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Commons Chamber

Volume 952: debated on Tuesday 20 June 1978

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House Of Commons

Tuesday 20th June 1978

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Private Business

Christ Church Woburn Square And Saint Matthew Oakley Square Bill Lords

Read the Third time and passed, with amendments.

Sheffield General Cemetery Bill (By Order)

Order for consideration, as amended, read.

To be considered upon Thursday.

Oral Answers To Questions

Education And Science

Teachers (Training And Employment)

1.

asked the Secretary of State for Education and Science if she will introduce a scheme of mandatory training schemes for teachers after 15 years in service, whereby they have a year away from their posts in which they can have updating courses relevant to their subjects and techniques, and thereby free teaching posts for those teachers currently unemployed.

The Government's expenditure plans envisage that the number of teachers released for in-service education and induction programmes will rise from the full-time equivalent of 4,500 in 1977 to 18,500 in 1981. Replacement teachers will be needed, thus providing additional employment. I do not believe that mandatory training would be appropriate.

I thank the Minister for that answer. May I press him further and ask him to say whether teachers will be released on a voluntary basis so that all those who feel that they require further training will be given that opportunity? Does the Minister accept that, as a general principle, it is much better to give the opportunity for further training in this way and allow other teachers to be taken on in employment rather than have them unemployed or on job creation schemes that are totally irrelevant to their training?

My right hon. Friend and I set the highest possible store on effective in-service training. I hope that local authorities will take advantage of the money that the Government have put into the rate support grant for this purpose. Some local authorities have done this very well: others leave some things to be desired.

On the subject of teachers away from their posts, may I ask what advice the Government will give to any young male teacher who wants to run a football team but does not want to have a girl in the team? Does not my hon. Friend think that the recent decision of the court at Newark is absolutely farcical and a misuse of public funds on the part of the Equal Opportunities Commission?

I suppose that I ought to recommend in-service training in the Sex Discrimination Act.

Would my hon. Friend agree that, laudable though it may be to arrange for teachers to have a sabbatical year or something like that after 15 years, a much more practical way of easing the teachers' work would he to reduce the size of classes by devoting more funds to the educational budget?

My hon. Friend knows that, given the economic difficulties of the Government, we are doing the best we can. I agree with my hon. Friend that the suggested mandatory year would be a clumsy way of providing in-service training.

Literacy

2.

asked the Secretary of State for Education and Science what further steps to implement the Bullock Report on literacy will be taken in the the next 12 months.

The Bullock recommendations were addressed to the education service as a whole, and Her Majesty's inspectors continue to collaborate closely with authorities in initiatives of many kinds. In the next 12 months assistance will be given to 29 authorities to mount in-service courses for teachers and others. In addition, my Department's programme of short courses for serving teachers for 1978–79 includes 15 which will cover various aspects of the teaching of English.

Does the Minister recognise that every independent inquiry which has been held since Bullock reported four years ago shows that the position over the provision of books in schools has deteriorated? Why does the Minister refuse to implement the principal recommendation of the Bullock Committee, which was the establishment of a standing committee to ensure that there were adequate capitation allowances and that the provision of books in our schools was adequate?

We hope to have some fresh information about the provision of books in schools shortly when local authorities reply to our circular on the review of the curricular arrangements. We have, in the new rate support grant settlement, made provision for an increase of 2 per cent. in non-teaching costs which, we believe, will enable authorities to do better in the provision of books. I must tell the hon. Gentleman that we have not refused to implement the recommendation to which he refers. It is actively under consideration in my Department.

Is my hon. Friend satisfied that local authorities are making sufficient funds available to finance adult literacy programmes?

We hope that local authorities are making adequate funds available. Obviously some authorities do and others, perhaps, make less satisfactory provision. As my hon. Friend knows, all we can do is to advise, make some money available and hope that authorities will follow the policies of which we all approve.

Is the Minister aware that her answers so far have shown a remarkable degree of complacency bearing in mind that in this country we spend only 0·84 per cent. of total educational spending on books? When will the Government take steps to see that we at least begin to match the international standards set by countries as diverse as Trinidad and West Germany?

I accept that it would be pleasant to be able to spend more than we do on books. What the hon. Gentleman has perhaps forgotten is that not all the expenditure on books is simply that contained in this part of the rate support grant. For example, when a new school is established and a library is built there, the cost of filling that library with books comes under capital provision, so that the finance available is perhaps better than the hon. Gentleman imagines.

Is the Minister aware that while we welcome the Assessment of Performance Unit and sample testing with regard to literacy from next year onwards, there is also a need for blanket testing so that children who have fallen behind in literacy have resources switched to them and no child who does not have brain damage leaves school illiterate at the age of 16? Such children are deprived for the rest of their lives in regard both to their jobs and to fitting into society.

We do not approve of blanket testing totally across the whole spectrum of children. We believe that sample testing of the kind which the APU is producing will give us a better picture nationally. If, however, the hon. Gentleman is talking about an assessment of the progress of the individual child, of course we are in favour of that and have never disputed it.

Village Schools (Closure)

3.

asked the Secretary of State for Education and Science whether she will make a statement on the general criteria which she adopts when deciding whether or not to approve a Section 13 notice to close a village school in a rural area.

My right hon. Friend takes into account the educational and economic factors set out in the Department's circular 5/77, "Falling Numbers and School Closures". She also gives due weight to the social and, where appropriate, denominational arguments.

Following her very regrettable decision to close Grimston School in my constituency against the express wishes of both the parents and the managers, does the Minister agree that there is growing parental support for these small schools and that the general presumption in her Department on Section 13 notices should be towards keeping them open rather than closing them?

I would contest the hon. Gentleman's assumption that our general view is to close them rather than to keep them open. What we do is to examine each case as an individual case, as we did with regard to Grimston. We know that there is often support from parents for keeping such schools open, but we take considerable advice about the educational aspects of such decisions before we make them. They are often difficult to make, but we seek to make them in the interests of the welfare of the children.

May I suggest to my hon. Friend an additional criterion in deciding whether or not to close a school, which is that she should favour the closure of schools in the constituencies of those Tory Members who voted for cut-backs in public expenditure and should oppose the closing of schools in the constituencies of Labour Members who are in favour of public expenditure? In this connection, will she look particularly sympathetically at the representations of the people of Wall, in Lichfield, who are very concerned indeed about the possible closure of their school?

I look sympathetically at representations from all groups of parents, whoever they are fortunate or unfortunate enough to be represented by.

Does the Minister accept that financial economic criteria are the very worst reasons for closing small schools? Whatever is meant by a school being "financially viable" must be insane when one looks at the realistic benefits which a small school bestows on those who go to it.

I do not accept that finance should be totally ruled out, but I certainly accept that it should be very much a secondary consideration and that the educational experience which child- ren are having in a school should be the matter of prime concern.

Student Grants

4.

asked the Secretary of State for Education and Science what reassessment of the student grant system is being made in the light of other Government schemes for tax-free payments to young workers involved in approved training, work experience and similar projects.

My right hon. Friend has now begun her discussions with local authorities about improved financial support arrangements for the 16–18 age group. Those will need to cover many aspects, including the availability of training allowances for young people.

In view of the far-reaching plans by the Manpower Services Commission, involving the payment of tax-free weekly sums to young people, is it not time that urgent consideration was given by my hon. Friend's Department to the position of boys and girls in schools, or undergoing further education, so that decisions about their future should be taken in the interests of the children on the advice of the parents and not simply on financial grounds?

My right hon. Friend has already had two meetings with local authorities to discuss this and other matters. There is another meeting to come. I would stress to my hon. Friend and to the House that the MSC courses, where money is being paid to young people in this age group, are for comparatively very short periods of time compared with someone staying in full-time education.

Is the Minister aware of the evaluation study of the MSC which shows that there is such poor quality in terms of literacy and the capacity to handle figures at a functional level that the MSC is calling for a tripling of the preparatory courses in literacy and numeracy? What does he think this shows about standards in some of the schools with regard to these basic things which are so crucial for people getting jobs?

Where youngsters have difficulty with reading or numbers, I am very delighted that the present MSC scheme has far more educational topping-up provision than did the previous schemes.

University Vice-Chancellors And Principals

5.

asked the Secretary of State for Education and Science when she next intends to meet the Committee of Vice-Chancellors of the universities.

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

I have no immediate plans to meet the Committee of University Vice-Chancellors and Principals.

When the Secretary of State next meets the Vice-Chancellors, will she discuss with them ways of encouraging industry to make a greater financial contribution towards the universities? Does she agree that while industry for the most part accepts its responsibility for the training of unskilled or semi-skilled members of its work force, it makes very little contribution at the moment in the form of sponsored studentships to the highly-skilled engineers, physicists and scientists upon whom industry depends?

Yes, indeed. The hon. Gentleman may know that industry has recently entered into a joint system of industrial scholarships with my Department which are jointly funded between industry and the Government. Secondly, we have recently extended the amount which we permit to be paid to sponsored students before they become liable to a reduction in the normal mandatory award. Therefore, we are doing the best we can to encourage greater industrial interest in higher education.

What exactly are the criteria upon which these industrial scholarships are to be awarded?

In the first year the industrial scholarships will be awarded to young men and women who in their school records show leadership capacity and who intend to go into manufacturing industry. In the first year the awards will be tenable only for the specialised and enriched engineering courses with a strong management element in them, but beyond the first year they will be tenable with regard to any engineering course approved by the Council of Engineering Institutions.

Universities (Industrial Democracy)

6.

asked the Secretary of State for Education and Science what is the position of the discussions on industrial democracy in the universities.

The report of the working party established by the Committee of Vice-Chancellors and Principals in October 1976, to consider the implications of industrial democracy for the universities, was published in March. I hope to receive shortly the views of the University Grants Committee on the report's conclusions.

Does not my hon. Friend agree that this kind of working party could be considered by us? Would it not have been better to have involved the trade unions directly in these talks so that at least an impartial report could have been prepared?

I would prefer not to comment in any detail at this stage. The University Grants Committee, in considering this, will shortly be submitting a report to me. I hope that it will consider this report not in isolation but in the context of the Prime Minister's statement about the White Paper on industrial democracy.

Is not this whole concept for discussion in universities absolute nonsense? Is not the purpose of universities to discuss true learning rather than ephemeral and fashionable political notions?

I am amazed that that view still prevails, even by the hon. Gentleman, in this House. Universities work as a team, with both the non-academic staff and the academic staff working together.

School Transport

7.

asked the Secretary of State for Education and Science when she expects to publish her Department's revised proposals for school transport.

17.

asked the Secretary of State for Education and Science when she expects to bring forward her revised proposals for school transport.

My right hon. Friend will publish fresh proposals as soon as possible.

Is my hon. Friend aware that the cost of fares to travel to school for schoolchildren imposes a very heavy burden on many parents and guardians, particularly when added to the other expenses of attending school? In these circumstances, is there not a very urgent case for introducing proposals to restore half fares for all schoolchildren who need to use transport to attend school?

I am well aware that this cost is often a heavy burden on many parents. I am afraid that the question of half fares is one not for me but for my right hon. Friend the Secretary of State for Transport.

Will my hon. Friend accept that too many local authorities rigidly apply the three-mile limit and that they could use a degree of moderation in this respect? Will she reconsider impressing upon the Secretary of State for Transport that all children who require school transport should have either free transport or at least an agreed concessionary fare, because I can assure her that this causes bitter disputes among the parents of children attending the same school?

I accept that entirely, and it is our hope that the proposals which we shall put before the House will contain the basis of a scheme which will enable all children to travel to school for a reasonable sum, and perhaps even for the same sum. I also agree with my hon. Friend that it is within the power of local authorities at present to give assistance to parents but that many of them choose not to exercise those powers at the moment.

The hon. Lady said "as soon as possible". Can she be a little more explicit and definite about the time scale of this proposal?

I hope to lay these proposals before the House before the Summer Recess.

I welcome my hon. Friend's announcement, but does she not accept that any introduction of a new system which penalised parents who at present get free transport would be un- desirable? Therefore, will she agree to consider introducing a phased system so that no parent will have to pay more in fares after the scheme is introduced?

This is one of the difficult matters that we are considering. We are anxious to find a low-cost solution which minimises the loss of benefit to those who are getting free transport at present. But, as my hon. Friend will recollect, it is the burden of protest from those at present getting free transport as well as the concern of local authorities which has made it difficult to introduce a solution so far. However, we hope that those at present enjoying free transport for their children will recognise the problems faced by others.

When the Minister referred just now to the possibility of all children paying the same or a similar fare, did she have it in mind that it would be quite unjust to expect parents whose children use school transport only because their local village schools have been closed to pay to send their children to schools in other villages?

Where free transport is being provided in circumstances like that, it introduces an additional difficult factor. However, we are concerned to establish a fair system for the country as a whole.

Does my hon. Friend agree that children in rural areas under the three-mile limit would find it dangerous to walk to school and that the cost to which one of my hon. Friends referred falls particularly heavily on low-paid workers in rural areas? Is there not an allocation in the rate support grant for school transport, and is my hon. Friend prepared to do anything about seeing that rural authorities apply that allocation to school transport?

As my hon. Friend knows, we have no power to direct local authorities about how to use their rate support grant. That is a matter for them. I take her point about the circumstances of travel to school for children in rural areas. It is one of the unfortunate features of the present system that authorities do not have to consider factors such as danger or suitability of available transport. These are matters which we hope to consider.

School Governing And Managing Bodies

8.

asked the Secretary of State for Education and Science when she intends to introduce legislation to implement the Taylor Report on school governing and managing bodies.

In the light of her consideration of the Taylor Report, my right hon. Friend intends to introduce legislation on some aspects of school management and government as soon as the parliamentary timetable permits.

In view of the concern by many peope about appointments to school governing and managing bodies, does not the hon. Lady think that this matter is rather more urgent? Is it not important to ensure that the people who get on to these bodies have a real interest in education and in the schools concerned rather than merely being political appointees?

I agree with the hon. Member. It is a source of much dismay to the Government that recently a number of Conservative authorities have thrown everyone off their governing bodies other than those who are prepared to support Tory Party policy. We feel that much action on the report can be taken, and, of course, it does not all need legislation. Therefore, it is within the power of those local authorities to introduce such changes now. But we hope to introduce legislation as soon as possible.

Is my hon. Friend prepared to look at an apparent anomaly whereby a school manager or governor who is a councillor can get some form of remuneration or expenses whereas a school governor or manager who is not a councillor gets nothing? It would appear that this is at the discretion of the local authority. Will my hon. Friend look at and try to regularise the position?

There is much at present which is at the discretion of the local authority, and we shall have to look at all these matters when we consider our legislative proposals.

Does not the hon. Lady think that the role of parents in the running of schools and in serving on managing and governing bodies is of the utmost importance? Does she not agree also that in the main the local authorities, especially the parish councils, play a vital role in the running of these schools? Will she assure the House that the relationship between local councils and governing and managing bodies will continue in any legislation that her right hon. Friend introduces?

I accept what the hon. Member says about the role of parents. As I have said several times, we hope that local authorities will take steps, which they are free to take at present, to involve parents more in the management and governing of schools. As for the hon. Member's comments about minor authorities such as parish councils, we are still in the process of consultation, but we have indicated already that we are not convinced that the suggestion in the Taylor Report that the right of minor authorities to nominate to governing bodies should be withdrawn is the right approach, and we shall also be considering that.

Student Grants

9.

asked the Secretary of State for Education and Science what is the estimated overall cost to public funds within which her discussions with the local authorities on grants for 16-yearolds are taking place.

I refer the hon. Member to the answer I gave to his Question on 25th May.

Does the Secretary of State recognise the concern in all parts of the House at the pitifully small scope of discretionary awards at a time when the age group is expanding? Is she quite certain that her priority is right in launching this new scheme of awards rather than coping with the lottery of discretionary awards in these vocational areas, which would help young people to get jobs?

I notice that on 10th June the hon. Member attacked my proposals as being "a useless bribe". He went on to say that he would give himself the priority of straightening out the lottery with regard to further education awards. However, I think that the hon. Member sounded off without studying what was proposed. What is proposed is specifically help for those staying on in further education to pursue vocational courses as well as those staying on at school. I advise the hon. Member to study my proposals before condemning them.

Has my right hon. Friend noticed that the Conservative Party merely talks about these matters but that this Government are the first Government to do something about them? Is she aware that from many Government supporters there is a great welcome for her extension of this scheme to sixth formers?

Has my right hon. Friend noticed that the city of Sheffield, a Labour-controlled city, is one of the first to get on with it? We in this House do not want to see our sixth forms become a sort of class institution, and this is one of the very best ways of making sure that everyone has the chance to take advantage of sixth form education.

I agree wholly with my hon. Friend, and for two reasons. The first is that we have one of the lowest staying-on rates in Western Europe, and that seems to me to be appalling. One reason for it is the lack of financial support for young people after the age of 16. The second is that what has been described by the hon. Member for Ripon (Dr. Hampson) as "a useless bribe", when applied to students in higher education, is normally welcomed in all quarters of the country. We are simply proposing to extend what is available in higher education to further education, where we desperately need more trained and skilled people.

Will my right hon. Friend bear in mind that it is still a crime to allow children to leave school at the age of 16 without jobs to go to? Therefore, whatever grants are made to children, will she make certain that they are high enough to encourage them to continue at school until we can find jobs for them?

The rate is under discussion between me and the local education authorities. I hope to bring about a position where a young person can make a free choice between further education and leaving school rather than being forced to make that choice because of financial considerations.

Voucher Schemes

10.

asked the Secretary of State for Education and Science what requests she has received from local education authorities for permission to introduce experimental education voucher schemes.

12.

asked the Secretary of State for Education and Science what recent consultations he has had concerning the educational voucher scheme.

I have received no requests and had no consultations about the introduction of voucher schemes.

My right hon. Friend is aware of the decision by the Kent education committee to go ahead with this ludicrous waste of educational resources. Does she not regard it as a strange sense of priorities that an authority with one of the worst teacher-pupil ratios in the country and an abysmal record in nursery education, and an authority which cannot afford to reintroduce free school milk in junior schools, can afford to go ahead with schemes such as this?

I find the position amazing. Kent is third from the bottom in nursery provision in the country as a whole, it has a lower average of pupil-teacher ratios than the average of counties, let alone the average in the country as a whole, and it has refused to provide free school milk for primary school children. Yet that county now seems to be able to consider bringing in a ludicrous voucher scheme which would produce nothing but a waste of money.

Has the right hon. Lady received any clear indication at all from the Conservative Front Bench that it wishes her to embark on this public expenditure?

I have received a most enjoyable cacophony from the Conservative Front Bench. The hon. Member for Brent, North (Dr. Boyson), true to his normal backing of all reactionary ideas, has indicated that voucher schemes are a first-rate proposal for turning the clock back in education. The hon. Member for Chelmsford (Mr. St. John-Stevas), who has a rather more balanced approach to education, indicated in a recent "Panorama" programme that he was far from enthusiastic about the voucher scheme and used language with which I could not more agree, that

"We cannot turn the education system upside down. We cannot take risks with children's education."
I say "Amen" to that.

Why is my right hon. Friend so gentle with the Conservatives? Does she not recognise that this is yet another political gimmick by the Friedman centre of the Conservative Party, which is trying to introduce the cash nexus into British education? Will it not be rejected at the forthcoming General Election in common with the rest of Conservative policies?

What amazes me about the voucher scheme is that the very study that was undertaken in Kent indicated that as a way of meeting parents' wishes this was a foolish and administratively inefficient way of proceeding. Therefore, even on the arguments advanced by the Opposition, this is an absurd aberration and an absurd experiment. Anybody who studies the scheme, as I have done, will see that as a recipe for overcrowding some schools, overstraining them and leading to wasteful expenditure on temporary accommodation, while other schools are under-used, it is a totally irresponsible proposal and no sensible education spokesman would dream of advocating it.

Before the right hon. Lady is overcome by her eloquence in criticism of Kent, will she reflect on one very important statistic contained in what more fair-minded observers would regard as a very interesting experimental study by Kent? It is to the effect that 90 per cent. of parents among those questioned in the survey wanted the greater freedom of choice which an educational voucher system might provide. Even if there are administrative difficulties, should there not be a rather more constructive approach to an experiment along the lines suggested by Kent?

What the hon. Gentleman does not appear to appreciate is that the study undertaken for Kent indicated that, as a way of meeting parental choice, this was neither an efficient nor a sensible system for undertaking such a scheme. If the hon. Gentleman had read the survey, I am sure that he would not follow that particular route.

Will my right hon. Friend make clearly known in advance to authorities which might take up this experiment the tremendous cost involved, as she illustrated in an answer she gave to me last Friday?

Yes, indeed. It is difficult to make any clear estimate, but the estimate that Kent made for a single division of a county with 14 education divisions within it was the sum of £600,000. That is for one division of one county out of 100-plus education authorities. That would give no advance at all. That is the basic administrative overload cost of running a voucher system. If the system were to be extended to independent schools, because the voucher would be payable to every parent with a child in an independent school the cost could be as much as £400 million. That seems to be a very strange way of spending scarce education resources.

Instead of worrying about the mote in my eye, would not the right hon. Lady be better occupied in thinking about the Benn in her own? If she is so strongly against the voucher, on which apparently she has a totally closed mind, why does she not put forward proposals of her own for extending parental choice and influence, since the overwhelming majority of parents interviewed in the survey declared that the policies of the present Government and the Secretary of State for Education and Science were denying them the freedom of choice which they wanted?

On the first matter mentioned by the hon. Gentleman, I noticed that in a recent "Panorama" programme he said:

"An experiment is going to be quite expensive, and if it was introduced generally it would cost a lot of money, and that creates great difficulties."
That hardly sounds like an enthusiastic welcome to the voucher system.

Secondly, the parents who responded in Kent and who said that they were anxious to have much more parental choice were responding in the most selective county in the entire country. What we on the Labour Benches have always argued is that a strictly selective system does not give parents a choice at all. In three-quarters of the cases it reduces the choice because children have to go to the secondary modern school.

Thirdly, contrary to much talk on the Opposition Benches, I should inform hon. Members that we have asked all authorities to provide prospectuses of information for parents. We have indicated our acceptance in principle of the Taylor Report on parent governors. If I may give one example relating to Kent, that county has totally turned its face against the appointment of parent governors to governing bodies in that county.

Further Education Pupils

13.

asked the Secretary of State for Education and Science what estimate her Department has of the number of young people over 16 years of age who will be undertaking full-time secondary education in the academic year 1978–79.

My Department expects about 309,000 pupils over school leaving age to be attending maintained secondary schools in January 1979. In 1978–79 there are expected to be 226,000 boys and girls on full-time or sandwich non-advanced further education courses.

Of the 390,000 pupils, what number does the Minister estimate will be staying on at school as a result of the proposal to support them out of public funds? Does this proposal imply that he and his Department realise that there will be a serious increase in youth unemployment?

The figure I quoted was 309,000. That figure relates to pupils who are expected to stay on at school under the present arrangements. We hope that when the grant system comes into operation there will be a considerable increase in the participation rate of those staying on at school.

Has my hon. Friend any evidence that some children are being denied the opportunity to stay on at school because of the economic burden that this represents on families? In these circumstances, what further steps does he envisage taking in addition to those already taken to make it possible for all children above the age of 16 who desire to undertake further education to take advantage of that opportunity?

The main weapon in the hands of the Government to persuade children to stay on at school is the financial one. In 1973–74 the percentage staying on at school was 24 per cent., in 1976–77 it was 28 per cent., and it is estimated to reach 29 per cent. next year, even without the student support system.

Will the Minister break down the figure of 309,000 as between boys and girls? Does he agree with me that one of the most tragic aspects of the position is the poverty of ambition among all too many girls in this country?

I do not have in my possession the proportion as between boys and girls. If the figure is available, I shall write to the hon. Gentleman.

O-Level Examination

14.

asked the Secretary of State for Education and Science what obligations are imposed in the Education Act 1944 on the governors of secondary schools to provide an O-level syllabus.

My right hon. Friend has written to the hon. Member to explain that no specific obligations are imposed by the Education Acts on schools to provide O-level courses and that the question whether such an obligation was implicit in the provisions of the Acts, if raised, would be one for the courts to decide. I understand that Nottinghamshire has now decided as a matter of policy that comprehensive schools in the county should offer both O-level and CSE courses.

I am grateful for that reply. Is the Minister aware that until recently the Sutton Centre comprehensive school in Sutton-in-Ashfield did not offer an O-level syllabus to its pupils? Was not this a grave dereliction of duty, and is not the decision of the newly elected Conservative education committee, to which the Minister has referred, most welcome?

My right hon. Friend has recently made clear that she regrets that some comprehensive schools, such as the Sutton Centre, have chosen not to offer O-level courses. She is grateful that the decision has been changed.

Does not my hon. Friend find it extraordinary that a Conservative Member should be so ignorant of the extent to which the selective system of education, which the Conservatives have purported to support for the last 25 or 30 years, created precisely the situation in which only a small number of schools had the opportunity of providing O- and A-level syllabuses? Is it not one of the greatest features of the development of comprehensive education that this sort of question can be asked by Conservative Members?

My hon. Friend is absolutely correct. I was careful to say that we regretted that such courses were not offered in comprehensive schools. We are all too well aware that in the selective system these courses were frequently not offered to many children who could have benefited from them.

Does the Minister appreciate the strength of the point that many people supported comprehensive schools because they wanted their children to go to schools that could offer GCE courses? Is it not ironic that certain comprehensive schools taking children of all abilities do not offer O-levels, which are necessary for professional and higher education. How many comprehensive schools follow the example of the school in my hon. Friend's constituency and do not offer O-levels?

I cannot give the hon. Gentleman an accurate figure, but I can tell him that it is a very small number indeed, and it has been made more than clear that we do not believe that this is a satisfactory policy.

Mathematics And Science Teaching

15.

asked the Secretary of State for Education and Science what is her estimate of the number of cases where mathematics and science subjects are being taught by inadequately qualified teachers, or teachers who are not trained in these subjects at all; and if she will make a statement.

Does the Minister agree that as there is such an urgent need for skilled people in industry, which requires the good and effective teaching of mathematics in schools, it is vital that this information is obtained by the Government, otherwise their expensive retraining schemes for teachers from arts subjects into mathematics will be ineffective?

We are aware of the problem and are doing something about it. In 1974 there was a considerable shortage of mathematics and science teachers, and when the Conservative Party was in power nothing was done about it. We have set up the courses, but it will be some time before the products of those courses are available to the schools.

Is the Minister aware that there is an inadequate supply of properly trained teachers of religious subjects, just as there is in science and mathematics? What steps are the Government taking to make this a more important subject within teaching and to ensure that there are sufficient fully qualified teachers trained in this vital area of moral and religious education in schools?

I agree that there is a shortage of graduate teachers, but there is not the overwhelming shortage of non-graduate teachers in religious subjects that there is in mathematics and science. We have sent a circular to local authorities and we should know by the summer of this year how many people who are qualified to teach religious education are teaching it.

Redbridge (Secondary Reorganisation)

16.

asked the Secretary of State for Education and Science whether she is prepared to agree to the request made in the letter she has received from the Redbridge Education Committee asking for further time to consider the reorganisation of secondary education.

I received proposals from the Redbridge authority on 1st June for the elimination of selection within its area. Officers of the authority will shortly be invited 10 discuss these proposals in detail with officials of my Department.

Will the Minister please explain why she chose 1st June as the date on which the proposals had to be put to her and why she found it necessary to send her letter by special messenger?

I did not choose 1st June. The authority had to explain its position by 22nd May. It asked for an extension of time, and before an extension could be refused or granted, it had sent us a fresh letter dated 1st June with new proposals. It is the authority which has overtaken its earlier request.

What about the second part of the question concerning the special messenger?

Does not my right hon. Friend regard as unsatisfactory the reply that she received, which was cobbled up at the last moment by the chairman of the committee without any reference to the committee? Is it not unsatisfactory that that reply extends selection until 1986 and that the authority, which has had at least 10 years to make up its mind, now complains that it has not had enough time? Does my right hon. Friend agree that this is simply procrastination by the authority, which is awaiting the unlikely event of a Tory Government in the near future?

If the authority's intentions are genuine, it will have every possible opportunity to make that clear to my officials. If they are not, my officials will advise me to take the appropriate action

Northfleet

Q1.

asked the Prime Minister if he will pay an official visit to Northfleet.

I have at present no plans to visit Northfleet.

Is my right hon. Friend aware that if he could find time to visit my constituents in the coming months he would soon find how much they welcome the Government's success in bringing down inflation to the lowest level for five years? Would he not find it refreshing if, just for once, the Leader of the Opposition would stop carping and would give a similar welcome to the country's success in overcoming its economic problems?

It is the case that, thanks to some moderation in wage settlements during the last 12 months and to other factors, the inflation rate has gone down, with benefit to our exports and our living standards. I hope that we can maintain that. Our rate of inflation is now lower than that of a number of our major competitors. On the other hand, it is still higher than the rate in Japan, West Germany and the United States. I should like to see it comparable with those countries as well.

The Prime Minister and the Chancellor of the Exchequer have repeatedly said that if wage rises were 10 per cent. or more inflation would soon be back into double figures. Now that the figures are showing that wages are rising at the rate of 15 per cent. or more, what is the Prime Minister's forecast of the annual rate of inflation?

I am too wary about the inaccuracy of forecasts to start a competition of that sort, but I have no reason to withdraw from my consistent position on this, which I uttered as recently as a fortnight ago to the hon. Member for Romford (Mr. Neubert) when I said to him that we need a substantially lower rate of increase in earnings next year if we are to maintain inflation at its present level. It is far better to get the major basic lesson home than to indulge in battles of forecasting statistics.

In that case, why did the Prime Minister say a fortnight ago that he did not see why inflation should ever rise above single figures again?

I hope that some time I will get the right hon. Lady to understand the simple point—

I would not need to be patronising if the right hon. Lady were not artificially slow. I know that really she is intelligent, but she tries to misunderstand this point.

There is no reason for inflation to rise into double figures if we adhere to our policies and keep increases in incomes in single figures. If I have said that once, I have said it 20 times, and perhaps some day it will dawn into the heads of the Opposition.

Does not my right hon. Friend agree that it is an admirable situation, according to what the Leader of the Opposition has said, when inflation is coming down and wages are going up? That is a wonderful society.

Yes, but we must ensure that productivity and increased production keep level with the wages that are being paid. As my right hon. Friend knows, that is the major point. Certainly, when I reflect on all the questions that I have been asked about special cases and all the people who should be allowed to escape, I must say that we have not had very much help from the Opposition in trying to keep earnings at a reasonable level.

As earnings are rising at an annual rate of 15 per cent., and in view of the Prime Minister's misleading attempts to grapple with that fact a moment ago, does it not show that his answer of a fortnight ago was as complacent as it was characteristic?

What I think it shows, and what I hope everyone on the Opposition side will grasp, is that it is necessary to carry the consent of the people of this country. I do not believe that either side of the House stands for a statutory incomes policy. Therefore, the people of the country can decide to take decisions out of the Government's hands where the Government are not the direct controller. Where we are, as in the case of public servants, we have stood firm, without any help from the Opposition. I was pressed by the CBI and others to do that. We have played our part as a Government in trying to keep inflation down. I hope some day to have some help from the Opposition.

Prime Minister (Engagements)

Q2.

asked the Prime Minister if he will list his official engagements for Tuesday 20th June.

In addition to my duties in this House, I shall be holding meetings with ministerial colleagues and others.

Will the Prime Minister find time today to think about the problem of Rhodesia? Does he not think that it is time to heed the views of people of such divergent opinions as Mr. Smith and Mr. Sithole and start to support the internal settlement? Does he not agree that the pursuit of a vendetta against Mr. Ian Smith is no substitute for a positive policy by a Government who ought to be but are not seeking peace in Central Africa?

Will the Prime Minister, on the contrary., make it absolutely clear that the House of Commons has always stood by the principle that sanctions will be lifted only when majority rule acceptable to the people as a whole has been achieved? Does he agree that the fact that some Members of the House have reneged on the commitments of their own previous Government is no reason for changing the view of the House of Commons?

I understand that that has been the view of both sides of the House, and, therefore, I assume that the hon. Member for Louth (Mr. Brotherton) is not speaking for the Opposition on this matter.

Will my right hon. Friend consider the still unacceptable level of unemployment? What plans are there, in view of the present rate of inflation, to begin to expand the economy in order to provide employment in the areas which at the moment have high levels of unemployment?

The figures for unemployment, as my hon. Friend may have seen, although in gross total they are higher, reflect the number of school leavers last month. Excluding school leavers, the level is down. More important, perhaps, the number of vacancies in employment exchanges has risen, and I always regard that as a good sign. The unemployment level is still too high, but my hon. Friend will know of the steps taken by the Government through the temporary employment subsidy and of the international measures that we are trying to secure in co-operation with other major industrial countries. That is the best way, as well as keeping inflation down, to overcome unemployment.

May I ask the Prime Minister to come back to the question of Rhodesia? Is he not aware that the issue of a solution in Rhodesia transcends the whole question of party relationships? Is he aware that at the moment we are in the course of losing perhaps the single greatest opportunity of achieving a solution to this problem? Can he not, please, bring his influence to bear to try to ensure that the grave suspicion which is harboured against his Government by those who have signed the internal settlement is removed, to enable a proper peaceful solution to take place?

I am grateful to the right hon. Gentleman for what he said about the significance of this issue transcending the parties. He is quite right. I can assure him in return that hardly a day goes by without the Foreign Secretary or myself being involved in some exchange or other in an attempt to get all the parties to this dispute together. There is no doubt that the attitude of some of the parties—I shall not particularise this afternoon—is making it difficult for them to co-operate. As far as I can sec, there is no prospect of this Government or the American Government being able to enforce a settlement. However, we are constantly making moves with all the individual parties concerned to try to get them to discuss this issue and secure a settlement as quickly as possible.

Will my right hon. Friend say how many jobs would be lost if the Opposition's proposals to cut public expenditure were introduced, and how many kidney patients would suffer if the suggestion by the Leader of the Opposition when she was in the United States that we should not spend any more money on kidney machines were carried out?

I am unable to give such figures, but it is time that we had a clear statement from the Opposition about whether they wish to decrease or increase public expenditure. I have here a clear list of additional expenditure that the Opposition want to undertake, but they go on pretending to the country that they wish to cut public expenditure. Which is it?

Q3.

asked the Prime Minister if he will list his official engagements for Tuesday 20th June.

I refer the hon. Member to the reply which I have just given to the hon. Member for Louth (Mr. Brotherton).

May I return the Prime Minister to the subject of inflation, because two weeks ago he clearly informed the House that there was no reason why single-figure inflation could not continue indefinitely if he were able to continue his policies? Does he now agree, since he now knows the facts, that wage rates are running at 15 rather than 10 per cent., that unemployment is up and that the matter is far more complicated? Will he tell the whole truth to the House and to the country as to the prospects of phase 4 when phase 3 has already failed?

I understand the hon. Gentleman's gleeful gloom when he thinks that phase 3 has failed. It is understandable that he should want it to fail. If it fails, he, with others, will have helped to make it fail. But I do not think that we should accept one month's figures annualised as being necessarily the true reflection of the situation. For example, 800,000 building workers have today settled for 9·75 per cent. That is a most significant addition to the present statistics. Although, as I have said on a number of occasions, I believe, with regret, that the figure will be above 10 per cent., it may well not reach the annualised total suggested by the hon. Gentleman. I still have considerable hopes for phase 4, but whether or not my hopes are justified makes no difference to the need for the Government to state their position. I promise the hon. Gentleman that that will be done clearly, truthfully and without regard to any of the consequences.

Will my right hon. Friend try to find time today to contact President Carter? If he finds that most inconvenient, will he endeavour to do so at least before 13th and 14th July, when President Carter is to visit Germany? Will he impress upon the President that it is time that the United States, Germany and France helped this country by reflating their economies so that there could be an improvement in the standards of the Western world?

I shall not be contacting President Carter today, but I shall be visiting New York, with the permission of my colleagues, next Monday in order to receive the Hubert Humphrey Memorial Award. I hope to have conversations with President Carter then. I trust that we shall be able before 13th and 14th July to work out a mutually agreeable package on growth and the other issues that are now facing us.

National Health Service (Secretary Of State's Speech)

Q4.

asked the Prime Minister whether the public speech by the Secretary of State for Social Services in Harrogate on 5th June 1978 about the Health Service represents the policy of Her Majesty's Government.

Is the Prime Minister aware that the whole House will regret that the Secretary of State is in hospital and wishes him a speedy recovery? Was it not extraordinary that the Secretary of State made such a complacent and inadequate speech to the nurses on that occasion that he had to send a telegram of apology three days later?

That is not my understanding. I have read the speech and the telegram. I do not know whether the hon. Gentleman has done both or either. My right hon. Friend said that he wished that there had been more time for questioning and that his speech therefore should have been cut a little shorter. That is a very different matter from what the hon. Gentleman suggested. I dare say there is none of us in the House who has not at times regretted that one's speech was overlong. Certainly I have.

Is my right hon. Friend aware that, far from a Conservative Government increasing their expenditure on the National Health Service, thus strengthening the Service, they would actually reduce such expenditure by, according to the right hon. Member for Leeds, North-East (Sir K. Joseph), setting up two Health Services, one privately financed for those who could afford it and with a residual and inferior State service for the rest? Is not this question another example of Tory hypocrisy?

Yes. My right hon. Friend would not expect me to agree with that extreme language. It is true that the Opposition were given the chance to spell out their policy on 20th April. However, the questions were never answered. Perhaps we shall get an answer now. Does the Conservative Party, if it is ever elected to govern, propose to bring in new charges for those who go to see a doctor? Does it propose to bring in new charges for being in hospital? Does the right hon. Member for Wanstead and Woodford (Mr. Jenkin)—[HON. MEMBERS: "Reading."]—stand by his exact words, which naturally I read when I quote:

"We have to live within"
the amount that is already being given on the National Health Service
"and there is no possibility of extra money"?
Which is it?

As Prime Minister's Question Time is the time for the Prime Minister to answer questions, is he able to answer the question whether the National Health Service cash limits will have to bear the employers' national insurance surcharge of £100 million? If that is so, is not that £50 million up last month and £100 million down this month? If that is not so, why on earth cannot the Government answer the question and make that clear?

I recognise the right hon. Gentleman's embarrassment about these matters. The cost to the National Health Service this year will be about £44 million. The increase will not affect the finances of health authorities until mid-November. Therefore, there is no need at this stage to inject any additional money or to amend the cash limits.

Scottish Estimates

Ordered,

That the Estimates set out hereunder be referred to the Scottish Grand Committee:—
Class III, Vote 2, Agricultural Support (Department of Agriculture and Fisheries for Scotland).
Class III, Vote 6, Other Agricultural Services (Department of Agriculture and Fisheries for Scotland).
Class III, Vote 10, Forestry.
Class IV, Vote 15, Trade, Industry and Employment (Scottish Economic Planning Department).
Class VII, Vote 2, Housing (Scottish Development Department).
Class XIII, Vote 18, Department of the Registers of Scotland.
Class XIII, Vote 22, Other Services: Scottish Office.—[Mr. Foot.]

Statutory Instruments, &C

Ordered,

That the draft Job Release Act 1977 (Continuation) Order 1978 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Foot.]

Companies (Regulation Of Political Funds)

3.32 p.m.

I beg to move,

That leave be given to bring in a Bill to regulate the application of funds for political purposes and any other related purposes by companies incorporated under the Companies Act 1948.
Unlike trade unions, which have been subject to such regulations for the past 50 years, companies have never been subjected to anything of the sort. Indeed, the captains of industry in their ivory boardrooms have been completely free to indulge in any whim they fancy. In the main they have supported the Conservative Party, but my Bill is designed to bring in related organisations as well as political parties.

Some related organisations are queer fish. For example, there is British United Industrialists. No one is quite sure for what that organisation stands. However, we know that when the Companies Act 1967 appeared on the statute book—it dealt with disclosure of information and amended company legislation—the chairman of the organisation said that it would dissolve itself as a limited company. When asked why it would do so, he said:
"To stop snoopers finding out more about us than they need to."
We suspect that that organisation acts as a cover for the Conservative Party and that its funds—which are given by big business—go directly into the coffers of the Conservative Party.

There is Aims of Industry, or Aims, as it is now known. It claims to be nonpolitical but there is no doubt that its members are—

My hon. Friend says that they are Fascists, but we know that they are anti-nationalisation and anti-Labour Party. We know that their campaign substantially helped the Tory Party at election time.

The Economic League is a strange body. It was supposed to be set up to provide positive and economic education from the standpoint of free enterprise However, there is a more sinister form to it. We know that Reinforced Steel Services kept secret files on employees. They were secret files that stated
"Check through the Economic League"
or
"No history known to the Economic League."
We find companies supporting Common Cause. That is a cold-war organisation that concerns itself with Left-wing Members, crypto-Communists and occasionally even real Communists. I notice that companies are now shying away from that sort of organisation.

We are always hearing the Opposition talk about democracy in trade unions, but it is time that we brought about democracy in companies. I am here to protect the interests of shareholders. Consequently I hope to receive the complete and unanimous support of the Opposition for the case that I shall put forward.

At present if a company decides to contribute to a political party or related organisation, it is only the board of directors that takes such a decision. If the shareholders do not like it, they can lump it. A shareholder of a large company wrote to me, among others, and explained that he had written to the chairman of the company and lodged the strongest objection to the company giving £10,000 to the Conservative Party. He received a reply from the chairman stating that he, the chairman, believed that that policy was in the best interests of the shareholders of the company. The chairman wrote that if the Labour Party were elected to office, they might nationalise the company, or parts of it.

The shareholder said
"But when the Conservatives were in office I took shares out in the company. Those shares stood at 194p. When the Conservatives went out of office they stood at only 35p. Now under Labour they are 117p. Why cannot we give a contribution to the Labour Party?"
He may have a strong point, but the real issue is that that shareholder was not consulted before £10,000 was given to the Conservative Party.

I want to bring companies into line with the position of trade unions under the Trade Union Act 1913. What would happen if, under the Bill, a board of directors decided that it wanted to give a donation to a political party or related organisation? First, it would have to ballot all the shareholders. Only if a majority of the shareholders said "Yes" could it go ahead with that sort of donation. The donation would have to be made from a separate political fund. That fund would have to be set up by the company. Only the shareholders who had agreed to a percentage of their dividend being taken out and used for political purposes would have their money put into that fund.

The contribution would be made from the fund and the shareholders who did not want to contribute in that way could apply to the company's head office for an exemption form. It would be beholden on the company to let each shareholder know that he or she had that right—namely, that they could apply to head office for an exemption form so that their dividends would not be deducted for political purposes.

Surely there is nothing wrong with that sort of democracy. I do not understand how anybody could oppose the argument that what is sauce for the goose as regards trade unions is sauce for the gander as regards companies. It seems that this sort of reform is long overdue. It should have been introduced long ago. I do not think that company chairmen or directors of powerful companies should be allowed to decide to use their companies' money in this way without taking account of the views of their shareholders. It is completely wrong. This kind of democratic reform is long overdue. That is why I hope that I shall be given leave to bring in this measure. It can be only for the good of companies.

I am not criticising the organisations to which these funds go. All I am saying is that, if companies are to do this kind of thing, they should at least have the permission of shareholders.

And the customers as well. I completely agree with my hon. Friend. At the moment it comes from the customers. We pay. I want to make the shareholders pay out of their dividends. I think that is right as well. However, only those shareholders who are willing to make these contributions should be asked to make them.

I hope that I shall have the support of the whole House for this measure, which should have been brought forward over 50 years ago when the Trade Union Act 1913 was introduced.

3.40 p.m.

I am seeking to oppose most strongly, Mr. Speaker.

The hon. Member for Nelson and Colne (Mr. Hoyle) has entered on well-trodden and highly contentious ground which has been fought over for a long time and over which it would perhaps be better if the two sides could strike a bargain.

It is particularly unfortunate that it is the hon. Member for Nelson and Colne who seeks, as it were in his mind, to limit the funds available to those who are politically opposed to him. It ill behoves a Conservative Member to suggest that we should return to contracting in for the political levy just as it ill behoves the hon. Gentleman to seek to win political battles by seeking to reduce the funds made available to his political opponents. It would be akin to a Labour Home Secretary seeking to hold up the alteration of parliamentary constituency boundaries because he felt that it would not he to his electoral advantage.

There has been a balance in the sense that, since the war, Labour Governments have done two things. One was to return to a position of contracting out for the unions and the other was to make companies publish in their accounts the amounts given to political parties. So, for two moves aimed, as it were, to the advantage of the Labour Party, I am proud that there has been no move by Conservative Governments in the opposite direction—in some way seeking to get their own back—by restricting trade union funds made available to the Labour Party. I should have thought that the hon. Gentleman could have left it there.

This measure will not greatly affect the prospects for Conservative Party fund raising. The hon. Gentleman might be interested to know that we raise about £9 million a year, of which over three-quarters comes from door-to-door collections made by individuals. That contrasts ill with the fact that nearly 90 per cent. of the Labour Party's funds are provided direct by trade unions.

I am not suggesting that there should be any reform in this area, but if we had a crusading, reforming spirit it would seem more appropriate that neither companies nor trade unions should be allowed to subscribe to political parties but that it should be left to individuals, out of their own consciences, to decide to which party they should give financial support.

The hon. Gentleman has not chosen to do that. He has chosen a partial and, as I shall demonstrate, unfair suggestion to penalise only the Conservative Party. First, he suggests that there should be a ballot of shareholders. I have news for the hon. Gentleman. There is one every year. Each year at the annual general meeting, shareholders can say whether they wish to vote against the political contributions made by the company.

The hon. Gentleman referred to the Trade Union Act 1913. Will he tell the House when last there was a ballot of members of trade unions as to which political party, if any, they wished to support? He may not know the answer, but I do. The last ballot was the Durham miners in 1908. The miners were asked which political party the union should support.

This is all the more poignant, because I have further news for the hon. Gentleman. In SOGAT, 81 per cent. of the members are contracted out of the political levy. In ASTMS—the hon. Gentleman's union—63 per cent. are contracted out. In SLADE, 60 per cent. are contracted out. In TASS, the figure is 52 per cent. There must be a presumption. If the majority wish not to pay the political levy, the presumption is that they prefer either to pay no political subscriptions or at least to pay them to the Conservative Party, or conceivably to the Liberal Party for all I know.

When was the matter last tested? When was a ballot of the kind that the hon. Gentleman seeks to introduce in his Bill last imposed on a trade union? Shame on him for being a member of a union which is not practising that which he preaches for others. The hon. Gentleman should be aware of the dangers of what he is suggesting.

The hon. Gentleman suggested that individual shareholders should have the right to opt out of their share of the political contribution which a company makes. They have just that right. They can sell their shares, as the hon. Gentleman knows, if they do not wish to make the political contribution.

There is a further point. Directors are given responsibility for discharging the functions of a company in the interests of the shareholders. If they think that it is in their interests to make a political contribution to any party, they are responsible for that decision. That is absolutely the same as with trade unions. Therefore, the hon. Gentleman is wrong to suggest that there should be this right for individual shareholders to opt out just as there is great difficulty for individual trade unionists to contract out.

The nationalised industries, for example, find it inconvenient for their computer systems to deduct the political contribution from the trade union levy. Therefore, people who wish to contract out of the political contribution have to claim the money back from the unions. Of course, when they make claims for the political contribution, they find that the unions do not answer their letters. We all know that it took Mr. Jack Cleminson 12 years before he got a penny back, although he made frequent annual applications to the Union of Post Office Workers to be given his political contributions which were deducted at source. He had no alternative. He cannot change his job. He cannot switch. But the shareholder can.

Finally, the hon. Gentleman seemed to be short on a matter of fact. He seemed to suggest that political contributions were paid by companies out of pre-taxed income. They are not. They are paid out of taxed income. Therefore, there is the further unfairness that trade union donations to the Labour Party are made out of untaxed money, whereas company contributions to any political party are made out of taxed income.

Companies and trade unions cannot be treated similarly. Over the years, over the battlefield of industrial dispute in these matters, a balance has been worked out which may not be entirely fair one way or the other, but it is a kind of rough justice solution. I think that it would be just as wrong for the hon. Gentleman to

Division No. 232]AYES[3.49 p.m.
Allaun, FrankFernyhough, Rt Hon E.McMillan, Tom (Glasgow C)
Archer, Rt Hon PeterFitt, Gerard (Belfast W)Madden, Max
Ashton, JoeFlannery, MartinMagee, Bryan
Atkins, Ronald (Preston N)Fletcher, Ted (Darlington)Mallalieu, J. P. W.
Atkinson, Norman (H'gey, Tott'ham)Foot, Rt Hon MichaelMarks, Kenneth
Bain, Mrs MargaretFreeson, Rt Hon ReginaldMarshall, Dr Edmund (Goole)
Barnett, Rt Hon Joel (Heywood)Freud, ClementMarshall, Jim (Leicester S)
Bates, AlfGarrett, John (Norwich S)Maynard, Miss Joan
Beith, A. J.Garrett, W. E. (Wallsend)Mellish, Rt Hon Robert
Bidwell, SydneyGeorge, BruceMikardo, Ian
Bishop, Rt Hon EdwardGinsburg, DavidMitchell, Austin (Grimsby)
Blenkinsop, ArthurGolding, JohnMorris, Alfred (Wythenshawe)
Boothroyd, Miss BettyGourlay, HarryMorris, Rt Hon Charles R.
Bottomley, PeterGraham, TedNewens, Stanley
Boyden, James (Bish Auck)Grant, George (Morpeth)Noble, Mike
Bray, Dr JeremyGrocott, BruceO'Halloran, Michael
Brown, Hugh D. (Provan)Hamilton, James (Bothwell)Orbach, Maurice
Buchan, NormanHamilton, W. W. (Central Fife)Orme, Rt Hon Stanley
Butler, Mrs Joyce (Wood Green)Harper, JosephOwen, Rt Hon Dr David
Callaghan, Jim (Middleton & P)Harrison, Rt Hon WalterPalmer, Arthur
Campbell, IanHoffer, Eric S.Pardoe, John
Canavan, DennisHooley, FrankPark, George
Cant, R. B.Hooson, EmlynParry, Robert
Carter, RayHowell, Rt Hon Denis (B'ham, Sm H)Pavitt, Laurie
Cartwright, JohnHowells, Geraint (Cardigan)Penhaligon, David
Castle, Rt Hon BarbaraHoyle, Doug (Nelson)Perry, Ernest
Clemitson, IvorHuckfield, LesPrice, C. (Lewisham W)
Cocks, Rt Hon Michael (Bristol S)Hughes, Rt Hon C. (Anglesey)Price, William (Rugby)
Cohen, StanleyHughes, Robert (Aberdeen N)Radice, Giles
Coleman, DonaldHughes, Roy (Newport)Rees, Rt Hon Merlyn (Leeds S)
Concannon, Rt Hon JohnHunter, AdamRoberts, Albert (Normanton)
Conlan, BernardJackson, Miss Margaret (Lincoln)Robertson, George (Hamilton)
Corbett, RobinJanner, GrevilleRobinson, Geoffrey
Cowans, HarryJay, Rt Hon DouglasRodgers, George (Chorley)
Cox, Thomas (Tooting)Jeger, Mrs LenaRooker, J. W.
Crowther, Stan (Rotherham)Jenkins, Hugh (Putney)Rowlands, Ted
Cryer, BobJohnson, James (Hull West)Ryman,John
Dalyell, TamJohnson, Walter (Derby S)Sedgemore, Brian
Davidson, ArthurJones, Alec (Rhondda)Sever, John
Davies, Bryan (Enfield N)Jones, Barry (East Flint)Shaw, Arnold (Ilford South)
Davis, Clinton (Hackney C)Judd, FrankSheldon, Rt Hon Robert
Dean, Joseph (Leeds West)Kaufman, GeraldShore, Rt Hon Peter
Dempsey, JamesKelley, RichardShort, Mrs Renée (Wolv NE)
Dewar, DonaldKilroy-Silk, RobertSillars, James
Doig, PeterLamborn, HarrySilverman, Julius
Dormand, J. D.Lamond, JamesSkinner, Dennis
Douglas-Mann, BruceLatham, Arthur (Paddington)Smith, Cyril (Rochdale)
Duffy, A. E. P.Lee, JohnSmith, John (N Lanarkshire)
Dunn, James A.Lewis, Ron (Carlisle)Snape, Peter
Dunnett, JackLoyden, EddieSpriggs, Leslie
Dunwoody, Mrs GwynethLuard, EvanStallard, A. W.
Eadie, AlexMcCartney, HughSteel, Rt Hon David
Edge, GeoffMcDonald, Dr OonaghStewart, Rt Hon Donald
English, MichaelMcElhone, FrankStewart, Rt Hon M. (Fulham)
Evans, loan (Aberdare)MacFarquhar, RoderickStoddart, David
Evans, John (Newton)MacKenzie, Rt Hon GregorStott, Roger

seek to proceed with his Bill as it would be wrong for the Conservative Party, when in office, to seek to limit the ability of the Labour Party to raise funds from the trade unions and to upset that balance. It seems to me that the status quo should be allowed to remain.

I hope that the House will not give the hon. Gentleman leave to bring in his Bill.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at Commencement of Public Business):

The House divided: Ayes 190, Noes 127.

Taylor, Mrs Ann (Bolton W)Wainwright, Richard (Colne V)Wise, Mrs Audrey
Thomas, Ron (Bristoll NW)Walker, Harold (Doncaster)Woodall, Alec
Thorne, Stan (Preston South)Watkins, DavidWoof, Robert
Thorpe, Rt Hon Jeremy (N Devon)Weitzman, DavidWrigglesworth, Ian
Tilley, JohnWhite, Frank R. (Bury)
Tinn, JamesWhite, James (Pollok)TELLERS FOR THE AYES:
Tomlinson, JohnWhitlock, WilliamDr. M. S. Miller and
Torney, TomWigley, DafyddMr. Tom Litterick.
Wainwrignt, Edwin (Dearne V)Wilson, Gordon (Dundee E)
NOES
Adley, RobertHiggins, Terence L.Neubert, Michael
Amery, Rt Hon JulianHolland, PhilipNewton, Tony
Arnold, TomHowe, Rt Hon Sir GeoffreyNott, John
Atkins, Rt Hon H. (Spelthorne)Howell, David (Guildford)Page, Rt Hon R. Graham (Crosby)
Atkinson, David (B'mouth, East)Hunt, David (Wirral)Page, Richard (Workington)
Bennett, Dr Reginald (Fareham)Hunt, John (Ravensbourne)Paisley, Rev Ian
Benyon, W.Hutchison, Michael ClarkParkinson, Cecil
Berry, Hon AnthonyIrving, Charles (Cheltenham)Percival, Ian
Biogs-Davison, JohnJames, DavidPowell, Rt Hon J. Enoch
Blaker, PeterJenkin, Rt Hon P. (Wanst'd&W'df'd)Price, David (Eastleigh)
Boscawen, Hon RobertJohnson Smith, G. (E Grinstead)Rathbone, Tim
Boyson, Dr Rhodes (Brent)Jopling, MichaelRees, Peter (Dover & Deal)
Bradford, Rev RobertJoseph, Rt Hon Sir KeithRenton, Rt Hon Sir D. (Hunts)
Brooke, Hon PeterLamont, NormanRenton, Tim (Mid-Sussex)
Brotherton, MichaelLangford-Holt, Sir JohnRhodes James, R.
Buck, AntonyLawrence, IvanRidsdale, Julian
Budgen, NickLawson, NigelRifkind, Malcolm
Bulmer, EsmondLester, Jim (Beeston)Roberts, Michael (Cardiff NW)
Chalker, Mrs LyndaLewis, Kenneth (Rutland)Roberts, Wyn (Conway)
Clark, William (Croydon S)Luce, RichardRost, Peter (SE Derbyshire)
Clegg, WalterMcAdden, Sir StephenSainsbury, Tim
Cope, JohnMcCrindle, RobertSt. John-Stevas, Norman
Cormack, PatrickMcCusker, H.Shepherd, Colin
Crouch, DavidMacGregor, JohnSilvester, Fred
Davies, Rt Hon J. (Knutsford)MacKay. Andrew (Stechford)Sims, Roger
Dean, Paul (N Somerset)Madel, DavidSmith, Dudley (Warwick)
Douglas-Hamilton, Lord JamesMates, MichaelSmith, Timothy John (Ashfield)
Drayson, BurnabyMather, CarolStanbrook, Ivor
Durant, TonyMaude, AngusStanley, John
Elliott, Sir WilliamMeyer, Sir AnthonyStewart, Ian (Hitchin)
Fairbairn, NicholasMiller, Hal (Bromsgrove)Stradling Thomas, J.
Fairgrieve, RussellMiscampbell, NormanTemple-Morris, Peter
Fowler, Norman (Sutton C'fd)Mitchell, David (Basingstoke)Wakeham, John
Glyn, Dr AlanMolyneaux, JamesWalters, Dennis
Goodhart, PhilipMonro, HectorWeatherill, Bernard
Goodhew, VictorMontgomery, FergusWhitney, Raymond
Goodlad, AlastairMoore, John (Croydon C)Winterton, Nicholas
Gow, Ian (Eastbourne)More, Jasper (Ludlow)Young, Sir G. (Ealing, Acton)
Gower, Sir Raymond (Barry)Morgan-Giles, Rear-AdmiralYounger, Hon George
Gray, HamishMorris, Michael (Northampton S)
Grist, IanMorrison, Hon Peter (Chester)TELLERS FOR THE NOES:
Hamilton, Archibaid (Epsom & Ewell)Mudd, DavidMr. Nicholas Ridley and
Hamilton, Michael (Salisbury)Neave, AireyMr. Ray Mawby.
Hannam, JohnNelson, Anthony

Question accordingly agreed to.

Bill ordered to be brought in by Mr. Doug Hoyle, Dr. M. S. Miller, Mr. Norman Buchan, Mr. Jack Dunnett, Mr. Robert Kilroy-Silk, Mr. Edwin Wainwright, Mr. George Rodgers, Miss Joan Maynard, Mr. Harry Cowans, Mr. Frank Allaun, Mrs. Audrey Wise, Mr Bruce Grocott and Mr. William Molloy.

Companies (Regulation Of Political Funds)

Mr. Doug Hoyle accordingly presented a Bill to regulate the application of funds for political purposes and any other related purposes by companies incorporated under the Companies Act 1948; And the same was read the First time; and ordered to be read a Second time upon Friday 14th July and to be printed. [Bill 150.]

Northern Ireland (Companies)

4.3 p.m.

I beg to move,

That the draft Companies (Northern Ireland) Order 1978, which was laid before this House on 6th June, be approved.
The order will, if approved, remove most of the differences which exist at present between company law in Northern Ireland and in England and Wales. I should acid that I intend no disrespect to the Principality if I omit it from future references in my speech. These differences have arisen for various reasons. Some have arisen through a deliberate decision that it should be so. Others—the majority—exist simply because of changes in English law which have taken place since the most recent substantive Northern Ireland enactment, the Companies (Northern Ireland) Act 1960.

There is, of course, no constitutional reason why differences should not continue to exist if these are considered to be in the best interests of Northern Ireland and—a reservation which is becoming increasingly important—they meet EEC requirements in this field. We have therefore approached the question of change with an open mind, and there has been extensive public consultation on the proposals prior to the draft being laid.

It is important to emphasise, nevertheless, the strong practical arguments in favour of uniformity in this field—arguments which do not depend on whether we are in a devolved or a direct-rule situation. Northern Ireland companies operate within the same economic and financial system as do companies in the rest of the United Kingdom, as do their shareholders and creditors. There are no commercial barriers, and it would seem good sense to have the same regulatory system for companies in Northern Ireland and Great Britain unless there are special circumstances clearly justifying separate arrangements.

It is significant that this is how the Murray Committee on company law, appointed by the Stormont Government in 1969 but not reporting until 1974, saw the situation. The Committee recommended a general policy of parity with English law, subject to certain reservations in the majority report to which I shall refer. Although much water has passed under the bridge since the Committee completed its work. I do not think it out of place today to pay tribute to Mr. Justice Murray and his colleagues for the work which they undertook. They can take some satisfaction that their report was influential in the decision to bring forward this legislation.

I am conscious that much of the order is of a technical nature, and I doubt that hon. Members would thank me for dwelling at length on all the changes it makes in Northern Ireland law. It may be helpful, however, if I refer, first, to certain minor differences compared with English law which would remain.

For example, in England a liquidator is required to obtain the sanction of the court or of the committee of inspection to the appointment of a solicitor to assist him in the performance of his duties, whereas in Northern Ireland no such approval is necessary. It is proposed to retain this distinction.

A further example is Northern Ireland's more flexible approach to the provision of a remedy in cases of oppression of minorities—and I mean oppression of minorities in shareholders, creditors and so forth. In such cases in Northern Ireland, the burden of proof required to obtain an appropriate remedy is less onerous than it is in England.

I draw particular attention to the provisions for a Northern Ireland insolvency service for company liquidations. The Murray Report referred to the lack of such a service as
"one of the most serious defects now existing in the field of company law in Northern Ireland."
The order will remedy this deficiency by providing for the appointment of an official assignee for company liquidations with duties and obligations broadly similar to those of the official receiver in England. The official assignee will be appointed by the Department of Commerce and will act under its authority, but he will also be an officer of the court.

For the first time, Northern Ireland will have a governmental authority, charged with statutory responsibility for the oversight of the proper conduct of compulsory liquidations in the interests of the creditors and public, who will be available to act if a liquidator is not forthcoming in response to, or in the absence of, the usual commercial incentives. There are some minor differences compared with the English system in the detailed provisions for the new service, which is why I mention it in this part of my speech. but the effect is virtually the same.

As I said earlier, there have been extensive public consultations in Northern Ireland on the proposals in the draft order, and I take this opportunity to thank the organisations, companies, individuals and Members of Parliament who have made their views known to me or to the Department of Commerce during this period.

There is no doubt that there is overwhelming support for most of the provisions of the draft order, but it is also the case that considerable concern has been expressed by, and on behalf of, private limited companies which would be required under the order to make specified information about their accounts available for public inspection. This would include information about the company's balance sheet and profit and loss account, the chairman's remuneration, remuneration of directors and of staff above a specified salary limit, and contributions to charities and political parties. In other words, we should have the position which has obtained in England since 1967.

The Murray Committee was clear that the main disclosure provisions should be adopted in Northern Ireland, but the majority report hesitated about the wisdom of doing this while the Province continued to be disturbed. The representations received by my Department have stressed various aspects of this concern. Information about profitable businesses and the remuneration of individual business men might tempt terrorists into taking action against the companies or individuals concerned. Companies which are struggling financially may become a prey to take-over or to being forced out of business. There would be an unfair trading advantage for businesses—shops, in particular—which were branches of large organisations and did not have to divulge separate accounts. Companies in the Irish Republic might be put at a com- petitive advantage in some cases if the Republic decided to allow more limited disclosures.

I have also received representations which reject such arguments. The Northern Ireland Committee of the Irish Congress of Trades Unions has reminded me of the positive arguments in favour of disclosure which led to our decision to change the law in England, and has questioned whether the situation in Northern Ireland really justifies a continued difference in treatment.

I must tell hon. Members that I share these doubts to a considerable extent. I do not believe that the disclosure provisions would be generally damaging to industry and commerce in Northern Ireland. Indeed, I hope that they would make a positive contribution to the task of building a healthy expanding economy, which is one of the top priorities of my right hon. Friend the Secretary of State.

At this point, I should, perhaps, correct one or two widely held misconceptions. Northern Ireland does not have proportionately more private companies than Great Britain. At the last count, 96·9 per cent. of companies in Northern Ireland were private companies, as compared with 97·5 per cent. in Great Britain. Northern Ireland does not have relatively more small companies. The number of businesses in Northern Ireland with fewer than 50 workers is 93·2 per cent. compared with 93·4 per cent. in Great Britain. The total employment provided in Northern Ireland by companies with less than 50 workers each is about 35 per cent. of total employment, compared with 36 per cent. in Great Britain.

I am nevertheless sensitive to the importance of maintaining the morale and dedication of the business community in Northern Ireland which, with the magnificent co-operation of the working people of Northern Ireland, has kept the wheels of industry and commerce turning at an undiminished rate throughout the years of trouble. There is no doubt that some business men are worried about the possible effects of disclosure in the short term; and, whatever I or others may think about this, it is part of the facts of life in Northern Ireland. It has been decided, therefore, that, while the provisions relating to disclosure have been retained in the draft order, the Department will not seek to implement the requirements for private companies until the disclosure provisions of the fourth EEC directive have to be met, and my information is that this will not be before 1982.

Does the right hon. Gentleman mean that limitation absolutely? By that I mean, supposing that the EEC requirements should not, for whatever reason, come into force at all, surely he is not meaning to say that the Government and a successor Government would regard themselves as bound not to implement these provisions at all.

No. All my consultations with business people in Northern Ireland suggest that they are with the order 100 per cent. Their particular difficulty, as the Murray Committee said, relates to bringing it in while the disturbed situation continues. As I understand it, the EEC directive will not come before 1982. I assume that at that point, whatever happens to the directive, we shall be able to review any new circumstances, including any proposal for changes in the English law which obtain at that time.

I am obliged to the right hon. Gentleman for giving way again. In fact, then, he means that this aspect of the order will not be implemented until the earlier of two events—either the EEC requirement or general agreement that circumstances in Northern Ireland which made its implementation at the moment undesirable had ceased.

That is exactly the situation. I do not intend to bring this forward until the EEC obligations are with us. At that moment, we can review the situation again. That would happen before I bring in these disclosure provisions.

I do not think that the right hon. Gentleman has quite met the point of the right hon. Member for Down, South (Mr. Powell). If the security situation in the Province should improve before 1982 or the date when the directive becomes operable, will the articles in the order which he is not proposing to activate then be activated?

I assume that if I am under continual pressure to activate them—I should have to consider the opinion of the business fraternity in Northern Ireland—that would be a different situation. However, I have listened carefully to what many people have said. I have had consultations. We seem in Northern Ireland to do a lot of consulting. I have listened to them and I believe that this is the way of taking the business fraternity with us. We could not bulldoze through an order like this over their heads. This is one way of bringing them with us.

As the right hon. Gentleman said, one of two things has to happen. If there is a change of view in Northern Ireland, I shall respect it. But if the EEC directive comes along, unfortunately—depending on how one looks at it—we shall be bound by it at that time.

Representations received on other aspects of the draft order have been relatively few but they have been considered by the Department with great care. In some cases it is possible to take care of the point raised without amending the order. To take one example, the Jenkins Committee on company law recommended that, on the registration of notices of satisfaction of a mortgage or charge on company property, these should be signed by both the mortgagee and the mortgagor. This recommendation has not yet been implemented in England and, although it was suggested that it should be, I was reluctant to proceed on this matter in advance. However, the order provides that this recommendation could be implemented by Statutory Instrument without delay if it were decided to follow the Jenkins Committee's recommendations in Great Britain.

I have not been persuaded that any of the points raised during the consultations justified a positive amendment to the draft order as originally published, bearing in mind my starting point that there should be very good grounds for departing from uniformity.

On the other hand, this bringing together and updating of Northern Ireland company law in line with that in the rest of the United Kingdom should be of great assistance to legal practitioners and accountants who at present must grapple with the company law codes presently existing in each jurisdiction. In Northern Ireland terms, the law will be brought within two enactments, the 1960 Act and the present order. This simplification, both internally in Northern Ireland and in relation to English law, will also greatly simplify adaptations to take into account future changes in English and Community law.

I commend the draft order to the House.

4.16 p.m.

I wish at the outset to extend a general welcome to this measure. I want also to express warm appreciation of the tone and spirit of the Minister's speech and of the willingness that he has shown to meet all of us in his consultations over the past few months. This proposal radically to alter company law in Northern Ireland has proven highly contentious and, as the Minister said, has generated considerable debate among those most directly concerned in the Province. In contrast to common experience of such matters of registration, I understand that in the course of consideration of this order a number of submissions were made to the Department, the vast majority of which were unfavourable.

The opponents of the order have not lacked support from one or two people in public life in Northern Ireland, who seem ever ready to jump on the band wagon of public fear and misgiving for their own personal or party purposes. For example, one noble Lord who sits in another place recently declared his intention to kill the order. I do not know to what degree he impressed or reassured those in the business community in Northern Ireland who are genuinely perturbed by some of these provisions, but his promises—one might regard them perhaps as threats—do not appear to have been backed by positive action. His success has been measured in a few column inches in the local Press.

It is the duty of responsible leaders of opinion in the Province to articulate the fears and anxieties of those they represent, but our duty extends beyond that. The willingness which some display simply to pander to fear is not responsibility and is a poor substitute for real leadership.

In determining our attitude to this proposal, we have had regard to opinion in Northern Ireland and have engaged in lengthy consultations with representatives of the business community there. In addition, we have been guided by our repeatedly declared attitude to the legislation which seeks to bring Northern Ireland into line with Great Britain.

In our submission to the Minister on 7th April, we said:
"As a matter of general principle we have sought parity between Northern Ireland and the rest of the United Kingdom; and would be prepared to depart from that position only when, in particular instances, regional differences or other such considerations render parity unrealistic or unsuitable."
In this respect, I have been greatly interested in the view of the Murray Committee. Paragraph 13 of its report said:
"The law here (that is, in Northern Ireland) should not differ from the law in Great Britain unless there is good ground or reason for making or leaving it different. To put the matter another way, we feel that the onus of proof should he on the person who asserts that the law here on any given point should be different from the law in Great Britain and, by the same reasoning, that the existing differences in our law should be examined with a view to seeing whether there is a case for retaining those differences."
Thus, the view of the Murray Committee concurs with mine and that of my colleagues. Whether on the question of company law or any other, the onus should be on those who seek to retain differences in Northern Ireland to prove that those differences are justified.

I am bound to say that none of the arguments we have heard from those opposed to the harmonisation of our company law has persuaded us to depart from the principle of parity. I do not propose to rehearse all the arguments advanced to us, but for the record I would mention only two.

We were rather surprised to hear the view expressed in some quarters that one effect of the order would be to place Northern Ireland businesses at an unfair disadvantage and to heighten competition with businesses in the Irish Republic. The Minister touched on this and mentioned that the point had been made to him. I wonder whether he might want to comment further when he winds up the debate and to give us his view as to the validity of that argument. Certainly my view would be that anything which encourages competition and thus greater effort and efficiency is to be welcomed.

The second argument put to us was that the structure of business in Northern Ireland is different from that in Great Britain and that businesses in the Province are smaller and accordingly more vulnerable to take-over and to commercial damage should their affairs become widely known. The Minister confirmed that the structure of business in the Province does not differ greatly from the structure of business in Great Britain. I mention these two arguments at this stage because they have been widely canvassed during the public debate on these proposals, and it is clearly desirable that people should know what weight those arguments carry. We are grateful to the Minister for the information he has given on those two matters and I hope that he will feel that he can elaborate still further in his winding-up speech.

The real opposition to the order has very little to do with competition and the structure of business and everything to do with the proposed provisions for the disclosure of reports and accounts. As we heard from the right hon. Gentleman, this was an area of concern to the members of the Murray Committee. Then, as now, the fear was expressed that public disclosure of accounts would make various businesses instant terrorist targets and place directors and others at great personal risk. So, while endorsing the parity principle, the Murray Committee urged the Government to postpone the implementation of the disclosure provisions until more settled conditions were restored to the Province. The CBI and others have taken the view that the Murray Committee's recommendation holds good in view of the continuing upheaval and unrest.

In our submission to the Minister we said:
"Knowing as we do the genuine fears which exist amongst the business community in Northern Ireland, we have considered sympathetically the objections raised to the proposal on the grounds of security."
We went on to say:
"Whether or not the fear has substance, the Government will clearly want to have regard to the fact that fear exists, and do all in its power to give reassurance where it is needed. To that end the Government might consider postponing the implementation of those sections of the draft order which provide for the publication of reports and accounts. Certainly if this could be done without prejudice to the purpose and intent of the overall proposal, the Government would have gone some considerable way towards meeting criticisms which have been made."
In drafting that submission we could not have hoped for a better response than that given by the right hon. Gentleman this afternoon. Those who lobbied and counselled the Government on this matter will undoubtedly be reassured by the announcement he made. These are matters on which many of the right hon. Gentleman's colleagues are known to hold strong views. It must be acknowledged that he has shown great willingness to be both accommodating and sympathetic in this matter.

I am sure I echo the sentiments of all concerned in expressing the hope that the delay announced may prove to be of a temporary nature, and that events in Northern Ireland may soon contribute to much greater confidence and permit the early implementation of the provisions of the order. If we have to wait for that condition, I hope that we shall not have to wait until 1982. When we come to that year I hope that meddlesome EEC directives will be a thing of the past and, for that matter, the EEC itself.

The Murray Committee spoke of the close trading and commercial links between Northern Ireland and the rest of the United Kingdom, and rightly saw the parity principle as being consistent with the economic realities of life in the 1970s and beyond, which brings me to my final point. Apart from those I have already listed, the opponents of this proposal employed one other, seemingly convincing, argument. A new companies Bill for Great Britain is expected to be published before the end of the year, and it was suggested that the proposed changes in Northern Ireland company law would soon be superfluous and in need of updating.

It will come as no surprise to hon. Members that my colleagues and I found the alternative argument much more attractive. If one uniform law is established, the task of amending and updating the law in future will be that much more simple and straightforward. That is to say, we support these proposals with the resultant harmonisation of the law in Great Britain, and we assume that in seeking to amend the law in future the Government will be able to introduce United Kingdom legislation, thus removing the need for separate legislation for Northern Ireland.

4.27 p.m.

It is with some hesitation that I enter into discussion on a subject concerning the Province. I accept the case made by the hon. Member for Antrim, South (Mr. Molyneaux) that the Province should have the same laws as England unless there is good reason for it not to. The order will end the equivalent in Northern Ireland of the old exempt private limited company which existed in the United Kingdom until 1967 and was, I believe mistakenly, abolished in that year.

The Minister said in introducing the order that it was his intention not to implement the disclosure requirements until the EEC fourth directive required it, and he mentioned 1982 as being his approximate idea of when that might be. The fourth directive, as I understand it, will provide the opportunity for the Government to make throughout the United Kingdom similar exemptions for small private family businesses to those which now exist in Northern Ireland.

Therefore, the Government are asking the House to pass an order which will give power to the Minister to abolish in Northern Ireland a particular status when the whole trend of public opinion throughout the Common Market is moving in the reverse direction towards restoring the status of the exempt private limited company, or the proprietary company which used to exist. That is why the fourth directive makes the provision that there should be the power for the Government of the United Kingdom or any other member country to make these exemptions.

It is interesting that public opinion has moved in such a way as to produce a recognition in this House of the importance of the smaller business and the contribution that it makes. I do not believe, after a re-reading of the Jenkins Report, which led to the abolition of the exempt private company, that any Government in this country would today accept that report as an adequate case for making the changes in the law then made. It certainly does not provide an adequate case for making those changes in Northern Ireland.

The Jenkins Report did not think that there was any substance in the argument that a serious administrative burden would be placed upon exempt companies. I accept that a serious administrative burden is not being placed upon them. But the fact is that businesses in any part of the United Kingdom are today being suffocated by the amount of controls and regulations with which they have to comply. It may be possible to justify any single one of these controls, regulations and requirements, but taken together they are suffocating enterprise and initiative. I have to tell the Minister, who has a special interest in seeing a strong and vigorous economy in Northern Ireland, that this move is placing one more unnecessary burden upon companies.

The Jenkins Report referred to the National Association of Trade Protection Societies which agreed that its societies could ask exempt private companies for copies of their accounts when judging their credit-worthiness. It added that it would not only be simpler but much less embarrassing if they could see the accounts of such companies filed at Companies House. The concept that, to give a convenience to a private company that deals in credit rating, is an adequate reason for requiring thousands of companies to file their accounts at Companies House seems to be out of tune, to say the least, with current thinking.

There was considerable comment in the Jenkins Report on the question of the disclosure of credit rating for those who extend credit. I ask the Minister to examine the damage which will be done if he abolishes in Northern Ireland the exemption from disclosure provisions which have been abolished in England. I know, and the Minister knows, that the Government are considering the possibility of bringing back these exemptions. There are thousands of company accounts being filed unnecessarily. No one examines them. There is all of the work involved at Companies House in checking with companies which have to file and seeing that they do so on time. Since the format of accounts has been changed many boards of directors do not understand the accounts, let alone many others who would otherwise be interested in them.

Who looks at such accounts? There are the creditors and those who are thinking of making a take-over bid. I would have thought that the Minister would accept that, particularly in the provinces, in Northern Ireland, Scotland and the West Country, there is a considerable disadvantage in the activities of the takeover bidder, who often comes from a firm in the South of England. When there is a cut-back in trade it is usually the bit in the provinces, in Northern Ireland, or in Scotland that is chopped off for rationalisation or centralisation reasons. I do not believe that there is any advantage in encouraging a take-over bidder to extend his activities into Northern Ireland.

Competitors also examine the accounts which are filed. It is nice for a competitor to be able to know another manufacturer's price. If one company is supplying a local market while its competitor is supplying markets all over England, Scotland, the West Country, Wales and Northern Ireland, it is possible for that competitor to discover the exact profit margin of the other manufacturer. He will then know what he has to do to drive the local man out of business. He cannot be got at in the same way. The larger competitor has lost his local trading activities through all of the other areas in which he trades. This is a serious risk to the one-product company, of which there are many. This risk applies to new businesses, such as those encouraged by the Northern Ireland Development Corporation. For these one-product companies disclosure means that their competitors can work out exactly their profit margin.

In England today the small businesses are at a disadvantage in terms of disclosure requirements as compared with EEC competitors. The Minister admitted that when he said that there was a possible disadvantage involving disclosure in connection with the Irish Republic. There is certainly that disadvantage in connection with the EEC. Now the Minister seeks to extend to Northern Ireland the same disadvantages that we labour under in the rest of the United Kingdom.

There is the additional question whether it is necessary to have disclosure to protect creditors. This is based upon an assumption that those who have limited liability as a benefit must pay a price for it. That is to misunderstand the whole history and purpose of limited liability. This provision was to encourage those not involved in the running of the business to put their savings into it, to invest, knowing that they were at no greater risk than the amount of money they invested.

I would have thought that the Minister would be anxious to encourage investment in Northern Ireland. Yet he is introducing an order the effect of which will be to discourage people from forming limited liability companies and thus to discourage the outside investor. We are told that the intention is to protect the creditor. For whose benefit is credit extended? It is not extended solely for the benefit of the person extending it. It is a two-way arrangement. If people want to give credit they could ask the company for a copy of its audited accounts. It is not necessary to publish those accounts so that all and sundry may look at them.

It is said that it is general practice to look at company accounts before extending credit. I have never heard anything so daft in my life. In 25 years of business experience the only time I ever looked at the accounts of companies in Companies House was when T was thinking of taking someone over. The accounts, when filed, are ten months out of date. They are totally useless as a way of satisfying oneself about the creditworthiness of the company.

In the circumstances, I suggest that for the benefit of Northern Ireland and the whole of the United Kingdom the sooner there is extended to the United Kingdom as a whole the benefit of exempt private company status such as now exists in Northern Ireland, the better. The sooner we implement the fourth directive and allow the smaller family business to operate without disclosure the sooner we shall be making it more attractive to people to start businesses and create jobs.

4.39 p.m.

I say to the hon. Member for Basingstoke (Mr. Mitchell) that so far from his owing any sort of apology to hon. Members representing Northern Ireland constituencies for seeking to intervene in one of these debates, we welcome not only his intervention but that of hon. Members generally representing seats in the other parts of the United Kingdom. There is only one point on which our susceptibilities might be delicate and that is where, by inadvertence, the hon. Member slipped into describing Great Britain as the United Kingdom in contradistinction to Northern Ireland. He did it only once, but we are sensitive on that score.

What I have said to the hon. Member for Basingstoke is implicit in the statements both of the Minister and of my hon. Friend the Member for Antrim, South (Mr. Molyneaux), that unless the contrary is proved, our view is that there should be parity of law between Northern Ireland and the rest of the kingdom. If that is so, then law-making for any part of the United Kingdom must be of concern to the whole of the House and hon. Members in all parts of it ought to have the opportunity, and be encouraged, to participate.

That brings me to the one point which I wish to make. It has come to our knowledge—at least, it has been stated—that the Government contemplate a new companies Bill for Great Britain in the near future. I do not believe that the Minister of State referred to this possibility in his opening speech. Perhaps the imminence of such proposed legislation has been exaggerated, but what we would wish to say to the right hon. Gentleman and to the Government is this. He pointed out that in future, after this order has been approved by the Privy Council, company law in Northern Ireland will consist of only two instruments—the 1960 Northern Ireland Act and this order.

The proposition I want to put to the right hon. Gentleman is that, if and when further legislation is introduced, the principle of parity on which he has based the case for this order ought to be carried to the point of that new legislation being legislation for the United Kingdom; for only so is it possible for hon. Members representing Northern Ireland seats, as for all other hon. Members, to participate in the general discussion upon the principles. The hon. Member for Basingstoke has, indeed, challenged one of the principles this afternoon. In doing that we ought to be in the position of arguing thane principles for the law of the United Kingdom as a whole. Having done so on Second Reading, we should have the opportunity, for those specially concerned, to participate at every stage in the detailed formulation of the legislation.

It is quite true, and the right hon. Gentleman has mentioned this, that there are a few respects in which, even after this order, the law in Northern Ireland will deliberately be different from that in Great Britain. I shall not trouble the House with those respects. They were set out very clearly and carefully in the third appendix of the explanatory memorandum which the Department of Commerce issued simultaneously with the proposals for the draft order. But I do not think that anyone who addressed himself to those differences—I think there are four—could imagine that those differences were such as to make it impracticable, or even inconvenient, for future legislation to cover Northern Ireland at the same time.

Obviously some sort of application clause, as not infrequently happens in respect of other parts of the United Kingdom, would be necessary. But it would certainly not be laborious or clumsy. Therefore, when there is further legislation on this subject, we look forward to that legislation complying with the spirit and the principles enunciated by the right hon. Gentleman in that it will be United Kingdom legislation and all parts of the House will participate in debating and refining it.

4.44 p.m.

I would not wish to see legislation introduced in this House applied automatically to Northern Ireland, because I believe that if that situation should ever arise our hope of seeing a Stormont Parliament being restored would be dashed for ever to the ground. I want all Northern Ireland legislation to be dealt with separately and apart, where possible, from Great Britain legislation in order to make sure that as soon as possible we can have a Stormont Parliament or Assembly re-established so that the representatives of Ulster people can deal properly and in detail—which at present we are not able to do in this House—with legislation which intimately affects their lives.

I listened to the speech of the hon. Member for Basingstoke (Mr. Mitchell), who, in his customary lucid and able way, dealt with the objections to certain parts of this order. I concur in what he said. I do not wish to cover the ground which he has already dealt with. In doing so, I would not be adding anything to the hon. Gentleman's contribution or to the strength of opposition to the disclosure of accounts. However, I want to register my own opposition to part of the draft order and make this appeal to the Minister, even at this late stage, with regard to the disclosure of accounts. Since in due course we are to have a new body of company law in Great Britain, I would have thought that it was wiser to wait until we saw that legislation brought before the House.

Indeed, some years ago—I think it was 1976—the Under-Secretary of State for Industry referred to likely radical changes in company law in Great Britain as a consequence of the United Kingdom being a member of the Common Market. It seems strange that the Government should be introducing a draft order which creates a greater burden for private limited liability companies in Northern Ireland than exists inside the Common Market. I wonder whether it is wise for the Government to continue with this part of the draft order, because what will happen—this certainly applies to Northern Ireland vis-à-vis the Irish Republic—is that an EEC competitor company will be able to look at the costs of the Northern Ireland company and find out what its profit margin is. But at the same time that information will be denied to the Northern Ireland private limited liability company. It is important that we should keep in line with the EEC in this regard, not just from the point of view of conformity with EEC directives but in order to ensure that we do not put onerous burdens on Northern Ireland companies which do not apply to their counterparts inside the Common Market.

In recommending the draft order to the House, the Minister referred to security. Business men in Northern Ireland are aware, as is every citizen in Ulster, that any one of us is a target for the gunman. I am positive that if the terrorists see that some man is extremely wealthy they may contemplate kidnapping him. That makes life more difficult for the business man who contributes to the wealth of the Province and who provides the jobs which are desperately needed. We have 60,000 unemployed people in Northern Ireland. That is certainly nearly 60,000 too many. I ask the Minister not to dismiss lightly the complaints which have been raised by the business community about the security risk which this draft order will bring about.

The business community in Northern Ireland welcomes the greater part of this order. It does not mind the disclosure of accounts. All it asks is that in the first place it should not be required to disclose them at present while terrorism continues and, secondly, that the order should keep in line with company law in the Common Market so that businesses in Northern Ireland are not at a disadvantage compared with their competitors in the Common Market, especially with those in the Irish Republic.

I ask the Minister to think again about this. If he insists on pushing ahead with the order in this form, I hope that he will give a solemn pledge on behalf of the Government that there will be no demand for the disclosure of accounts while the security situation remains as it is.

4.50 p.m.

I apologise for not being here earlier. I had some travel difficulties which prevented my being in my place at the proper time. I am sorry that I missed the Minister's speech. However, I have been given what I hope is a fairly good briefing on what he said by one of my colleagues.

As I look at today's Order Paper, including the business currently before the House, I cannot help reflecting that Ulster, like the remainder of the United Kingdom, is in danger of becoming a grossly over-managed society. We in this House tend to put our fingers into social pies and business pies which we would be far better advised to keep out of, and when we talk about company law, I suppose that it is better to make the point in relation to business.

It is elementary common sense that every burden which we place on business makes business less efficient and less competitive. I am sorry to say that both in Northern Ireland and in this part of the United Kingdom there is far too great a readiness to place unnecessary burdens on business, not just through company law but in many so-called social interests where we never stop to assess the costs to the competitiveness and efficiency of British industry.

Hon. Members on both sides of the House will recognise that company law has a two-pronged duty. First, in terms of public companies, it must protect the interests of the public who invest in public companies and see that their affairs are managed in an honest and straightforward way. However, it is not the job of compny law to decide how a company should be run.

The law's responsibility is considerably less than that in terms of the private company, where it is not a matter of the public at large investing but usually of a small group of people investing in a company with very special executive responsibilities rather than purely an investment interest.

In terms of the public, the duty of the law in respect of the private company is to protect them only in so far as the private company's liability is protected. Those who trade and do business with a private company have a right and an entitlement to know the worth of those with whom they are dealing. That far and no further goes the law in protecting the public interest. In terms of protecting the participants in or members of a private company, the main responsibility of the law is to see that minority interests are not abused.

Having set those two standards, when I look at this order I wonder whether we are not going too far. I agree with the Murray Committee that there is a very strong argument for saying that there should be a broad uniformity of law in this respect throughout the United Kingdom. But I emphasise the adjective "broad". It does not mean strict uniformity. The law should be shaped to protect and develop the interests of the companies and businesses according to the circumstances in which they operate.

Northern Ireland is not a typical economic or business area when compared with the United Kingdom as a whole. The preponderance of private company activity is very much greater proportionately than in the rest of the United Kingdom.

The private company in Ulster operates in a very intimate society. It is almost a fact that anyone whispering in confidence at one end of Northern Ireland will be heard at the far end of Northern Ireland. I am not in favour of facilitating the broadcasting of unnecessary information, but it seems that we might be about to do just that.

Our company structure is very important to the operation of the business world, especially that of the private listed company. If we push too many burdens on it, I suspect that many small businesses will put to one side the structure of the private limited company and seek to carry out their business in other forms, even in other forms of limited liability.

I am sorry that because we are legislating by Order in Council, we have no opportunity to study this subject, assess it and weigh it in the way that we should. Certainly we have no opportunity to move the amendments which I feel to be necessary. I appreciate that the Minister has undertaken that for the immediate future certain provisions will not be put into effect. But some of those provisions should never be put into effect, in my opinion. When shall we, the representatives of Northern Ireland, have an opportunity to see that they are not put into effect? Do we have to wait for another Government who take a different attitude to these matters?

This is the grave disadvantage of legislating by Order in Council because, having made these criticisms, I must concede that there is a lot of good in this order. There is a necessary bringing of our law into line with legislation in Great Britain. There is a necessary measure of consolidation. But that in no way excuses the abuse of certain articles requiring disclosure. Those can be very damaging in terms of the Northern Ireland business climate.

We have this compulsive and compelling requirement of the European Economic Community and, for a change, I have pleasure in noticing that it is less burdensome than the requirements of the United Kingdom law. I think that we could have left the more burdensome aspects of United Kingdom law until such time as it became absolutely necessary to consider them.

As for the publication of accounts and directors' reports, in a small company operating in an intimate society, what benefit are we achieving when we say that private companies have to list and publish the names of all those employees who earn more than £10,000? There was a time, when this country was well governed, when £10,000 was worth a great deal. But £10,000 is no great sum today. If any level of income has to be disclosed, in my view £10,000 is much too low. If we are not careful, we shall be asking miners at the pit face to disclose their incomes in certain circumstances.

I see the logic behind the principle which requires disclosure of this kind. If payments are being made to employees, directors or anyone else in a company that threaten the financial stability of the company or the confidence of the business world in the company, it is a matter for concern. But is this the right approach? If we have to have disclosures on these lines, should not they be dependent on a certain percentage of resources being eaten up by this sort of activity rather than by fixing flat sums?

Why should the law compel any company, public or private, to disclose gifts to charities or even gifts to political parties? Let us remember that companies are entities under the law. They are entitled to have the same rights as the ordinary individual citizen who engages in business, subject to the conditions which are necessary for the safe operation of the companies.

It seems to me that we are seeking to embark on action in this respect that is not in the interests of the proper operation of companies but is being embarked upon for purely political purposes. I believe that any legal entity, be it a corporation or company, in the United Kingdom, within reason, subject to the agreement of its board, has a right to make whatever gifts it feels like making. It may be argued that these provisions have already been applied in Great Britain without any great kick-back. Whether or not there has been any difficulty in Great Britain, I know with some certainty that this legislation will have damaging consequences in Northern Ireland.

It was said a little earlier in the debate that difficulty could arise in Northern Ireland if the law becomes unreasonable and unnecessarily burdensome, because companies will be tempted to operate from a foreign neighbouring city in the Irish Republic. That is a factor which needs to be weighed carefully in the interests of business in Northern Ireland.

I have one or two technical points to make in regard to Article 107. If the Department of Commerce has "good reason" it can give directions that a company should do this, that or the other. That is a most bureaucratic power to give. What does "good reason" mean? What right of appeal has the company if it disagrees with the Department's assessment of what is good reason? Should not a company have a right of appeal to somewhere or other?

Certainly that argument is true of Article 108 if it is not true of Article 107. Article 108 gives almost an arbitrary power to officials to enter company property and carry out searches. Those officials have only to go through the formality of appearing before a justice of the peace to obtain the issue of a warrant. With all respect to justices of the peace, I submit that they are not a competent body to assess the issues involved in such a search. I should feel much happier if the Department's officials and inspectors were required to appear before a much more competent court to justify the serious activity of searching business premises.

I shall not weary the House unduly with technical points, but there are many such points, regarding provisions which we have no opportunity to amend. The Minister may say there was plenty of opportunity for consultation long before the order came to the House. No doubt he will add that he has been ready to receive representations. We appreciate that such a process ameliorates the position, but it is no substitute for the fruitfulness of parliamentary debate and for the consultation and research which such debate makes necessary. One may try as hard as one can to carry out these matters through the process of consultation, but one finds it inadequate. As a Member of Parliament, I should not have to negotiate or consult behind the backs of my electorate. If I have something to say to the Government, this is the place for me to say it, and the people I represent should know what I am saying.

I concluded by saying that there is much good in this order, but once again it illustrates many of the deficiencies and shortcomings of direct rule, and through it, harm will be done to the business community in Northern Ireland.

5.4 p.m.

I wish to declare an interest. I happen to be an honorary director of a limited liability company. I do not receive anything for being in that capacity, apart from a lot of headaches and heartaches. I wish to contribute only briefly to this debate because I believe it would be wrong for this subject to be debated without my underlining the fears which have been expressed in this debate.

We are caught up in the iniquitous system of ruling part of the United Kingdom by Orders in Council. Other matters are due to come before the House today and the longer we debate any particular order, the more we cut time from the discussion of other orders. Therefore, we are today at a double disadvantage. First, there is a limitation as to time, and we also know that if we take more time dealing with one order, that will be taken from the amount of time available on a matter which is of concern to everybody in Northern Ireland which will arise later today.

Order. I think that the hon. Gentleman has made a mistake. There is no question of cutting time from one order as opposed to another. This order can run until 11.30 p.m. It is up to hon. Members to adjust their timing accordingly. After that, according to the Standing Orders, each order is allowed one-and-a-half hours of debate.

On a point of order, Mr. Deputy Speaker. With geat respect, what you have just said to the House is correct, but what you have said of this order applies also to orders that will follow it. Therefore, it is possible for a subsequent order entered upon before 10 o'clock to occupy more than one-and-a-half-hours. In referring to that fact, surely the hon. Member for Antrim, North (Rev. Ian Paisley) was correct in saying, although it does not arise directly from the Standing Orders of the House, that extension of debate on this order may, and probably would, curtail debate on one of the subsequent orders.

I am obliged to the right hon. Gentleman, but the question of the allocation of time allowed for the first order is entirely for hon. Members. If they wish to spend the whole of their time dealing with the first order, that is up to them. However, we are not seeking to curtail discussion of the other orders.

I was aware of the point you made originally, Mr. Deputy Speaker. The point I was trying to make was that the matrimonial causes order, which comes up for discussion later, runs deep into the heart of the whole community in Northern Ireland. If that order had been called first today, we could have debated it until 11.30 p.m. These other orders would have taken one-and-a-half hours each. The point I was making was that the longer we spend discussing the order that is now before the House, the more we shall curtail discussion time on subsequent orders. If those orders are discussed after 11.30 p.m., we shall have one-and-a-half hours on each.

I wish to emphasise to the Minister that there are areas in Northern Ireland in relation to which one cannot make the law uniform with the rest of the United Kingdom. Scotland is part of the United Kingdom, and we have heard strong arguments by Labour Members that Scotland must remain part of the United Kingdom, but Scotland contains different laws from those that apply to the rest of the United Kingdom. Furthermore, I understand that different laws apply to Wales, although England and Wales are usually taken together.

I believe that in some matters we should have combined legislation which makes it easier for the House to deal with subjects relevant to the whole of the United Kingdom, but even in such Bills, special provisions are often made for different parts of the United Kingdom. We should not say that just because the rest of the United Kingdom has a law, Northern Ireland must also have it. The law in Northern Ireland might be better and it might be that the rest of the United Kingdom would be wise to conform to the law in Northern Ireland rather than vice versa. For example, we in Northern Ireland are streets ahead of the rest of the United Kingdom in regard to our ombudsman because he can receive complaints from local authorities, which is not possible in the rest of the United Kingdom. Perhaps the rest of the United Kingdom should look at Northern Ireland not through the usual jaundiced eyes, but to see which provisions in Northern Ireland would be good for the rest of the United Kingdom.

This is a lengthy order. It includes 153 articles and seven fairly long schedules. It merits a real parliamentary debate including First and Second Readings and a Committee stage. I agree with the right hon. Member for Belfast, East (Mr. Craig) that the best way of considering such legislation is not by consultation before orders are laid. We are happy that the Minister takes time to consult and we appreciate some of the amendments that he has been able to concede to interested parties as a result of that consultation, but it is no substitute for proper parliamentary debate and the proper bringing of legislation before the House.

I suppose that we are fortunate that we are having these debates on a Tuesday. Usually, they are held on a Friday. I do not know whether it was feared that the cafeterias might run short of fish this Friday, but the fact that we are debating the orders today is a crumb of comfort to us. More and more undigested legislation affecting Northern Ireland is being pushed through the House and the time has come for us to underline this fact. Perhaps continual dripping may eventually wear away the flinty hearts of those who bring the legislation before the House.

I must make allowance for the fact that, I am told, this is the only way in which, under the law, Ministers can bring forward such proposals. I am not so sure about that, but that is what I am told when I correspond with Ministers.

I must make clear that companies in Northern Ireland have nothing to hide. I do not want it to go out from this House that companies in Northern Ireland are afraid of legislation. However, the Province is passing through a difficult time and I am glad that the Minister has told us that he will not activate certain matters because of the difficulties that he appreciates.

However, an outside body—the Common Market—can tell us how these businesses should be run, and if it intervenes, the Minister must abide by what the Common Market says. I do not think that we should necessarily abide by what it says, but that is a matter for another debate.

We have an interesting proposition before the House. The Government have to admit that there are certain sensitive matters in the order which the Minister does not want to activate until he has the good will of the business community. I would rather that these matters were not activated at any time.

There are certain fears about this legislation and certain parts of it that we would like to delete, but that is not possible. As other hon. Members have said, there are good things in the order, and this is where Northern Ireland Members have to weigh up whether we should go all the way and divide the House and make our protest in that way or say that the good outweighs what we do not like and we shall therefore allow the order to go through without a Division.

That puts us in a difficult position. There are matters which come before us which are necessary to the community, but they sometimes include provisions with which I entirely disagree. I have to consider whether to make a protest and try to wipe out everything or to say that the good outweighs the bad and therefore I shall give the legislation tacit support. That is not a good way for any representative to have to work.

I line up with those who have pointed out the fears of the business community in Northern Ireland. I do not want companies to go south of the border rather than put themselves under the obligations of this legislation. I do not believe that the Minister wants that to happen. He wants to keep companies operating from their base in the Province. However, there are real fears and legitimate critcisms which the right hon. Gentleman must take on board.

5.16 p.m.

The House will he grateful to the Minister for his careful explanation of the draft order. It is a most important order, running to 137 pages. For Great Britain or for the United Kingdom, such a measure would have involved the normal legislative procedures in each House. Because the order relates to Northern Ireland alone, there has been only a short debate in another place and there will be only a few hours of debate in this House. There has been no possibility of amending the order in either House. This is a procedure to which the House has grown accustomed, but it is a procedure which is wholly unsatisfactory.

The Government in their explanatory memorandum have referred to the debt that is owed to Mr. Justice Murray and the members of his committee which reported on the company law of Northern Ireland in 1973. That report was presented to my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw) four and a half years ago. The committee was set up as long ago as 1969, before the introduction of direct rule, by the then Minister of Commerce, Mr. Roy Bradford. The order therefore represents, in a sense, the partial implementation of recommendations made by a committee set up nine years ago.

The order is of constitutional and economic importance. It is of constitutional importance because it brings the company law of Northern Ireland into virtual parity with that of Great Britain. It is of economic importance because we believe that, on balance, the provisions of the order will lead to a more efficient company structure in Northern Ireland. Therefore we support the principles lying behind the order.

We agree with the preamble in the Murray Report which said:
"in the whole field of company law the uniformity principle is a sound one and that, as a general rule of policy, the law here on any particular topic should not differ from the law in Great Britain unless there is good ground or reason for making or leaving it different."
On the question of the privacy privilege as it relates to private companies in the Province, the Murray Committee said:
"While we are recommending a change in the law we are quite satisfied that in view of the emergency conditions now prevailing in this province and their effect on trading in certain areas, it would be most undesirable to introduce that change until more settled conditions have returned, and we so recommend."
The Government have followed the advice of the Murray Committee, advice given nearly four years ago. Of course, the security situation in Northern Ireland has improved substantially over the past four years. Nevertheless, as the Minister acknowledged, there are fears in Ulster that the requirement to file accounts and related information and to give details of directors' remuneration and all political and charitable contributions could help indentify industrial targets for a terrorist and could attach to leading business men the risk of kidnap or attack. Those fears may or may not be justified, but they exist. As they exist, and as they are genuinely felt by the key element of the population in Northern Ireland, I am sure that the Minister is right to follow the advice of Mr. Justice Murray.

The whole House is at one in stressing what is in many ways the normality of life in Northern Ireland. One of the most extraordinary features of the past decade is the extent to which the commercial and industrial life of the Province has been able to continue, despite the ordeal through which the people have passed.

Although we stress that there are excellent commercial and industrial prospects for investors in the Province, whether they are from within or without Great Britain and whether they are from within or without Northern Ireland, it is right that we should recognise that there is a case for deferring the introduction of the articles to which the Minister has referred.

When the Minister replies I hope that he will tell the House which articles will be suspended and will confirm that the Government have power under Article 1(1) to bring into operation different articles in the order at different times.

It has been argued that the whole structure of companies in Northern Ireland is very different from that in the rest of the United Kingdom and that separate considerations and separate laws should apply. I find myself in respectful disagreement with those arguments. There are slightly fewer than 10,000 companies on the register in Northern Ireland. Of those companies 67 per cent. have capital of less than £20,000 and 93 per cent. have fewer than 50 employees. It would be easy to find six counties in Great Britain where there was a similar pattern of company size, structure and employment.

The case for a special, separate law in Northern Ireland is no stronger than, for example, the case for a separate law for Devon, Dumfriesshire, Cornwall, Cumberland, Shropshire and Westmorland. Those six counties have a structure of industry and agriculture that is in no way dissimilar from the six counties in Northern Ireland.

It has been argued that the proposed reform of company law in the Province will put Northern Ireland companies at a disadvantage compared with companies in the Republic, but trade between Great Britain and the Republic is substantially greater than trade between Northern Ireland and the Republic. I have never heard it argued seriously that United Kingdom companies are disadvantaged as a result of our company law when compared with companies in the Republic.

I turn to the points raised by my hon. Friend the Member for Basingstoke (Mr. Mitchell) and the right hon. Member for Belfast, East (Mr. Craig). I am bound to say that in welcoming the order it is not necessary to agree that company law in Great Britain is perfect in every respect. I agree with my hon. Friend the Member for Basingstoke and the right hon. Member for Belfast, East when they both argue in favour of less onerous burdens being placed upon companies by Secretaries of State or Ministers of Commerce. I wish to reassure my hon. Friend that I am no friend of an extension of bureaucracy.

We welcome the strengthening of the powers of inspection by the Department of Commerce. However, the right hon. Member for Belfast, East was justified in pointing out that the powers contained in Articles 107 and 108 are precisely those that would normally have been probed most thoroughly in Committee if this measure had taken the form of a Bill. I agree that we would welcome a much clearer explanation—I make no criticism of the Minister—than we have been able to have so far about the circumstances in which the powers envisaged in Article 107 will be used.

Before many months are out the House will have before it further company legislation. That will depend in part upon the implementation of directives from the EEC. I confess that I share the hope of the hon. Member for Antrim, South (Mr. Molyneaux) that the next Companies Bill to come before the House will refer to the United Kingdom as a whole, with only such minimal changes as those for which there is an overwhelming case as regards Northern Ireland.

We welcome the order and we commend it to the House.

5.26 p.m.

First, I put on record how much I appreciate the valuable contributions made by hon. Members to the debate on this important order. Their contributions reflect the interest expressed in Northern Ireland during the consultation process when I received many communications, some of them for the order and some against.

Some of the arguments that have been advanced today against the order are in some respects similar to those that were advanced when the Great Britain Companies Bill 1967 was passing through the House. Some of these fears have not been borne out by events. I have no reason to believe that the position will not be the same in Northern Ireland.

Hon. Members have raised a number of matters on this detailed and complex measure. I shall endeavour to reply to them. However, I am mindful of the pressure on time. I shall endeavour to get on and make progress as I know that the House wants to move on to other important matters.

The problems of the business community and security matters formed the theme running through the debate. The Murray Committee recommended that full disclosure should be introduced only in a more settled situation. I take all the points that have been wrapped around that theme by the hon. Member for Antrim, North (Rev. Ian Paisley) and others. I share their concern.

I am celebrating my fourth anniversary of being a Northern Ireland Minister this week. I have been around and I fully share the anxieties and concern that have been expressed. It is difficult to be certain of getting the correct answers. Do we permit terrorists to dictate our policy or do we take the risk that is envisaged in the order? I have received counter-submissions from responsible sources stating that terrorists do not need balance sheets and profit and loss accounts to know which company to attack, and that full company disclosure should take place immediately. It was interesting that most of the firms and individuals who wrote to me used company paper, setting out all the directors' names and other information.

I was guided by the report of the Murray Committee. I consider that it got it right. It recommended disclosure but suggested a postponement until we are able to judge how the security situation is progressing, or until we are forced to disclose under the fourth EEC directive. I have taken that on board. The recommendation has been generally welcomed by the House and by the business community in Northern Ireland. It is not much good trying to bulldoze a measure of this sort through Parliament if we do not bring along those whom in general we are supposed to be bringing along.

It might have been thought before the order was considered that the percentage of private companies of the total number of companies in Northern Ireland was much greater than in the rest of the United Kingdom, and that the same would apply to the number of small businesses in Northern Ireland and the number that they employ. I was not too surprised to discover that that was not the position.

However, I was surprised how close the figures were for Northern Ireland and Great Britain. I gave the figures in opening. The figures for businesses employing fewer than 50 workers in Northern Ireland are 93·2 per cent. compared with 93·4 per cent. in the rest of Great Britain. The employment totals show that here is another myth that we have probably produced ourselves. It has been suggested that the structure in Northern Ireland is totally different from that in the rest of Great Britain, but it is not.

I find the take-over question very interesting. I should not have thought that small businesses in Northern Ireland would be attractive take-over propositions. I consider that firms in Great Britain are more vulnerable to that kind of thing than firms in Northern Ireland. I know that take-overs occur throughout the United Kingdom. But I should have thought that the Irish Sea would cut off small businesses in Northern Ireland from the danger of take-overs by large firms in Great Britain. I have received counter-arguments in favour of take-overs, such as the better utilisation of assets, the bringing in of new ideas and technology and so on.

During consultations, prior to laying the order, I was told that there would be changes in United Kingdom company law. I should not have moved this order today if another order or Bill were to be published tomorrow which would change the law. I have looked into the possibilities of changes in company law in Great Britain but have found no indications that such changes are likely to take place. If such changes were enacted at any time, this order would place Northern Ireland in an ideal position to make similar changes in its company law without too much difficulty.

I take on board the point made by the right hon. Member for Belfast, East (Mr. Craig) and his hon. Friends about the law in Great Britain. There is no need for me to rehearse the arguments. We could rehearse them on every order with which we are to deal this evening.

There was a point about competition from companies in the Republic of Ireland. My record shows that I have considered this matter very closely: I have been travelling round the world and living out a suitcase to such an extent that my good lady has sent me a twenty-fifth wedding anniversary card to the House of Commons to remind me of it; I sometimes wonder what is happening to me.

I shall look at this matter very closely. We do not want to chase any jobs south of the border. The easy reply would be to say that the position is no different in other EEC countries where there are wide divergences in requirements between neighbouring States, but I agree that our close proximity with the Republic of Ireland justifies more consideration.

We can only guess how full the Republic of Ireland's disclosure provisions will be. I understand that it will be only a matter of time before there will be pressure from the EEC to bring all member States into line with a uniform high standard of disclosure provisions. In my deliberations in Northern Ireland, no one raised or was fearful of that matter.

The order will put Northern Ireland on near parity with the rest of the United Kingdom until the EEC directive comes along. Many people have said that there is a lot of good in the order, especially for minorities, shareholders and the people who work in small firms. There has been trouble in the past because such provisions have not operated in Northern Ireland. I have had to wrestle with many difficulties. I welcome these provisions on behalf of the minorities represented in Northern Ireland. I commend the order to the House.

Before the Minister sits down, will he tell the House which articles in the order will be suspended in accordance with the undertaking that he gave earlier?

I cannot reel them off just like that, but I promise to send the hon. Gentleman a detailed answer.

Question put and agreed to.

Resolved,

That the draft Companies (Northern Ireland) Order 1978, which was laid before this House on 6th June, be approved.

Northern Ireland (Payments For Debt)

5.34 p.m.

I beg to move,

That the draft Payments for Debt (Amendment) (Northern Ireland) Order 1978, which was laid before this House on 11th May, be approved.
To put this short order in its context, I must first remind the House of the size and nature of the overall problem of public debt in Northern Ireland. Since 1975 debts for rent, rates, gas and electricity have grown to £28·2 million from an original figure of £14 million. The rent debt has continued to increase, but debt for electricity and gas has grown even faster. At its current level of almost £16 million, it is now the largest part of the public debt total.

The debt problem has its origins in a variety of circumstances. There was the so-called rents and rates strike of the early 1970s which perhaps helped to produce a certain attitude of mind towards public debt which has persisted; and the security situation, while vastly improved, means that it is not always possible to take physical action, such as disconnection of electricity or gas supplies. It is also a fact that domestic electricity and gas prices are higher in Northern Ireland than they are in Great Britain. It is important to appreciate, however, that this is far from being the full explanation. We have only to recall that public housing rents in Northern Ireland are among the lowest in the United Kingdom and that this has not prevented the rent debt from rising.

Wherever the balance of explanation may lie, the plain fact is that it is not possible to accept a situation in which fuel bills are not being paid and fuel debts are still mounting. I must emphasise that many of the debts are very large indeed in relation to the size of the household and could not have reached this level here in Great Britain as the consumer would have been disconnected long ago. Some households are careless about their consumption, because they are hoping to avoid payment indefinitely. These are the kind of people we have to try to reach. I must emphasise that the security situation makes it difficult in many cases to disconnect those in debt, as would be done here in Great Britain, because disconnection involves possible danger to staff.

Naturally, we must expect the fuel industries themselves to do all they can, within the limits imposed on them, to tackle the problem in the nationally accepted way; but we have had to think very hard about alternative ways of helping the industries. The Government's proposals for dealing with this difficult situation were announced by my right hon. Friend in a statement published on 14th December last.

Before I go on to explain these proposals in detail, I should like to underline the nature of the problem by some examples. One example deals with a street of 34 small houses in Belfast. This first came to my notice when the residents complained that their gas supply had been unduly interrupted while necessary repairs were being carried out to a fault in the mains. A letter with various signatures arrived on my desk. After four years in Northern Ireland, I was satisfied that the gas department was doing everything possible in the circumstances but, because I noticed where the street was, I asked my officials to investigate the debt position. At the last count, of those 34 houses, no fewer than 29 were in debt to the Belfast Corporation to a total of £7,516—an average of £259 each. No fewer than 33 out of the 34 had electricity debts totalling £10,438—an average of £316 per household. The total average fuel debt was £544.

The order is of great importance in Northern Ireland, no matter from which side of the political spectrum one views it. Therefore, is my right hon. Friend prepared to name that street? As a parliamentary representative—I am sure this goes for my parliamentary colleagues—I am not certain or aware of the geographical location of that street. I believe that it would be in the interest of all in Northern Ireland, particularly in the city of Belfast, if my right hon. Friend would name that street.

My hon. Friend has known me quite a long time. I hope that he is not suggesting there is any impropriety on my part in this matter.

These people wrote complaining about not having gas supplies and so on. I do not intend to broadcast the name of that street within the House. It would not be fair, because those people wrote to my Department.

Let us not have any chit-chat about it here. If my hon. Friend cares to ask me about it behind the Chair later, I shall fill him in on the general location of the street.

I am explaining the kind of problem that we have run up against in Northern Ireland. The electricity service has made tremendous efforts recently to encourage the defaulters to pay off their debts by installing coin collecting devices in 14 houses. Three householders have been making use of the budget payments scheme. The gas department has also succeeded in getting some householders into its regular giro payments scheme. These householders co-operating with the fuel undertakings have nothing to fear about further Government measures so long as they continue their voluntary efforts, but it is significant that the residents of this street felt no embarrassment about complaining at the interruption in their gas supply when they were in heavy debt to the gas department.

Further examples will show that it is not only the poor who are in debt and who have to pay. An employed debtor from a respectable South Belfast suburb owed £600 for electricity. Within the last few days he was cut off, and on that same day the bill was paid in full and in cash.

A sales manager in the home sales business owed £850 for gas. He was taken to the enforcement of judgments office and ordered to pay current bills as they arose and £24 a month off the arrears. But the agreement was honoured for only a few months, and the man was taken back to the enforcement of judgments office where it was ordered that a slot meter should be installed, that he should pay £50 a month, and where a charge was put on his property to prevent it from being sold or transferred.

A self-employed business man owed over £600. The Payment of Debts Act was used to attach £320 of the superannuated rights from his former public employment, while the enforcement of judgments office ordered him to pay £35 a month. These examples demonstrate that debt is not confined to the poor and that effective action is being taken against those who will not pay.

The Gas and Electricity Council has advised me that for the last year in England and Wales the outstanding debts were for the Electricity Council £500 million and for the Gas Council £229 million. That is a total of £729 million for England and Wales. Can the Minister tell the House how these combined figures compare with the information he has given us about Northern Ireland?

They simply do not compare. I do not know from where my hon. Friend got his figures—

The figures do not represent debts incurred by people not paying their way. They are not for gas or electricity consumed—

I can assure my hon. Friend that they are not. The only debt that is attributed to people not paying their bills to the CEGB in England is £5 million, and that figure basically covers the entire last quarter's payments. In Northern Ireland the debt to the Electricity Board is £12·5 million, and that does not take account of the last two quarters' payments. If we use the multiplier of 40 in relation to Northern Ireland to provide a comparison with the rest of the United Kingdom, that provides us with a figure for Northern Ireland of £500 million compared with £5 million for the rest of the United Kingdom. There is no comparison just as there is no comparison between local authority rents in Northern Ireland and those in the rest of the United Kingdom. If there was any such comparison we could consider this matter with greater sympathy. I can assure my hon. Friend that the figure for non-payment of gas bills for Great Britain is virtually nil. I think that my hon. Friend is referring to non-payment of hire purchase and other factors.

I can assure my hon. Friend that I have checked how much is owing to the electricity boards in Great Britain. I have been given the figure of £5 million. I am told that that figure includes the last quarter's payments which the boards will get anyway. They tell me that the figure of debt incurred by people not paying for electricity used is minimal.

Let me simply quote from the letter signed by the chairman of the Electricity Council. It says:

"The value of aggregate outstanding debt…for electricity (i.e. consumption read in the year and work done)…was £499 million"
I think that the Minister has an obligation either to explain clearly why the figures era not comparable or to make a comparison that makes sense.

I do not come to a debate such as this without checking the comparisons. Debtors for rent in Northern Ireland number 41,000, and the proportion of debtors to tenants is one in five. For electricity the proportion is one in 10. For gas in the Belfast gas area it is one in four. This is the only explanation I can give by way of comparing Northern Ireland public debt with public debt in Great Britain.

I am talking about unpaid quarterly bills. The figure I gave of f12·5 million for electricity does not include the two last quarters not paid. I can assure my hon. Friend that this is the information I have from the CEGB, from the local councils, from the gas authorities and from other sources.

If I may now come back to the Government's proposals, the key element is that consumers should be given every assistance and encouragement to avoid getting into debt in the first place. The fuel undertakings already operate a variety of schemes to make it easier for consumers to meet their current bills. These include saving stamps, budget payment schemes and prepayment meters and coin operated collecting devices. The undertakings are being encouraged to continue to develop these schemes and to make their existence more widely known to the public.

These measures are also intended to help those who have fallen into arrears with their payments. I am satisfied that the fuel undertakings are fully alive to the difficulties which face many poor families in this situation, but it is essential that arrears owed by consumers should be paid. The starting point in this process is an agreement by the consumer to enter into a voluntary arrangement with his electricity or gas supplier to pay off his debt over a period. Measures such as the coin collecting device and fuel stamps supplement voluntary arrangements by encouraging the saving habit and making it that much easier for the consumer to cope.

Both of these objectives—avoidance of debt and encouragement to catch up with arrears—will be greatly helped by intensified efforts by the fuel undertakings to ensure that individual accounts are not allowed to get out of hand in the first place. The undertakings are being encouraged to allocate more staff to this type of work so that the consumer in debt can expect individual and sympathetic treatment if he makes an attempt to clear his arrears.

Unfortunately, we still have to deal with those consumers who, for whatever reason, will not respond to this sympathetic approach. In this situation our first objective has been to improve the effectiveness of the judical channels through which particular debts may be pursued. The recent proposals for legislation to streamline the operations of the enforcement of judgments office should, if approved, enable judical enforcement of debt to play a fuller role in the recovery of fuel debts for those who are in employment.

For those who are not in employment and cannot be dealt with by the enforcement of judgments office we have the procedure which was first developed to assist in the recovery of rent and rate debts in Northern Ireland under which certain deductions can be made from social security benefits to which individual debtors are entitled—what has become known as the benefit allocation procedure.

As my right hon. Friend emphasised in his statement, the Government have decided, with the greatest reluctance, that the public gas and electricity undertakings should be able to explore this route to debt recovery when—and I stress this—all other procedures have failed. They will be able to apply for the allocation of benefit from 1st October.

My right hon. Friend made it clear that this system will not be used to impose intolerable burdens on the poorer sections of the community. Before a fuel debtor is made subject to benefit allocation, the creditor body must make every effort to recover the debt by any of the conventional methods—including disconnection. There is a rigorous procedure to ensure that this has been done in every case. The amount deducted from benefit is sufficient to cover current consumption and the collection charge of 50p a week plus a contribution towards arrears is calculated according to a formula which sets a limit to the deduction so as to prevent excessive deductions from families in poor circumstances.

Once on benefit allocation any debtor can have his case reviewed by the creditor body with the aim of concluding a voluntary agreement. Failing this, an administrative review by the DHSS can reduce the amount of deductions if there is evidence of hardship, and there is a right of further appeal to a tribunal.

The benefits which may be made subject to allocation are supplementary benefits, unemployment benefit, retirement pension, sickness, invalidity and industrial injury benefits, widow's benefit and, in very exceptional cases, child benefit.

The appeals procedure is designed to minimise undue hardship and appears to have been working reasonably well. Debtors are informed about the procedures at the time they become subject to benefit allocation. We shall also be looking at the way in which the system as a whole—by which I mean such aspects as the formula used for determining deductions for arrears, the procedure for appeals and the scope for using other alternative methods of debt collection—is working when the benefit levels next come up for review in the autumn.

I emphasise these safeguards in view of the understandable anxiety amongst those with a special concern for the problems of the underprivileged that the system should not be used to create additional hardship. It is essential, none the less, that we use every reasonable means open to us to ensure that persons who have been deliberately withholding payments over a long period are pursued.

While I believe that this was a necessary background to the order before the House, the order itself is concerned only with the narrow point that debtors who make it necessary for the fuel undertakings to have recourse to the benefit allocation system should contribute to the costs of operating the system.

My hon. Friend has listed the benefits, or part of the benefits, that someone could lose if in debt with his electricity or gas bill. At the end of that list, he even mentioned child benefit. May I assume from that that the other benefit to which someone is entitled would be taken away and that if that was still not enough, then the child benefit could be taken away? It seems that we are creating a situation in which people will be in really desperate straits. Will my hon. Friend please explain why this is necessary in Northern Ireland, and only in terms of that Province?

I said that it was only in very exceptional circumstances that the child benefit would be affected. I was explaining all the procedures that take place. There is an appeals procedure, and I assure my hon. Friend that it works.

Will my hon. Friend clarify one point? He has mentioned that deductions will be made from social security benefits with a view to recovering the debt. Is this practice carried out at present in the remainder of the United Kingdom?

The problem in the rest of the United Kingdom is not the same as that which we have in Northern Ireland, as I have illustrated by giving figures. We have a different problem. I assure my hon. Friends that I was dealing with a constituency case of mine at 12 o'clock the other night. My constituent had not only had his gas supply turned off but people had broken into his house and taken his meter out of it. That was because he was three weeks late in paying a bill of £27. That is the difference between what can happen in my constituency and what happens in Northern Ireland.