency there is the research centre for Platt Saco and Lowell, which sells textile machinery all over the world and is making new discoveries. The Shirley Institute is renowned throughout the world for the work which it does in textiles.

We have led the way, but now we find that the technology is easily transferred and the skills involved are often easily obtained. We now find a situation in the Third world and developing countries in which low wages and high technology are undermining industries in countries of the developed world. We are not saying that there should be protectionism to prevent development in the Third world. The Lancashire textile worker has a tradition and history second to none in dealing with the problems of the Third world. It was the Lancashire cotton worker who embargoed cotton from the Southern States of the Union 110 years ago to assist the fight against slavery, and that tradition continues today.

However, some 80,000 people are finding that their jobs are threatened. That threat faces my constituents who are working in electronics, those in the car assembly industry and others—wherever there is high technology industry with a transferable technology and skills which can be readily acquired. The General Agreement on Tariffs and Trade, which was designed to deal with the problem of world trade, is totally outdated and increasingly discredited because countries evade the main philosophies of the agreement by reaching understandings, operating blackmail and making gentlemen's agreements in order to control in some way world trade outside GATT. All they are doing is coming to terms with reality, and it is GATT that needs re-examining.

Let us take, for example, the definitions of fair and unfair competition. The Secretary of State has said, about attitudes towards unfair competition, that today, in the mind of the developed world, unfair competition usually means competition that for whatever reason is of a kind that domestic production cannot meet. We must ask ourselves what that means. According to GATT it would mean if there was dumping, if there were Government subsidies or help, and so on, but it ought to include the circumstance in which the workers in indigenous industries are treated as nothing better than wage slaves, and that is what happens in much of the textile industry throughout the world.

I have here a report from the International Textile Garment and Leather Workers' Federation dated December 1974 and entitled "Multinational Co-Operation in the Trade Unions". It said of the textile industry:
"MNCs in the textile industries in Asia are either joint ventures or wholly owned by foreign companies. Some of the textile companies concerned are exclusively, or mainly, export oriented."
That is obviously because there is no market because the workers cannot afford to buy the goods that they are themselves producing. It goes on:
"The majority of MNCs in the textile industry originate from Japan."
Surprise, surprise!

It continues:
"But other such companies come from other Asian countries in search of markets and lower wage and other costs. The majority of workers in the textile, clothing and leather industries in MNCs in Asia are still not organised in trade unions. Indeed in some Asian countries workers in MNCs are not allowed to form trade unions or to strike. Even where unions are legally permitted, government policy frequently handicaps their growth. Sometimes the very absence of unions, or their being handicapped in the exercise of their functions, is presented as an incentive for investment by MNCs."
That is absolutely disgraceful. If the workers of Lancashire were prepared to go hungry 110 years ago to free the slaves in the Southern States of America, today they want to see that fight carried to the under-developed and developing countries of South-East Asia, where people should enjoy the same rights and privileges as are enjoyed here.

There is another myth about multinational corporations. We are told that they take employment to these countries. Another report by the International Textile, Garments and Leather Workers' Federation, issued in March 1976, says:
"it is broadly accepted by expert opinion that MNCs do not provide a great deal of employment in comparison with the capital they invested. … The second reason why MNCs create relatively little employment is that their investment is usually highly capital-intensive. This certainly applies to the textiles and shoe industries despite the academic myth that these industries are labour-intensive. The recent example of the destruction of the hand-loom industry in Indonesia by MNC capital-intensive investment is illustrative of the damage that can be done in a relatively brief period by the MNC giants to industries that employ hundreds of thousands and upon which a whole way of life has been slowly built up over decades and even centuries. From 1969 to 1974 no less than US$ 1,156 million was invested by 97 foreign textile firms (mainly Japanese) in the Indonesian textile industry. This led to the slaughter of the Indonesian handloom textile industry which was reduced from 320,000 to only 50,000 workers. The cruel consequences of this flood of MNC capital was that no less than 250,000 Indonesian textile workers lost their jobs. Admittedly the modern MNC textile plants employed 70,000 new textile workers. But the net job losses were a huge 180,000 workers."
That is the second myth about multinational companies which have been encouraged to go into these countries where they have destroyed employment. That example can be repeated in many of the countries in question.

Another myth is that these corporations pay better wages. Let us look at that. The same report says:
"One of the mighty myths about the MNCs is that they pay higher wages than domestic companies. If one thing is clear, it is that they tend to pay no more, and no less, than they are obliged to do by existing conditions in the countries in which they are established, including the strength of the local unions."
The multinational corporations sometimes pay even lower wages than domestic firms.

The three arguments that have been put forward, not simply by hon. Members opposite but by free traders on this side of the House, are that if we restricted imports we should handicap the development of countries that badly need this sort of investment. However, that is not the situation.

Workers in those countries are facing the same traumatic experience of the industrial revolution as workers in this country faced 200 years ago. It has taken 200 years to build the labour movement in this country to its present strength. We should use our experience, strength and knowledge to make sure that those workers do not suffer and do not go through the same sort of experience as textile workers in my area suffered throughout the nineteenth century. We should help them leap into the twentieth century at a reasonable pace by their own goods and the goods that we are producing. The question is how we can do this.

The Secretary of State for Trade has argued recently that we need safeguard clauses in a new GATT which would allow more selective action to be taken in the face of disruptive imports. I concur with that. To use the words of one of my constituents, Mr. Tom Whittaker, the General Secretary of the Footwear Union, we need managed trading relations.

At present we have a situation—and this is particularly true in the textile industry—where a minor breach in the wall can bring a flood of imports and create such a catastrophe that industrial capacity is lost for ever. Is that to the benefit of workers throughout the world, to the country producing the goods or to the importers in this country who are making a swift killing? I approve of the idea of safeguard clauses being introduced into the GATT.

I would make a point that I have made repeatedly in the House. We also need a social clause attached to the GATT so that workers in developing countries can enjoy some of the advantages that our workers have. I know what the criticism is of this. It is that we cannot interfere in the internal Government responsibilities of these developing countries. I wonder what the workers of those countries would say if we asked them. They would not say "For God's sake, stay away. Do not bring trade unions in. Do not have social security systems. Do not have free collective bargaining." What they need is a sustained campaign by the nations of the West to ensure that free collective bargaining and trade unions are introduced, not simply as a matter of economic convenience for them but as a matter of political responsibility and for democratic reasons.

There can be no doubt whatsoever that there is a grave danger that democracy in the developing world will disappear. In many cases it has disappeared. All we are doing when we import cheap goods is propping up some tin-pot dictator who rules by terror. What we must do is make sure that democracy will flourish in these countries. The backbone of democracy—regardless of what Opposition Members may say—is a firm trade union movement. A fair measure of democracy is the size, structure and functions of the voluntary bodies and organisations and the non-State organisations in any community. The backbone of democracy in this country and in many other countries in the developed world is the trade union movement.

We accept that. Why can we not say that that should be a fundamental feature of the developing countries as well? By our helping those countries to raise their standards, not only will they buy more of the goods that they are at present exporting to us, but it will mean a more international control of multinational corporations, which are the great givers to charities and which make noises about democracy, but which are bleeding these people dry. This is a crusade that this country ought to take up.

I believe that we shall begin only when we can convince our Government, and probably the European Community, the United States and many other countries, that the fundamental rights that are enjoyed by workers here should be enjoyed by the workers of these developing countries.

I conclude by simply reiterating that with which I started. The textile workers, employers and trade unions in my own constituency and in the constituencies of my hon. Friends are looking to the Secretary of State for Trade to maintain a firm hold on the remainder of the Multi-Fibre Arrangement renegotiations. Our expectations are high. They are high because the Government have had the courage to stand up to the enormous pressures that have been placed on them, first of all in the EEC and later by the rest of the world. We applaud that courage. We ask now that between today and next Tuesday or Wednesday—whenever the signatures are finally put to the document—that courage should be maintained so that we can say to the workers in Lancashire that we are not bringing the goose home this Christmas, although the Christmas card is there, but at least the goose or the turkey will be there next Christmas, because we have established a secure and safe future for their jobs.

10.19 p.m.

I am sure that the House is grateful to the hon. Member for Rossendale (Mr. Noble) for raising the very important subject of international trade policy and, in particular, the Multi-Fibre Arrangement. It is far too infrequently that we have the opportunity of debating these very serious matters.

However, I beg leave to doubt whether people who are not involved immediately in their constituency interests could follow the hon. Gentleman in the suggestion that vast benefits will accrue to the workers in Indonesia, Africa, India and other countries by denying them participation in international trade and by denying them an industrial revolution—and by denying them, in fact, the very possibility of trade union organisation that the hon. Gentleman was so ardently and eloquently advocating. It is a preposterous suggestion.

The hon. Gentleman's strictures about multinational corporations are apparently directed to foreign-based corporations. We hear little criticism of ICI or Courtauld no doubt because they are able to maintain some employment in the areas which are represented by Labour Members.

I have in my possession a list of multinationals involved in international trade, including Courtauld, Tootal, Carrington Viyella and ICI Fibres. I am critical of their attitude, not because their attitude is moulded by the strength of the trade union movement here but because they operate in countries in which high levels of profit are recouped and where trade union representation is largely reduced. I was critical of the Japanese multinationals which have moved into South-East Asia, into Malaysia and Indonesia.

I hear what the hon. Gentleman says, but his ideas about the Japanese are as outdated as his other ideas.

I wish to declare a past interest. [HON. MEMBERS: "Oh."] Labour Members appear to be objecting to my declaring a past interest. Some of them are not so nice about their past interests. They can confine themselves to present interests, but I declare a past interest in that for some years I was responsible for negotiating in Hong Kong certain textile agreements and for the operation of export controls. I attended the first United Nations Conference on Trade and Development, which became generally known as UNCTAD. Later I was a director of a textile manufacturing company in this country. [Interruption.] If the hon. Member for Bury and Radcliffe (Mr. White) wishes to intervene, I shall try to answer his inaudible mutterings. Obviously he has not the courage to put a question to me and, therefore, I hope he will keep quiet. I repeat that I was a director of a textile manufacturing company which from 1969 provided a steadily increasing amount of employment in the North-West. I was also employed until three years ago as a director of a textile importing company.

I shall outline to the hon. Gentleman some of the benefits of that experience when I discuss the matter of import levels.

I wish this evening to address myself to the subject of trade policy and to illustrate my remarks by referring to the Multi-Fibre Arrangement. That arrangement was a freely-negotiated derogation from international trading rights under the GATT voluntarily entered into by exporting as well as importing countries. The hon. Member for Rossendale mentioned Pakistan, India, Egypt and Brazil —countries which subscribed voluntarily to the Multi-Fibre Arrangement.

I wish to point out that the EEC's negotiating basis is in direct contravention to some of the main principles of the Multi-Fibre Arrangement. The people of Hong Kong and their Government are particularly concerned about this derogation. The concept of disruption has been done away with in the EEC's negotiating mandate. We have moved to the concept of a global quota, which was familiar to EEC negotiators before United Kingdom entry.

I was interested to hear echoes in the hon. Gentleman's remarks of the well-known French approach towards a managed market. Those who are most opposed to the EEC now appear to be in favour of the principle of the managed market. But when we are considering disruption and the principle of "globalisation", let us remember that that embraces only 60 per cent. of trade and that the other 40 per cent.—a growing percentage—is accounted for by trade between developed countries.

Please do not let hon. Members from Lancashire imagine that because they have shut off imports from the developing countries they are to rejoice in the fruits of the market that is left. We have had the experience in Hong Kong of imports from America and Canada taking up that part of the cloth market in this country that we voluntarily gave up to protect the Lancashire industry. Do not let anyone say that since 1959 the people and the Government of Hong Kong have not demonstrated and carried the cost of a real understanding of the difficulties of which the hon. Member for Rossendale spoke. The people in Hong Kong share with him the very real disappointment that despite the 18 years of restraint we have tonight to hear once again from the hon. Gentleman that the Lancashire industry is in a stricken condition.

Do not let anyone lay responsibility at the door of Hong Kong, where restraint has been exercised over the past 18 years, allowing other newcomers to enter the market. I was surprised to hear the hon. Member for Sowerby (Mr. Madden) at Question Time earlier this week criticising Hong Kong when he knows that on his side of the Pennines Hong Kong is the sixth largest market for woollen textiles, and his comrade, the candidate for Huddersfield, was actually in the Hong Kong Government office asking whether there was a likelihood that exports of woollen textiles to Hong Kong from this country would be endangered if Britain went ahead in insisting on the agreement contrary to Hong Kong's interest under the Multi-Fibre Arrangement.

The derogation from the principle of disruption to which I shall refer later, is a most serious matter in international trade.

I wish to move now to the second derogation from the principle of the Multi-Fibre Arrangement, which explains the position of the developing countries specifically named by the hon. Member for Rossendale—namely, Brazil, India, Egypt and Pakistan. I refer to the cutback of trade levels for newcomers. It is a most curious concept. It is the analogy of the overflowing cup—that to prevent the cup overflowing it is allowed to be filled only to a certain level below the lip so that any later additions to it may not overflow the rim.

That is a direct derogation from the Multi-Fibre Arrangement and all its predecessors, which made strict provision for the roll-back to be employed where disruption had been shown. The situation was particularly severe in 1976. I refer to the levels that were adopted under the EEC negotiating position. It was a year when the United Kingdom economy was unduly depressed. I shall not go into the political reasons, but the economy was unduly depressed and the exchange rate militated against imports of any description. During that year the landings from Hong Kong were below those of 1975, which in turn were below those of 1974. That is a direct and specific derogation from the freely negotiated terms of the Multi-Fibre Arrangement.

I am following the hon. Gentleman's argument very closely, and I admire the spirited way in which he is putting it forward. However, I am sure that he would like to be fair. He said that imports from Hong Kong had fallen in the last two years. That is to be set against the background of a depressed market generally. As a proportion of total sales here, imports have beer increasing.

I shall point out why that is a totally inadequate basis on which to negotiate a five-year arrangement.

I am now coming to the need for a review of these arrangements in the light of market conditions. I think that the hon. Member for Oldham, East (Mr. Lamond) will agree that there is no logical, economical or political reason why the exports of one established trader should be cut back to make room for putative trade from countries which have not yet participated and have not established any manufacturing or trading capacity, which, indeed, may not come to pass.

Will the Under-Secretary of State tell us what will happen if at the end of the first year or the first period of this new five-year arrangement the vacuum that is left is not filled by imports from newcomers? Will it be redistributed among established traders for ensuing years or will it be given away to the developed countries?

I want now to move specifically from the Multi-Fibre Arrangement, to trade policy as a whole, to which, in all fairness, the hon. Member for Rossendale addressed himself at some length in an attempt to establish, as I said in my initial remarks, that a favour would be done to developing countries if they were confined to hand-loom operations and denied the benefits of technology, increased wages and better working conditions from investment in modern textile manufacture.

I said that the multinational corporations, according to the evidence, have not paid high wages. They have paid the rate that the market there will bear. With the massive unemployment situation there, they have paid putative wages. Yesterday in The Times, Mr. William Rees-Mogg quoted wages in Malaysia at two dollars a day. Does the hon. Gentleman recognise that bringing in capital-intensive industry, destroys rather than creates jobs? Does he also recognise that industries often move to areas where trade unions are banned or discouraged, where there is no free collective bargaining and no social security system, so that they do not have to pay the on-costs?

I listened to the hon. Gentleman with some care. I was a director of a large textile manufacturing company with factories in Nigeria and Ghana. Therefore, I have direct experience—

They were certainly unionised—of the beneficial effects of investment. It is all very well for the hon. Gentleman to laugh. I am pointing out from practical experience the increases, if he will listen as I listened to him, in wages and employment that were brought to those countries by that kind of investment. I am proud to say that the first polyester fibre plant in Africa has now been opened by that company, with which, unfortunately, I am no longer connected. I am trying to show that those investments had a real effect on those economies. In fact, 10,000 jobs were created in Nigeria.

Before the hon. Gentleman gets carried away by the benefit of unionisation and wages, I should like to refer him to a recent report of the Low Pay Unit regarding conditions in the garment industry in this country. It points out that there is a 50 per cent. turnover in employment and that girls of school leaving age are paid totally disgraceful wages which may be below the take-home pay of people in Hong Kong. What are we protecting? [Interruption.]

Order. Peace on earth and good will towards men—we are on the very fringe of it. I can hear the hon. Member quite well. If hon. Members listened carefully, they would hear him as well.

I should like to remind the hon. Members for Oldham, East and Rossendale that a large proportion of the textile workers in their constituencies, particularly those on night shifts, are Asian immigrants. The hon. Member for Sowerby would recognise that that is also the case on the other side of the Pennines.

I shall get on. The benefits of unionism and high wages are not all that apparent in some sectors of the industry in this country.

I have listened as closely as I can, and it is interesting to hear the other point of view put so well. I did not follow the point that the hon. Member made. I think that he said that I and others should remember that the night shift in the textile industry in our constituencies is, in the main, manned by Pakistani workers. I accept that but what is the hon. Member's point?

I was trying to say that the benefits of unionism and supposedly higher wages and protection for Asian workers have not necessarily been fully extended in this country. [Interruption.] If hon. Members have patience I shall continue. If people in developing countries with transferable technology and a comparable level of wages—as I have illustrated from Hong Kong—are able to produce a competitive and satisfactory product we must ask why this has not happened in this country.

The company with which I was connected set up a cloth manufacturing enterprise in this country in 1969. I am proud to say that it beat hell out of imports from India and Pakistan.

I shall be happy to name the firm to the hon. Member later. From my experience I can say that when high technology is introduced in this country and is worked effectively it can easily compete with allegedly low-cost imports from developing countries.

I have given way many times. I am trying to come to a conclusion.

This is most important for the international trade policy of this country, for the North-South dialogue and for the future of our relations inside and outside the EEC. I was disappointed to hear the Secretary of State say in reply to questions earlier this week that there was an imbalance of trade with Hong Kong. He totally omitted to take account of invisible trade, I presume, when he accepted that that imbalance existed. Far less did he take account of any trade generated in Hong Kong as a centre for United Kingdom trading operations in the whole of the Far East.

But the important question is how developing countries are to develop. There used to be the category "least developed" or "less developed". Then we envisaged the gradation to "developing". This is all chronicled in the proceedings of UNCTAD. Now, lo and behold, these countries are supposed to become "developed". The hon. Member for Rossendale said that Brazil was a developed country. Am I to assume from that that he has no objection to trade with Brazil without quota as he has no objection to trade with the United States and West Germany, and perhaps with COMECON countries, although I do not know about that?

Does the hon. Member accept that a country may become developed and in that case should not have these safeguards imposed against it? Does he imagine that the future of our trading relationships in the world is to be governed entirely on the basis of the managed market, in which case it would be a great deal more honest if he said that there should be restrictions on Canada and the United States, both of which I know from my experience took advantage of Hong Kong's restraint to increase their exports of cloth to this country?

Does the hon. Member not agree that trade with Brazil in footwear and textiles should be conducted on the basis of reciprocal arrangements? Does he not agree that Brazil is seeking in the present negotiations almost to pose as a developing country, whereas in many respects, particularly in terms of technology, it is highly developed? Does he not think in those circumstances that if it wants an agreement on textiles it should offer us the same opportunities as it is asking of us?

I can see that, but the hon. Gentleman is still insisting on barriers to trade from Brazil. I am not shirking this question. Take Hong Kong as an example. It was a developing country, but it has moved up the scale to "more developing", and in some senses in its textile trade it is now a "developed" country. There are no barriers to United Kingdom trade with Hong Kong. It is the United Kingdom's sixth best customer for worsted and woollen piece goods. It is a very valuable export market.

I am astonished and depressed by the fact that the United Kingdom takes such a miniscule percentage of total Hong Kong imports. The figure is 5 per cent. There is no trade barrier. Hong Kong's imports from this country are roughly equivalent to four times our exports to China, to the total level of our exports to India, and to about two-thirds of cur exports to Japan.

We must answer some serious questions about that performance. The woollen textile industry has shown us the way. I suggest that in dealing with these difficult questions the criterion should be not import penetration but production as a whole. I know that Hong Kong has accepted for the past 18 years that these are difficult questions. Otherwise one is not taking any account of the United Kingdom proportion of production that is exported, and that would particularly apply to woollen textiles, as I have remarked more than once this evening.

What we have to grapple with is how "developing" countries are ever to become "developed". How are they to increase their proportion of world trade? All the evidence we have before us at the moment is that trade is increasing between developed countries, the most notable example being West Germany. The Minister responsible, according to a report in the Financial Times by-lined on 8th December, said that that country already accounted for a large proportion of trade in textiles inside the EEC. This is the question to which we have to address ourselves.

A notable contribution to that discussion has been made by the author of the Fabian Society pamphlet, Series 335, entitled "Import Controls—the Case Against". He develops a very coherent argument that intra-developed countries' trade is on the increase and that the barriers we are discussing this evening are all directed against the trade of developing countries. We are up against not only political and philosophical difficulties but very real economic and practical difficulties. That is why I very much welcome the opportunity that the hon. Member for Rossendale has given us this evening of making these remarks.

We simply have to come to grips with this problem, and I do not think that this insistence on the EEC derogating further from the Multi-Fibre Arrangement is at all helpful in the context in which I have been discussing it, although it is understandable from the point of view of the interest of the hon. Gentleman whose constituents are most immediately concerned.

The United Kingdom has traditionally been a trading nation, with a population too large to support by our own agriculture. We have to import raw materials and export finished products. I was listening to a Member of the Tribune Group saying that in the House in those terms last week. In this context it is extraordinary that we are now concentrating, apparently, on reducing the volume of trade. I cannot see how that can be in the long-term interests of this country.

It is highly significant that West Germany already has a higher share of imports of textiles from Hong Kong than the United Kingdom has, but the pressure is all from the United Kingdom and not from West Germany, although the job loss in West Germany has been higher in textiles than it has been in this country, and there are more jobs at risk. This is on the Germans' admission, because they have been redeveloping their industries and moving to a more capital-intensive form of textile manufacture, with an increasing share of intra-EEC trade, specifically in garments, as a result.

We had exactly the same experience in Hong Kong when conducting negotiations with the United States of America. The United States of America was always claiming disruption and loss of employment. What was happening was that the whole of the American textile industry was being re-located from the north-east down to the south-east, and we carried the can for that. We were restricted in order to facilitate that redevelopment. Despite the difficulties, with which I am very familiar and which I understand and accept, I ask Labour Members to try to grapple with this very real problem.

In conclusion, I would say that the consternation—it is not a word that I use lightly—created in Hong Kong by these, two derogations from the Multi-Fibre Arrangement by the EEC is very well founded. Already that example has spread to other markets. The United States has already pressed for renegotiation of its agreement with Hong Kong, although it was concluded only as late as September this year. Because the EEC derogation from the MFA has leaked out, Hong Kong is now being expected to renegotiate its agreement with America.

The Nordic countries have also taken up this challenge. I am not talking theoretically when I say that there is a real risk of spread. It is not confined to other countries with textile products only. That is the fear of Hong Kong and other developing countries which are watching the situation closely with regard to a spread to products other than textiles. Footwear and electronics have already been mentioned.

We must therefore ask ourselves where we in this country are leading world trade policy. I believe that it is the United Kingdom which is leading the EEC in this respect. I have always been a supporter of the United Kingdom's entry into the European Community because I believed that we would lead that Community towards adopting an outward looking policy for world trade.

Indeed, I remember the welcome given in this House to the conclusion of the Lomé Convention by the right hon. Member for Lanark (Mrs. Hart) and the good wishes that accompanied the success of that agreement. But it is no good wishing this theoretically. There are practical implications.

Just as Hong Kong always recognised the practical implications for the United Kingdom—it has accepted restraint since 1959—I am asking Labour Members to make a similar effort of imagination and to accept that there are very real consequences of wishing the Third world to develop and of trying to get the EEC to adopt a more outward-looking posture.

I therefore believe that we shall have to have a review of these arrangements after one year of operation in order to see what has happened particularly with regard to this notional allowance for trade from newly developed manufacturers who have not yet established any performance at all, and to see what has happened in respect of the increase in unrestricted trade from developed countries.

Those nice, cosy developed country trading relationships need to be brought under much closer examination. If the hon. Member for Rossendale believes in a managed market, I believe that the compass should extend to trade from developed countries to make certain that the restraint borne by the developing exporters is not taken advantage of by the developed exporters. That is the history of Hong Kong's whole trade in textiles since 1959, and it can be demonstrated to be so.

I am calling for a review of this arrangement to make certain that the restraint accepted by Hong Kong is not exploited by other developed countries. I am asking the United Kingdom Government to re-examine their trade policy in the EEC towards developing countries as a whole. Finally, the people of Hong Kong ask that the United Kingdom Government reflect on their responsibility towards the people of that still remaining Colony.

10.55 p.m.

I bring a simple message from my constituents in Bolton. In the town, during the past eight years, we have seen 50 mills reduced to 28 and we have had 6,000 people made redundant. However, having talked to both unions and employers, I know that they agree that this Government have done more to help the textile industry than any other Government in the past 20 years. But that does not alter the fact that most of the companies are keeping going on temporary employment subsidy, and that if we cut off TES, there will be thousands of redundancies in the textile industry.

I tend to argue—and I make no apology for doing so—that the skills of the British textile industry and its work force should be maintained against all comers. It is for that reason that I ask the Government to maintain the position that they have taken in negotiating extremely toughly on behalf of the British textile industry.

It may be easier in certain other areas, but in the North-West no Government for 20 years have provided sufficient diversification. It is easy to talk about closing down industries if there is somewhere else for people to go. We are fighting not simply for textiles but for many inherent British skills and for maintaining our technology.

I am not arguing essentially for soft-bedding. But I am told by the unions and managements that if recent levels of incoming goods from abroad continue, mainly from the underdeveloped countries, the textile industry in Bolton will go out of existence.

I ask the Minister once again to preserve British interests. In saying that, I repeat that I am not implying that there should be any soft-bedding. But there are many means of veiled support which go to other areas, and I have never felt that the way to aid underdeveloped countries was on the basis of their exporting on the balance of low wages.

I thank the Government for what they have done so far. I ask the Minister to continue with the action that he has started and to maintain his tough pressure, in the interests of my constituents in Bolton.

10.58 p.m.

We heard an inspired speech from my hon. Friend the Member for Rossendale (Mr. Noble), and we have just listened to the intervention of my hon. Friend the Member for Bolton, East (Mr. Young). But, between their contributions, we had a most unusual speech from the hon. Member for Bromsgrove (Mr. Miller). I am only sorry that the hon. Member for Macclesfield (Mr. Winterton) was not present to hear it, because I am sure that he would have been disappointed and dismayed by the message being put across by his hon. Friend, as I am certain all Conservative voters in textile areas will be when they read his speech. It was a defence of a Colony, Hong Kong, which I do not regard as part of the developing world. It is an area which has had a lot of investment from many of the multinational companies. What it has not kept up with is the level of wages in the rest of the developed world.

I noticed, too, that the hon. Member for Bromsgrove did not mention the fact that trade unionism in Hong Kong is very weak. I was there quite recently, and I was shown two of Hong Kong's show pieces. One is a large electronics factory. The other is a large textile mill. I asked the managements of both factories whether they recognised trade unions. The managing director of the textile factory had to ask the general manager, and of course the answer was "No". In fact, they had no intention of doing so. In the textile mill, which was very modern, some of the safety conditions were a disgrace to any country in the world, and would not be tolerated here. I would have preferred the hon. Member for Bromsgrove and Redditch to argue for better conditions for workers in Hong Kong. I hope that next time he goes there he will look at some of the ways in which conditions could be improved. I feel very sorry for the workers who have to work in these conditions.

I think that I lived in Hong Kong rather longer than the hon. Member visited there. I could show him weaving sheds operating to this day in North-East Lancashire, so that he could compare the conditions there with those in Hong Kong.

Indeed, I would be delighted to go to any mills that the hon. Member names in North-East Lancashire. He would not be able to show me conditions there that were in any way comparable with those in Hong Kong.

Would my hon. Friend make clear that it is not fair to compare the worst in North-East Lancashire with what we presume to be the best in Hong Kong, since it is used as a show piece?

My hon. Friend makes a very good point. I am delighted to look at the worst in North-East Lancashire because I know that area very well. In the mill I visited in Hong Kong they were weaving denim. My constituency has the largest manufacturer of denim in this country and that factory has just spent £500,000 on an air-conditioning plant alone. When I was in Hong Kong there was not a single extraction fan to be seen. These are the conditions that I am talking about. I would willing go with the hon. Member to look at any mill he names.

I have often joined the hon. Member in his fights and applauded hi actions in complaining about the import of Japanese cars into this country. How ever, he seems to apply different standards when he is considering the interests of the motor industry. He tells a rather different story then from when he is talking about textiles.

That is a travesty of the truth. I supported Government aid to the textile industry and I supported Government aid to the motor car industry. What worries me in both cases is that good use is not being made of it.

The answer to the dilemma of the hon. Member for Bromsgrove and Redditch (Mr. Miller), who seems to have gone from the Back Benches to the Opposition Front Bench during this debate, is that he represents a car constituency. His eagerness to tackle Japanese car imports flows from the fact that he represents a car constituency rather than a textile one.

There is a lot in that. I would rather see the hon. Member for Macclesfield on the Front Bench during a debate on textiles. At least he appreciates the difficulties faced by the textile industry.

The hon. Member for Bromsgrove and Redditch does not seem to recognise the facts. Listening to his speech one would not have known that in the three years 1973–76 3,500 textile factories closed in the EEC, that roughly 500,000 jobs were lost—or 15 per cent. of the labour force—and that many of those lost jobs were in areas where no alternative work was or is available. That is the sombre picture in the industry which we are discussing.

As regards the Multi-Fibre Arrangement, I join my hon. Friend the Member for Rossendale in saying that the Government have done a first-class job for the textile industry. We are proud of the job they have done. What it means is that if that effort is followed through and we have a new arrangement there will be a more secure future for our textile industry. All of us with textile interests are very pleased with what has gone on. We know only too well that over many years the textile workers have said that no Government begin to look after their interests and that, because of other exports from this country, they are the forgotten people. "Very often", they say, "Britain is prepared to accept textile imports because even if we lose our jobs there will at least be other British exports taking our place." Now, however, the Government have realised that something had to be done, since otherwise there would not be a textile industry to discuss.

My hon. Friend the Member for Rossendale was right to point out that in countries such as Hong Kong what is needed to protect the workers is a strong trade union movement. It is certainly not there at present; nor is there any sign of pressure being exerted to build up the trade union movement. We know that it is derided on political grounds, and that is one of the misfortunes in Hong Kong, but there is need for the trade unions to be developed there.

The idea of a planned import policy will find more favour on these Benches than it will with the Opposition, because we believe in a planned economy. We certainly need it, and we need it badly in the textile industry.

In giving praise to the Government for what they have done I must add, however, that there will be a difficult period in the interim before the new Multi-Fibre Arrangement comes in and before it is of benefit to the textile industry. There have been closures already. In my constituency there is the possible closure of 350 jobs before Christmas. It will be a bad Christmas present for those workers if they receive their notices. This is a multinational company, Courtauld, and there is another point to be made in this connection.

I realise that planning agreements are not the concern of the Department of Trade, but in the context of this debate it is right to point out that a planning agreement with a multinational company is essential, because we need to look not only at its policies for investment in this country, not only at its sales in this country and at its manpower requirements, but at its global requirements and its corporate plan. Especially in the case of a British multinational company, that is the sort of thing that a planning agreement would do.

In the factory to which I have referred, although we are having discussions with the company, we are reacting when the closure is almost imminent. If, on the other hand, we had had a planning agreement, the workers at Oakbank Mill, Nelson, would have been aware, before this critical stage, of what the Courtauld policy was. If they had been so aware, they would, I am sure, have been able to press on the management the steps which ought to have been taken to avert a catastrophe of this kind. No one can come to the House and say that the fault for any particular closure lies with the workers in the industry or that it has been due to labour disputes or lack of co-operation by the trade unions. Indeed, in the factory that I am now talking about nothing but praise for the workers is given by the management. If there is a fault it must be looked for elsewhere, in the marketing policy and management of the company, but certainly it does not lie with the trade unions there. That is why we need to look at the position.

I repeat that we need from the Government, if we are going to have the benefit of MFA, some help meanwhile for the companies which are finding things so difficult with the market as it is—not only in the United Kingdom but elsewhere—and with a flat economy. They need Government help, and the sooner we can resolve our policy on TES—I see that an Industry Minister is now in the Chamber—the better it will be for the textile industry. One of the calamities that could befall us is that, although we are now able to offer a better and rosier future, some of the companies that need help now may not be there, unless help is given, to receive the benefits of the Government's integration through the EEC in the MFA.

One thing is absolutely certain: if there is an upturn in world trade we shall again find that we have allowed our textile industry to decline so much in the recession that we shall have to fill the gap with imports.

Looking at this purely domestically, would my hon. Friend not agree that with the present level of stock the most vital thing to deal with the problems of textiles and unemployment is a substantial reflation in the Chancellor's next Budget?

I could not agree more, and we have argued for reflation of the economy.

I turn to another point that needs to be looked at. The Government should meanwhile be looking at Government contracts to see whether we cannot phrase in some Government contracts throughout many of the mills. I have been doing a survey on Government purchasing, and, while in many instances it is good, I was extremely surprised to receive a reply about something that we had thought was made in this country—prison uniforms. This is a small order. Increasing from 50,000 metres of imported cloth in 1976, we ordered overseas 480,000 metres in 1977. I should have though that these orders could have been placed with the British industry now.

We need a reflation of the economy, Government orders and a definite statement on TES or some alternative to it. I see that there is now some interference from the Commission on TES. I hope that new arrangements can be worked out and that help can be given to comparries when they have used up TES.

I know that some of my hon. Friends believe that the Tories do not want to know about any subsidies unless there is a specific case. The Tories agree to subsidies in certain instances and then there is a change of tune in relation to, for example, motor cars and textiles coming into the country. However, a different point of view is usually put forward by them.

We need help to carry us over the next few months. If that is provided, there will, thanks to the Government, be a better future coming. I must emphasise that we want companies that are in difficulty now to be able to hang on. We therefore need Government assistance extremely soon.

11.15 p.m.

I wish to make a brief contribution as an hon. Member representing an area which has considerable textile interests and as the vice-chairman of the all-party textile group. I hope that the hon. Member for Oldham, East (Mr. Lamond), who is chairman of that influential and hard-working group, will also be able to make a contribution.

I congratulate the hon. Member for Rossendale (Mr. Noble) on raising this important subject. I hope that it will not be considered unfortunate by my hon. Friends if I immediately criticise the few words that I heard my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) utter. A long-standing parliamentary engagement prevented me from being here at the beginning of the debate, but I feel that my hon. Friend was presenting a very unfortunate view which I do not endorse.

I hope that the hon. Gentleman informed his hon. Friend that he would be attacking him as viciously as he is.

I commented as my hon. Friend passed me that I would be referring to his contribution, but I mentioned nothing about attacking him as I am not doing so. I am merely saying that on this side we do not hold the same views as my hon. Friend implied on the importance of the renegotiation of the MFA for the textile industry.

My hon. Friend the Member for St. Ives (Mr. Nott), the Opposition spokesman on trade, made an important speech on 21st February this year about the textile industry. I am delighted that he is present for this debate. It clearly indicates that the Opposition, unlike the Liberal Party, are concerned about textiles. It is a pity that the hon. Member for Rochdale (Mr. Smith) is not here.

The hon. Gentleman has referred to the speech of his hon. Friend the Member for St. Ives (Mr. Nott). Can he tell us whether that speech was polished up by the public relations agency with which his hon. Friend has been associated?

I do not wish to make a direct comment on that matter. I made considerable representations to my hon. Friend, and I believe that some of those views appeared in his speech.

On a point of order, Mr. Speaker. May I refer to the intervention of the hon. Member for Sowerby (Mr. Madden)? As I have kept silent on the matter of public relations agencies for four weeks, would it be in order for me to ask you whether it is in accordance with the normal courtesy of the House for an hon. Member to put on the Order Paper a motion about another hon. Member and persistently refer inaccurately to that hon. Member—using invention and imagination to a quite astonishing extent—without first asking that hon. Member to whom he is referring whether what he intends to say on the Order Paper or in points of order to you is accurate? I am sorry to spring this on you. It has not seemed worth while to say anything for four weeks but this seemed an appropriate moment since I happened to be here for this debate.

Further to that point of order, Mr. Speaker. I am sure that you will recall that the matter to which I have referred was the subject of exchanges on two days between myself, my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) and the right hon. Member for Penrith and The Border (Mr. Whitelaw) and others. It seemed then to be an extremely confusing situation. My endeavour in tabling the motion to which the hon. Member for St. Ives has referred was to elucidate the truth from the confusion that seems to pervade the Opposition on these matters.

The answer to the point of order raised by the hon. Member for St. Ives (Mr. Nott) is that the motion is clearly in order, otherwise it would not have passed the Table Office. I can comment no further on the matter.

I am not sure how my speech will appear in Hansard, when Hansard is printed. I am used to being involved in controversy, but on this occasion I appear to be the innocent party.

Having perhaps lost my train of thought and my line of argument, I return to saying that we are basically debating textiles and the renegotiation of the MFA. Like one or two other hon. Members who have already spoken in the debate—and although it may sound strange coming from the Opposition Benches—I want to congratulate the Government. To an extent they have been sustained in their endeavour by support from Opposition Members. I congratulate the Government on their very firm attitude in the renegotiation of the MFA through the EEC.

Order. Perhaps I may remind the hon. Member for Rossendale (Mr. Noble), who, in his interesting speech, addressed us for 32 minutes, that other hon. Members are waiting for their debates to come and that he has made four interventions since his own speech.

Thank you, Mr. Speaker. I shall be brief.

We accept the hon. Gentleman's rôle in the fight that we have had for the textile industry. He has played a very honourable role. But it is significant that one of his hon. Friends in the House tonight has spent 30 minutes attacking the Government for their attitude towards the MFA. That hon. Member sounded like the Member for Hong Kong, not Bromsgrove. It is unreasonable for the hon. Gentleman to pretend that the Opposition have been anything but dragged screaming and kicking behind the Government on this issue. The Opposition have not shown the kind of support that the hon. Gentleman has shown.

I am grateful for the hon. Gentleman's kind remarks about me and my rôle concerning textiles. However, I made it clear when I rose to speak that I did not associate myself with the remarks of my hon. Friend the Member for Bromsgrove and Redditch. I went on to say that I believe that my hon. Friend the Member for St. Ives, who is the shadow spokesman on trade, made a very positive speech on 21st February, indicating quite clearly the Conservative Party's policy on textiles. Perhaps to some extent the Government have been sustained in their policy by the fact that the Opposition have given them fairly strong support in the line that they have taken.

I am delighted that the Under-Secretary is present. He has played a major part in representing textile interests. I pay tribute to him for the strength that he has sustained in the attack through the EEC. I know that in the textile industry as a whole the work force, the trade unions and the employers are extremely grateful to him for what he has done and for what the Government have done in the very strong line they have taken in the renegotiation.

This is a very important debate. I was not present to listen to the speech of the hon. Member for Rossendale. However, the temporary employment subsidy was undoubtedly mentioned. I am a strong believer in market forces and a market economy. I believe in fair competition. For many years our textile industry has faced anything but fair competition. It has faced very unfair competition. For that reason, I support the continuation of the TES or an alternative. At Question Time earlier this week I put a supplementary question to the Secretary of State as to whether his Department was considering any alternative to TES, because, as we have heard in the debate, we shall shortly, perhaps, fall foul of our European partners in the application of TES in the United Kingdom. It is right and proper that in plenty of time the Department of Employment, and perhaps other Departments, should consider an alternative to this necessary assistance to the textile industry.

Many minutes ago—the hon. Member for Rossendale spoke for about 32 minutes and it looks as if I might be speaking for as long, but if hon. Members study Hansard they will see that I spoke for only half of the time that my speech lasted because of the interventions—I said that I wanted to quote from the excellent speech of my hon. Friend the Member for St. Ives. He said:
"By any standards the textile and clothing industries are of great significance for our country. In spite of the major reduction in employment which has taken place, we are still concerned"—
I am delighted that my hon. Friend the Member for Bromsgrove and Redditch has returned to the Chamber because the point that I am making in quoting my hon. Friend's speech is important. My hon. Friend continued:
"with a larger employer than the whole of the coal and steel industries put together. Although I have not had time to do any sums, it is possible that we are talking about an industry which, employing 800,000 people, is larger in numbers than the motor industry and its allied trades. The industry is of great significance to our economy."—[Official Report, 21st February 1977; Vol. 926, c. 1104.]
That clearly indicates that my hon. Friend, to whose presence tonight I pay tribute, is clearly aware of the importance of the textile industry to this country.

I think that the observations of my hon. Friend the Member for Bromsgrove and Redditch—I managed to hear only part of his speech—indicated that he was presenting a rather one-sided view and that he is not aware of the problems facing the industry. Unlike the motor car industry, which, sadly, has been riddled with industrial disputes which have caused many of the problems which face the industry, the textile industry has had an industrial relations record that is second to none. The problems that face the industry are not basically of the industry's own making but the result of unfair world competition. I take exception to the position that my hon. Friend adopted over the MFA and the textile industry—

I do not believe that that is the case. A great deal depends upon the renegotiation of the GATT Multi-Fibre Arrangement. We have heard about the agreement that has been made with Korea and Hong Kong. Reference was made by my hon. Friend the Member for Bromsgrove and Redditch to the agreement with Hong Kong. However, those elements are only part of the renegotiation. We have a number of uncharted waters, a number of areas for which answers are not yet available. For example, there are Brazil, Pakistan, India and Egypt.

The most important countries are India and Pakistan. They already supply a heavy tonnage to this country each year. Any increase in the amounts that they send to us is likely to be extremely detrimental to the textile industry, especially the spinning yarn and grey cloth industries. They are in the main further north than my constituency of Macclesfield, in Cheshire, but I am not making a constituency speech. I have a great interest in the whole of the textile industry, which I believe is of vital strategic importance to the country. However, in making general points I should be wrong if I did not make one or two constituency points.

For example, Courtauld bought itself into my constituency, taking over George Swindells, a long-established family firm in my constituency. That happened some years ago. It took over the Adelphi and Clarence mills in Bollington, which is a village north of Macclesfield. It is with regret that I tell the House that those two mills are now silent. Courtauld took them over. I do not know why it did so. It may be that it was motivated by our capital taxation system. Perhaps it was because it wished to remove competition. The two mills at one time produced some of the finest spun cotton ever produced in the United Kingdom. They are now silent. They are no longer part of the textile scene. Many hundreds of very skilled, responsible, moderate workers have been forced to find alternative employment. Most of them, fortunately, have done so, but a number remain out of work. That is very hard on them and their families. As Courtauld has told hon. Members on both sides of the House, many of the problems have been caused by unfair competition from the developing world and other countries exporting subsidised goods to this country.

In the town in which I live, Congleton, in the south of my constituency, a large company, Tootal, took over Conlowe Ltd. and Condura Fabrics Ltd. Those two companies have now been closed or their operations have been transferred elsewhere. Tootal says that that has been done because of a bad recession in textiles and rationalisation, so often the excuse for that type of action. At Condura Fabrics 200 people are losing their jobs. Some are being found jobs by Berisfords Ltd., the largest ribbon manufacturers in the world, which is taking over the Condura premises, but that company is not finding jobs for all those who have lost their jobs with Tootal. The clerical staff are being transferred to a Tootal distribution depot in Longport, near Stoke-on-Trent, some miles from Congleton.

My town is losing 200 jobs that it can ill afford to lose. In the whole of the North-West many jobs have been lost not through inefficiency or industrial disputes but because the industry is suffering from unfair competition. It has rationalised and put in new equipment to enable it to compete as best it can with the Third world, which has the advantage of cheap raw materials and cheap labour.

The industry has had some protection under the MFA. I say to the Minister "For heaven's sake maintain the robust position which has been adopted to date. Do not concede to India and Pakistan, Egypt and Brazil. You will have the support of the textile workers—perhaps in the voting booths—if you sustain this strong attitude. You will be doing it in the interests not only of the textile industry but of the United Kingdom as a whole."

We are talking about an important industry. It is bigger than the car industry, about which we hear in the House time and time again, not only in debates but at Question Time. The textile industry does not feature often enough in the deliberations of the House. I only hope that the Government appreciate what is at stake and will sustain their very tough attitude in what remains of the renegotiation.

I want to show an across-the-Floor attitude. I think that I am the only Conservative Member to have signed Early-Day Motion No. 127, headed
"Textiles and the Multi-Fibre Arrangement",
put down by the hon. Member for Rossendale and signed by a number of his hon. Friends. The motion reflects exactly what I feel. I hope that I shall not bore the House if I read it out, because it should be registered for the Minister to consider further. It says:
"That this House calls on Her Majesty's Government to re-affirm its unequivocal support for the mandate initially accepted by the EEC on the Multi-Fibre Arrangement renegotiations; reminds Her Majesty's Government of its declaration to take unilateral action should renegotiation be unsuccessful; and calls on the Secretary of State for Trade to make an early statement on progress made in the current round of negotiations."
Since the tabling of the motion we have become aware of some of the details of the negotiations and the agreements that have resulted. They have been good, and I hope that the remainder will be good as well.

I should like to raise a matter that was mentioned to a number of hon. Members on both sides of the House when we recently met representatives of the British Textile Employers' Association here at the Palace of Westminster. It was pointed out to us that one of the disquieting features of the EEC bilateral negotiations has been the negotiations with a country in South America—Peru.

I hope that the Minister will be able to provide us with some information. Peru is the only producer of a particular growth of cotton called tanguis cotton. I am sure that the hon. Member is aware of this product, which has special properties of value to the knitting industry. Due to the inefficient management of the Peruvian cotton-growing estates, tanguis cotton is in very short supply, but the Peruvians have been successful in obtaining a special and substantial quota, in addition to that for the cotton itself, of yarns spun from this cotton. They are thus making their tanguis cotton available to other countries, and to this country in particular, in yarn form only.

Surely this is a form of trading blackmail, which I believe is a very unwelcome innovation in international trading. I raise that point at the end of my speech because, while I do not think it affects the overall situation, I feel that it is a trend that requires attention. I hope that the Under-Secretary will pay some attention to it when he replies to this important debate.

Once again, I congratulate the hon. Member for Rossendale on raising this subject. It has enabled me to say things that have been building up within my heart for a long time. I am very attached to the textile industry. What I say I do not say for party gain but because I think that the industry deserves our support, backing and understanding. After all that it has suffered in recent years it rightly looks now to this House and to the present Government, and a future Conservative Government, to do right in its interest—and I hope that right will be done.

11.37 p.m.

It is no wonder that the hon. Member for St. Ives (Mr. Nott), who has been looking more and more glum during the debate, has chosen this moment to depart, because he is faced with the awkward task, at the end of the debate, of reconciling two irreconcilables, expressed, first, by the hon. Member for Bromsgrove and Redditch (Mr. Miller), who seems to have become the self-appointed spokesman for Hong Kong, and, secondly, by the hon. Member for Macclesfield (Mr. Winterton), who, as always in these debates—unlike the hon. Member for Bromsgrove and Redditch—has been speaking up for the British textile industry.

It is always tempting to take up the remarks of the hon. Member for Macclesfield, but on this occaison I shall resist the temptation. I shall even resist the more provocative temptation to take up the very strange contribution of the hon. Member for Bromsgrove and Redditch. In passing, I point out that not only will his contribution make very interesting reading for textile workers in the British textile industry; he will also have upset some of his former friends who own, control and run the British textile industry. He seemed to be laying the blame for many of the difficulties of that industry on the doorstep of those who own and control it. It was an indictment of private enterprise and the competence of those who run the industry. I am sure that it will make very interesting reading for textile employers.

Secondly, it was also a little cheeky. It certainly shows that the hon. Member has got a pretty good brass neck to lecture us about shortcomings, in terms of the pay and conditions of clothing workers, and to cite a document recently published by the Low Pay Unit. It may come as a surprise to the hon. Member for Bromsgrove and Redditch to know that a number of Labour Members contributed their first parliamentary pay increase to the Low Pay Unit to produce that publication. I believe that it was a very commendable report. It exposed the low pay and poor conditions that clothing workers, particularly in Leeds, have endured for many years. Much of that situation is due to the extreme loyalty that both textile and clothing workers have displayed over the years, as was pointed out by the hon. Member for Macclesfield.

However, none of these matters will divert me from paying my debt of gratitude to my hon. Friend the Member for Rossendale (Mr. Noble) for having initiated the debate. I am grateful to him for providing us with yet another opportunity to discuss the problems of the textile industry and for his well-documented well-argued and incisive speech, which said for all of us what needs to be said for the industry. Therefore, I hope—indeed, I promise—to be brief.

I am in the rare position, shared by my hon. Friend the Member for Rossendale, of expressing thanks to the Government Front Bench. I am also pleased to express my gratitude particularly to my hon. Friend the Member for Oldham, East (Mr. Lamond) for the contribution that he has made in recent years in trying to assist the textile industry, and especially for the part that he has played in ensuring the negotiating position that the Government have pursued in the events leading up to the renegotiation of the Multi-Fibre Arrangement, which reflects a tough attitude. If it had not been for the attitude demonstrated by the Government, the negotiating mandate pursued by the Commission would not have been as tough as it has been. That needs to be repeated often. Indeed, to underline the point made by my hon. Friend the Member for Rossendale, that approach is appreciated by those who speak for the industry. My hon. Friend referred to Mr. Edmond Gartside, President of the British Textile Employers Association, and I should like to echo the sentiments that he expressed.

I pointed out to the hon. Member for Bromsgrove and Redditch that the Common Market is not in the business of planning trade. It is the epitome of the philosophy, characterised in this House day in, day out, of the right hon. Member for Leeds, North-East (Sir K. Joseph). It is based on the philosophy of the free movement of capital and labour. It has nothing to do with planning trade.

As in so many other things, we are the victims of our Common Market membership as regards the textile industry and the renegotiation of the Multi-Fibre Arrangement. The Common Market has been negotiating on behalf of the British Government. The British Government have not had independence in these matters.

I should like to draw attention to the importance of the meeting of the Council of Ministers which is to take place on Tuesday 20th December. It appears that that meeting will be presented with extremely voluminous information about the bilateral agreements which have so far been reached between the EEC negotiating team and 25 textile-exporting nations.

I am concerned that precise information giving details of the quotas and what these agreements mean in terms of the British market is not available. I understand that, for some unknown reason, all this information is being processed through a computer in Bonn. I am not sure that the information has yet reached the computer in Bonn. However, I know that it is not available in London this week. Therefore, we do not know the precise terms of the agreements which have been reached. Still less do we know the precise impact that they would have if they were to form the basis of a renegotiated Multi-Fibre Arrangement. Understandings have been reached. On the basis of these understandings, I believe, agreements have been initialled. The Minister should give the House all the information that he has about the exact terms which have been agreed and his best estimates of their effect on the British industry and the British market.

I am pleased that agreements have been reached with Hong Kong, Taiwan and South Korea, because those three countries import the lion's share of textiles. I hope that that agreement will help to curb the effects of imports from those countries.

I share the concern expressed by other hon. Members about the failure so far to reach agreement with India, Pakistan, Brazil and Egypt. I understand that no agreement has been signed. This is an important grouping. It would be dangerous if any significant increase were allowed because virtually any substantial increase would lead inevitably to a further reduction in employment in the British textile industry.

I should like the Minister to confirm that an understanding has been reached in respect of the most sensitive products limiting the average growth under the bilateral agreement between zero and 0·6 per cent. This is an important aspect of the negotiations. The British industry and our constituents are entitled to clear information.

I share with other hon. Members concern about the transitional arrangements and their effects on the British industry. I share the concern about the sharing arrangements. There is an excellent case for trying to secure agreement with other members of the EEC for them to take a much larger share of textile imports which come to the Community.

There is a need to improve the surveillance arrangements which have existed and about which concern has been expressed. I should like an assurance that the anti dumping arrangements, which have been criticised time after time, will be secured and strengthened. I should like an assurance from the Minister that efforts will be made to improve documentation, which has been the subject of widespread concern in the industry.

There is a need for recession arrangements to protect the British industry, which, although it has been taking a large share of the market, at times of recession suffers more than other Common Market countries because of its historic levels of imports. It is important to have better recession arrangements than we have had in the past.

The hon. Member for Bromsgrove and Redditch referred to the importance of Hong Kong for wool and worsteds. I agree with him. I underline his comment about the excellent export record of the wool industry. But he neatly omitted to refer to the very unhappy situation that surrounds exports of wool to America. It is wholly unreasonable for the Americans to scurry around, as they were doing some weeks ago, trying to weaken our position in the renegotiation of the MFA yet justifying their own 50 per cent. tariff against British wool exports to America. I should like to hear from the Minister what success there has been in the recent efforts, aided by the new British Ambassador to America, to encourage the Americans to reduce that 50 per cent. tariff, a reduction which would greatly assist the British wool industry.

Does the hon. Gentleman not accept that America, in spite of its attempts to weaken our position in the renegotiation, is the first country, at the drop of a hat, to rush to put up tariffs to protect its own industries if they are in danger of being undermined by imports?

I entirely agree with the hon. Gentleman. Britain has been a soft touch on textile imports for a long time, and if we have a much tougher MFA in the future countries such as Hong Kong and other traditional exporters of textiles will be able to find other exporting opportunities around the world which will not have the harmful effects on the British industry that we have witnessed in recent years.

I make a last appeal to the British negotiators to stand firm in the talks on this matter on Tuesday. We can all understand the atmosphere in which those talks will take place. The negotiators will be confronted with an enormous amount of material which they will not have had much time to consider. There will be enormous pressure for agreements to be reached. Officials will be stressing the urgency of reaching an agreement. The negotiators are human beings, too, and there will be a great temptation for them to pack up their bags and get back to the Christmas festivities.

In Common Market tradition the clocks may be halted and 20th December may last for just 24 hours, but it might last for 48 or 72 hours. But I urge the British negotiators not to give in on Tuesday. Much rides on the outcome of that meeting. If necessary, I would urge them to tell those who have been negotiating on our behalf that what they have agreed is not good enough and that, if necessary, they should go back and negotiate further. If necessary, the Council of Ministers should meet in January. We should not readily agree to everything that is presented on Tuesday. We should stand up for the British textile industry as we have done up to now. That is important both for the country and for thousands of textile workers and their families, whose future security hangs very much on the outcome of the talks.

I therefore wish our negotiators success and urge them to be very tough and to get the best deal they can for the British industry.

11.54 p.m.

I have sat through the debate and, therefore, feel entitled to take part in it to deal with certain matters of deep concern. Although there are no textile mills in my constituency, Manchester shares a lot of the wealth of the industry and attaches much important to it.

It is important to remember that we are considering here not merely the problems of one industry but the problems of an industry which in the North-East is central to an area which has many problems. If we pull away the support which that industry has at the present time, the problems will not only proliferate in the textile industry but will run riot through the area and cause many difficulties elsewhere.

I underline the point made by my hon. Friend the Member for Macclesfield (Mr. Winterton) that it has been, and continues to be, the case that the Government's negotiations in this matter have had the support of Conservatives, and even of Liberals—although they are not here tonight—in Lancashire and the North-West. That support has been given freely and has continued. I do not think it helps the Government's position or our likely success if we ignore that fact.

I should like to say a word on behalf of my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), who has come in for some stick tonight.

The hon. Member may say that, but my hon. Friend has made a point of considerable importance. Speaking, as he did, on behalf of the people of Hong Kong—if I may so put it—he drew attention to a very important point which will be relevant in the negotiations next week. A very harsh agreement has been made with Hong Kong. We think it a necessary one but the fact is that it is harsh. My hon. Friend's points were well made, and we do ourselves no credit if we fail to acknowledge the reciprocal effect of what we are doing. It will, however, be extremely damaging if the burden that we have imposed on the people of Hong Kong is thrown away and open to doubt, as it will be if we give way to India, Pakistan, Brazil and Egypt. Therefore, in asking the Minister, as others have done, to make sure that the negotiating position is not weakened in respect of those four countries, I think that my hon. Friend's warning, when he spoke of America and other countries also beginning to question again the agreements they have made, is well taken. If the position is weakened in respect of those four countries, we shall have done a great disservice to the people of Hong Kong and have opened the gates to a very unhappy season hereafter. Although we may not all agree with everything that my hon. Friend said, it needed to be said in the debate.

We are essentially dealing here with the immediate position. We are talking about the negotiations taking place next week. We are talking about the acute difficulties at the present time in the textile industry. We are talking about stock levels which are horrendous and getting worse. We have mentioned in passing the temporary employment subsidy. We have to recognise that that particular form of subsidy is in real trouble. I do not think that we shall be able to hold that line very long. It is no good beating the EEC about the head. It is quite likely that we are in breach of the EEC arrangements, and it is quite likely that the court will so find. It is also questionable whether that particular remedy is one which this country would wish to continue across all industry for very much longer.

It is a great mistake for us to regard this as the only way of helping the textile industry. I therefore ask that the Government, combined with the texile industry, while recognising that some form of subsidy and assistance will continue to be required in the present circumstances, should endeavour to find a way of doing it which is not a continuation of the TES.

We are particularly concerned with the period up to the time when the renegotiated agreement begins to bite. I ask the Minister, therefore, to have a word in the ear of his right hon. Friend the Secretary of State for Employment and ask him to get us out of our misery about whether TES is to be extended as soon as possible. I think it is extremely unsettling for the industry. Although I personally think that there are other ways of assisting the industry which would be better and endanger it less, an immediate or quick announcement is required to know exactly what sort of support the industry will get. The present situation is unsettling.

I wanted to make only those two points. In the longer term we shall have to face up to the problem mentioned by my hon. Friend the Member for Bromsgrove and Redditch. It is no good saying to ourselves that we can wholly regard imports as something against which there is permanent protection. That will not be the case.

Nor is it helpful for Labour Members to imply that the EEC is an enemy to us in this respect. In many respects we can regard the EEC as a friend. More and more we shall have to move towards picking up our textile trade from trade between developed countries, and in that context our membership of the EEC will be to our benefit. We should make sure that our industry is structured to take full advantage of that.

12.1 a.m.

As constantly remind my colleagues, this is a debating Chamber. I want to pick up some of the points made in this debate. However much we may disagree, I would say to the hon. Member for Bromsgrove and Redditch (Mr. Miller) that we sometimes need a certain point of view expressed which we might possibly miss because the argument tends to flow in one direction.

I wanted to intervene only because I am sorry that the hon. Member did not give way. There seemed to be some secret signs of communication between him and my hon. Friend the Member for Oldham, East (Mr. Lamond). I do not know whether it was the flashing of the eyes or the lifting of the eyebrows, but the hon. Gentleman gave way a couple of times to my hon. Friend when I would have liked him to give way to me.

I wanted the hon. Gentleman to give way on his allegation—he said it was true—that there is a Low Pay Unit report which indicts the garment industry and which he said was absolutely shocking. I wanted to ask him who runs that industry. Who are the people running that industry who are paying those low wages?

Earlier in his speech the hon. Gentleman poured scorn on the efforts of trade unionists. I should tell the hon. Gentleman that what caused trade unionism in the first place was employers as bad as the people he was indicting.

I also want to comment on something said by the hon. Member for Manchester, Withington (Mr. Silvester). He was quite right to say it. He has no textile mills in his constituency. I think I am right in saying that there are few mills in Manchester. Nevertheless, the textile industry has a certain standing, not merely psychologically or emotionally, in Lancashire generally and certainly in Manchester.

If we allow that industry to be slimmed down any more the effect will not be contained within those towns where mills exist but will spread outwards and further demoralise a region that has taken more than its fair share of the hard knocks, largely through unfair competition. I seize that point because in my constituency there are tremendous social problems of industrial dereliction as well as unemployment.

Twelve months ago we were all lamenting the closure of the Courtauld mill in Skelmersdale. It closed prematurely and paid off the workers. Most hon. Members were in deepest sympathy with me and did all they could to sustain me—for which I was grateful—when Courtauld announced that closure in Skelmersdale.

The loss of 1,000 jobs in one fell swoop—300 had been lost earlier—meant that the male unemployment rate in Skelmersdale—now the biggest town in my constituency—was 23 per cent. I do not know the precise reasons, but Skelmersdale now has 17·6 per cent. male unemployment. Although I am glad that it has come down, it is still a terrific figure. We still have not recovered from the consequences of that closure and the demoralisation which followed it and other blows in Skelmersdale. We still have the same social problems to meet, and we get them in the rest of my constituency, which largely falls within the metropolitan borough of Wigan.

About 12 months before the closure of the Courtauld mill, we had the closure of the Empress mill. This is an indication of how Lancashire and the textile industry have suffered. The Empress mill was a cotton spinning mill, and Lancashire, the birthplace of the industry, once had 100 per cent. of the world's spinning capacity. We are now down to less than 1 per cent., and that little mill in my constituency, which was also owned by Courtauld, had added a little to that capacity. But it went.

In the community jobs were lost as a result. There was less money, and there was not the same opportunity for people to meet the cost of living. There was not the same money going to the local authority, Wigan metropolitan borough, but still there were the same social problems and the industrial dereliction. The effect was to demoralise one of the townships in my constituency, and in the Greater Wigan area today we have an unemployment rate of 9·6 per cent. which is well above the national average of 6 per cent. and about 1½ per cent. above the North-Western average. What is more, we are virtually surrounded by areas which receive all kinds of benefits, yet we get only assisted status benefit and, as I said earlier today, it looks as though we shall lose out on rate support grant.

These debates have come to resemble a continuous film show. When I was a boy, there were two separate houses—one at 8.30 and one at 10.30. Then came the continuous show, and people could not believe that it was possible to stay in all the way through, though I may say that the novelty soon wore off. Inevitably, people fell asleep after seeing the programme once, and after a time they would rub their eyes and say "This is where we came in."

That is my impression of these textile debates. This is where we came in last time. We seem to rehearse the same old topics. The difference this time, however, is that there is a sense of hope. Just before the House returned after the Summer Recess, about eight of us Labour Members—I think that a group of Conservatives did the same earlier—went round some of our spinning mills and weaving mills to get some first-hand knowledge of the views of people in the industry.

I gained the impression that there was a feeling that something would be done to arrest the decline and that the Government had taken a firm stand in this renegotiation and offered some hope to an industry which had become almost paralysed with fear. Until then, the feeling in the industry had been that there was nothing that could be done, that Parliament repeatedly debated the problems, but that the demands of the so-called poor or developing countries, collectively or individually, for a bigger share of our market were paramount, that we were a soft touch and that the inevitable end would be the total decline of the textile industry in Lancashire, bearing in mind that its work force is down from many hundreds of thousands in its heyday to about 80,000.

I am pleased to see that my hon. Friend the Member for Oldham, West (Mr. Meacher), the Under-Secretary, will be answering the debate. We could not have a man with a better and deeper understanding of the problems—unless it was my hon. Friend the Member for Oldham East. Maybe we should have a combination of the two.

In this period of hope we must not be carried away too much. There are still many things to battle for. I hope that when my hon. Friend winds up he will tell us some of the sticking points where he sees difficulties, and that he will urge caution on hon. Members with textile interests. I do not have many textile interests now—my mills have slipped away from me—but I take an interest because I believe that the industry is a matter of importance to the prosperity of North-East Lancashire as a whole.

I urge upon my hon. Friend the same message as he has heard from my colleagues—stick firm. No other developed industrialised country in the world has allowed the import penetration that we have allowed. I can see why the textile industry is the first industrial enterprise in which developing countries engage. People have to be clothed and so it is the threshold of industrial take-off. It is so attractive that any country in the world, once it is beyond the agricultural state and wants to get into industry, goes automatically for textiles. But there is no country in the world that has taken penetration as we have.

The hon. Member for Bromsgrove and Redditch made a stink about the problems of Hong Kong. I have been there, but I do not claim to be as knowledgeable as he is. I have great respect for the people of Hong Kong. They frightened me to death with their ability to work. Obviously, we have to play the game with them. We cannot impose pretty strict restrictions on them and let others play old soldiers. We cannot give others what we deny Hong Kong. Does the hon. Member think that it would benefit other countries if our capacity to produce textiles was eliminated altogether? I believe that they need a country that produces enough to take not only their textile products but other products that they are starting to produce and will produce in greater numbers.

The fact is that the Lancashire people, in particular, have a great tradition for looking after the interests of people from poorer regions. A classic example is the attitude of the Lancashire cotton workers of the time to the question of slavery in America. Their stand on this matter must have put them out of work and caused them and their families great hardship, but this sort of behaviour is a strong and honourable tradition.

The hon. Member for Bromsgrove and Redditch represents a motor car manufacturing constituency. Many of his constituents work in the industry. In the past, he has made statements about motor car import penetration and has asked the Minister to say how many British people are opting to buy foreign as opposed to British cars.

Without being critical of the motor car industry—I do not know too much about it—I believe that many of its problems are self-inflicted. But that cannot be said of the textile industry. Textile workers do not receive anything like the wages in the motor car industry, but their industrial relations record is an example to the nation. Yet, as I have said, they have constantly seen their industry whittled away simply because of the competition. Even if they were on half their present wages, they could not stand up against it.

My point was that the people of Hong Kong and the industry there had always understood the difficulties in this country, and they had shown it once again by reaching an agreement entailing a serious cut-back, but they were concerned that if that gap were filled by developed countries or others without such a claim, the situation should be reviewed when the trade became better.

As for the analogy with the motor car industry, both industries, as I said in response to an earlier question, have had Government support which they needed to restructure, and part of that restructuring inevitably involves a loss of jobs.

I am glad that the hon. Gentleman has cleared that up. I shall not pursue it further. I shall listen keenly to my hon. Friend the Under-Secretary of State. If it be possible to stiffen his resolve by repeating what he has heard about 40 times already, I add only this. We have confidence that he will not let the textile industry down when our representatives get round the table this coming Tuesday. The textile workers of Lancashire have every confidence in him, knowing that he will protect their interests.

12.17 a.m.

This debate opened some time ago with an excellent speech by my hon. Friend the Member for Rossendale (Mr. Noble), and I know from the wistful tone in which you remarked that it had lasted only 32 minutes, Mr. Speaker, that you greatly regretted having missed it.

I apologise, Mr. Speaker. Obviously, your patience has suffered more than I had given you credit for.

It has been an extremely interesting debate, and many good speeches have been made, but I congratulate the hon. Member for Bromsgrove and Redditch (Mr. Miller), in particular, because he made it a real debate, which is somewhat unusual when we discuss textile matters. Our debates on the textile industry over the past few years have tended to be rather one-sided in that there has been unanimity across the Floor. I thought the hon. Gentleman's speech valuable because it cleared our minds a little. Had I been called earlier—I appreciate your difficulties, Mr. Speaker—I should have wished to launch into a lengthy analysis of the points that he made. I shall now refrain from doing so, but I must say that I agreed with the hon. Gentleman on several points.

For example, I support the proposition that we should try to get as great an extension of trade throughout the world as we can. That would be greatly to the benefit of workers everywhere, and in Britain in particular. That is one of the reasons why I was so concerned to support the deal we made with the Polish Government the other day, because it will make possible not only trade between us and the Poles but more ships in the world to carry the increased trade. I support that fully.

I also share a soft spot for the people of Lancashire. I knew when I saw the hon. Gentleman coming into the debate that he would be taking the line that he did, because I knew of his particular interest in the Crown Colony. It behoves all of us to take an interest, because it is a Crown Colony, and there is some merit in his argument about our unfair treatment that has been meted out to Hong Kong. I am not saying that the level of imports should be increased because of that, but within the levels that are being imposed or agreed Hong Kong could reasonably say that it has not been as fairly treated as it should be because of its special position. On that account I agree with him also.

The hon. Gentleman also suggested that the analysis that has been made of the difficulties—not only by hon. Members and trade unionists who have a lifetime in the industry but by employers and owners of the industry in Britain who have also had great experience—was not entirely correct. He suggested that we should examine the position again and that there should be more investment, that we should examine the technology of the industry, its organisation and so on. I think he will find that perhaps most of his experience of the industry has been outside the country, but there has certainly been great investment in the textile industry. It has moved from being labour-intensive to being the second most capital-intensive industry—second only to chemicals—in the country. There cannot be an argument on those grounds.

We have heard several references to the excellent industrial relations that exist in the industry, and, in passing, we might rightly say that the low wages of which the hon. Member and I and others in the industry complain may be due to the rather compliant attitude of the trade union movement in the textile industry. I could not follow all the argument of the hon. Gentleman about immigrants manning the night shifts in the main, but that is so. However, if he was saying that they are not union members he was wrong, because there is good trade union organisation among them and many play an active part as shop stewards and so on. I therefore did not think that his analysis was correct.

We cannot protect the long-term interests of the industry with the hope that we can get by with a continuing series of such agreements. At the end of the day we must liberalise trade.

My hon. Friend the Member for Rossendale mentioned some letters that he had received from Mr. Edmund Cart-side, President of the British Textile Employers' Association. Mr. Gartside is not alone in his opinions. We are now speaking about emergency action to try to prevent the annihilation of the industry. "Annihilation" is an emotive word but it is not mine. It was contained in a letter that I and other hon. Members have received from Mr. John Longworth, Chairman of the Textile Industry Support Campaign and Secretary of the Oldham and District Employers' Association. He said:
"It is now widely recognised that certain sections of the textile industries of the Western World are at risk of annihilation as a result of low cost exports—particularly from the Far East."
I accept that analysis by those who have a fairly deep knowledge of the industry. I make no such claim for myself. I merely hope to represent people here but I want to see jobs for my constituents. That is my long-term aim. I recognise that the textile industry has diminished considerably during the last 70 years and that it is now a mere shadow of its former self as an employer, but I do not object to that. I should rather have the balance of diversified industry in my constituency that there now is than the position that prevailed 70 years ago when almost everyone in Oldham was employed directly in textiles or in the making of textile machinery.

I like the better balance that we have now, though, of course, I do not want it to diminish until it disappears completely. That would be the result if we had not had such emphatic and strong representations from the Government in the negotiations. I congratulate them, and I hope that they will be able to sustain their arguments to the point where they emerge successfully from the negotiations. I am sure that what they have done on behalf of the textile industry will be widely recognised by working-people and employers in the Lancashire textile industry.

12.26 a.m.

We have had a fairly extensive Second Reading debate on textiles, and it has been a passionate and rousing occasion in parts. I should like to express my gratitude to my hon. Friend the Member for Rossendale (Mr. Noble) for his generous tributes to the Government, and I should like to give credit to him for the diligence, perseverance and single-mindedness which he and other hon. Members have repeatedly shown in pursuing their campaign on behalf of the textile industry. I am entitled to make that statement since I am often on the receiving end of that campaign.

The British textile industry has some very good friends in this House to whom it should show considerable gratitude for their perseverance and effectiveness. I am pleased that my hon. Friend the Member for Rossendale quoted the statement of Mr. Gartside who has enormous experience in the Lancashire industry. My hon. Friend can take a lot of credit for keeping the Government up to the mark and is responsible for the interesting state of mind of Whitehall on this subject. It was put to me recently by a civil servant that the whole of Whitehall is decidedly twitchy about the subject of textiles. My hon. Friend can take a lot of personal credit for that excellent state of affairs.

The MFA is only the latest of a series of GATT arrangements regulating international trade in textiles and clothing. Like previous arrangements—the hon. Member for Bromsgrove and Redditch (Mr. Miller) was correct in what he said about this—it is essentially a bargain under which developing countries accept discriminatory controls against their exports in return for assurances of the growth of their exports to the developed market.

The arrangement came into operation on 1st January 1974 and it expires at the end of this year. By the time renewal came to be considered, it was widely accepted that in the economic circumstances that have developed, particularly the world recession which has hit the textile industry particularly hard, the arrangement did not give adequate protection to our industry or to the industries of Western industrialised countries. I need hardly stress the importance of the textile and clothing industry.

My hon. Friend for Nelson and Colne (Mr. Hoyle) spoke eloquently on the subject. As the hon. Member for Macclesfield (Mr. Winterton) pointed out, the industry employs 800,000 people. Although, as my hon. Friend the Member for Oldham East (Mr. Lamond) reminded us, that is not as many as it used to employ, the great majority are in assisted areas where unemployment is high. Since we are talking not just about employment but about the industry's importance to our national economy, it should be pointed out that its export, last year totalled £1,345 million—7 per cent. of our total export trade.

I think that the hon. Member for Bromsgrove and Redditch was an unnecessary Jeremiah in suggesting that if there was a cutback in countries such as Hong Kong, our industry, if given the breathing space to reorganise and consolidate, will not be able to take up any slack which is brought about by any reduction in countries such as Hong Kong. In fact, I am glad to say that our clothing exports to the EEC in the last year or so have been going very well. That shows the capacity of our industry, given the chance to compete very effectively.

I am sure that we—many hon. Members have emphasised this—certainly could not, and would not, stand by and allow these vital industries to be disrupted by the flood of low-cost imports which continues to come into the country.

In renegotiating the MFA we had two objectives. First, the growth rate in the existing quotas, which was 6 per cent., had been agreed at a time when expectations of growth for the textile industry were much higher than they are now, and it was important that the growth rate should certainly be reduced. Second, the existing agreement covered only 75 per cent. of our low-cost imports—still quite a high figure, but 75 per cent. and no more—and gave no protection against the problem of cumulative disruption. This occurs with the imports from a number of suppliers, often including new suppliers—I shall return to this point because it is important to the hon. Member for Bromsgrove and Redditch—but each possibly in themselves quite small matters but nevertheless, as a whole, becoming damaging to our industry.

After a great deal of discussion at the GATT textiles committee and with EEC member countries and the European Commission, it was decided that the best way to proceed would be for the importing countries to negotiate direct with the exporters to agree reduced quota levels and coverage, and only when this had been done would the MFA be renewed, if it was going to be renewed.

The next step, therefore, was to agree the negotiating mandate under which the European Commission would negotiate with the exporters on behalf of the nine EEC member States. We in the United Kingdom took the lead by pressing for a very tough mandate, and we refused to allow the negotiations to begin until we had satisfactory assurances on a number of sensitive areas, of what the quotas, for example, proposed for imports into the EEC as a whole meant in terms of the level of imports into the United Kingdom.

Satisfactory assurances on these points were achieved, following detailed discussions with the Commission, and the negotiating mandate was approved by the Council of Ministers on 18th October. Negotiations with the supplying countries began immediately afterwards.

I need hardly say that the negotiations proved to be extremely tough. I am sure that hon. Members would have expected that; we certainly did, as well. We are asking some of the exporting countries to accept very large, sharp cutbacks in the level of trade that they would have enjoyed under the old MFA. I hope that my hon. Friend the Member for Ince (Mr. McGuire) will accept that after these negotiations we shall never again be regarded, I think, as a soft touch, if indeed we ever were.

However, I say to the hon. Member for Bromsgrove and Redditch, about the essential point of his speech—I hope that he is the Member for Bromsgrove and Redditch and not for Hong Kong—that it seems to us to be impossible to provide for stabilisation or increased security for our own industry and for extra room for new countries coming into textiles as they industrialise, which may well be smaller and less rich than Hong Kong, without at the same time requiring some cutback from the larger, older, more established and richer supplying countries. It is impossible not to have some cutback. I think that the hon. Member is unfair if he does not recognise that that is inevitable—unless he is prepared to sacrifice Lancashire jobs or, indeed, textile jobs elsewhere in the country.

I think that the hon. Gentleman will recall that I was asking him only for an assurance that there would be a review at the end of a period to see what had happened to the gap that had been left for newcomers and to see whether developed countries or which others had filled that gap, and, if so, whether there would be any redistribution. That is what I asked.

It is British industry that will fill it if it is not taken up by new suppliers. I can give the assurance that it is our understanding that there will, if necessary, be a review. No one can foresee the state of the international economy. We do not know whether in two years there will be a deeper recession or a marked recovery. There will be the opportunity for such a review.

The Commission made it clear in respect of the cutbacks that we were demanding, that in the absence of a satisfactory agreement it would in the last resort be prepared to take unilateral measures to restrict low-cost imports. I am glad to say that by and large the exporting countries recognised that if an orderly trade in textiles was to be maintained their best interests lay in reaching an agreement with the Commission. As a result, the Commission has now reached agreement, or is expecting shortly to reach agreement, with 27 countries. Unilateral measures will also be taken against Taiwan, which is not a member of the GATT. The results of the Commission's negotiations are now being carefully examined by ourselves and the other EEC member States, and a decision on whether the Commission's recommendations can be accepted and the MFA renewed will be taken, as my hon. Friend the Member for Sowerby (Mr. Madden) said, at the important meeting of the Council of Foreign Ministers next Tuesday, 20th December.

I turn to our response to what the Commission has achieved. Our first task has been to consider whether the Commission has managed to reach agreement within the terms of the mandate. That is a little less straightforward than it might seem since the Commission has been negotiating on behalf of the whole of the EEC. It is necessary for as to consider the result of the negotiations as they affect the United Kingdom. The calculations—I can vouch for this—are extremely complex. We are dealing with nine EEC States, over 30 supplying countries and over 120 products. Although the Commission's negotiations with the supplying countries were going on right up to the last moment, even now all the details are not yet fully available. However, I think that the general pattern is clear. It is worth emphasising again that the fact that the Commission has initialled an agreement with a number of countries does not in any way bind the Council of Ministers, and that as of now the United Kingdom's position is fully reserved.

The new MFA will, in our view, represent an enormous improvement over the old agreement. I shall indicate why we take that view. First, the coverage will be a great deal more comprehensive. The present coverage of restraints is equal to only about 75 per cent. of low-cost imports of textiles and clothing by volume proportions. Bilateral agreements will increase that to 95 per cent. The coverage will rise to 98 per cent. if we include quotas outside the MFA which have been agreed with some Eastern European countries.

My hon. Friend the Member for Rossendale spoke of the desirability of a managed market. I suggest that what we now have is something that goes a long way in that direction.

Secondly, we have secured certain global ceilings for the eight most sensitive products so that in no circumstances will imports of these products rise above the ceilings laid down, even if new suppliers do enter the market. The eight products account for no less than 60 per cent. of our total low-cost imports.

Thirdly, we have more realistic base levels, which is of great importance as new quotas will be based on actual trade in 1976 rather than on quota levels, which in many cases were under-used. In some cases 1976 trade is below the level of 1977. Therefore, the quotas here represent a cut in existing levels.

Fourthly, a very important feature of the proposed new MFA is an automatic trigger mechanism to bring under restraint any products not yet under quota if exports to the Community or any member country rise above a certain level.

Fifthly, growth rates are substanially lower than in the existing MFA, particularly for the most sensitive products.

Sixthly, the number of product categories covered has been greatly extended, from about 60 to over 120. The products themselves have been defined more precisely in order to cut down the scope for evasion, and the amount of flexibility between products—so that, for example, an exporting State may transfer the unused proportion of a quota in one product to increase trade in another whose quota is fully used—has been greatly reduced.

All this amounts to a degree of protection going far beyond anything that our industry has enjoyed in the past, and I believe that it will provide it with a sound basis for its future development. By any standards, therefore, the new agreement is a great improvement over the old, but we need to consider to what extent the Commission has succeeded in keeping within its negotiating mandate and how far we are satisfied with the outcome of the negotiations. Here I shall be more critical.

With regard to the 27 countries with which the agreement has been reached, the Commission has been able to keep very close to the mandate. It has not been able to keep within it in every case, but I think, frankly, in the nature of things—given that there has been some very hard negotiating—it would have been surprising if it had been able to do so.

The departures from the mandate can fairly be described as small. Present information is that they should not affect those products of greatest sensitivity to the United Kingdom. In the case of the eight most sensitive products in Group 1, which account for over 60 per cent of total United Kingdom low-cost imports, the Commission has, with certain exceptions, kept closely to the terms of the mandate. The excesses range from nil on jerseys to 2.4 per cent on blouses. These are all provisional figures.

In the case of the 18 sensitive products in Groups 2 and 3 not subject to global quotas, preliminary indications are that the Commission has settled for growth rates of between 5 per cent. and 9 per cent. rather than the 4 per cent. to 7 per cent. laid down in the mandate.

I turn to a point that many hon. Members raised. There are four countries, which have been regularly named in the debate, with which the Commission has not been able to reach agreement within the terms of the mandate. They are important supplying countries, and agreement with them is necessary if the renewal of the MFA is to take place as planned. One of the factors which we need to consider, and which will be considered by the Council of Ministers next Tuesday, is whether we could justify giving something extra to those four countries in order to reach agreement. Every hon. Member who has taken part in the debate has expressed the strong view that there should be no departure from the mandate, that no departure is acceptable. That is the clear message, and I have a great deal of sympathy with that view. But we need to consider the consequences of such a stand. If we were to take such a stand we would have to ask the Commission to take unilateral measures against those four countries, and we would also need to carry the Commission and the other EEC member States with us in imposing measures more restrictive than we had been able to achieve by negotiation. That would be the meaning of such a stand.

This is one of the central issues to be discussed in the Council of Ministers, and no decision has yet been taken by the United Kingdom Government; nor, indeed, can it be taken at this point.

I want to emphasise the fact that whatever decision is taken the effect—this is not an unfair judgment to make—will be small, in the context of the agreements that have been successfully negotiated, and it certainly needs to be judged in perspective, in comparison with the improvements, which I have outlined, which the new MFA offers compared with the old one.

I now want to turn to some of the more specific points raised in the course of the debate. My hon. Friend the Member for Rossendale asked in particular whether when there was a transformation from United Kingdom into EEC quotas, it meant that the amount of the product coming into the United Kingdom specifically was any longer restricted. I can assure him that if there is such a transformation it will in no way affect the parcelling-out of the original distribution within the EEC. The United Kingdom position will be safeguarded.

My question was: will knitting yarn quotas transferred from this country to the EEC be treated as new quotas in terms of the transitional arrangement, which would allow them to be shipped before 31st December this year and to arrive before 31st March next year? Will they then not be counted against 1978 quotas?

I understand my hon. Friend's point. I am sure that they will not be treated as new quotas; they will be regarded as a continuation of the existing quota. Therefore, the loophole to which my hon. Friend referred will not exist in respect of the interim arrangement. Where there is no quota prior to 31st December, if goods are shipped before 31st December and arrive before 31st March next year they will not count against the 1978 quota. That would not apply in the case of Indian yarn quotas.

My hon. Friend referred to the safeguard clause in respect of the multilateral trade negotiations. It is our intention to seek a selective application of article 19, which could certainly have an influence in respect of other countries, although it would probably have little effect now in respect of textiles precisely because of the very wide coverage of quotas under the new MFA; but it is our intention to negotiate that, and we are pressing for that as one of our objectives.

My hon. Friend also referred to the social clause in his remarks about the myth concerning the role played by multinational corporations investing in underdeveloped countries. I am sure that he is right when he says that people in those countries want better working conditions and more security, and in that context the social clause would work in their interest. But we have to negotiate with Governments—and when we ourselves have rightly taken a stand in respect of attempts to increase extra-territoriality, particularly in respect of American jurisdiction over its multinational corporations operating in this country, it would be very difficult for us to impose, albeit with proper and honourable motives, a similar infringement of sovereignty on other countries, particularly developing countries.

I refer my hon. Friend briefly to the point about the evasion of origin. This worries many hon. Members. There are strict rules to ensure that goods do not evade quota restrictions by being shipped via countries to which no quotas have been applied. I accept that this kind of thing can never be entirely eliminated, but we normally expect to be able to prevent its becoming a serious threat to our system of controls.

Two separate points are involved. The first is that evasion in most cases will be stopped by the application of the origin rules. Secondly, it will become more difficult anyway because of the extension of the MFA into more countries and products.

On the first point, all goods imported under the MFA will be required to have certificates of origin. We are constantly on the alert for cases of abuse of the certificate of origin system. I do not deny that such cases exist. But Customs and Excise has full powers to investigate where evidence is presented that indicates that abuse may be taking place.

On the second point, evasion of this kind will be more difficult, because of the arrangements under the new MFA. In the first place, far more countries will have negotiated bilateral agreements and more products will be under quota. Therefore, the scope for evasion will be much less.

In the case of countries which have signed bilateral agreements, the trigger mechanism would come into play before any significant damage could be done.

In the case of MFA signatories where there are no bilateral agreements, our intention—we have assurance from the Commission on this point—would be to impose quotas when exports reached levels no greater than those laid down by the trigger provisions of the bilateral agreements.

That leaves only countries which have not signed the MFA, and we would expect the Commission to deal with any quota evasion through them, which would also quickly come to light on a similar basis. In most cases this would involve invoking the safeguard clause in existing trade agreements.

When the detail of what I have just said has been carefully read, it will be seen that, to a large degree, we have an effective framework for checking evasion under the new MFA.

My hon. Friend the Member for Rossendale asked about goods in transit on the last day of the year. Under the GATT rules we are bound to allow into this country goods which are in transit at the moment that a quota is imposed. That is the nature of the predicament. Quotas in all the bilateral agreements negotiated by the Commission start from 1st January next year.

For the 75 per cent. of products at present under quota, that makes no difference, since products not covered by the 1978 quota will fall to be counted against that for 1977. For products not at present under quota—the extra 20 per cent. to which I referred—I agree that there could be a rush to beat the new quotas when they are imposed. To that extent, there is a loophole. Where there is clear evidence of this happening, we are certainly prepared to intervene with the country concerned. I should add that in the only case of this kind that has yet come to light, we have already done so.

At worst, this is a once-and-for-all operation. With barely two weeks of the year to run, the danger of disruption from this source is not great. If any hon. Members have evidence from their industrial sources showing or suspecting any use of this loophole, I hope that they will let us know quickly.

I was going on to refer to other points, but time is short.

Before the Minister sits down, may I remind him of the special cotton from Peru? Have his civil servants yet managed to give him any advice on that matter? I agree that, when compared with many of the matters that have been mentioned, this may seem a trivial point. However, as it is a form of industrial blackmail, I believe that it should be dealt with now so that, if it occurs in any other form in future, we can deal with it effectively. Has the hon. Gentleman had any information on this subject?

I shall deal with that in a moment. First, I should complete my previous remarks.

I know that there has been a suggestion that "goods in transit" might be so loosely described as to offer continuous disruption in 1978. The term "goods in transit" is not a loose phrase. It is described specifically as "goods for which there is evidence of shipment prior to the cut-off date." It is not sufficient to place an order or state an intention to place an order. Our normal criterion is a bill of lading. I do not expect any significant evasion of the spirit of the law.

I have never heard of Peruvian tanguis. I am not sure that my officials have either. I shall investigate the position and write to the hon. Member for Macclesfield. Since the EEC claims that the global quotas for cotton yarn and cloth have not been exceeded, any extra for Peru must have been balanced by less for somewhere else. Presumably the situation means that there is a right to concede this to Peru and perhaps we extracted less of another product from Peru.

I hope that I have given the assurance that this is a valuable and important new deal. I do not deny that it is not in accordance with all our wishes but it provides a framework for world trade in textiles which offers enormous gains for our industry. I hope and believe that in the light of any modifications that might be agreed by the Council it will at least provide a structure for the regeneration for which our industry has sought for so long.

Civil Aviation (Scotland)

12.58 a.m.

I refer to Vote on Account, Class VI, Vote 6. It gives me great pleasure to pay tribute to the work of the Civil Aviation Authority and the effective services which it has given both in its headquarters and in the Highlands and Islands airports of Scotland, including Inverness and Wick, Kirkwall, Sum-burgh and Stornaway, Islay, Tiree and Benbecula. There is considerable evidence that it has carried out its duties with immense efficiency and as much economy as possible.

I shall give three examples which establish beyond any possible doubt the very high levels of efficiency to which it operates. In 1976–77 the CAA spent £1·2 million on the Highlands and Islands airports to handle 650,000 passengers. In comparison, the BAA spent £10 million for 4,600,000 passengers. This means that the expenditure by the CAA for each passenger handled for that year was £1·80 and that the expenditure for each person by the BAA was £2·20. That shows that the CAA operated with greater economy. These figures exclude depreciation and indicate conclusively that the CAA operates these airports more economically than the vast BAA monopoly could ever do.

The second fact relates to the ratio of members of staff employed to passengers handled for the year 1976–77, In that year the number of management staff for the Highlands and Island airports was 110 and for the BAA Scottish airports 1,065. The number of passengers handled by the CAA was 651,000 and by the BAA 4,576,000. For every one of the CAA's airport management staff 5,918 passengers were handled and for every one of the BAA's airport management staff 4,295 passengers were handled. This means that the CAA employee can, and does, handle more passengers than the BAA employee under the present two systems in Scotland. This proves conclusively that the CAA operates on a more efficient and less bureaucratic level in the running of small and very small airports.

The third case that I would take for the year 1976–77 is a comparison between the productivity of two Scottish oil-related airports—Sumburgh and Aberdeen. The latter is operated under the BAA and the former by the CAA. At Sumburgh 22 members of the management staff handled 268,000 passengers for that year. The BAA in Aberdeen used 135 members of management staff and handled 882,000 passengers. This means that for every passenger handled by the BAA at Aberdeen the CAA at Sumburgh handled 1·86 passengers. Therefore, the CAA employee can handle nearly twice as many passengers as the BAA employee. That means that in practice the CAA is operating more economically and in cost-effective terms more effectively.

What is the significance of these facts? To use an old Scottish saying, "Facts are chiels that winn a ding." These three cases demonstrate that the CAA's considerable experience in running airports since 1945 should be allowed to continue, and that the Government would be wise to support the outstanding example of an efficient sector of a public body rather than to encourage monopoly control.

In the light of this very compelling evidence, I hope that the Minister will consider confirming the CAA as the long-term owner of these airports so that it can get on with the business of serving the vital needs of the oil industry and continue to foster the excellent relationship it has already established with the communities that these airports serve.

The crux of the matter is that there is a very great difference between administering large airports and small airports. Some of these airports consist merely of small landing strips. As the former chairman of the CAA, Lord Boyd-Carpenter, said in a recent speech, very often the handling of traffic is done by one man whose traditional form of duties consists first of chasing the sheep off the runways, then talking the aircraft down and then carrying the baggage to the terminal. All that is done by one man. Almost always he is a local man whose heart is in the job and who is proud of the fact that he is running the airport, which under modern conditions is the hub of these remote islands.

I am glad that the right hon. Member for Western Isles (Mr. Stewart) is present. He can confirm whether I have painted an accurate picture of what happens at Stornoway and Benbecula. Similarly, the hon. Member for Argyll (Mr. MacCormick) may feel moved to state what the position is in his constituency.

In other words, those working for the CAA, are closely integrated into their communities as well as doing a highly efficient job, and it would be a human tragedy for any of them to be threatened needlessly with redundancy. This applies particularly to those who work at Aviation House in my constituency where the headquarters staff are carrying out their jobs with great dedication.

The Minister may ask, at a time of high unemployment, what a few dozen more job losses mean. But he is dealing with human beings who have considerable expertise, and if they are thrust into unemployment by a costly bureaucratic exercise there will be no guarantee of other suitable employment for them.

Is it the case that if this transfer were to go ahead the small number of executive staff at CAA airports would not be offered jobs? Would there not be redundancies at these airports as well as at Aviation House? The needs of these employees should be sympathetically considered by the Minister before he comes to any hasty conclusion.

But it is not primarily the question of redundancy which concerns most Scots and most Britons. There is a very important principle at stake, that the transfer of responsibility from the CAA would lead to increased costs, and that fact has certainly been put before the Minister by the Scottish Council for Development and Industry. If there are increased costs it is inevitable, surely, that sooner or later this will lead either to increased fares, which will be contrary to the interests of the Highlands and Islands communities, or to substantially increased taxation. Either way it would be unsatisfactory.

It is, of course, a fact that the total number of passengers handled by the BAA in Scotland is a small percentage of its total numbers, and any decision by the BAA might well be a corporate interest decision rather than one taken in the specific interests of the communities in the Highlands and Islands.

Furthermore, as the British chambers of commerce have confirmed, there is very strong opposition throughout the chamber movement, both in Scotland and in the rest of the United Kingdom, against these aerodromes being transferred to the BAA.

It is also worth noting that the Chairman of the Highlands Air Transport Consumer Council, Major Hunter Gordon, has made certain representations in this matter. Not only is he Chairman of the Highlands Region of the Scottish Council. He also represents a broad cross-section of industry, commerce and local interests, quite irrespective of any political commitment which he may have. Even if this gentleman were a Labour candidate, he would still represent in his professional capacity a cross-section of industry, commerce and local interest. He has written stating that in view of the complete agreement of the elected representatives in the local authority and that of industrial and commercial air travelers represented by the Highlands Air Transport Consumer Council, the council feels that the changeover from the CAA to the BAA should not proceed. Indeed, late this afternoon, before the debate began, I received a telegram from him which states:
"Highland Air Transport Consumer Council deeply concerned about any possibility which would lead to increased operational costs. The existing high air fares already over one hundred pounds return are a disincentive to development representatives and buyers. On island routes air travel fulfils vital social need and costs must be kept to minimum."
It is not only that consumer council which takes that view. It is of interest that virtually all the light aircraft operators are satisfied with the CAA charges, and invariably where the BAA has taken over airports, costs have escalated for landing and parking fees. If the Minister checks up with the light aircraft operators he will find that there is substantial opposition to any proposed takeover.

I regret to inform the Minister that that was not the only telegram I received this afternoon. I received another, this time from a wholly different source—the Convenor of the Shetland Islands Council. He states:
"I understand that you will be raising the question of the proposed BAA takeover of Highlands and Islands airports in the House of Commons today. You have the Council's strongest support for any action which prevents a possible increase in air travel costs to this community which is already experiencing major financial stresses and strains as a result of oil development but which tolerates them in the national interest. The proposed takeover can only result in an increased cost burden on the Shetland Islands people despite assurances by the BAA to the contrary."
That is sent by the Convenor, Shetland Islands Council, Mr. A. I. Tulloch

I quote next from Lord Boyd-Carpenter, who probably knows as much about aviation as any man living. He made it clear that the Highlands and Islands airports were there not for economic reasons but for social services, and that they provide the only means of maintaining civilised standards of life for the persons in the remote communities concerned. He said:
"It seems the height of folly to alter what is plainly the most economic system, in order to substitue for it a system which, in the nature of things, must be more expensive and therefore must increase the bill which the taxpayer in one way or another will have to meet."

I have listened with interest to the telegrams that the hon. Gentleman has received. Can he indicate whether he has received any message at all, telegraphic or otherwise, from the Scottish TUC, for example? Can he indicate whether he has consulted the STUC?

I am grateful to the Minister for asking that question. That was precisely the question that I was going to ask him. We are well aware that the Minister has been having conversations with the STUC. But my understanding is that the STUC was sworn to secrecy and was not in a position to state what representations it had made to the Minister. Perhaps the Minister can tell the House exactly what line the Transport and General Workers Union has taken. We should be most grateful to know.

Perhaps the Minister can also tell the House what specific terms the BAA has put forward concerning a possible takeover. Can he also tell the House whether it is the case that two years ago senior civil servants in the Department of Trade decided in principle that a policy should be adopted to take over the Highlands and Islands airports? Is it not the case that the Minister is coming under considerable pressure from his senior civil servants in this connection?

May I ask the Minister why is it that British Airways has not been consulted? We all know, of course, that the 13 AA has been consulted throughout. Is it not astonishing and extraordinary that British Airways has not been consulted in this whole process? If British Air ways had been, is it not possible that the Minister's picture of this matter might be somewhat different from the picture that he now has?

The Minister will be aware that in February 1974 the CAA requested that its airports should be looked after by a subsidiary company in Edinburgh with a Scots board receiving assistance from the staffs of the CAA. If the Government are still not prepared to consider this proposal seriously, will the Minister at least accept the recommendation of the Scottish Council for Development and Industry that the CAA's responsibility, with all its advantages of flexibility and experience, should continue until a far more comprehensive review of Scottish airport services can be undertaken?

After all, there is the awful warning to the Minister of local government reorganisation. In two years of local government reorganisation in Scotland more than 24,000 extra officials have been created. If this proposed take-over is thrust through we seriously believe that it will be exactly the same story all over again and that there will be a large increase in bureaucracy.

In the debate in the other place six days ago, on 8th December, the Solicitor-General for Scotland said that the Government had not reached a decision. I suggest to the Minister that this matter could be regarded by senior members of the Department of Trade as a peripheral matter compared with all the other decisions which go across his desk. But in Scottish terms it is not a peripheral matter but a matter of considerable importance, especially to the Highland and Islands communities themselves.

I hope that the Minister, who in the past has listened to our representations with great courtesy, will appreciate the substantial strength of feeling throughout Scotland on this issue. If he interferes with men performing their duties with great efficiency and dedication he will be taking a great risk. If the CAA and the Highlands and Islands communities are unjustly treated this could well become a cause célèbre.

1.14 a.m.

I am pleased to have been called after the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) because of the excellent case that he has made against the proposed transfer of the Highlands and Islands airports from the CAA to the BAA and also because of the way in which he has pursued this campaign with tenacity and vigour. This is a matter of great anxiety and concern for workers at the airports concerned, not least in the Western Isles—my constituency—at Benbecula and Stornoway.

As Lord Boyd-Carpenter, the Chairman of the Civil Aviation Authority, said in another place, there is all the difference in the world between large airports and the techniques involved in operating them and the small airports. The hon. Member for Edinburgh, West went into that in some detail, and I need not repeat what he said. The noble Lord went on to describe the unique job structure at airports on the islands, and I can confirm what he said. Apart from the jobs mentioned, workers double up by cutting the grass, tending the fire tenders, and so on. There is a very different job structure from that at a British Airports Authority airport where the very nature of the organisation means that jobs have to be divided among several categories of worker. That is the basis for the very real fear that jobs will disappear. On behalf of my constituents, I view with the greatest hostility the possibility that even one man may be added to the dole queue in an area with consistently the highest unemployment in the United Kingdom.

I want also to express anxiety on behalf of people in my constituency who travel by air or might wish to do so. We have appallingly high air fares. It is possible to fly from the United Kingdom to Canada for the fare that has to be paid to fly from Stornoway or Benbecula to London. If this proposed transfer goes through, the possibility that higher landing fees will be added to the astronomical fares is viewed with the greatest anxiety.

Lord Boyd-Carpenter said that it seemed the height of folly to alter what plainly was a most economical system by substituting for it a system which would increase the bill to the taxpayer. That is the nub of the matter.

We have had assurances that our fears are unfounded, and I do not cast any doubt on the sincerity or good faith of the people who have given those assurances. But I have found too often that assurances of that kind are altered within a year or two on the excuse that circumstances have changed.

Then there is the possibility that one of the functions of the proposed Scottish Assembly will be the running of these airports. For that reason, at least, any final decision should be delayed.

Those right hon. and hon. Members with airports in their constituencies are totally opposed to any transfer of the kind proposed. All the staff at the airports wish the status quo to be maintained, and that should have some weight with a Labour Minister. After all, there are considerations more important than administrative tidiness. There is no demand, nor, I believe, any need for the change. There is total opposition from the people most closely concerned. I say to the Government "Leave well alone".

1.18 a.m.

I congratulate the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) on raising this subject and I applaud the energy with which he has been pursuing it for some time. I am also grateful to the Minister for the courtesy with which he received the hon. Gentleman and various other hon. Members representing Scottish constituencies when we discussed the issue.

However, now that we have a chance to discuss the matter on the Floor of the House, there are a number of aspects of it that I should like to bring to the Minister's attention.

I have the great privilege to represent what is probably the most scattered constituency in the United Kingdom. It comprises not only a very large part of the mainland but probably the largest number of inhabited islands of any constituency. Many of the islands are served by air, and the needs of the people of the islands are usch that they rely absolutely on the ability to fly straight to centres of population such as Glasgow. It may be for urgent medical reasons. That is why the Air Ambulance Service is important. Or, of course, it may be a matter of convenience. Most people in my part of the world rely on air travel in a much more real sense than those who live in urban conurbations such as Glasgow. If one lives in Glasgow one can travel to London by bus, train or plane. But if one lives on Islay or Tiree or Coll one has no option but to fly.

When discussing the running of airports, it is most important to bear in mind the degree of flexibility that is possible under the present system. We have a system in which everyone knows everyone, and everyone can do the job. There are no demarcation lines between unions. Firemen can become baggage unloaders, and the airport manager can become a jack-of-all-trades. We think that this is not a bad system.

I have asked the Minister to come to Islay and Tiree, and I hope that he will do so. I shall be glad to introduce him to the staff of the airports and to members of the local communities.

One can extend the argument further. There was a time when services to my constituency were run by British Airways, the biggest airline in this country. Now they are run by Loganair, a small independent company, helped by subsidies from public funds—

Order. If the hon. Member for West Stirlingshire (Mr. Canavan) wishes to intervene, he must do so in the proper way and not from a sedentary position.

There might be another way out. If we have a situation in which it is better to have a small airline with small aeroplanes, it might be possible some day to make further economies by allowing that airline to be responsible for running the airports on the islands.

I am looking at this purely from a constituency point of view. I admit that if any particular airport grows to such an extent that it becomes a major airport, it must be looked at in a different way. But no one can tell me that Tiree or Islay airports will become major centres of international traffic and, therefore, must be taken over. There is a very strong case for looking at them separately.

I urge the Minister to have regard to all airports in the Highlands and Islands in the same way and to realise that certain airports will never be great commercial airports. We could suffer from having them put under the blanket control of the British Airports Authority instead of leaving them as they are under the Civil Aviation Authority. In the long run the solution might be different, but it is dangerous and wrong to make up one's mind about these airports, take a difficult decision, and then reverse it later.

1.24 a.m.

I have a great deal of sympathy with the views expressed by the right hon. Member for the Western Isles (Mr. Stewart) and the hon. Member for Argyll (Mr. MacCormick) about viable air services to their constituencies, particularly to the islands in the West of Scotland. The only way in which we can get a viable service to the West of Scotland is by having a Socialist public transport policy and State intervention. The hon. Member for Argyll admitted that when he said that formerly British Airways ran the service and latterly it has been run by Loganair. But Loganair could never do it on its own as a private enterprise concern; it can be done only with State intervention, and State intervention, to my mind, is the very essence of what Socialism is all about.

The hon. Member for Western Isles finished by saying "Let well alone". To suggest that the present standard of service to his constituency is well shows considerable complacency. I do not think that it is well. I do not think that we should "Let well alone". We should improve the standard of public transport to his constituency.

When I said "Let well alone", I meant it on the basis of the old saying "Better the devil you know than the one you do not know".

Whether he thinks that British Airways is a devil, whether he thinks that Loganair is a devil, or whether he thinks that the CAA is a devil—whatever he thinks about devils—the hon. Gentleman must admit that the status quo for his constituency is far from well. It is very imperfect, and the Labour Government are intent on improving it. The only way to improve it is by getting a greater degree of co-ordination of the existing services. That is why the Government are coming forward with the present proposal.

The hon. Member for the Western Isles may shake his head and come out with his nationalist argument, and the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) may come out with his Tory argument about leaving it all to free enterprise and so on, but the truth is that there would not even be a service to the Western Isles or to Argyll if it were not for State intervention. The Labour Government are now trying to rationalise things in a reasonable way.

I want to get this on record, and I apologise for intervening again. At a CAA hearing in London two months ago it was admitted by British Airways that the airlines to the Western Isles and to the Orkneys and Shetlands are in the black, paying their way, whereas the services in the internal parts of Scotland, such as the one which the hon. Member represents, are in the red Let him put that in his pipe and smoke it.

This is nonsense. For example, the British Airways shuttle service is the most profitable service in the United Kingdom. But if British Airways or any other airline were operating purely on the basis of profit it would not even bother to go to the Western Isles. It is nonsense to say that one can run a profitable enterprise going to the Western Isles or to Argyll.

In my view, what the Government propose is a reasonable solution to get some integrated organisation into the whole concern so as to provide decent services to these Tory areas of Scotland where the people do not even have the gumption to vote Labour. If they did vote Labour, they would have had a decent transport service perhaps a century ago.

1.29 a.m.

Once again the hon. Member for West Stirlingshire (Mr. Canavan) has shown that he is in a very agitated state this week, and I think we understand the reasons for it. But it should be said at the outset that this debate is not about nationalism, about Socialism or about Conservatism, or about air services, shuttles and the like. It is about the management and control of a number of airfields, and to that extent we are grateful to my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) for raising the matter. He has pursued this cause with vigour and tenacity, and, without doubt, his argument tonight has been excellent.

I remind the hon. Member for West Stirlingshire that when we talk about the British Airports Authority and about the Civil Aviation Authority we are not talking about one Socialist efficient organisation and one inefficient capitalist one. They are both State organisations.

The Minister has kindly received a deputation, including me and two SNP Members. I know that the Minister is a busy man who has many important problems to look at which need to be resolved and which are crying out for action. However, the general message from the Opposition and those who are involved at a constituency level is that here is a problem in which the Minister would be well advised not to look for trouble. As the right hon. Member for Western Isles (Mr. Stewart) has said, the Minister should let well alone unless he can successfully prove that his alternative proposals would be of advantage to the communities invomved.

The Under-Secretary of State for Scotland, the hon. Member for Glasgow, Queens Park (Mr. McElhone), has been kind enough to attend the debate and show his continuing interest in this matter, and I should like him to talk to the Secretary of State for Scotland about what happened in the House yesterday. There was an announcement by the Secretary of State about teacher training colleges in Scotland that was the culmination of a long battle stretching over 10 months in which the Government had originally had a report prepared that was presumably based on expert advice.

The House knows all about it, but I simply put the point that in this matter a proposition was put forward by experts although it was totally opposed by Scottish opinion.

Order. We are not discussing teacher training colleges in Scotland, and I ask the hon. Gentleman to remember my ruling on the matter. [Interruption.]

Order. I have indicated that I shall not allow discussion on teacher training colleges or what happened in the House yesterday.

I can make a general point without referring to that. It is sometimes unwise to proceed with plans based on expert advice and to have to alter them later when opposed by local community opinion. The Minister should bear in mind that the proposals that have been put forward have been opposed by the Scottish Council, the chambers of commerce, the local communities and hon. Members. I am sure that if the right hon. Member for Orkney and Shetland (Mr. Grimond) and the hon. Member for Inverness (Mr. Johnston) were here tonight—and we understand that they have had a busy and trying day—

Is the hon. Member aware that the right hon. Member for Orkney and Shetland (Mr. Grimond) wanted to be here very much but was unable to attend because of a pressing engagement and that he is going to send strong representations to the Minister on this subject?

Yes. Like other Liberal hon. Members, the right hon. Member for Orkney and Shetland has had a trying day today, and I can fully understand that.

Local hon. Members, the Highland and Islands Transport Consumer Council and other local interests have made it clear that they do not like the proposals, and the Minister, although he has indicated in an intervention that some bodies in Scotland may take a different view, should bear in mind that those directly involved—those who use the airfields—and the local communities are of one opinion: they are happy with things as they are and are extremely concerned and apprehensive about a major change.

There was a discussion on this in the Lords on 8th December, and there was given then an indication of some of the reasons—they were advanced by the Solicitor-General for Scotland—that might be argued for the change. Only two arguments have been generally advanced and those were the ones that were raised by the Minister at his meeting with us. The first was that it would be useful and constructive to have the Scottish airports brought into one package in the event of the Government devolution Bill going forward. That is laughable. It might go forward and be approved in a referendum or it might not, but it was said that it might be administratively useful at that time to have all the airports in one package to prepare for devolution.

The words used in another place were:
"The transfer of the eight Highlands and Islands aerodromes to the BAA and their incorporation with the other Scottish airports in a single organisation with headquarters in Glasgow, perhaps or, possibly, Aberdeen, would therefore be wholly consistent with, and would facilitate, the Government's approach to devolution."
It would be a major mistake if the Government envisaged two major organisational changes in airports in Scotland in preparation for something which might or might not happen.

I was worried to read in some newspapers, including that Scottish paper called The Scotsman, on 31st May a report that the BAA had told the Government that it was prepared to take over four of the Highlands and Islands airports. I am not sure whether that has been confirmed, but if it were proposed to transfer only four of the airports, that would be a new fragmentation and the Government would not even have the argument that something was being put in one package.

The second argument concerns commercial exploitation. The words used in another place—which were similar to those used by the Minister—were:
"Another way to reduce the losses is to exploit other means of income which airports have."
Much of this argument has been centred around Sumburgh airport. Many of the oil men are going through there and there might be considerable exploitation available from those who go through there. The BAA has considerable experience of this, but has the Minister any evidence that this cannot be done by the CAA, which, as far as Sumburgh is concerned, has shown a great deal of commercial expertise?

Another point that worries me is that it was said in another place that the Government have not been given convincing evidence that the transfer of airports to the BAA would result in increased overall costs. That is not the sort of argument that is acceptable to hon. Members representing Scottish constituencies. We want an assurance that there is evidence that there would be advantages from transfer and not that there was no evidence that there would be no disadvantages.

Transport is so vital to Scotland that any possibility of additional costs understandably causes enormous concern. It is no part of the case of those who oppose change that the BAA is inefficient or costly. All the indications are that it is extremely efficient in running the airports it manages at the moment. Few people could produce convincing evidence that it is an inefficient organisation. It has major problems, particularly with trade unions and others, but it copes pretty well. However, that is different from saying that an organisation which has experience of managing its present airports could necessarily manage other airports better than the CAA.

There are a number of particular points that I hope the Minister will be able to answer. There is concern that the changeover may result in increased costs. There is no doubt that at CAA airports one has quite different management and labour arrangements from those organised by the BAA. This was summarised brilliantly by one or my noble Friends in another place who said:
"very often the handling of traffic is done by one man whose traditional form of duties takes the place, first, of chasing the sheep off the runway, then talking the aircraft down, and then carrying the baggage to the terminal. All that is done by one man. Almost always he is a local man, locally recruited".—[Official Report, House of Lords, 8th December 1977; Vol. 387, cc. 1838, 1824.]
I do not know whether that was an extreme example or a paraphrase of what may happen. There is no doubt that the flexible arrangements at these airports contribute to reduced costs. If there were to be a division between the airport and the management functions, there would be increased costs.

There is no doubt that if we were to have this change of ownership, it would not mean the CAA disappearing from these airports. It would carry out some of the functions, and the other functions would be carried out by the BAA. There would be a real danger of duplication of what is done by one person or organisation now.

Has the Minister given any consideration to what might be the additional costs of dividing into two the responsibility for airports for which at present the CAA is entirely responsible? [Interruption.] Or the CIA? I am not allowed to mention teacher training colleges—

The second point concerns landing fees. There is very real concern that if the changeover takes place, the BAA might increase landing fees. That would undoubtedly have an effect on air fares. The Minister must come to some of these Scottish airports to realise how acutely concerned people in the area are about the high level of air fares. It may be that some commercial travellers engaged in the oil industry will not be so conscious of fares, but the high level of fares is causing serious concern and anything that would result in fares increases would be of enormous concern.

Third, private fliers, operators of small aeroplanes of their own, have given reports that in places such as Aberdeen, where there was a change, the costs have risen considerably.

There are four additional questions that I hope the Minister will be able to answer tonight. First, how many complaints has he or the Scottish Office had about the CAA's management of the airports that it controls? That is often a good guide. My experience of these airports, particularly Inverness and some of the island airports, generally gives me the impression that most travellers and local residents are very happy indeed with the way in which the airports are managed.

Secondly, will the Minister give an assurance that he will visit the airports and consult the employees and travellers?

Thirdly, will the Minister assure us that in the event of his going ahead with the proposals, there will be no question of having a further division, of having, as was suggested, perhaps four airports being transferred to the BAA and the rump being transferred to some other body?

Fourthly, will the Minister give a clear assurance that he will not advocate a change unless he can present convincing evidence to the House of Commons, the local community, the local councils and other bodies that the change will be for the better?

It would be only fair to tell the Minister that on the basis of the opinions that I have gathered in Scotland and of the speeches that the Minister has heard tonight and the representations that he has received, there is little doubt that if this proposal were to go forward without absolutely convincing evidence that it would result in an improvement, the Minister would be facing a very major battle.

My final point is very important. In the discussion on a Question in the House of Lords, there was a statement by the Solicitor-General for Scotland that a decision was expected round about the end of the year. The words used were,
"Around the end of the year, the Government plan to publish a White Paper … on airports policy, and it is my expectation that a decision on the aerodromes will be reached by them and announced at that time."—[Official Report, House of Lords, 8th December, 1977; Vol. 387, c. 1842.]
We are almost at the end of the year. Some of my hon. Friends have been buying Christmas presents. There is no doubt that the end of the year is approaching. When does the Minister expect this decision to come? Unless he can provide the most convincing reasons for change, will he let well alone, let the CAA get on with the excellent job that it is doing for the eight airports and let the BAA continue to manage the other airports in Scotland, for the management of which it can take credit?

1.44 a.m.

This has been an interesting debate. From my point of view, as one who has to make a decision or, at least, to recommend a decision to my right hon. Friend the Secretary of State, it is helpful to garner hon. Members' views. Indeed, as has been mentioned, I have heard every one of the hon. Members who have spoken in the debate, apart from my hon. Friend the Member for West Stirlingshire (Mr. Canavan), because they came to visit me and made almost exactly similar representations on that occasion.

I want to make it clear that although it is true that the White Paper will be published, it is hoped, early in the New Year—it will not be before the end of this year—the Government have made no decision on this particular point at present. We would wish to announce our decision in the White Paper. It is right that at this stage I should not commit the Government—indeed, I am not in a position to do so—to a particular point of view. However, having heard the arguments for maintaining the status quo, it is only right that I should present the arguments on the other side of the balance-sheet so that the public at large may be aware of the respective arguments. That is what I propose to do.

The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) is not directly affected in terms of constituency interests by the operation of the Highlands and Islands airports. His interest lies in the fact that the Civil Aviation Authority has its headquarters in Edinburgh. In that sense he is concerned primarily with a constituency interest, although I am certain that he is entitled to take into account wider interests in Scotland. He is concerned about any possible redundancies that might affect about 15 employees at the Edinburgh headquarters of the CAA.

Will the Minister accept that the much more important principle is that of my constituents who have to travel to the Highlands and Islands, who suspect that they may have to pay substantially increased fares or higher taxes? That is a much wider principle affecting many more people, and it also affects my constituents.

I shall come to that argument. It was my impression that the hon. Gentleman was primarily concerned with the possibility of a loss of jobs at Edinburgh. That seemed to be one of the most important points that he made to me in his representations. I do not complain about that. I shall deal with that argument.

I am fully aware that there is opposition to the proposals. I have had not only a substantial amount of correspondence on this score from hon. Members but the sort of representations to which the hon. Gentleman referred during the course of his introductory remarks. He did not exactly catch me by surprise when he read out the telegrams. I do not think that the money was very well spent as everyone was well aware of the position that the various bodies were taking.

However, in the first place I shall deal with the argument that the hon. Gentleman made rather more emphatically when he came to see me than tonight—namely, the future of the Edinburgh office of the CAA. I do not believe this to be an argument of substance, although the loss of 15 jobs is not something that one relishes. However, if it were in the interests of a more efficient operation to take such a course, what view would the Opposition take? Opposition hon. Members constantly regale us with talk about overmanning, and the right hon. Member for Leeds, North-East (Sir K. Joseph) never stops talking about it from one weekend to another. I can understand the hon. Gentleman's reticence in broaching the subject tonight.

It is true that if the BAA took over the Highlands and Islands aerodromes about 15 jobs would disappear. That would have the effect immediately of reducing the overheads and providing a saving on the costs of the running of the aerodromes. It is accepted that any loss of jobs is regrettable, so we have asked the CAA, which employs another 100 or so people in the Edinburgh office who are unconnected with the operation of the Highland and Islands airports, for an undertaking that the people employed in Edinburgh on aerodrome management work would be found other work. I have not yet had that undertaking.

It has also been suggested, more particularly in the representations I received from the hon. Gentleman earlier, that if those 15 or so people lost their jobs the CAA's office in Edinburgh would no longer be viable. I have asked the CAA management about that as well, and it has not yet responded. I find it difficult to accept that the future of the Edinburgh office could be jeopardised by the loss of these relatively few jobs. That would be ludicrous. If it were so, it would call seriously into question the authority's judgment in acquiring an expensive new headquarters site in Edinburgh. Therefore, I do not believe that that is an argument of substance, and I understand the hon. Gentleman's reticence in not referring to it tonight.

What evidence is there that the BAA could run these airports more efficiently, in the light of the fact that the CAA has operated them efficiently and effectively over past years?

The hon. Gentleman must not imagine that I shall sit down at this stage, although hon. Members who want to get on with the next debate might reasonably desire that I should. I shall deal with these points.

I come to the question of the future ownership of the aerodromes. The argument has been adduced that the Government have sought to introduce this idea simply for the sake of administrative tidiness. There are far more serious and fundamental reasons. There are three principal considerations that I would put to the House as matters that should go into the scales of the debate on this issue.

First, the CAA was established for the purpose of regulating civil aviation and to run the National Air Traffic Service. Incidentally, the service would not be devolved. The Highlands and Islands airports are absolutely essential to the communities they serve. They are vital to the Scottish transport system, but they are peripheral to the main functions of the CAA. On the other hand, the British Airports Authority was established exclusively for the purpose of running aerodromes. That is the distinction between the functions of those two bodies.

The second consideration relates to Sumburgh. It would be wrong if I were to hide my concern about the way in which Sumburgh has been utilised and developed by the CAA. Sumburgh has expanded rapidly, but it clearly requires expertise in the planning of new facilities, the control of investment and the exploitation of commercial opportunities which is not available in the CAA to anything like the extent that it is within the BAA.

I said that I was disappointed by the CAA's failure adequately to develop the opportunities for commercial exploitation. I am disappointed that the previous chairman of the CAA did not cast his mind sufficiently, or at all, over this important aspect. My noble Friend the Solicitor-General for Scotland was right to assert that there was an opportunity for taking advantage of people who could afford to pay considerable sums of money, who could take advantage of restaurant facilities and shops, and the rest, which provide the infastructure of the modern airport. That opportunity, so far, has been lost, and it is a regrettable loss. It means that the income which could have been used to sustain the whole operation of the Highlands and Islands has been lost.

I agree with much of what the hon. Gentleman has said, but does he not appreciate the fact that the real opposition to the proposal set before us is not to try to create a dividing line between those airports run by the BAA and those run by the CAA? We are not saying that just because one airport has always been run by the CAA it should not be run by the BAA. The point is that some airports are not capable of being commercially expanded in the sense to which the hon. Member is referring.

It is an extraordinary thing that in this debate hon. Members should exercise such impatience. I am coming to that point—but I must deal with the points one by one, and I must express my disappointment at this lost opportunity. In that respect I do not sense that there is any great disagreement between the hon. Member and myself.

The hon. Member for Edinburgh, West presented some very unfair comparisons. I think it was Lord Boyd-Carpenter who on one occasion talked about comparing apples with pears. That is precisely what the hon. Member was doing when he read out his statistics. The sorts of operations carried on by the airports run by BAA and those carried on by the airports run by the CAA are quite different. The general undertaking is of quite a different character.

Here we have an example where the expertise to seize the commercial opportunities that are available has gone by the wayside thus far, and I think it is a pity. I think I have the hon. Member for Argyll (Mr. MacCormick) with me on that point.

To be fair to the CAA, we accept that a great deal of money can be made by selling sticky buns and tartan pencils at airports, but some of the catering facilities at airports run by the CAA, certainly in Inverness, are among the best in Britain.

I was not referring to the hon. Member's tastes when he visits airports; I was talking of tastes that were somewhat more selective. There can be no doubt that at some airports the facilities that could have been provided have not been provided.

I do not want to labour the point. [Interruption.] The hon. Member must take drink for what it is worth. If I went into a debate about drink I am sure that you, Mr. Deputy Speaker, would rule me out of order.

The one sad omission was that the hon. Member for Glasgow, Cathcart (Mr. Taylor) did not mention haggis.

I feel rather a stranger in this debate in some ways.

The third point—I find it difficult enough already; heaven knows what I shall run into when I try to answer all the points that have been made—deals with the question of devolution. The hon. Member for Glasgow, Cathcart (Mr. Taylor) is wholly opposed to devolution. I shall not become involved in a debate about the principle; the House is now considering the issue of devolution, the Bill having been given a Second Reading by a considerable majority. I want to refer to a number of questions that I think are relevant to that principle.

At present, the British Airports Authority already has Scottish airports, under an executive director. It has in mind—I have this from the chairman of the British Airports Authority—to establish a board under the present deputy chairman, who would be the chairman of the Scottish board, so that Scottish airports would be provided with a greater degree of autonomy. I do not think that hon. Members representing Scottish constituencies would cavil at that suggestion, which I think is desirable.

The proposal for the Highlands and Islands airports is to establish the control and management of the western airports from Glasgow and the eastern airports from Aberdeen, thereby again providing a closer and more localised area of control than exists at the moment.

There is another factor, which has been left out of the speeches made tonight on this subject, which I might interpose at this point. The British Airports Authority has a considerable record of consulting local opinion. Indeed, it is duty bound to set up consultative committees. Only two months ago the Civil Aviation Authority set up a consultative committee at Sumburgh. I pay tribute to the present chairman of the CAA, who applied the expertise that he had gained when chairman of the BAA, for taking that step. I think that it is a great pity that his predecessor had paid such scant regard to local interests and had not considered it necessary to establish a consultative committee earlier. That is certainly an advance. I welcome it as a move in the right direction on the part of the CAA. I know, however, that it would be part and parcel of the duties and functions of the BAA to establish consultative committees in respect of every aerodrome if they were to be transferred to the BAA.

Perhaps I may summarise the position regarding devolution as I understand it. I do not claim to be an expert in this area. Hackney, Central is far removed from this matter.

As I said before, airports would be devolved under the Bill, but there would be no automatic devolution of the BAA or the CAA. Indeed, the CAA, except in its functions as an airports authority would not have its functions devolved at all.

The devolution of those bodies, as airports authorities, would arise only if the Scottish Secretary made a request to the Secretary of State for Scotland for that purpose or if the Scottish Assembly should legislate to remove the BAA from Scotland altogether. That would be an alternative proposition. It seems to me that already the BAA has established a mechanism that is more available and flexible in this regard than that which operates under the CAA.

In the light of these considerations, the Government formed the view that there were good grounds for asking the authorities to consider a change of ownership.

Earlier this year Mr. Norman Payne, the Chairman of the BAA, told the Secretary of State that his authority was willing to take over the aerodromes if the Government wished that to take place on certain stated terms.

Mr. Nigel Foulkes, the Chairman of the CAA, took the view—frankly, he has always taken this view, even when he was with the BAA—that there would be no benefit to be gained from his authority, the CAA, relinquishing the aerodromes.

Since that time we have had a substantial number of representations. I have gone to a great deal of trouble, as has been acknowledged by hon. Members, to try to sort out the views of people who are interested in this matter, which is very important to the people of Scotland, in particular to the Highlands and Islands. It may be considered by some—particularly English Members—not to be a matter of great concern, but I do not share that view.

Only a few days ago I went to Scotland where I met and had further consultations with the Scottish TUC. I have discussed this matter with the STUC on two separate occasions. It is only right that I should tell the House that the STUC is firmly of the view that it would be right for the BAA to take over the aerodromes. That is one point of view as against the others that have been mentioned. Of course, the unions are anxious to ensure that the new terms of employment for their members are satisfactory.

Does the Minister deny that some senior members of the STUC have expressed a contrary view? Why was British Airways not consulted?

I shall deal with British Airways later. I did not sense that there was outright opposition to the proposals for a BAA takeover. Concern was expressed about a number of issues which would be dealt with in the course of ordinary industrial relations negotiations. I have just referred to that.

The Minister has implied that we are to be faced with a situation in Islay and Tiree in which everyone will be totally unionised and that there will be demarcation lines and even disputes about who does which job.

That is a rather frivolous intervention. I shall deal with the question of one man having two or three jobs in a moment.

The question of British Airways really relates to the whole process of consultation that has taken place on an unprecedented scale. At the outset I took the view, as did my predecessor, my right hon. Friend the Member for Stepney and Poplar (Mr. Shore), that it was right notwithstanding the delays and uncertainities caused by delays, that there should be the fullest possible consultation. Throughout the country everyone had the opportunity of submitting to the Department his views on the two consultation documents. British Airways took a wholly neutral attitude. It made no representations to us to the effect that we should not proceed along these lines or that we should do so.

I now turn to the points made in the debate. I shall attempt to answer them all.

Can my hon. Friend clarify exactly what the STUC said during discussions? Is part of the reason why it was in favour of BAA rather than CAA that the industrial relations of the BAA are better and that the SNP and the Tories oppose the BAA changeover because both the Tories and the SNP are opposed to trade unions?

I do not want to hot up this issue unnecessarily. The basis of the STUC submission was that it favoured an integrated transport policy. It saw the BAA as being more readily able to achieve that. The CAA was already a fragmented operation. This was the crux of its submission.

The hon. Member for Edinburgh, West seemed to be arguing two different cases at the same time. He was anxious about redundancy in one argument and concerned about too much cost being involved—presumably by overmanning—in another. He cannot have it both ways. He argued a contradictory case.

The hon. Member said that senior civil servants decided on this policy two years ago and that Ministers simply owed their policies to articulate expressions made in support of them by senior civil servants. That is not the way that my right hon. Friend approaches his job.

The hon. Member asked for a far more extensive review of Scottish airports. That would be ludicrous. We have already had this prolonged period of consultation. Everybody has had the opportunity to make submissions to the Department, and we have had more than a thousand of them. I do not believe that creating further uncertainty would be the right approach. There is no case for a further extensive review.

The right hon. Member for the Western Isles (Mr. Stewart) and the hon. Member for Argyll essentially made the same points and I shall bracket them together. They make an unholy duo. They were concerned about the significance of air travel for their constituents. They were critical on the points concerning flexibility of employment duties. I agree absolutely, and I understand from the BAA that there would be no question of breaking down the existing flexibility that operates. Where one man is doing a couple of jobs it is in the BAA's interest to continue with that.

The BAA prides itself on running its activities profitably. A justifiable tribute was paid to it by the hon. Member for Cathcart, who obviously was not impressed by the argument he heard earlier from the hon. Member for Edinburgh, West about the BAA. The BAA would want to carry out its undertaking with its usual standards of efficiency and profitability. There would be no joy in its undertaking the sort of bureaucratisation of the Highlands and Islands airports that some hon. Members have flippantly described.

Does the Minister accept that what he said about my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) is just not fair? There is a great deal in which we believe that the BAA does well. On the question of flexibility, did the Minister get the agreement of the STUC to the continuation of the present practices of the CAA?

The STUC did not go into details with me, nor would it have been proper for it to have done so until a decision is made. Then it becomes a matter for negotiation. But the STUC understands how the operations work. There was no suggestion that this sort of procedure should not be persued.

I was invited to visit Tiree and Islay. I shall try to go there. I have, however, visited more airports in the United Kingdom than any other Minister holding this position. I shall make the visit if I can, notwithstanding the beguiling influence which I fear from the hon. Member for Argyll. I cannot make a commitment that I shall do so. However, these airports have been visited by numerous people and I have had full reports about them. I do not dispute the arguments adduced in that regard in the House tonight.

The hon. Member for Argyll proposed that Loganair or some other operator might operate these services in the future. I am not convinced that that is a viable operation that we should consider, but I will not rule it out simply because it was suggested by the hon. Member. We shall, of course, look at what he said.

My hon. Friend the Member for West Stirlingshire (Mr. Canavan) rightly pointed out the importance of State intervention in the running of the Highlands and Islands airports. That is a most important factor. The hon. Member for Cathcart said that it was sometimes unwise to be seen to advocate plans which have been put forward by experts. That is a bit of a cheek coming from him. It was his Government who implemented plans put forward by experts for the reorganisation of local government and the National Health Service, both of which have cost this country a great deal of money.

The hon. Gentleman asked me what consultation has taken place. I have already dealt with that in some detail. He went on to ask me whether the British Airports Authority would be prepared to take over four of the airports. That, I believe, is not something that the BAA would wish to do. I think it is concerned about running a tidy operation, certainly. There is the possibility of looking at Sumburgh separately. That is something that we might have to do, but I do not think that we ought to embark upon consideration of that proposition at this stage.

The hon. Gentleman spoke about landing fees and blandly asserted that the BAA might increase landing fees. It is that sort of assertion that really does not help in a debate of this kind. Bare assertions do not necessarily reveal the naked truth, and it does not help merely to make that sort of blind assertion. Indeed, I must tell the House that when the CAA puts forward proposals for increased air traffic services, this meets with tremendous disapproval from local authorities and others who are concerned. That is not unnatural.

We are really concerned here with whether the taking over of these airports by the BAA would lead to increased charges. In my view, the arguments are really against simple assertions, and there is nothing to support the suggestion that the BAA would suddenly, because it descended on these airports, add enormously to their charges. This has been the constant theme, however, in the debate and in the representations made to me.

What we have to face, clearly, is that some people suggest that nothing at all should be done to increase aerodrome charges. Whether we carry on under the CAA or have a transfer to the BAA, there can be no guarantee given that there will be no increase in aerodrome charges. Aerodrome charges reflect—or should reflect—the cost of running aerodromes. If I may stress the point, it is important to distinguish between, on the one hand, increases in costs which are directly attributed to a BAA takeover which would not otherwise occur and on the other hand, increases in costs which will occur irrespective of who owns the acrodromes.

We have no evidence that transferring the aerodromes to BAA would result in increased costs, and no evidence has been adduced tonight, nor could it be. It must be recognised, however, that for a variety of reasons costs will increase, even under the CAA. But there are those who suggest, as I say, that aerodrome charges should still be held down and I want to say a word on that.

In general, it is our policy that those who use air services should meet the cost of providing them, either directly through air fares or indirectly through the profits made on commercial activities such as the sale of duty-free goods. We recognise that this policy cannot apply, in its pure form, in the Highlands and Islands. Those in the region who rely on air transport as an essential social service cannot be expected to meet the full cost of the service, which therefore must be subsidised. But for many passengers, especially at the aerodromes serving the oil industry, the air service is a normal commercial operation and there is no reason why the taxpayer should subsidise such passengers.

We have to strike a balance between subsidies to keep down air fares, on the one hand, and the varying ability of different categories of passengers to pay an economic rate, on the other. It is not axiomatic that a subsidy has to be applied to aerodrome charges. There are other ways of keeping down fares where this is considered necessary. We have these various issues very much in mind but they are essentially separate from the question of who should own the aerodromes.

There are other points with which I wish to deal, but that would be unfair to those hon. Members who want to take part in other debates. Perhaps I may summarise briefly the three points that I have made. It is said that the BAA has no experience of running small aerodromes. When it took over Aberdeen, which is not a small aerodrome in comparison with the aerodromes that we are talking about—but perhaps it bears a relationship to Sumburgh—it took over that operation with distinctive success.

It is said that the BAA is somehow an enormous entity operating from London whereas the CAA is a sort of Freddie Laker of public enterprise. That is almost the terms in which this matter has been put to me. Again, that is far removed from the truth. The CAA is a very much larger body than the BAA, and the BAA has done much to ensure that there is a local responsibility, particularly in Scotland.

Lastly, I want to deal with the effect on unemployment. I assure the House that the BAA has given me an undertaking that working conditions and the people who are currently employed in the airports themselves are matters which it takes seriously. I ask hon. Members not to dismiss that assurance.

More particularly, if the transfer takes place it is right that the BAA should be given the opportunity of showing the country that it is capable of operating these airports successfully. I therefore believe that I have made out a case on the other side.

The hon. Gentleman would not find any case put forward by a Labour Government appealing to him. His basic principle is to reject anything which a Labour Government do regardless of its merits. I do not take that observation very seriously.

I believe that these are important issues and that we are right to debate them. We have not made up our mind about them. I have put the argument as strongly as I can on the other side so that the country does not have a one-sided perspective of what has taken place. I hope that our proposals which will be announced shortly will be given a reasonable opportunity to work. We understand that we cannot win. We are talking about a national airport strategy as against the chaos that has hitherto existed when constituency interests have impinged on this, and the Government understand that it will be difficult to convince everyone.

But, in taking our decision, our concern primarily will be to ensure that the Highlands and Islands aerodromes are operated as safely, efficiently and economically as possible for the benefit of the communities which they exist to serve. I believe that to be a worthy objective.

Employment (Young Persons)

2.24 a.m.

Unemployment is a curse. It is socially indefensible, and it is economic nonsense. But it has a particular evil for young people. This is the problem that I want the House to pay some attention to this evening.

Overall, the unemployment figure is about 1,500,000 but within that figure 708,000 are under 25 years of age. Within that figure 93,000 school leavers were unemployed last month. The trouble is that unemployment hits the most vulnerable hardest.

From January 1972 to January 1977 there was a 120 per cent. rise in the number of 16–17-year-olds unemployed in Great Britain compared with a 45 per cent. rise overall in unemployment. In 1970, 35 per cent. of the young unemployed were girls. This rose to 49 per cent. in 1977. A much more frightening statistic is that the number of young black people unemployed trebled between 1973 and 1977.

This problem is not only one of particular categories of boys and girls. It is a geographical problem, too. In the inner cities, the population is of the order of 7 per cent. of the total, while the number of unskilled people in those areas is about 12½ per cent. One of the difficulties which will compound the problem in the next few years is the rising population trend.

The Manpower Services Commission, in its report "Young People and Work" of May 1977—for the sake of brevity, I shall refer to it as the Holland Report—gave some figures. In 1977, the number of school leavers coming on to the labour market was 671,000. Next year, it will be 689,000. In 1979, it will be 703,000. In 1980, it will be 718,000. In 1981, it will be 725,000. So, in four years we shall have to deal with a labour demand by school leavers which has increased by 50,000, which is a formidable problem in itself, quite apart from the trends and difficulties of finding work for young people.

This raises the fundamental argument about whether the problem that we now face in relation to the unemployment of boys and girls is what is called cyclical—that is, simply a function of the downward trend in the economic recession—or structural, which is whether we are facing a problem in which, owing to our present economic arrangements and industrial development, something has gone wrong with the structure of our employment pattern and we face a much more intractable problem than even the very serious problem of the downturn in the economy.

I quote from the admirable Seventh Report of the Expenditure Committee, dealing with the job creation programme. In paragraph 19 on page 16, it says:
"As a result of this shift in view from a cyclical to a structural theory of unemployment, which is echoed by many other authorities, it is urgent that we should think about the unemployment problem in terms of policies for the next few years, not the next few months."
What are the factors which are making this problem so difficult and so challenging? First, there is the change in the technological and occupational base of industry. Industry is demanding more highly skilled people. It is becoming more capital-intensive, even in our own society, which is somewhat backward compared with West Germany, Japan or the United States. The technology is changing and becoming more sophisticated, and the demand for skilled people is higher, whereas the demand for the unskilled is less. In fact, it is a curious irony that even today, with so much high unemployment generally and amongst school leavers particularly, there is still a shortage of skilled workers. There is a shortage in Sheffield at the moment.

Secondly, there is a tendency for older people to stay longer in the same employment. Some of this derives from the very proper legislation that this House has enacted in terms of security of employment, redundancy payments, and so forth.

Thirdly, there is a comparative lack of mobility among younger workers. One may think that the young are foot-loose and can go here and there in search of jobs, but in practice they live at home with their families and are not as mobile as people sometimes imagine.

Fourthly, and extremely important, there is the enormous importance of the public sector as an employer. Unfortunately, the policies of the Chancellor of the Exchequer in this respect in restraining and even cutting back the growth of certain important areas in public services and even in public corporations have a serious repercussion on jobs overall which plays back into the job opportunities of young people.

The Manpower Services Commission's forecasts of posisble figures of youth unemployment over the period 1978–81 make extremely grim reading. The graph shows that the possible peaks in that period range from 250,000 to 350,000 unemployed young people, and even the troughs—the immediate outflow from schools and the gradual absorption into the labour market from Easter to the autumn—show figures of between 100,000 and 200,000 in the 1978–81 period. Therefore, if the Manpower Services Commission's figures are right, we are faced with problems of having between 150,000 and 300,000 boys and girls unemployed in each of the next three or four years.

I do not want to give the impression that I am unaware of any of the very important programmes that the Government have launched in the past couple of years in order to cope with various aspects of the problem.

First of all, there is the question of training in industry through the Training Services Agencies and the Industrial Training Boards, on which £121 million has been spent. In the current financial year 41,000 places have been made available through the training services programme.

Secondly, there is the Training Opportunities Scheme—TOPS—which applies to older workers as well as youngsters. This has cost £10 million and has given training opportunities to some 13,000 young people.

A much larger scheme is the job creation programme. This is coming to an end at the end of this year, although it will be replaced by other schemes. It has cost £130 million, and by March this year it was estimated to have provided 68,000 job opportunities. Unfortunately, there has been a decrease in the numbers of young people involved in the scheme—from 57 per cent. in the earlier days to 40 per cent. currently. Apparently only 20 per cent. of those involved in the job creation programme have been girls. Nevertheless, it has done valuable work, as was indicated by the Expenditure Committee's report.

I quote one particular scheme in Sheffield. This involved the creation of Sheffield's first new park for 40 years. A local planning officer commented:
"There were tips of rubbish, four-foot high weeds, brickwork and stone scattered about, it was an eyesore.
Altogether some 350 people have had jobs on the project. A formal entrance garden has been made, miles of new paths laid, a cycle speedway created and four football pitches have been drained and improved.
One of the main improvements has been the planting of more than 67,000 trees and bushes. During the next few years, with continued maintenance, it will keep on improving as trees and bushes become more established and we will have another park to be proud of.
An extra bonus is the fact that, of those who worked on the project, about 50 are being offered permanent jobs—some in the park they created."
That indicates that the job creation scheme in some respects and in some areas has had a valuable and permanent spin-off.

Then there is the work experience programme, which cost £19 million and provided about 16,500 places for young people. Under this heading about 55 per cent. of those involved were girls, thus offsetting the lower percentage of those benefiting from the job creation programme.

Apart from the specific training and work schemes, there have been major subsidies. The youth employment subsidy for boys and girls under 20 placed 12,500 young people and cost £3·7 million. The much wider scheme, affecting adult employment, as well as youth employment, was the temporary employment subsidy, which will cost £430 million to March 1978 and may have saved some 400,000 jobs. Again, this is a scheme which has some value in Sheffield. I quote this time from the Morning Telegraph:
"A Sheffield firm and nearly 80 jobs have been saved by the Government. Workers at Chapeltown dishwashing machine and catering equipment manufacturers, Dawson MMP, have been told that the firm's application for a temporary employment subsidy has succeeded. Redevelopment plans, which could mean new jobs next year, will now be able to start as hoped."
Unfortunately, there are serious and alarming suggestions that the temporary subsidy is being threatened by the Brussels bureaucracy. Whether that is true I do not know, but, if it is, I sincerely hope that any such threat will be firmly and absolutely resisted by our Ministers. The temporary employment subsidy has been widely praised as a valuable technique for preserving jobs and, incidentally, holding skilled workers in firms where they will be useful as the economy expands, and it would be quite outrageous if this scheme were to be destroyed because of some technical pedantic objection from the Brussels machine. I hope that my hon. Friend the Under-Secretary of State can give us an assurance about that.

The Government have gone further than these various schemes and haw asked the Manpower Services Commission to provide a more comprehensive scheme drawing together the individual programmes and ideas. This was published by the Manpower Services Commission in May this year under the heading "Youth Opportunities Programme", but perhaps it is more generally known as the Holland Report. The intention is to draw the experience of the job creation programme and the other subsidies and schemes into something more comprehensive to tackle more systematically the problem of youth unemployment.

Broadly, there are three heads in the Holland Report. First, there is the proposal to provide various preparatory courses to prepare young people for going into work, perhaps giving them a bit of help, advice and encouragement on how to present themselves and sell themselves to employers. These courses will last anything from two to 26 weeks. Then there are actual work experience courses either with employers or with various training projects or community service. These courses will vary from six months to one year in duration. Third, there are incentive training grants and Community Industry schemes, which will last for a year.

The total throughput, as it is rather inelegantly put in the report, of young people in these schemes is estimated to be 234,000 in the course of a year, at an annual gross cost of £168 million, though the net cost will be somewhat less because one has to offset the unemployment pay and other social benefits to which the young people would otherwise be entitled.

This is an ambitious and sophisticated scheme. I suspect that it may well be one of the most sophisticated efforts among the EEC countries as a whole, if not in the world. I wish to say nothing which would denigrate it or suggest that it should not be pursued, but I fear that it is not drastic enough to cope with the formidable problem which we shall face in the next two or three years and which the Manpower Services Commission's own figures reveal to us.

The scheme has three or four weaknesses. First, for individuals—I realise that the proposals can extend year by year—the projects are short term. Most of the courses or work experience schemes will last for six months or less, although in some cases they will be for a year. Boys and girls who get involved in the various schemes are faced with the prospect that they may be in a scheme for three months to a year but then what happens? They have been trained or had work experience but then they are back on the roundabout.

The work experience programme, which actually involved boys and girls with employers and which I regard as the most important idea within the whole report, will cover only about 60,000 within the total of 234,000 boys and girls involved at a cost of £28 million out of the total of £168 million. I should like to have seen that principle much more strongly embedded in the scheme and I shall speak more of this later.

There is also the basic point that young people want a job. They want to be at work and not shunted around from this, that and the other course and at the end find that they are still unemployed and with nothing to do. I discussed this matter with an officer of the Training Services Agency. She said "It is quite clear that those who have been on schemes or have been unemployed want only employment. They are simply not prepared to consider any other alternatives." That may be a rather strong way of putting it but there is a lot of force in that. It is true that offering people courses, training and preparation is useful but the boys and girls want a job.

Another weakness of the Holland Report is that it does not basically compel employers and trade unions to face up directly to their responsibilitites for the unemployed boys and girls, except in the case of the work experience programme, which forms but a small part of the whole scheme. Holland asks a whole series of Government agencies—capable civil servants and training service officers, of whom I make no criticism—to try to grapple with this terrible problem of 200,000 to 300,000 young people without work, while the people who should be forced to grapple with it directly and immediately are the employers and trade unions within the trades and industries involved.

In the not-too-distant future we shall be forced to adopt a much more drastic plan. My proposals would be along the following lines. I am assuming that the total number of unemployed 16-19-year-olds—that is, those above 16 years and under 20—will be about 400,000, which may be a slightly high estimate. One can arrive at slightly different figures by talking about different ages but I think that that is about right, and if it is a bit high the problem is slightly simpler.

The total registered work force in the United Kingdom is roughly 24 million, so young unemployment is equivalent to about 1½ per cent. of those in work. The essence of my plan is that every form of employer, in the public and private sectors, would be required to take on as supernumary to the normal work force the unemployed boys and girls at an agreed percentage. Small firms with fewer than 25 employees might be exempt, firms with 25 to 100 employees might be required to take on one boy or girl, those with 200 to 300 employees three young people, and so on pro rata up the scale. In effect, the right to work would be absolutely guaranteed to young people up to the age of 20 years. It would then be clear how many young people had jobs, how many had gone into full-time or further education and how many remained officially unemployed in each area. The manager in each area would be required to produce a form which provided space for the name and address of each unemployed boy and girl, some brief account of his or her qualifications and a list of the 20 or so main types of employment in the area. In Sheffield, for instance, this would obviously include steel works, engineering, machine tools, construction, cutlery, food processing, the retail trade, local government, the Civil Service, the Health Service, education, railways and so on. Not every type of employment need be included separately but all forms should be included somewhere in the main groups.

Each boy or girl would indicate his or her preference, ranked one to six, for the types of employment listed. In the meantime, every employer, public and private, from universities and hospitals to steel works, with more than 25 employees would be required to make a return to the employment exchange of the size of its work force and the pro rata number of supernumaries that it would expect to be allocated. The percentage allocation would vary from area to area, but the national average would be about 1½ per cent of the total of employees in each firm.

Employment exchanges would then allocate the boys and girls in the light of individual preferences they have expressed and the quota of each firm. If people do not like the idea of the allocation being done by civil servants, perhaps an informal committee of trade unions, employers and a representative of the MSC could be set up to deal with the problem.

The duty of the employer would be to produce useful work and/or training or day release for each boy and girl in close co-operation with the shop stewards or trade union representatives in the establishment. This is essential. The scheme can work only if it has the wholehearted backing of the trade unions on the shop floor and nationally.

Every young person would be paid the normal rate for the job he or she was doing. There would be no question of undercutting wage rates, but perhaps a Government subsidy of £10 or £15 a week could be paid to an employer employing young people in the scheme who were surplus to his actual needs. This could cost £200 million or £300 million a year, but, of course, the gross cost would be reduced by the social security benefits otherwise payable. The net cost to the taxpayers would probably be rather less than £200 million a year plus a small addition to the total labour costs of the nation.

Can it be argued that this scheme is sweeping under the carpet and trying to push it out of sight? I do not think so. I would regard it as formal recognition by the unions and employers of the need to bring into the environment of the workplace, whether factory, hospital, office or college, boys and girls who look like being shut out for a long time. It would accustom them to the atmosphere of work and useful activity instead of the boredom of the street corner, an empty house or a betting shop. It would impose on them the discipline of clocking on and leaving at regular hours and give them a modest earned income instead of the unearned miserly dole. It would bring them into daily contact with trade unionists, supervisors and managers and destroy that yawning endless vacuum of month after month on the dole. There is no reason for it to hamper or retard the expansion of training, day release or apprenticeship schemes. Indeed, it might throw up new needs and suggest new techniques.

About four-fifths of young people would, I believe, welcome such a scheme. About 20 per cent. would, for one reason or another, not fit in, and they would need special care, advice and guidance from careers officers and the TSA.

Is there any advantage in having young boys and girls bored and fed up at work rather than at home or on the street? It would be the job of the manager, foreman or shop steward to see that the young people were not just dumped in a corner with nothing to do. At worst the individual would be in a working environment with a chance of learning something about the working world and not on the street corner, cut off and shut out.

More than that, there is all the difference in the world in the expectation of permanent employment by an employer who knows a boy or girl as an individual and a young person trying to get a job from cold on the basis of a written application to someone who has never heard of him. There is nothing in my suggestion which would prevent the individual from applying quite freely for a permanent job, if he wished to do so, in any other place.

Clearly, such a scheme would have immense applications, and there would be immense difficulties in implementing it, and, indeed, in persuading employers, and some trade unions, to accept it. But my own belief is that we shall not grapple with the problem of youth unemployment successfully unless we go for something much more radical than what is included at present in the Holland Report, although, as I have said, I do not wish to play down the value of the suggestions in that report.

Finally, I should like to quote again from the report of the Select Committee, because I think that it has something very important to say on this whole problem. I quote from page 35, paragraph 112:
"Employment prospects are now such that young people face long periods of joblessness, particularly those of low educational attainment, but also special groups such as newly qualified teachers.
There are dangerous social consequences, apart from important economic ones, from young people in many areas (especially the inner cities) having to cope with long periods of unemployment without the life experience of older people.
It is therefore imperative to have a comprehensive and continuing programme to combat unemployment among all age groups and both sexes, but primarily among the 16 to 18 year olds."
I am not suggesting that the proposals that I have put forward are in any way the last word, but I am quite sure that something more drastic and far-reaching than what we have in the Holland Report will be required if we are to grapple successfully with what I regard as the most formidable social problem that we have on our hands at present.

2.52 a.m.

The hon. Member for Sheffield, Heeley (Mr. Hooley) is to be congratulated on raising this issue. There is nothing of greater importance at present. The hon. Member has presented the House with a great many statistics. I should like to add one set only from my constituency experience.

In Kidderminster, taking the September figures, in 1975 there were 205 young people leaving school for whom there was no job; in 1976 there were 387; in 1977 there were 460. It is calculated that next year 50 per cent. of those leaving school will have no job to which to go. If that figure does not ring alarm bells, nothing will.

A society that does not look after its young people must be sowing the seeds of its own self-destruction. The hon. Member was quite right to point to the most obvious pressure point, but I think that it must be our overriding priority as a society to see that our young people have a proper start in life. I do not believe that the Minister will be able tonight to offer any immediate comfort. As I understand the figures, neither the Government nor the MSC can see the point in the future at which unemployment will drop below 1 million.

The unemployment from which we are suffering at present is both structural and cyclical, unfortunately. The cyclical problems that were brought upon us so viciously by the increase in oil prices were compounded by the Government's overspending and by the pressure that that overspending brought upon industry. From my own experience I have seen at first hand the demoralisation that is caused by Government over-reaction and and by excessive intervention. If a person running a company cannot fix the price of his product, cannot employ the people he wants and cannot pay them as he wishes, he feels that he is running the business with one hand behind his back. Many of those in industry feel that the rewards are not there. They feel that the decisions that they wish to take are frustrated and that their companies are not being run to the best advantage. Until there is more confidence that the Government understand the problems and are reacting to them, I do not believe that industry will offer the jobs that are within its power to provide and on the scale that we want to see.

The starting point—I think that the Secretary of State for Employment recognised this in his contribution during the Queen's Speech—must be that we as a nation have to compete in the world, and that our competitive edge is all important. If our industries are to be competitive, a great deal of flexibility is required. That flexibility will not be forthcoming unless those who lose their jobs recognise that there is some hope offered by the alternative schemes produced by the Government.

Clearly, the Holland Report is an important contribution. What else is there that we can do? I wish to put a few thoughts to the Government.

First, we must improve our intelligence. I find it disturbing that the Manpower Services Commission has still not received any projections on the jobs that will be offered in future or the impact of technology on various skills. How can the country prepare young people for the future if we have not done our homework?

Some of the information to which I have referred will be available in the next few months. I hope that the Secretary of State will make it available to the House. He promised to consider doing so. No doubt he has some natural reservations about making available information that might induce greater gloom than perhaps he feels is justified. However, I think that he should consider the contribution that can be made at local level. The TUC is now becoming more aware of that factor. It is important that we get groups of people together, especially in towns and areas that are over-dependent on one activity, In that way we can get better intelligence than that obtainable through sector working parties and develop strategies more responsive to the needs of the community.

In my constituency I have seen that system working at first hand. A group of people representing employers, unions, the council and those giving careers advice, for instance, is in a position to make a direct examination of the problems on a regular basis. It also has regular contact with all the major employers so that it can monitor both current reaction and future expectation.

It must be said that of 52 companies in my constituency only two expect to be taking on more employees within the next four or five years. Certainly half expect to be employing considerably fewer. What can we do about that? We are clearly at a disadvantage, not being a favoured region or in receipt of any special benefit, against the areas that have such benefits. We can ensure that land is brought as quickly as possible into a condition in which it can be used for industry. We can promote a much greater exchange between schools and employers. We can perhaps bring forward job creation schemes.

I would like to refer to some of the difficulties that are exprienced within the job creation scheme as it is now operating. It is still in the do-it-yourself stage, but I believe that it is potentially extremely important for the future if it can be developed. At present some of the constraints are too strict. The fact that a scheme cannot last beyond a year means that the young people working on it know that they have only a limited time. Towards the end of the 52 weeks they tend to lose interest. There are problems in getting the right level of supervision. There are problems in getting the right candidates put forward for the right opportunities. Sometimes there are difficulties with trade unions. But this approach should be developed.

I ask the Minister also to consider the special problems of rural areas, where the allowances for overheads are insufficient. The sum of £10 goes nowhere near covering fitting out somebody for forestry, which requires about £100. The cost of travelling is a powerful disincentive. Most bodies, such as the National Trust, have a separate cheque book and separate bank account for each scheme they operate.

Perhaps the most important thing a local group can do is to enlist employer good will to see that the schemes put forward are advanced. Where possible, key managers spend time talking to those about to leave school and make themselves available to those in education to bring home to them future prospects in a way to which they can respond. It is particularly important that young people receive training in companies rather than at outside centres. It would be helpful if the Government allowed any employer who was training in a skill known to be one that the country required to recover the costs of that training in full.

But there is a limit to what can be done locally. Above all, we look to the Government to provide stability, and particularly to control inflation, because that is the great job destroyer; to raise the level of economic literacy; to provide cash for training; and to avoid the sort of interference that makes company longterm planning impossible. Examples of the interference to which I refer are arbitrary taxes, such as the 25 per cent. VAT, the violent fluctuations in interest rates from which we suffered a year ago as a result of the Government's mismanagement, or sudden cuts in Post Office contracts. The Government should in particular consider how to encourage the will to innovate and small business.

I recently talked to the sixth form in a school in my constituency. I asked the 112 boys and girls how many were going into industry and found that only one was. There is a great deal to do to bring home to those in education the real problem that we face and the extent to which it is competitive industry that pays for all the things they require in the future.

I hope also that the Minister will look again at the Employment Protection Act. There is a Private Member's Bill which would extend the qualifying period for unfair dismissal and redundancy to 52 weeks. I hope that when that Bill is introduced it will have the hon. Gentleman's blessing. When a similar clause was debated in Committee it had the blessing of the Secretary of State when he was Minister of State. I believe that the Act is a powerful disincentive to small businesses taking people on.

The Minister might think again about how to bring together people, materials and money locally to get new business off the ground. This is not the time or place to relate the success of the Man-dragon experience in Spain. Many managers in their early 50s from big companies such as ICI can offer expertise. Many skills are not being used. We know that money is available to back the right schemes. What is lacking is a framework in which these can be brought together locally.

My constituency has suffered from the refusal of IDCs. I hope that the Government will reconsider the whole problem of mismatch in their regional policy to mitigate the appalling problems of youth unemployment. I hope that they will recognise that industry must have priority, that there must be a back-up for all those who face retraining and for young people, and that no young person should be without a worthwhile activity at least up to the age of 18.

But I think that we have to look at the question of structural reform, to the shorter working week and earlier retirement, and that can be done only in the context of a united European effort, because if one country acts on its own, it will put itself at a disadvantage. I hope that the Minister will pursue initiatives in this field as hard as he can.

So we approach Christmas and should be giving tidings of some comfort, but I regret that there are no such tidings at present. I hope that there will be combined action in this matter by all those of good will in the coming year and that some solutions will be offered.

3.6 a.m.

I agree that my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) deserves support for raising the important issue of youth unemployment. There is no doubt that there is a good deal of parliamentary consciousness about the problem of unemployment, although I suspect that there is less concern about the particularly acute nature of the problem of unemployed youth.

It is a few years since we lowered the voting age to 18. At the last General Election there were little more than a dozen Members of Parliament under the age of 30, and we are all three years older now—not that I was then in the category of the under-30s. Perhaps this relative absence of younger people from our political institutions reflects our seeming indifference towards the sensitivity that exists when one is looking for one's first job at the age of 16.

Only last week we had some staggering figures from the Secretary of State for Employment concerning the number of people who will come on to the labour market in the next decade or so. We are reaching the stage at which unemployment will be a way of life for many young people. In some homes it is almost a heredity factor, because the fathers or mothers have often undergone long periods of unemployment. In an area such as Clydeside the main forms of employment have been the traditional apprenticeship for boys and office work for girls, but this pattern is changing. The traditional apprenticeship itself is changing. The job opportunities for many young girls are shrinking as many offices organise their employment in such a way as to reduce the need for the same employment.

In the last few years we have seen employers revising their employment practices as a result of the raising of the school leaving age. We have seen the expansion of further and higher education, which, in its turn, has resulted in greater job expectation on the part of youngsters. Yet at the end of the period of further and higher education many of those youngsters have found even greater difficulty in getting jobs.

I was interested in the report that has just been published by the Manpower Services Commission on training for skills—"Programme for Action". As I understand it, the industrial training boards will have to assess the future needs for skilled manpower. I wonder, however, whether they will also take on board an assessment of future changes in technology—because every new technology puts jobs at risk. I am not suggesting that we should set our faces against technology, but increasingly in our political decision-making we should recognise the impact that it is making on employment prospects. The more we automate, the more we decrease job opportunities. There is increasing pressure to eliminate routine work, therefore removing the need for people to do such work, but job opportunities are not being created in other sectors of our economy.

I shall not bore the House, at ten minutes to three in the morning, with statistics about unemployment. The OECD and member countries recognise the seriousness of the situation. Indeed, the Director-General of the OECD stressed the importance of youth unemployment when he addressed the Council of Europe in Strasbourg recently. The European Commission also seems to recognise that there is a serious problem here. What is lacking is a co-ordinated effort on the part of member Governments to produce a number of major social changes, which I think will be forced on us whether we like it or not, to overcome the growing unemployment figures.

Even if we get a substantial increase in industrial demand in this country, increasingly improved investment would seem to result in fewer jobs. Many firms openly say that they could get more production with the present numbers employed by them.

A lot of discussion is going on at this time about the spending of North Sea oil profits. Last night we discussed the European Commission's proposals for social security equality. I feel that an opportunity was lost to take action in that regard when we put through Parliament the Pensioners Payments Act, which is due to come into effect in April next year. It was felt that the cost of lowering the age at which men retire to 60 would be too great.

I wonder whether we should revise our views about weighing the social cost of such a step against the cost of not doing anything in that respect, quite apart from the fact that it would remove the discrimination between men and women regarding retirement. I understand that about 3 per cent. or 4 per cent. of the working population would be involved if we were to reduce the retirement age for men to 60. I hasten to add that, in my view, we ought not to force people at the age of 60 out of jobs, because many are mentally and physically fit enough and want to continue working. However, we should certainly change our social security legislation to enable men to retire at the age of 60. Indeed, many people in the white-collar sector, particularly in the Civil Service, already have that provision in their conditions of employment.

My hon. Friend the Member for Heeley was right to stress the need to look at the longer-term trends in employment—for example, a shorter working week with perhaps a different pattern of working week. A serious attempt should be made by the Government to discuss with the trade union movement the possibility of reducing overtime working. Such a step would, of course, require some changes in pay policy, because overtime working in many firms is simply a way of topping up the pay packet.

A year ago the Department of Employment published some interesting statistics projecting the trend in new employment opportunities up to the early 1980s. It was significant that the major expansion was seen in the white-collar and non-manufacturing jobs. In many ways that runs counter to the Government's industrial strategy in the sense of expanding the manufacturing base. More investment often results in fewer jobs but higher production.

The latest Manpower Services Com mission's report suggests that about 10 million job changes take place each year That figure staggered me. I thought that the figure was nearer 7 million. This might indicate greater mobility and greater instability in the employment market with fewer gold watches being handed out at the end of a person's working life.

This has implications for young people I do not wish to go over the ground that was covered by my hon. Friend the Member for Heeley by describing the various measures which the Government have introduced in the last few years in an attempt to reduce the incidence of youth employment. I shall refer to the attempts that have been made to assist local authorities in the work of careers officers.

One of the best ways of assisting careers officers is to put more jobs on their books. There are limitations on the amount of advice that they can give to youngsters if there are no jobs on their registers to Which they can direct them.

This year we are spending a great deal of time on job creation for politicians, not only by introducing direct elections to the European Assembly but by preparing for devolved Assemblies for Scotland and Wales. We really must concern ourselves more with employment opportunities for the rising generation. I fear that if we do not we shall have not only a generation gap but a real conflict of generations. There will be a growing resentment by younger people of the older section of the community which is not sufficiently concerned to create the type of job opportunities that they are seeking.

I do not want to knock my hon. Friend's suggestion that firms should take on additional young people. But when I examine the sectors of industry that are likely to take on additional labour I find that the nationalised industries are in the process of contraction and that there is great pressure on both the Civil Service and local government to restrict staff intake. I do not see the multinational companies becoming generators of additional employment opportunities. That leaves us with just the small firms, of which my right hon. Friend the Chancellor of the Duchy of Lancaster is, I understand, making a special study.

I do not think that we should fall back too much on to the idea that we should encourage firms to take on labour that they do not need. That would just build up a lot of bored workers in industry, and that is not a healthy state of affairs. The Government will have to act much more purposefully with other countries in the EEC and OECD to try to achieve changes in the pattern of the working life, the working week and the working year. Otherwise this problem of unemployment will remain and, because of the demographic changes in this country, become even greater and more alarming than at present.

3.22 a.m.

This is not the first time that I have replied to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) in a debate of this kind. As always, he has raised these matters in a thoughtful and constructive way. The whole House shares his view that youth unemployment is a matter for grave concern. That is certainly the Government's view.

All unemployment is a serious matter but, without wishing to suggest that its effect on adults is unimportant, I think it is true to say that youth unemployment is particularly wasteful. Its economic and social consequences are especially serious. Work is a crucial factor in the transition to adulthood. If a job cannot be found, the impact on self-confidence and morale can be shattering. The opportunity for investment in human resources, if that is once lost, certainly is not easily regained, and the level of youth unemployment is now higher that it has been since the war.

My hon. Friend talked about youngsters being left on the street corner. My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) has referred to the conflict that could arise between generations. There is a very real danger that today's jobless school leaver could be tomorrow's vandal or football hooligan or maybe tomorrow's National Front recruit, or perhaps all three. This problem is storing up trouble, and it represents a serious challenge to the Government. I shall describe how we have tried to meet that challenge, but let me first put the matter into perspective and underline certain points that my hon. Friend has made. I do this because of the way in which my hon. Friend has framed his approach to our debate. The subject he has raised is the problem of youth unemployment. Let us look at the dimensions of the problem so that we all know exactly what we are dealing with.

This year over 845,000 young people left school in Great Britain. By November, some 780,000 of them had found jobs or training or further education. There were still 68,000 young people registered as unemployed who had never had a job since leaving school, and that is a worse figure for November than in any previous year. It is 68,000 young people too many to have on the unemployment register. But I mention the figure, and the number who left school, because I think it is important that we realise that the majority of school leavers do find jobs within a few months.

I do not make this point in order to minimise the size of the youth unemployment problem, which, as I have already said, is a grave one. No Government can afford to be complacent about a problem the size of this. But I want to make the point that the characteristics of the unemployed are as important as the numbers when it comes to deciding on a policy to help them. When unemployment and youth unemployment are very high the weakest go to the wall. The better qualified youngsters will generally find jobs, even if the jobs are not as good as they had hoped, and that means that better qualified school leavers are taking the jobs that the less well qualified would normally have got. So the youth unemployment problem today is very largely about the most vulnerable section of our young people—the less able, the disadvantaged, the handicapped, the black, the youngsters in the inner cities.

My hon. Friend the Member for Heeley mentioned the rising population trend, and I point out that, because the numbers of young people leaving school each year are rising, the difficulties faced by the less able are likely to be compounded. In 1972 we had 573,000 youngsters leaving school and looking for their first job. As was pointed out, by 1981 we can expect the number to be about 725,000. It will not be until 1983 that the figure should begin to drop.

I say to the hon. Member for Kidderminster (Mr Bulmer) that this ought not to be in any way a subject for party points, and I am not accusing him of treating it in that way. It could be said that successive Governments have woken up too late to the scale of the problem. Action should have been taken earlier, but there is now very substantial action being taken.

The problem is not confined to school leavers either. It is less well known, perhaps, that unemployment among the 19 to 25-year-olds has increased enormously as well. Young adults often suffer disproportionately from "first in, last out" redundancy policies. They have not had time to build up long periods with an employer. They have at least had experience of work, and that in itself helps them when it comes to finding another job. But the fact remains that a growing proportion of our total unemployed are well under 25.

The question of protective legislation was mentioned and the disincentive that that is to the employment of young people. We are not convinced by arguments that employment protection legislation has acted against the interests of young people. The evidence for this is somewhat shaky. I have seen the same argument quoted in other countries as well. It tends to rest on assumptions rather than facts. My right hon. Friend the Secretary of State has recently announced that we are mounting research so that we shall have the facts available. But in general I share the view that the Employment Protection Act is an achievement and not a liability.

I think I can reasonably say that the Government responded fairly quickly to this very serious situation. We began our programme of special measures to help the unemployed in 1975. Between them those measures have helped 300,000 people in two years, about one-third of them young people. The measures were, I accept, introduced piecemeal. The main need was to act quickly, and we have done that. My hon. Friend the Member for Heeley mentioned his own gratifying example from Sheffield under the job creation scheme. The hon. Member for Kidderminster talked about specific constraints. I think that the most sensible thing I can do is to draw his examples to the attention of the Manpower Services Commission.

Although the temporary employment subsidy is not specially applicable to young people, my hon. Friend asked me for a comment on that. My right hon. Friend the Secretary of State and, indeed, the Prime Minister have both made very plain the importance they place on the temporary employment subsidy. There are informal technical discussions going on with the Commission in Brussels at the moment on this issue. Certainly TES is due for review. It is not a static concept. We may want to alter the scheme in some way. But I repeat what I said at Question Time on Tuesday, that anything that undermines the basic purpose and effectiveness of the scheme would be viewed by us with great concern. I hope that we do not get into that sort of situation.

To return to the specific measures, by the beginning of this year it was clear that there was a need for a long, hard look at youth unemployment as a basis for a more coherent programme for dealing with it. The result was the Manpower Services Commission's report "Young People and Work" and, subsequently, the youth opportunities programme for the 16–19-year-olds announced to the House by the Secretary of State at the end of June. The House is familiar with the details. The programme, which is to be run by the MSC, will offer a wide range of opportunities combining work experience and training within a single framework designed to adapt easily to the needs of individual boys and girls. They will be able to move from one element of the programme to another depending on their needs. Some 230,000 opportunities will be on offer each year, double the present provision. Above all, it is the Government's firm intention that no Easter or summer school leaver who is still unemployed the following Easter will be without the offer of a place under the programme.

What we have tried to do with this programme is to concentrate help where it is most needed—on those youngsters who would not get jobs without it. That is why we have put the main thrust of the programme into help for the 16–19year-olds who have just left school. Resources will be concentrated, too, on areas where youth unemployment is highest—allocation will be in proportion to the level of youth unemployment. Our experience with the measures we have already operated suggests that this is the best approach. We have tried to ensure that the programme does not interfere with employers' normal recruitment of school leavers, and we are putting the emphasis, for this age group, increasingly on work experience gained in a normal industrial or commercial setting rather than on straightforward job creation. This is likely to prove most attractive to potential employers. The present work experience programme is bringing good results as far as finding permanent jobs for the trainees is concerned, and we want to build on that.

So far I have concentrated on the needs of the 16–19-year-olds. We have not neglected the over-19s. Their needs are rather different. They have had some experience of employment and have less need of work experience and need jobs where they can build on and develop skills already gained. So for adults we are keeping job creation in the new Special Temporary Employment Programme—STEP, as it is called. This will give priority to the 19–24-year-olds, who will take up as many places as they do on the present job creation programme.

All this amounts to a major commitment by the Government to tackle youth unemployment. We are mounting perhaps the most comprehensive, and certainly the most coherent, programme of any European country. We are doing it on the basis of voluntary co-operation and agreement with the many organisations and individuals round the country who have become involved in the programmes. Employers, trade unions and local authorities are working hand in hand with the MSC to put its proposals into action. The MSC has got full agreement from the organisations concerned, and from the Government, for its proposals to ensure local involvement in the new programmes. We cannot expect success without local co-operation. Here I agree very much with the remarks of the hon. Member for Kidderminster.

I now want to mention the disadvantages to the less qualified. I want to turn briefly to the particular problem among young black people which has been highlighted by my hon. Friend the Member for Heeley. Since the beginning of the present recession in November 1973 the number of unemployed in the racial minority groups has grown faster than the rate of total unemployed. The difference between the two rates of increase was most pronounced in the year ending November 1975, when total unemployment figures rose by 80 per cent. but the minority group figure rose by 217 per cent.

From November 1975 to the present time the rates of increase have been more closely related, with the total figure rising by 40 per cent. and the minority figure by 50 per cent. Some encouragement can be drawn from the fact that the rise in minority group unemployment has been levelling out in the past two years and has more recently fallen below the overall rate. But there can be no room at all for complacency, because unemployment among the minorities is still unacceptably high.

Various reasons can be advanced for the fact that young people under 25 have suffered disproportionately in the current recession, as I said earlier, and there is a high proportion of young people in the minority groups. Unskilled workers have suffered disproportionately in the recession, and, again, the minorities tend to contain a high proportion of unskilled and semi-skilled. Recent immigrants have special difficulties very often arising from newness or language problems, so they find it more difficult to get work. Some of the increase will also be due to further immigration.

All these factors have had some effect, but it is undoubtedly the case that racial discrimination and disadvantage almost certainly play a significant part in the relatively high level of unemployment. The Government are taking positive steps to try to deal with these problems through the Manpower Services Commission's programme, which is aimed at all young people, whether black or white. But it is designed to help those most in need, and as members of the minorities are disproportionately represented in this respect, they will benefit accordingly.

I mention one other important feature in the area of black unemployment. We have been disturbed by reports that there are areas throughout the country where unemployed young people, especially blacks, fail to register for employment at employment or careers offices. That means they are unable to take advantage of the opportunities which are otherwise available to them. To deal with that problem the Government have provided funds for the employment of 20 additional officers whose task will be to reach out to those young people and encourage them to make contact and make full use of the services available to them.

I turn now to the quota proposal suggested by my hon. Friend the Member for Heeley. I have talked about the need for co-operation and for all-round involvement in making a success of the MSC programme. I stress co-operation because it is one of the keys to the operation. My hon. Friend has put forward an interesting proposal for a quota scheme for young unemployed people. I want to assure him that the Secretary of State has given his proposal—my hon. Friend was good enough to send a very detailed and constructive memorandum—a great deal of thought. But we do not believe it is the right response to the present unemployment problems of young people. My hon. Friend said that there were immense problems, and I cannot see any way of making an allocation system work without a considerable degree of compulsion on employers and young people, and I do not believe compulsion is acceptable. I do not think local employers and unions are going to be willing to accept an agreed quota, regardless of the circumstances in a particular firm. We would almost certainly lose all the good will of employers and trade unions which has been built up—not, in the early days, without some difficulty. I think compulsion would alienate young people. It would be impossible to monitor a scheme as big as this one would be and to ensure that all the young people allocated to employers were getting something useful out of it. I can see some problems on the shop floor if employers are forced to take additional young people regardless of the situation in the workplace. But the real stumbling block remains the element of compulsion. We have had direction of labour only in war time, and that is how it should be.

My hon. Friend the Member for Maryhill referred to technological change, and he rightly said that the training boards would have to be looking forward at future skill requirements in their industries. They are doing that. They cannot deal with these requirements without taking account of changes in technology, and they already do so. The Engineering Industry Training Board has published the results of some useful studies showing clearly how the skill shortage, skill structure and skill requirements of the industry are changing.

Another matter raised by my hon. Friend the Member for Maryhill and the hon. Member for Kidderminster concerned international trade. There is, of course, a great deal of international concern about youth unemployment. Following the Downing Street Summit earlier this year, the OECD was asked to mount a high-level conference on youth unemployment as a means of exchanging experiences on a problem common to most industrialised countries. The Secretary of State and my hon. Friends the Under-Secretary and the Minister of State for Education will be attending the conference, which begins tomorrow. We welcome the conference as a valuable means of bringing together Governments who, faced with a common problem, have reacted with a great diversity of measures. We can do nothing but learn from discussions with them. There is a continuing involvement through the EEC.

My hon. Friend the Member for Maryhill referred to the EEC. Following its tripartite conference involving Economic and Labour Ministers, together with representatives of trade unions and employers, that conference had a remit which is now being pursued by the Commission. The remit was to find a Community approach to look at measures such as the shorter working week.

There are very great difficulties in most of the changes in this field. If such changes are to be contemplated seriously there are major advantages in a Community approach.

What we have tried to do, as I said earlier, is to find out the real problems of youth unemployment and to concentrate our resources—which are not unlimited—on the areas of greatest need. We have also tried to concentrate them on the ways of helping young people which we know from experience are most effective in helping them into permanent jobs at the earliest possible time.

We have also looked for ways of getting the maximum number of opportunities out of available resources, but not at the expense of making the right kind of provision. It is essential that what we do for young people is adapted as closely as possible to their needs. The programme we have asked the MSC to run is a flexible one, because young people's needs vary so enormously.

In the last analysis, we all know that youth unemployment is going to fall substantially only when the economy begins to grow again. So young people's prospects depend on the success of the industrial strategy and our fight against inflation. There are encouraging signs here, but we know that youth unemployment is going to remain unacceptably high for some time. That is why we have put the programme on a medium-term footing. We shall be reviewing it every year, but the resources will be there to maintain it for as long as it is needed. It is one area where the whole House will agree that a reduction in required expenditure would be more than welcome. In the meantime, we must do all we can to help the most vulnerable of our unemployed.

Livestock Industry

3.43 a.m.

I, like many other hon. Members, have received a bundle of letters from worried livestock farmers in my constituency. I am impressed by the detail into which the farmers have gone to explain to me the dire situation on their farms. The letters are informative and very convincing.

A sizeable reduction in the cattle and pig herds is clearly taking place, and all logic points to the fact that this can reach catastrophic proportions if action is not taken by the Minister pretty soon.

The crisis in livestock production is the certain and inevitable outcome of our having a Minister of Agriculture who has always been hostile to Europe and clearly has little regard for British agriculture. He has no qualms about cheating in his use of the green pound, because that is what his manipulation of the system is, in order to squeeze quite unjustified, disgraceful and humiliating food subsidies out of the EEC, despite the damaging effect on the industry which he should be proud to serve and promote.

By his too-clever-by-half conduct at Brussels, the right hon. Gentleman has forfeited respect, and he has got a far less good deal for Britain than he would have done had he been reasonable and co-operative. The clever lawyer who was going to run rings around the simple Europeans has turned out to be the not-soclever bull in a china shop, and the farmers are left to pick up the pieces.

We in Humberside—or the East Riding, as I still prefer to call it—have about 600,000 pigs, which is the largest number in any county area. Last year, we had over 90,000 cattle, other than dairying, which, although a modest number compared with some other countries, is of significance in the way in which yarded cattle is a traditional and useful enterprise on many farms in the area, and it is a system which complements the established farming policy in many cases.

I doubt that the Minister realises the extent to which one part of a farm enterprise depends upon and helps the remainder. One very good farmer from the Howden area has written to me to say:
"I suppose it would be easy not to have beef production and thereby stop the losses. However, this is not realistic because the farm production cycle revolves round the beef, and we use all our straw and hay with the beef cattle and all the manure is used on the potato crop, saving quite a lot of expensive artificial fertilizer.
I am afraid that all major capital projects for 1978 will have to be cancelled. These include 100 acres of drainage, three tractors and a new potato store. This will mean that other people's livelihoods will be affected by these cutbacks."
Those last remarks are confirmed by the latest report I have from a leading machinery dealer in the area, which shows a striking drop in his turnover.

There are a large number of farmers in the East Riding who have not bought any cattle this autumn, partly because they cannot see the sums working out to give a profit and partly because of the lack of confidence in the future. They see Government policy for expansion in shreds, and beef producers' fingers have been burnt too often in recent years. Where yards are stocked with cattle, this is either because the farm runs a suckler herd or rears from calves, and such systems are slow to run down. It is the producer who buys stores who is reaching the decision not to do so.

I illustrate the general situation with those particulars from my own constituency not only because this is the area which I know but also to point out that if the situation is as threatening as that in the East Riding one can be sure that it will be a good deal worse in many other agricultural areas. The East Riding is particularly well formed. The size and structure of the farms, by good fortune, happen to be particularly suitable for modern farming methods.

On the pig front, I could cite farmers who have given up pig production, but the position is more a slow contraction and the shelving of plans for future expansion. If this is happening in a county with many of the most modern pig units in the country, I dread to think what is happening in other areas.

Now let us look at the situation which has led farmers to make these retrenchment decisions. Britain's beef industry is in a mess. Since the middle of June, the market for clean fat cattle has slumped by 10p a kilo. During the same period of the MCA madness has made it attractive for foreign producers to ship in almost £20 million worth of extra beef compared with the same period last year. In addition, that same monetary system made it good commercial sense to ship thousands of 50-kilo calves out of this country to replenish the European stockyards. So the crazy cycle is kept in motion. Meanwhile, in the markets store cattle prices fall at a time when production costs are at record levels.

The chief depressing factor in the beef sector is the excessive imports of Irish meat. The Irish farmer is enjoying what is, in fact, a subsidy of about £75 a beast. In addition, there are United Kingdom Exchequer payments on Irish carcase beef imported into the United Kingdom under Article 5 of the EEC beef premium regulations. Not surprisingly, imports of Irish meat have practically doubled in the past year. The chairman of the Irish Meat Board has recently said that in 1976 Ireland exported to this country meat to the value of £135 million. The expected figure for 1977 is £265 million. It is no good the Minister saying, as he has done in the past, that this is but a small proportion of the total market. We all know that it is this marginal quantity that decides the price.

Sir Henry Plum has pointed out that the operation of the green pound in relation to Ireland is even more ridiculous than with the EEC. We use the same currency as the Irish when trading in motor cars and other products, but with agriculture the Irish are presented with a 30 per cent. subsidy. Farmers have called this legalised dumping, and I challenge the Minister to say that they are wrong. According to the Department of Trade, dumping is:
"Selling abroad at a price below the exporter's domestic price."
The Department adds that the EEC, which is now responsible for taking action against dumping, insists on evidence that the dumping is:
"causing or threatening material injury to the Community industry."
There is certainly no shortage of evidence that that is so.

The pig problem has much in common with beef in that it suffers from the same handicaps of the green pound and the MCAs. Since we joined the Common Market in September 1973 the United Kingdom breeding herd has dropped by 20 per cent. Of particular concern is the fact that within the herd the number of gilts continued to decline for the fifth successive quarter, and at September it was estimated that there were only 96,000 gilts in the United Kingdom. This represents a drop of about 25 per cent. over the previous year. The total percentage for the bacon market held by home-produced supplies continues to drop and for this year will be about 45½ per cent. compared with 46½ per cent. for 1976.

Although that does not appear to be a significant reduction, this share of the market has been held so far only as a result of producers selling below production costs for a period of nearly 18 months. Furthermore, imports of canned hams and bacon have increased by 10 per cent. in the first nine months of 1977. With the EEC pig-breeding herd again on the increase and the United Kingdom herd now in decline, the prospect for 1978 is for lower United Kingdom output and a massive increase in the import of processed pigmeat from other European countries, such as Denmark and the Netherlands.

Present bacon price levels, which are unlikely to be held after Christmas, are insufficient to enable bacon curers to pay pig producers the average price for pigs and make any profit. Indeed, currently curers are making substantial losses. This has put in jeopardy the future of the bacon contract, which in past years has done so much to stabilise the pig industry. It is hard to see a break-even situation, let alone a profitable one, returning to the pigmeat production and processing industry within the next few months. This means that curers may have no alternative but to close factories, making workers redundant.

In case the Minister thinks I am taking an alarmist line, may I read to him a letter that I received on 8th December from the managing director of Porkshire Limited, which runs an extremely substantial factory in my constituency? It says:
"Dear Sir Paul, It is with much regret that I enclose a Press release concerning redundancies at our Malton factory. After a very thorough investigation by a set of Management Consultants we have been forced to reduce our labour force as we can no longer sustain our throughput of bacon on the face of subsidised imports from within the EEC. I feel I do not need to labour this point with you as in the past you have kindly assisted us in trying to stave off this evil day. Yours sincerely, F. C. Lyon."
The Press release said:
"Porkshire Limited very much regrets that it has had to announce 80 redundancies at its Malton factory. Despite the support of its parent company and the Government, Porkshire Limited has found it impossible to compete in the home market with imported bacon which is subsidised by MCA at approximately £250 per ton."
We have been building up to this serious situation ever since the Minister took office. We have had to suffer the right hon. Gentleman's superior "I know best" attitude for too long. Surely he can see that unless he takes action on the green pound, agriculture in this country will suffer lasting damage.

One of my constituents from the Driffield area writes:
"As a young farmer specialising in pig production and having invested a large amount of time (15 years training and studying), energy and money establishing my herd, I would like to know if it really is being too optimistic to hope that one day my efforts will be rewarded."
This is the question being asked by hundreds of young farmers all over the country.

This is not just a short-term slump or dip in the cycle. Farmers have always been suspicious that a Labour Government, with their main support in the towns, would let down agriculture. Now they have a new fear. North Sea oil gives us a guaranteed balance of payments surplus for some years to come. Does this, in the eyes of the Government, mean that agriculture can safely be allowed to decline if, in one way or another, cheap or subsidised food can be got from abroad?

The conduct and attitude of the Minister of Agriculture leads farmers to believe that this is precisely the view of the Government. I ask the Minister in his reply to convince us that it is not so.

3.56 a.m.

The whole question of Government support for the United Kingdom livestock producers makes the Government's attitude towards the measures proposed by the EEC Commission one of importance and utmost urgency if the Minister is to maintain and restore the confidence of United Kingdom producers.

The Commission has published new proposals for a change in the operation of the beef regime based on the outcome of a study of the operation of support measures between 1974 and 1977. Although the review of the regime was initiated as long ago as March 1976, I understand that the present proposals are intended to come into force from the start of the 1978–79 marketing year—that is, next April.

Based on the experience of various member States using differing methods of market support, coupled with the varied circumstances of the EEC beef market—namely, a scarcity in 1972–73 and a surplus since 1974—the report on the review concluded that both intervention and the variable slaughter premia have been of significant benefit to producers and consumers but that neither method of market support is enough when used by itself.

Plain intervention buying has maintained producers' incomes at relatively modest cost to the EEC budget but has resulted in quantities of beef being stored rather than eaten, and, when they have been returned to the market in periods of shortage, the reduction in quality has substantially offset any benefit that the consumer would otherwise have gained from the increased level of supply. There have also been the physical problems of lack of suitable refrigerated storage space.

The use of the variable slaughter premia has maintained producers' incomes, but at the same time it has enabled consumers to maintain their beef-eating habit. I am sure that the industry will give full credit to the Minister for its introduction. The contra to this has been the cost of the premia plus the lack of frozen stocks to draw upon and restrain price increases when supplies became more scarce.

It appears highly desirable that both methods of support should continue to be used together and in conjunction, for the United Kingdom at least. The report of the review recognises the virtues of the variable premium system as at present operated in the United Kingdom and recommends that it be extended throughout the entire Community. So far, so good. But our present system of variable premia is authorised by a regulation—applying only up to the end of the current marketing year. A continuation of this regulation would bring a valuable fillip to confidence in the United Kingdom beef sector. Will the Minister be bringing forward new regulations, and will he be supporting the concept in the Council of Ministers?

The report also recognises the value of aided private storage. What are the Minister of State's views on support for the provision and extension of these facilities?

Lastly, the report indicates that the adoption of a common support scheme on a Community basis would mean that United Kingdom premia would be paid entirely from Community funds rather than 75 per cent. from the United Kingdom Government. Will the Minister be pursuing such an objective? It seems to be good for the United Kingdom.

The Minister is well aware of the price sensitivity of the beef sector with regard to consumers' purchasing willingness. The report on the review of the beef regime advocates a "cautious" price policy. The stress on a cautious price policy means that, if the United Kingdom producer is to be compensated for his ever-increasing level of costs, there will have to be substantial devaluations of the green pound to increase the United Kingdom support levels adequately without allowing the Community guide price to rise.

The Minister will no doubt be aware of Early-Day Motion No. 83, standing in the name of my right hon. Friend the Member for Yeovil (Mr. Peyton), calling for a 7½ per cent. devaluation of the green pound forthwith. Does the Minister recognise that this step really needs to be taken now, before the concept in the 1978–79 marketing year is fully developed?

The report does not adequately consider, however, the problems of green currencies in the beef sector. The Minister will be well aware of the distortions being created by the enormous disparity between the Irish and the United Kingdom green pounds, to which my hon. Friend the Member for Howden (Sir P. Bryan) referred in his excellent speech. The present low level of United Kingdom prices and high levels of subsidised beef imports, from both Eire and others of our EEC partners, emphasise the difficulties that the green pound differential continues to cause United Kingdom producers.

I draw the Minister's attention to a brief extract from an article in the issue of the British Farmer and Stockbreeder dated 10th December, in which the reporter, Donald Taylor, indicates that
"One of the ironies of the present situation is that Britain is having to make two separate payments to Irish exporters, which encourage them to ship their beef to the UK, and then having to pay UK farmers deficiency payments to counteract the effects of these shipments.
Irish beef exporters collect an MCA of 28p/kg on all shipments to the UK, part of which is funded by the UK. On top of this, under the Anglo-Irish Free Trade Agreement of 1965 and the EEC regulation on the payment of the beef premium in the UK, the Irish exporters get a further 10p/kg to remove the incentive to ship animals live to the UK to collect the variable premium payment, now about £15 a head. In effect the UK Government pays the Irish Government (who pass it on to Irish exporters) a variable premium on carcase shipments to the UK at a rate equivalent to what the animals would have earned had they been shipped here live."
In fact, it seems as though we are paying the Irish to export to us, to the detriment of our own market.

In October I wrote to the Minister of State drawing his attention to the sub-economic returns being obtained by producers in the markets of Hereford and Ross-on-Wye. He replied in confident vein, stating that
"Whatever the level of imports, our dual support system of intervention and premiums underpins the market and producers' returns."
Those are fine words, but certainly not inspiring enough for Herefordshire producers to be facing the future with confidence.

I draw the Ministers attention once again to the headline written by Donald Taylor in the British Farmer and Stockbreeder of this week
"Slaughter premiums now failing to support collapsing beef market."
That is the measure of the urgency of the problem.

In his reply, the Minister went on to say:
"We do"—
I take it that that is his Government—
"of course, recognise and understand producers' concern about the level of the green pound but we do not accept that a devaluation would be justified at the present time. We have, however, always maintained that if at any time we felt that a green pound devaluation were necessary from the point of view of the agricultural industry and would not damage the rest of the economy, we would not hesitate to recommend it. It must be remembered that a devaluation does not help all farmers; the real key to helping UK farmers is the level of returns and profitability in British agriculture and the green pound is only one of a large number of factors in this."
What is the measure of the damage that has to be sustained by the agricultural economy before the hesitation is overcome? The green pound may be only one of many factors relating to the level of returns and profitability in British agriculture, but is it not in reality the key factor, the linchpin around which all the problems and distortions revolve?

The Minister of State's right hon. Friend the Minister of Agriculture, Fisheries and Food has now acknowledged that a green pound devaluation is necessary, but only in principle. The right hon. Gentleman has declined to say by how much it should be devalued. That is understandable in the light of his price review negotiations in Brussels.

Why does not the Minister suggest that he gets on with a 7½ per cent. devaluation now and haggle about the rest during the course of his negotiations? I am worried because I suspect that he is not interested in a 7½ per cent. devaluation and that he will settle for 3 per cent. or 4 per cent. However, he must remember that the disparity with Ireland is of the order of 19 per cent. He will need to go some way towards eliminating that if he is to reduce the distorting effect of the differential to which I have drawn the Minister of State's attention in the article from which I have quoted.

Admittedly there will be an effect on food prices at consumer level if there is a 7½ per cent. devaluation of the green pound but that will have to be faced at one time or another. Such a devaluation would have a 2 per cent. effect on the cost of food and about a 1 per cent. effect on the cost of living. That would be spread over a period. It would take time to come through. It would not happen all at once.

I said in my letter to the Minister that the freeing of some disposable income brought about by the Chancellor's reduction of income tax thresholds enabled the impact of devaluation to be absorbed. There will never be another opportunity like this, and the Minister should take advantage of it now. Will he not recognise that in all probability it will be in the consumer's longer-term interest to face the problem now rather than later? Putting it off could lead to a traumatic situation in 12 months or more for both the consumer and the producer.

I terminate by drawing the Minister's attention to some remarks made by a constituent of mine, a farm manager who is a veritable technocrat of farming know-how who took a decision in 1967 to move his beef herd from cereal feed to grass forage. He made the necessary investment. He says:
"This entailed a complete reorganisation. A new fattening building was erected in 1967. A calf rearing unit was added to it in 1970. This complex won a CLA farm building award in 1971. In 1974 a slatted floor house was erected for cattle at an intermediate stage.
This large investment in cattle buildings completed the main development stage; the housing now relates fairly closely to the grassland acreage for cattle grazing and silage.
A great deal of effort has been put into increasing animal performance from silage since the late sixties.
In the period for 1968 to 1971 we reduced the cereals fed per pound of grain by 63 per cent. with no loss on animal performance. Over the last few years we have had groups showing a saving of 75 per cent. over the 1968 figures, but"—
here is the crunch—
"we are still no better off financially."
He asks,
"Where do we go from here?"
He acknowledges that there is still room for
"tidying up the performance, even at the expense, if needed, of a further cut in stocking rate."
He was purchasing 360 calves a year until the spring of 1976. Since then, purchasing has been cut by 20 per cent. He says:
"We are seriously considering a further cut of 20 per cent. unless there are definite signs of return to a more stable and profitable future for beef."
That is the case for the devaluation of the green pound—to restore that confidence.

4.10 a.m.

I am glad that my hon. Friend the Member for Howden (Sir P. Bryan) was fortunate in being able to initiate this debate, even at this hour of the morning. He has been extremely loyal to the industry. He spoke in the agriculture debate in November last year, the first occasion on which the right hon. Member for Deptford (Mr Silkin) appeared in his new role as Minister of Agriculture. Perhaps we were naive, but some of us hoped that his advent would signal better days for agriculture.

I would not wish the Minister of State to imagine that problems in the livestock sector are confined to the Yorkshire Wolds or the West Midlands. The story in Wiltshire is the same. Within the past fortnight I attended a meeting of pig producers who had come together from a large area. They expressed their deep concern. There were big and small farmers, farmers to whom pigs are a sideline and farmers for whom pigs are their entire livelihood. It is those farmers, whether big or small, who specialise and whose capital is solely locked up in pig breeding and fattening who command my sympathy today.

If the Minister can come with me this weekend, I shall take him to a farm to the south-west of Salisbury which I have known for more than 10 years. There is a young and efficient farmer there. He works all the hours of daylight and more. He has about 1,000 pigs on the breeding side of the business and about the same number on the fattening side. He is not given to exaggerating his difficulties. Last year he lost £17,000. If the Minister should think that I am taking an extreme example, I shall take him to other pig farms where the story is the same, where the losses are comparable.

Where will this end? How much further will the decline in the breeding herd be allowed to continue? Does the Minister wish to see these men go out of business? How much longer will he be content to accept responsibility for the well-being of agriculture? How much longer will he be talking about a fair balance between producer and consumer while the producer is hard up against his final overdraft limit at the bank?

I am one of those who have always supported our membership of the EEC. My views on the matter are on the record in Hansard as far back as 1961. I have always been entirely confident that Wiltshire farmers are more than a match for their counterparts on the mainland of Europe. Farms in my area average between 400 and 500 acres. There is nothing amateurish about those who manage them.

But the Minister knows as well as I do that our farmers are not competing on level terms. He knows that the falling value of sterling and the disparity of the green pound mean that our farmers are competing with one hand tied behind their backs. He also knows that in Denmark and Germany the small pig producers are prospering. There are colour television sets by the firesides of the small pig farms there, and there are new extensions to the farmhouse for the grandparents. There is an air of prosperity. The right hon. Gentleman also knows that in contrast the British farmer has been sacrificed and allowed to fall behind.

I beg the Minister to alter the balance and to inject new life into the livestock industry before it is too late.

4.15 a.m.

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

If I say that I am grateful for this opportunity of being here this morning I hope that hon. Members will not accuse me of being insincere, because the matters that have been raised are of concern not only to the industry but to the Government and my right hon. Friend.

I have listened carefully to the points that have been made. Hon. Members have expressed concern about the support mechanism for livestock. Fears have been expressed about the good faith of the Government in dealing with agricultural problems. I remind the House that it was a former Labour Minister—Tom Williams—who was responsible for laying the foundations of British agriculture—this is accepted by many people in the European industry—guaranteed markets and guaranteed prices, and support mechanisms generally. With the contributions of succeeding Governments, this has helped to make our industry one of the most efficient in the world. It is our aim to keep it that way.

Comments have been made about the uncertainty facing the industry. I remind hon. Members of the fact that we are going through the final stages of transition. We are in the process of renegotiating or reviewing the common agricultural policy. Surely no one will disagree with the need to do that. We are in the final stages of transition, on terms that were laid down by the Conservative Party when in office. My right hon. Friend's task is a very difficult one, but I believe that, provided the industry and hon. Members do not engage in unjustified criticism, he will succeed in restoring to the industry some of the certainty that was there in former times. This task must be carried out by any Minister of Agriculture. My right hon. Friend is doing a good job, not only in looking after the national interest but in the greater perspective of the European scene. This is the job of any Minister.

I am pleased to have this opportunity, at this early hour of the morning, to comment on some of the points that have been made. I also represent an agricultural constituency, with over 80 villages and more than 450 square miles of territory, with poultry, mixed farming, sugar beet and the rest. I am aware of some of the problems to which reference has been made.

I want to set the scene by describing some of the main features of our support mechanism for the livestock industry. For beef, United Kingdom producers' returns are protected by our dual support system of variable premiums and intervention. This point was made by the hon. Member for Hereford (Mr. Shepherd), and I shall return to it in a moment. We set great store by this and we are determined to keep the dual approach. This is one of the successes of this Government. We said that we wanted to underpin intervention and we voted to keep the variable premium system. We are aiming to ensure its continuance. It has recently been strengthened by the reintroduction of steers "M" as a category eligible for intervention. The level of the target price—which is more or less the guaranteed return—is now rising on the seasonal scale and will continue to do so until next March, giving returns substantially above the level of a year earlier. The level of the intervention price, which provides the back-up, goes up with the ending of the transition period on 1st January.

Sheep have not been mentioned but I should like to say briefly that for sheep we have the guaranteed scheme, which has served us well. The guaranteed price for sheep was raised by 24 per cent. at the last annual review and the wool guarantee for the 1977 clip was increased by over 30 per cent. We now await the Commission's proposal for the Community régime, but here again I think that there was a fair return.

For pigs, excluding the temporary subsidy in the first half of the year which transferred £17 million to the industry, we do not have national support arrangements, but our pig industry benefits from the Community support arrangements, which include aids for private storage of pigmeat, protection against third country imports and subsidies to encourage exports.

Our overriding concern in this sector has been, and still is, the competitive framework for our producers within the Community. That is why we have put unparalleled efforts into improving the basis of the calculation of the monetary compensatory amounts which apply to imports of pigmeat. This has been a difficult sector. We recognise the problems of the industry. However, my right hon. Friend has used every possible opportunity to see what can be done legally within the framework of the Community. It is not our fault that the £17 million subsidy was not continued.

We are changing the support system in the dairy sector. The guarantee ends on 31st December. Ministers will then no longer fix the precise level of producer returns but will determine the statutory maximum wholesale prices of milk for liquid consumption. Taken together with the boards' returns for manufacturing milk, the level of maximum prices that the Government have just announced should enable the boards to give producers a price significantly above that resulting from the present guarantee.

The Minister of State said that his right hon. Friend has made every effort to get the MCA changed. Does he agree that one reason why the EEC negotiators are less than co-operative is that he will not give way at all on the green pound?

That is not exactly true. I am not suggesting that the hon. Gentleman is misleading the House, but I remind him that devaluation of the green pound has amounted to about 21 per cent. already. My right hon. Friend has shown flexibility. The hon. Gentleman will know of the last change of 2·9 per cent. not so long ago.

The hon. Member for Hereford referred to lack of flexibility. I remind hon. Members that on 1st December, in reply to the right hon. Member for Yeovil (Mr. Peyton) who suggested a devaluation of 7½ per cent., my right hon. Friend said that, even if he did agree, although he certainly would not say so at that time, he could not imagine anything that would have a greater effect on speculation, but he was prepared to listen. That is certainly what we are doing. Therefore, there is flexibility, not a rigid doctrinaire approach.

As I said earlier, transition means a period of uncertainty, and I can well appreciate the concern of the industry. We are in close touch with the industry. My right hon. Friend and I and the Parliamentary Secretary spend a lot of time going round farms in the regions. I have been to the East Midlands recently, my right hon. Friend and I have been to the Northern Region, and only a few weeks ago I was in Northern Ireland. We get about and we recognise the concern of the industry.

With regard to the end of transition and price parity by 1978—a point which is often raised by the industry—the final transitional step will strengthen support from 1st January by a 4 per cent. increase in the intervention price and will at the same time encourage carcase exports by reducing the export MCA levy. On 1st January our intervention price for beef will be the same as for the rest of the Community when expressed in units of account. What no one could foresee in 1972 was the monetary turmoils of recent years.

We could not now accept that parity means coming into line with the "snake" currencies. That would mean devaluing the green pound by 30 per cent. We bear the need for a flexible approach very much in mind. I am sure that no one here would recommend a devaluation of that extent, but I agree that there is justification for keeping the matter in mind.

I turn now to the support system for the industry. Whatever the market price, our support system effectively maintains producer returns and aids the stability of the market. Currently, a sizeable premium is being paid in England and Wales. The target price is now rising and will continue to do so until next March. We have just strengthened our intervention arrangements by reintroducing the category of steers "M" and the EEC has recently introduced a new scheme for private storage of beef carcases.

I come next to the EEC report on premiums and intervention. I remind the hon. Member for Howden (Sir P. Bryan) that a great deal of work has been done by officials on the Commission's report on the reform of the internal beef regime. Hon. Members may have seen that in the first round of proposals for prices in 1978 the Commission has said that it did not think that the time was yet ripe to make changes on the internal beef regime. Naturally this is disappointing, but at this week's Council meeting my right hon. Friend made it clear that, whatever the Commission might propose for the Community as a whole, there could be no going back for the United Kingdom on the current mixed support system of premiums worked in conjunction with intervention. This was of great value to us during the difficult beef market from 1974 onwards when a serious position had to be corrected, particularly during the autumn and winter. The Commission has specifically commended the advantages of such a dual system for the Community as a whole.

I turn to the state of the market. Home marketings affect the market as much as imports. In the early part of this year, home production was down by 14 per cent. In the last quarter of 1977, the United Kingdom cattle sales are likely to be the heaviest of the year and about 4 per cent. up on the same period last year. The market is bound to be weakened by these extra supplies.

A useful development is that our exports of carcase beef are rising, and there are signs that the Christmas trade is beginning to firm the market. Although the imports of live cattle have been increasing recently, they are still low in relation to the traditional levels. To the end of October we imported 245,000 Irish animals compared with the 638,000 animals which the Irish were expected to send to the United Kingdom annually under the agreement. The trade in Irish cattle and beef is a traditional feature of our market. We actually imported less Irish cattle in October than in October 1976.

Comments have been made about the financial effects of this trade. Following the precedents set in the Anglo-Irish Free Trade Area Agreement, EEC legislation, which produces the authority for the variable premium scheme, states that beef originating in the Irish Republic and intended for consumption in the United Kingdom should receive the same advantages as home-produced beef. The variable premium is calculated on the quantities of carcase beef imported from the Irish Republic which meet the quality standards required for beef premium certification in the United Kingdom. Payments are not made on individual consignments or to individual exporters but are aggregated and paid about three months in arrears on a Government-to-Government basis. Any market effect is therefore remote.

Reference has been made to the decline in our breeding herds. After the high levels of breeding herds and production in 1974, we are still on the downward part of the beef cycle. The future direction of our support policy for beef is a matter for the annual review, which is now under way, and for the CAP price-fixing.

The hon. Member for Howden raised the question of the problems in the curing industry. We are conscious of the problems facing not only the pig industry but the curing industry, which is facing particular difficulties. The curing industry is in the front line in facing the competition from imports which benefit from the unfair MCAs operating in this sector. The Government are fighting for better condition of competition for the industry and we have sought a meeting with Mr. Gundelach, the Commissioner, to impress upon him the seriousness of the situation.

Both the Government and the industry have submitted evidence to the Commission in its study of the MCA system to demonstrate the distorting effects of the present arrangements on the pigmeat sector. Government policy here is well known with the initial change of 8 per cent. and the persistent pressure we have exercised since.

Devaluation of the green pound is put forward as the panacea for many of our ills. Such a change is not necessarily the best way of helping this sector, although that could play its part. The green pound is not selective like the MCAs. The industry would like an immediate devaluation since that would also reduce the pigmeat MCAs, but that is no substitute for getting the calculations on to a proper basis. Our case is that the present system of calculation provides a large degree of over-compensation to our competitiors. This persists whatever the level of the green pound.

We must continue our efforts to change the system. Our policy on the green pound is clear. We will devalue when we regard it as in the national interest to do so. We will give full weight to the interests of the pig sector in reaching our view on the timing and the extent of any change.

I should like, in conclusion, to summarise our approach. First, on beef we recognise the force of farming opinion that in order to strengthen the market we should devalue the green pound so as to reduce monetary compensatory amounts on beef imports. We fully understand this point of view and the anxiety which is felt by producers. I would not dispute for one moment that the MCA position has influenced the pattern of prices on our beef market this year. But other factors have been at work, particularly the increase in marketing of Irish export slaughter-houses, compared with 1976 and a return to a more normal seasonal pattern of marketings here. It is the latter which dominated the market in the last few weeks. Indeed, imports from all sources were lower in September and October than a year earlier. The market has now become firmer and we must hope that stable consumer demand and the support mechanisms will help towards a more buoyant outlook. As for the green pound, we have no objection in principle to changing the United Kingdom representative rate—we have made a 21 per cent. change in the last year or two—but we have always stressed that the timing is very important.

We have to look after the wider interests on this, however. On the one hand, if prices rise too high there is consumer resistance, and that does not help the farmer. If prices are too low, the producer gets no encouragement to produce. The Minister of the day has the difficult job of keeping a balance of the interests.

On pigs, we recognise that the producers have faced a long period of difficulty on the present pig price while production costs have risen. There has been an improveme