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Commons Chamber

Volume 958: debated on Wednesday 15 November 1978

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House Of Commons

Wednesday 15th November 1978

he House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Message From The Queen

Queen's Speech (Answer To Address)

The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:

I have received with great satisfaction the loyal and dutiful expression of your thanks for the Speech with which I opened the present Session of Parliament.

Private Business

District Council Of Renfrew Order Confirmation

Mr. Secretary Millan presented a Bill to confirm a provisional order under section 7 of the Private Legislation Procedure (Scotland) Act 1936 relating to the district council of Renfrew; and the same was read the First time; and ordered to be considered upon Tuesday next and to be printed. [Bill 11.]

Cunninghame District Council Order Confirmation

Mr. Secretary Millan presented a Bill to confirm a provisional order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Cunninghame district council; and the same was read the First time; and ordered to be considered upon Tuesday next and to be printed. [Bill 9.]

Monklands District Council Order Confirmation

Mr. Secretary Millan presented a Bill to confirm a provisional order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Monk-lands district council; and the same was read the First time; and ordered to be considered upon Tuesday next and to be printed. [Bill 10.]

Oral Answers To Questions

Oral Answers To Questions

Before we turn to Questions, although I acknowledge that right hon. and hon. Members from Scotland are always brief with their questions and with ministerial replies, I wish to remind the House that there are five parties from Scotland. I cannot possibly call them all on every Question but it helps if, instead of debating matters, we have straightforward supplementary questions.

Scotland

Lime

1.

asked the Secretary of State for Scotland if he will give details of lime sales in Scotland for the two years prior to the abolition of the lime subsidy, and in each subsequent year.

Seven hundred and twenty-eight thousand tonnes of subsidised lime were used between October 1974 and September 1975 and 1,098,000 tonnes the following year. A sample field inquiry shows an uptake of about 708,000 tonnes in 1977.

Is the Minister aware that the downturn in sales is taking place in areas that can least afford it, namely areas with high rainfall and marginal land? Is he further aware of the tremendous job loss that has occurred in the lime quarries of Scotland since the subsidy was removed?

The hon. Gentleman should not exaggerate the position. I do not think there has been a tremendous loss of jobs, bearing in mind that the decline in lime use is so limited. How-ever, if the hon. Gentleman has any evidence to show that advice or encouragement will lead to an intelligent use of lime, even if it is not subsidised, I shall be glad to listen to his representations.

How does the refusal to reintroduce the lime subsidy square with the Government's promise to increase home food production, arid does the Minister not accept that a relatively tiny amount of lime subsidy can reap great rewards in increased efficiency and food production in Scotland?

This is what happens when one has too many agricultural experts in one party. I must tell the hon. Gentleman that production is increasing and that there is no evidence of any serious decline in the use of lime. It is well understood by most intelligent farmers that lime is beneficial to their land.

Scottish Tourist Board

2.

asked the Secretary of State for Scotland what annual increases in the rates of pay of the chairman, deputy chairman, and members of the Scottish tourist board have been introduced since April 1976; and what were the expenses claimed by each during the last 12 months for which figures are available.

The salary of the chairman of the Scottish tourist board was increased by £125 and £462 on 1st April 1977 and 1978 respectively to £5,085. Other board members have received one increase of £100 from 1st January 1978 to £1,100. Information about the payment of expenses to board members is not held centrally.

Can the Minister justify the expenditure of £2 million to £3 million in total to enable an amateur body to duplicate work already carried out most effectively by the professionals in the tourist industry in Scotland?

I doubt whether the hon. Gentleman's arithmetic is correct. Those of us who have experience of Scottish affairs appreciate the splendid work carried out by the chairman and the board members of the Scottish tourist board. Judging by the murmurs of assent on the Opposition Benches, I would say that that view is widely shared in the House.

Will the Minister reject the aspersions in the hon. Gentleman's supplementary question? I wish to declare an interest, since I was a member of the Scottish tourist board from 1974 to 1976. The House should take note that last year 30 million tourists in Scotland contributed more than £500 million to the Scottish economy and supported or created more than 116,000 jobs. Therefore, will my right hon. Friend increase the assistance and encouragement to the board and its activities?

I think that we are all conscious of the important part that tourism has to play in the Scottish economy. In company with my colleague my right hon. Friend the Secretary of State, I shall do all that I can to encourage tourism in Scotland and to encourage the Scottish tourist board.

What representations has the Minister received from the chairman of the Scottish tourist board about the disgraceful fact that the board is statutorily forbidden to advertise overseas the tourist attractions of Scotland?

That is not so. The work is done through the British Tourist Authority, which the hon. Gentleman knows perfectly well.

Aberdeen Travel-To-Work Area

3.

asked the Secretary of State for Scotland whether he is aware of the problems being thrown up by the downgrading of the Aberdeen travel-to-work area; and whether he has any plans to have this decision reversed.

I have no evidence that the downgrading of Aberdeen is having a substantial effect on the area, and my right hon. Friend has no plans to reverse the decision.

I very much regret that decision, but I accept the fortunate position in the city of Aberdeen that, owing to oil and to oil-related industries, we have a happier employment position compared to the rest of the country. However, what has that to do with the anomalies being thrown up 50 miles away inland, involving hotels in the foothills of the Grampians losing their tourist board grant because of the downgrading of the Aberdeen travel-to-work area? Will the Minister consider that sort of anomaly?

I am conscious of the effects of downgrading on tourist developments. That is something that has been raised with me on several occasions by the lion. Gentleman and by my hon. Friend the Member for Aberdeen, North (Mr. Hughes). We want to do as much as we can to help the industry. I hope to make an announcement shortly.

Will my right hon. Friend read the survey entitled "The Economic Impact of North Sea Oil on Scotland", which was commissioned by our right hon. Friend the Secretary of State? It pointed to a sharp deterioration in the manufacturing capacity of non-oil related industry in Aberdeen. Further, it stated that the downgrading of Aberdeen from development area to intermediate area status would have a significant effect on the long-term basis of the economy of the Aberdeen area. As the evidence was produced by a survey of great repute and was commissioned by the Secretary of State, will my right hon. Friend discuss these matters with Professor Mackay and with Back Benchers? There is a powerful case for my right hon. Friend to change his mind on this issue.

I am aware of that report. It was, in fact, commissioned by the Opposition, and was presented to my right hon. Friend two months ago. My view is that the report did not take proper account of the substantial assistance which is still available in Aberdeenshire. For example, selective financial assistance is still available under the 1972 Act. My officials held a seminar recently and there were a considerable number of inquiries, which I considered to be most encouraging.

What steps is the Minister taking to monitor the effects on traditional industries, other than oil, of the withdrawal of the status that the area had before? Will he pay more attention to tourism? Is he aware that hotels in tourist areas in my constituency are being refused grants on the ground that they are no longer within the area that was entitled to have assistance in the past?

There is constant monitoring of the situation. The whole reason for regional policy is that one day we may say that it has had a good and substantial effect in an area. It was the judgment of my Government colleagues that it had had that effect in Aberdeen. shire. That is why we reduced it from development area status to intermediate area status. I can only repeat what I said to my hon. Friend the Member for Aber- deen, North a short while ago, that methods are still available for giving substantial assistance to Aberdeenshire.

As for the hon. Gentleman's final question about tourism, I cannot add anything to what I said to the hon. Member for Aberdeenshire, West (Mr. Fairgrieve) a few minutes ago.

Will the Minister acknowledge that the Aberdeen travel-to-work area extends scores of miles inland from Aberdeen to communities and areas where there is little, if any, spin-off from North Sea oil? Will he give an assurance, in addition to the one that he gave my hon. Friend the Member for Aberdeenshire, West (Mr. Fairgrieve), that he is prepared to consider limited industrial developments in these areas and that they will be considered for selective assistance if projects are put to him?

I said that in my response a few minutes ago. The area is still able to receive selective financial assistance under both sections 8 and 7 of the Industry Act 1972. We held a seminar a short while ago so that the position could be explained to those in the Aberdeenshire area. There was a remarkably good response to that meeting.

One-Teacher And Two-Teacher Schools

4.

asked the Secretary of State for Scotland what guidance he has provided to regional councils about the closure of one-teacher and two-teacher schools.

Is it not surprising that a Department which in the past has been reasonably prolific in these matters has given no guidance to regional councils? Is the Minister aware of the intense anger that is felt in certain rural areas of Dumfries and Galloway, where there are considerable threats to these schools? Will he at least give guidance to the regional councils that they should not persist with further closures until structure plans for the regions are available?

I can tell the hon. Gentleman that my right hon. Friend has not received any applications from the regional council involved to close any schools. I understand that the director of education chaired a working party and recommended that the most viable units were three-teacher or four-teacher primary schools. I assure the House that before a school is closed my right hon. Friend takes account of many factors, including the wishes of the parents and social and community reasons for the closure.

Does the Minister accept that not many people agreed with the consultative document that he mentioned? Does he further agree that, in view of the value of the small village school to the rural community, he should give more priority to the improvement of rural schools and so encourage local authorities to keep them open?

I am in a cleft stick. I am not sure whether the hon. Gentleman is advocating Conservative Party policy. I took a great deal of stick from the convenor of the Tayside regional education committee for not closing a village school in that region.

M85 (Friarton Bridge)

5.

asked the Secretary of State for Scotland if he will reconsider his decision not to install lights on the M85 motorway over Friarton bridge.

Is the hon. Gentleman aware that his continued refusal to install lights on this motorway bridge in Perth contrasts markedly with English motorways which have long stretches of carriageway that are lighted—for example, the M1, M3, M4 and M6? Is not this gross discrimination against Scotland? Have we to wait until there is a serious accident on that motorway bridge before the Scottish Office will reconsider its position?

The Friarton bridge is unusual in two ways. First, it is part of a motorway and, therefore, it carries no cyclists and has no pedestrian traffic. It is very different from an all purpose bridge such as the Ballachulish bridge or the Forth road bridge. Secondly, and more importantly, it has no superstructures that could be a hazard in darkness. If the hon. Gentleman talks to officials at the Department of Transport he will find that in England there are stretches of motorways crossing rivers that are not lighted. Therefore the decision is not inconsistent with what is happening in the rest of the United Kingdom.

Glasgow

6.

asked the Secretary of State for Scotland what was the population of the city of Glasgow in the years 1968 to 1978; and how these changes compare in real terms with the level of rate support grant in each of those years.

Comparable information in the form requested is not available, but I shall circulate in the Official Report details of the population of the respective local authority areas before and after local government re-organisation and of rate support grant payable to the city of Glasgow district council from 1975–76 to 1978–79. The former county of city provided a wider range of services than does the present district council.

Is my right hon. Friend aware that the net rate-borne expenditure per head of the population in the city of Glasgow is £59·14, that 25,000 Glasgow citizens leave the city annually, that 43,000 citizens are unemployed, and that the increasing inequity of the burden on the ratepayers is discouraging industry from coming to the city and encouraging its people to leave? Will my right hon. Friend alter the rate support grant to ensure that the wide disparities of rate-borne expenditure between districts are either eliminated or substantially reduced?

I appreciate my hon. Friend's argument. I cannot anticipate my discussion with COSLA on the distribution formula for next year. I advise my hon. Friend to study the figures that will appear in the Official Report. If he does, he will realise that Glasgow has done remarkably well in the current year.

Does the right hon. Gentleman agree that, although we have had considerable sums from the Government, Glasgow could face a bleak future, bearing in mind its intolerable load of debts, a declining population and a district rate five times as high as that in other problem districts? How can we expect industry to be attracted to Glasgow when by moving a few miles it can save rate payments of several thousands of pounds?

The rate support grant formula is rather complicated, but the needs of Glasgow are well recognised. At present there is a declining population factor in the formula. If hon. Members look at the figures, they will see that last year RSG per head for all district councils was about £18·50. The Glasgow figure was about the same. In the current year the overall Scottish figure has gone up to nearly £23 and the Glasgow figure has gone up to £32.

Does my right hon. Friend agree that part of the problem of Glasgow, in addition to the decline in the old industrial jobs, lies in the reorganisation of local government? Areas such as Eastwood, Bearsden, Milngavie and Bishopbriggs, which are really part of Glasgow, have been abstracted from the district. Would it be possible, when the new Assembly is elected, to reorganise this section of local government?

It could be possible for the Assembly to do it. With regard to the other matter that was raised, my answer is that that was done by Opposition Members and I voted against it.

Will the right hon. Gentleman confirm that, relative to the total sums involved, more is spent on each person resident in Glasgow than on each person resident in Edinburgh? In view of the great need for an outer city bypass for the Lothian region, will he consider a slightly larger rate support grant for the Lothian region next time?

I do not think that we can bandy rate support grant figures across the Floor of the House of Commons. I am meeting the Convention of Scottish Local Authorities later this month to discuss this matter and I have very much in mind the particular problems in Glasgow.

I do not dispute my right hon. Friend's point that considerable efforts have been made in the past to help Glasgow, but will he accept that the real criterion here is need? When we look at the problems of Glasgow, such as the falling population, peripheral housing schemes, and so on, is it not a fact that the present financial effort of central and local government is not meeting these needs? Will my right hon. Friend undertake to look as sympathetically as possible at Glasgow's problems in that respect?

Will the right hon. Gentleman also remember that those who have been named as extracting themselves from Glasgow have done so with good reason, which is to get their rate lowered? Does he agree that that exaggerates the situation, as Glasgow is carrying a burden which can no longer be sustained? That is why people get out and are continuing to leave.

I do not know that I would accept that, but Glasgow has special problems. I have tried to recognise them and will continue to recognise them. The usual criticism from other parts of the country is that I am too favourably disposed towards Glasgow. I do not believe that that is so. I believe that Glasgow has problems which are much greater than those anywhere else in Scotland. I have tried to recognise these problems and I hope to recognise them further.

I am getting more and more tired of people saying that Glasgow—[Interruption.] It is not a funny matter, Mr. Speaker. To anyone living in Priesthill, or in part of the Secretary of State's constituency, it is not funny to be told that there are special problems. It is high time that something was done to solve them. The longer we leave them, the heavier the charge will be on the local authority. I agree with my hon. Friend the Member for Glasgow, Spring-burn (Mr. Buchanan) that this problem should be dealt with urgently.

As I have pointed out, we already have something in the RSG formula which is particularly beneficial to Glasgow, and I am looking at further proposals in the context of next year's formula, but that is something I have to discuss with COSLA. It is not a matter that I can decide in discussions only with Glasgow district council or, for that matter, with individual Members in this House. But I am very sympathetic to these problems, which, as I have said, are much worse than those anywhere else in

1. POPULATION OF THE FORMER COUNTY OF THE CITY OF GLASGOW 1968–74 AND OF THE CITY OF GLASGOW DISTRICT COUNCIL 1975–77

Former county of city of Glasgow

City of Glasgow district

Year

Estimated population at 30th June

Year

Estimated population at 30th June

1968945,034(1974905,032)
1969927,9481975880,617
1970907,6721976856,012
1971893,7901977832,097
1972861,898
1973835,622
1974816,265

Note: The figures for 1968 to 1974 relate to the former county of the city of Glasgow which cea ed to exist on 15th May 1975. Figures for 1975 to 1977 relate to the city of Glasgow district which came into existence on 16th May 1975. An estimate of the population in the area of the district at 30th June 1974 is given for reference. Estimates of population at 30th June 1978 are not yet available.

2. RATE SUPPORT GRANT, CITY OF GLASGOW DISTRICT COUNCIL COMPARED WITH GRANT FOR ALL DISTRICT COUNCILS IN SCOTLAND, 1975–76 TO 1978–79

Glasgow district council

All district councils

RSG £ million

RSG per head £

RSG £ million

RSG per head £

1975–7612·15913·4367·60313·10
1976–7715·69617·8289·68717·45
1977–7815·81318·4795·06818·50
1978–7926·88132·30117·65322·95

Teachers

8.

asked the Secretary of State for Scotland what is the current number of registered unemployed qualified teachers in (a)the primary and (b)the secondary school sector.

On 14th September 1978, the latest available date, 1,132 qualified primary teachers and 522 qualified secondary teachers were registered as unemployed in Scotland.

Is the Under-Secretary of State aware that the chairman of the Scottish teachers' salary committee has indicated that it would require only £3 million to eradicate composite classes within the primary sector in the Strathclyde region, where this problem is most acute? In view of the fact that 1,132 primary teachers are unemployed, would it not make sense to divert funds into this particular sector in order to end composite class education?

Will the Under-Secretary of State also bear in mind that Strathclyde region has been accused of rank hypocrisy in saying that there is no part-time education within Strathclyde? That accusation has been made by the teachers in the profession who know the realities.

Scotland. Iwant to help if I possibly can.

Following are the details:

The hon. Lady has asked several questions. I think she is aware that a tripartite working group, consisting of the teachers, the local authority management side and ourselves, is looking seriously at the whole question of composite classes and at circular 819, which judges the standards of pupil-teacher ratio in primary schools. We hope to make a comment on that very soon.

We hear stories about part-time education, particularly in the Strathclyde region. I think that the hon. Lady and most other people will recognise that there are subject shortages. We have unemployed teachers in history, geography and home economics, but the problem is that we arc short of teachers of mathematics, physics and technical education. There are two or three answers to this. We know that there are some unemployed teachers in these shortage subjects in the Grampian area, for example. Is the hon. Lady suggesting that I should direct labour to Strathclyde? Of course, she is not. I have discussed this with Strathclyde and with teachers and trade union leaders.

It is the intention of Strathclyde to have a publicity campaign to indicate particularly to youngsters that there is a future in teaching, especially in the shortage subjects. Any potential student who comes forward for mathematics, physics or technical education will not be barred on the question of numbers. But it is a real problem to persuade youngsters. It is a matter of guidance and careers officers encouraging young people to see their future as teachers of mathematics, physics and technical subjects.

Will the Minister confirm that in the rate support grant formula there was provision for staffing above the basic standards in all the education authorities in Scotland? Will he, therefore, have discussions with those who have refused to staff above the standards, which seems highly regrettable at a time when there are so many teachers unemployed and so many composite classes which are unacceptable to people?

What is coming out in Question Time is the whole matter of the autonomy of local authorities. Local government reorganisation was intended to give some autonomy to local authorities. The hon. Gentleman will recognise that through the efforts of my right hon. Friend we gave money, under the urban aid procedure, for 84 extra teachers for Strathclyde. There is a proposal before my hon. Friend the Minister who deals with urban aid for an extra 77 teachers. We gave money for 500 extra teachers for deprived areas, and money for another 100 teachers, to allow teachers in special education to be seconded for higher qualifications. I echo the point that most local authorities, through their rate support grant, are staffing above their agreed standards. I hope that when the working party's report appears it will indicate some improvement concerning the problem of composite classes in the schools.

What plans does my hon. Friend have for the special retraining of qualified teachers to improve their qualifications in the shortage subjects to which he has referred'?

There is a difficulty in trying to switch an unemployed geography teacher or history teacher into teaching mathematics, physics or technical subjects. There is a very real problem here. We are looking at the whole question of student grants in order that persons who have qualifications which can easily be switched to teaching, especially in shortage subjects, may be enabled to do so. We are reviewing it at the present time and I hope to make a statement about it to the House very shortly.

Doon Valley, Ayrshire

9.

asked the Secretary of State for Scotland if he will undertake an official visit to the Doon valley in South Ayrshire to meet local representatives about the discharge of his policy to support industrial development.

I am satisfied that present policies provide ample support for industrial development in the Doon valley, and I therefore do not consider that a ministerial visit to discuss the matter is required.

Is my right hon. Friend aware that we acknowledge the claims made in correspondence about the Government's efforts concerning the Ayr travel-to-work area but that the urgent need is to replace the hundreds of jobs lost within the Doon valley itself from pit closures? Will he give me a guarantee today that, together with the Department of Industry, he will undertake a review of the assessment procedures which lead to the question of redesignation, so that when there is a redesignation exercise in the future the Doon valley will be included and not excluded from special development area status, bearing in mind that it has male unemployment up to 35 per cent.?

As I think my hon. Friend knows, my right hon. Friend the Minister of State, Department of Industry answered some of these questions on Monday of this week. I can assure my hon. Friend that we constantly monitor the situation. If it is thought right to increase the status of one area against another, we do so. It would be better if sometimes much more publicity were to be given to the already very substantial assistance which can be given to an area such as the Doon valley—20 per cent. in grant for plant and building machinery, selective assistance and assistance of all kinds under the provisions of the Industry Act 1972, which is very substantial. I trust that my hon. Friend will join with me in publicising the very considerable advantages of setting up in that area.

I agree with my right hon. Friend about what has been done, but does he appreciate that this is a changing situation? Is he aware that proposals are being discussed which could mean bad news for Kilmarnock and central Ayrshire and extending as far as the Doon valley, where 1,100 jobs at Massey Ferguson are at stake? May I have the assurance from my right hon. Friend that he, the Secretary of State and the Secretary of State for Industry are taking a close and participating interest in these discussions?

I am conscious of the serious problem at Kilmarnock. Indeed, my right hon. Friend the Secretary of State has made public his special concern about this matter. I know that my right hon. Friend the Member for Kilmarnock (Mr. Ross) has been very active in this matter in meeting the stewards and others who are concerned about it. I assure him that both my right hon. Friend and I will do everything possible to assist the workers in the area.

Barry Buddon (Industrial Proposals)

10.

asked the Secretary of State for Scotland what consultations he has had and is currently undertaking regarding proposed industrial developments at the Barry Buddon site; and if he will make a statement.

My Department has had a number of discussions with ICI which is considering alternative sites in the United Kingdom for future industrial development. Consideration of Barry Buddon is still at an early stage and studies to establish its feasibility are still under way, but I understand that the development being considered by the company would be in general chemicals, possibly including petrochemicals. I have made it clear that any proposal for development would have to go through the normal planning procedures.

Is the Secretary of State aware that the secrecy surrounding the Barry Buddon project has caused a great deal of unnecessary alarm and anxiety locally? Will he guarantee that there will be the maximum possible public disclosure of information in future? If the project goes ahead, will he look at the possibility of supplying central Government funds to ensure that the necessary services and infrastructure are given to this project, and not place the full burden on the local authority?

All those matters would arise if a definite project were put forward, but that has not yet happened. I understand that this is one of a number of sites at which ICI is looking. Obviously, since the normal planning procedures will apply, none of these matters can be dealt with secretly. They must become matters of public discussion, and that will happen in this instance if ICI decides to come to Barry Buddon.

Rather than dissipate his energies considering this application for Barry Buddon, will my right hon. Friend expedite his decision on Moss Morran? It is nearly eight months since final approval for that project was given in principle by my right hon. Friend. Will he now indicate when his final approval can be expected, bearing in mind that the authorities in Fife are becoming a little annoyed at the pussy-footing which is going on in response to the vociferous objections to the scheme?

My hon. Friend has a later Question on Moss Morran. I am anxious to make a decision, and I shall as soon as I am in a position to do so. I think my hon. Friend knows that I cannot anticipate that decision, because, as I understand the technical term, I am acting in a quasi-judicial capacity in these planning matters.

Devolution (Referendum)

11.

asked the Secretary of State for Scotland when the referendum on devolution in Scotland will take place.

When do the Government propose to hold the Assembly elections if there is a "Yes" vote in the referendum?

It would be premature at this stage in advance of the referendum to talk about holding Assembly elections. I think that we should await the pronouncement of the Scottish people, which will undoubtedly be "Yes".

Will the Under-Secretary tell us why the draft order, which has just been published, setting out the eligibility for voting in the referendum does not deal with the vexed problem of dead men's votes and those who have double entitlement to voting, which will have an effect in terms of the 40 per cent. rule which the House passed and included in the Act?

I should have thought the hon. Gentleman would have understood that that was simply because it is not possible to deal precisely with those matters in a referendum order. But they will obviously be dealt with during the debate on the order.

Is it not a little difficult to accept that it is premature to set the date for the Assembly elections before the referendum, bearing in mind all the work that has been done on the Royal high school?

As my hon. Friend knows, I do not have much difficulty in accepting anything about the Scotland Act although I understand that others do. The work which has taken place on the Royal high school is in anticipation of a "Yes" vote, and I am sure that that will be achieved.

What part do the Government intend to play in the referendum campaign? For example, will they issue pamphlets extolling the advantages of voting "Yes", or will they do nothing?

As usual, it will depend upon our great eloquence in convincing the Scottish electorate that the Government's policies are correct.

Bearing in mind the precedent of the EEC referendum, is it the intention that this House—my hon. Friend can pass this question on to my right hon. Friend the Lord President if he is unable to answer it himself—should be in recess for a few days to allow us all to go all out for a "Yes" vote?

My right hon. Friend has lost none of his expertise in asking and answering questions. He is absolutely right. That is a matter for my right hon. Friend the Lord President.

Will the Secretary of State use his good offices to persuade the Prime Minister to go to Scotland during the referendum and campaign for a "Yes" vote in support of his legislation?

We were seeking to use our good offices last week to persuade the Scottish National Party to ensure that the referendum took place at all. I think that the hon. Gentleman, who supported the Government—I pay tribute to him for that—should seek to persuade his colleagues that we ought to have a referendum.

Youth Opportunities Programme (Dundee)

12.

asked the Secretary of State for Scotland if he will make a statement on the local employment consequences of the breakdown of the youth opportunities programme in Dundee.

I understand from the MSC that recruitment of young people to projects under the youth opportunities programme has been adversely affected by the strike of careers officers in Tayside. Nevertheless, about 400 places in such projects have been approved since the programme's inception in April and about 200 young people have been recruited to them. I am naturally concerned at the strike's impact on the recruitment of young people and I hope that an early settlement will be reached.

I am grateful for the interest that the Minister has taken in this matter. But does he realise that 640 young people on Tayside may be deprived of places under the youth opportunities programme because of this industrial dispute? Does he not know that the negotiations between the two sides seem to have broken down and that, as we are approaching the Christmas leaving date, the situation is critical? Will he, as a Minister, use his good offices to intercede and perhaps ask both sides to go to arbitration to have the matter settled as swiftly as possible?

First, I am not sure that the hon. Gentleman has got his figures right about the number of young people who are unemployed and who would take advantage of the scheme.

Secondly, ACAS has been in touch with the situation from the beginning of the dispute. It has maintained contact with the parties. It has already had a meeting with both sides. I do not think that any useful contribution can be made by Ministers making statements at the Dispatch Box. I think that the negotiations are going very properly and have not broken down. I regard the parties as being rather close to each other on this issue.

Does the Minister agree that it was highly disturbing to read in the report of the Manpower Services Commission last week that only one-third of young Scots people who retrain under the TOPS scheme get work in the skills for which they have been trained, as against two-thirds in the South-East? What does the Scottish Office propose to do to ensure that training is given in the proper skills and that jobs are available for those who are trained?

If the hon. Gentleman would care to put down a Question on that matter I shall answer it.

Seals

13.

asked the Secretary of State for Scotland if he will make a statement about his decision to cancel the Orkney seal cull.

I have nothing to add to the public statement that I made on 16th October, which I shall circulate in the Official Report.

Is the Secretary of State aware of the considerable concern in the fishing industry generally—not only in Scotland—about this decision? What discussions is he having with the British fishing industry about any future cull? How much money has so far been spent on killing not one seal?

The hon. Gentleman is not quite right in his last statement. A Question on that matter has already been answered. I have frequent consultations with the fishing industry, as a subsequent answer will make clear. The fishing industry wanted the cull to go ahead. I took the view that the cull was justified, but other views were expressed and I modified the cull. The whole matter is now open to public discussion. We shall have to see how we get on next year.

Is my right hon. Friend aware that millions of people in this country welcomed his statement and were delighted that the Government had retreated on the question of the cull? [Interruption.] Hon. Gentlemen may not like it, but people were delighted with the decision. In fact, the Government gained as a result of their action. No one is against the concept of a cull. However, it should be done in the way that is now being discussed by the Government rather than in the way that it was to be done.

One piece of scientific information that I have learned about seals recently is that, whatever one does about them, one cannot be friends with everyone.

As this enterprise resulted in a gross waste of public funds, has the accounting officer been surcharged?

No, Sir.

Following is the statement:

"I have now reviewed the situation regarding this cull. I reaffirm the Government's long-term policy in this matter. The management plan which I am following was recommended to me by the Seals Advisory Committee which is widely representative and includes members of the Nature Conservancy Council, the Natural Environment Research Council, Universities and other bodies. They have recommended this plan in the light of the substantial increase in the population of grey seals, and it is their view that the present increase is likely to continue. I welcome the statements made by both the NCC and the NERC supporting the management plan.

"The Seals Advisory Committee has been examining the problem of the increasing number of grey seals for some seven years. None of the discussions which I have had over the past week with conservationist interests has produced any evidence to contradict the advice which I have had from the Committee and from my own scientists.

"Research has been undertaken over many years into seal behaviour, diet etc. and there is no doubt that they are consuming considerable quantities of fish which has been put at a value of some £12 million per annum. The simple facts of the matter are that seals eat fish as their main diet, mostly fish suitable for human consumption, and the more seals there are, the greater the damage done to the fish stocks. I am bound, as Secretary of State, to have regard in this situation to the interests of both the consumer and the fishermen whose livelihoods are at stake.

"I am also anxious to ensure that the future of the species is not endangered but there is absolutely no question of that being at issue, as the NCC and the NERC have confirmed.

"The advice I have had from the Seals Advisory Committee is that given the present level of the grey seal population, unless some reduction is made in the number of adults, there would have to be a very considerable increase in the level of pup culling to achieve the necessary reduction in the total stock. This increased pup culling could result in a serious upsetting of the balance of the population.

"There has been considerable attention given to the presence of a Norwegian firm in this operation. I wish to point out that the Norwegian firm is, in the main, being employed for only one part of the operation—the culling of adult seals —and this is solely because there are no local hunters equipped to do this part of the operation. If adult culling is not carried out, the need for pup culling will increase.

"The major part of the pup culling has being planned to be carried out by local hunters. Licences have been issued annually for this purpose since 1962.

"Although I believe that the scientific advice which I have been given is correct, and that the cull as envisaged in the management plan recommended by the Seals Advisory Committee should be carried out, I am conscious of the widespread public concern which exists. I have decided therefore to reduce the size of the cull this year so that everyone will have the opportunity to study the scientific evidence and to submit to me for evaluation other data which they may have available. I must stress that so far such evidence from the objectors has been absent.

"In the light of this situation and notwithstanding what I have said about the need for an adult cull, I have decided to withdraw the Norwegian firm.

"I have also decided to restrict the pup cull. In earlier years, the level of the pup cull has varied between 750 and 2,000 (in 1975). I propose that this year's pup cull in the Orkneys and the Western Isles should be at this latter level. This will mean that the management plan which has been recommended to me will require to be revised.

"I have already given an undertaking to the conservation interests that I will make public all the scientific evidence available, so that anyone who believes that better scientific data exists can submit it to me for evaluation.

"I will also ask the Seals Advisory Committee, and my own scientists, to consider any such evidence and to publish their conclusions in good time before next year's cull. At the end of the day, the policy decision must be mine, but I will consider any relevant views which are put to me."

Fishing Industry

14.

asked the Secretary of State for Scotland what estimate he has made of the future size of the Scottish fishing industry; and if he will make a statement.

Until the level of future fishing opportunities is known it is too early to make an announcement.

Whilst wishing the right hon. Gentleman well in the negotiations that are taking place within the next two months over the common fisheries policy, may I ask whether he is aware that West Germany, for example, is encouraging diversification of its fleet towards species that are not fully exploited? Will he consider this as, perhaps, an interim measure, particularly in view of the recently announced closure of the Liston fleet of Grantown, which I think is symptomatic of the great uncertainty in certain sections of the Scottish fleet?

A good deal of diversion has already taken place from, for example, herring fishing to mackerel fishing. However, I agree with the hon. Gentleman's general proposition that, whatever happens about the CFP, we shall have an industry of a kind that is different from that which we have had in the past, and that means that some unexploited species —blue whiting, for example—will have to play a more important part in our industry.

When the Secretary of State is considering the future of the industry, will he constantly bear in mind that there are certain islands, particularly in Shetland, which arc wholly dependent upon fishing, and that any reduction in the size of their fleets will mean that the population there will have to go down or be evacuated, because there is no alternative employment? Do the Government now have any idea of when they will be able to make a fuller statement on the whole future of the industry?

On the latter point, the next discussions in Brussels will be on 23rd and 24th of this month. I cannot say at present whether any agreement will be reached there or whether, as I rather expect, we shall go over to a further meeting. But we expect to make progress at that next meeting later this month. I think that there is a general willingness now, on the part of everyone in the Community, to try to bring this matter to a satisfactory conclusion.

As regards Shetland and Orkney, of course I have the needs of these communities very much in mind.

Is my right hon. Friend aware that there is considerable satisfaction with the recent statement by himself and his right hon. Friend the Minister of Agriculture, Fisheries and Food that it remains the prime purpose of the Government during the negotiations to maintain a viable fishing fleet for the whole of the United Kingdom and for Scotland in particular? However, will my right hon. Friend realise that time is passing very rapidly and that, although there are difficulties in the discussion document which might give away the hand that we might have to play in negotiations, the time is now long overdue when we should have a discussion document laying down the different options which are open to the fishing fleet so that this matter can be discussed and so that an early decision can be reached once the definitive plans are available?

I think that the problem with the restructuring of the industry is that it assumes a certain conclusion to the CFP negotiations. I think that once we know the outcome of the CFP discussions we shall be in a much better position to decide the future structure of the industry. But I do not think that one should make assumptions about that until we have reached agreement. We have had preliminary discussions, as it were, with the industry about this, but we cannot take matters very much further at present. I do not think that at present a discussion document would contribute a great deal, I am sorry to say.

Does not it show great weakness on the part of those who negotiated our entry into the Common Market that we now hear that Britain's contribution to the EEC is to be doubled in the next year, when Britain contributes no less than 68 per cent. of all the fish in EEC waters? May we please take it that if Britain has to pay more cash to the EEC we shall have some more of our own fish stocks back?

Will the right hon. Gentleman accept that the Government have a responsibility here, bearing in mind that they claimed to renegotiate the Common Market issues in Dublin and that this matter was not resolved? However, bearing in mind that the future of the industry will depend very largely on the discussions later this month, will the right hon. Gentleman give Parliament an assurance that we shall have the opportunity of taking a view on a potential agreement before we are irreversibly committed to it?

The business of the House is not strictly a matter for me. However, the hon. Gentleman will know that the matter of fishing has been debated on many occasions and that there are plenty of opportunities open to the Opposition on this matter, as well as to the Government.

Local Authority Housing

15.

asked the Secretary of State for Scotland what recent discussions he has had with local authorities about their housing plans.

I have had discussions with six housing authorities in the last 6 months and my Department has reported fully to me on meetings which it has had with 48 authorities about their housing plans.

Is my hon. Friend aware that the ruling Scottish National Party group on Falkirk district council proposes to sell off 5 per cent. of that council's housing stock, which amounts to about 1,600 houses, at a time when there are at least 700 families on the waiting list, and that the council has no plans at all to build any council houses during the current year? Bearing in mind that certain SNP councillors who voted for this scheme have expressed an interest in buying a house from the council, will my hon. Friend step in to stop this municipal asset stripping? Will he also ask the Lord Advocate about the legality of SNP councillors voting in this way to feather their own nests?

The Lord Advocate has been listening to what my hon. Friend has been saying. Fortunately, I am not involved in making any judgments on criminal matters. I have to look at all the facts. I have this week received the housing plan from Falkirk which includes this proposition. It will be considered along with any other applications. On the face of it, however, Falkirk has a long waiting list and I should have thought it was unlikely that we would give approval in the way that Falkirk has requested.

As earlier this afternoon Ministers were urging the House to respect the autonomy of local authorities normally, will the hon. Gentleman say why this perfectly sound and excellent principle does not apply to applications by local authorities to be allowed to sell council houses?

If we ever have the misfortune to have another Tory Government, I hope the hon. Gentleman will remember that that would allow Labour local authorities to opt out of any national legislation. He should stop trying to be so slick and to score debating points.

In our whole approach in housing we have genuinely encouraged wider responsibilities for local authorities, but we are not prepared to give unlimited permission for the sale of council houses.

Does the Minister agree, however, that it would be desirable for a much larger number of Scots people, particularly young couples, to own their own homes? Further, does he agree that he should bring pressure to bear on or encourage local authorities not simply to sell council houses but to make more sites and land available to local people to enable them to buy or build their own houses?

That is a different question. The Government's record on that score is excellent. We have taken measures to encourage first-time buyers and young people. We have encouraged local authorities, even Glasgow, to make sites available for private building. In that respect our record is good.

Does the Minister agree that there will be greatly increased pressure on housing lists because of the Government's financial policy of putting mortgages out of the reach of many young couples, following last week's changes? There is now the lowest level of council building for many years. In the face of all their manifesto pledges, is it not true to say that the Government's housing policy is now a dog's breakfast?

No, I do not agree. It is not pleasant to have to admit that the cost of housing for owner-occupiers who have mortgages has risen. I hope that interest rates will not remain at their present high level. Nevertheless, overall our record in encouraging owner-occupation is good. Sometimes it is so good that I get into trouble with my colleagues.

Housing (Homeless Persons) Act

16.

asked the Secretary of State for Scotland if he is satisfied that the Housing (Homeless Persons) Act does not place an unfair burden on local authorities and existing applicants on house waiting lists and if he will make a statement.

I have no evidence that the Act is interfering with the exercise by housing authorities of their general responsibilities.

Is the Minister aware that on both sides of the House there is great sympathy for the homeless? However, is it not the worst of all possible worlds for the Government to help the passage of a Bill and then fail to give guidance or finance to local authorities to help them to implement the Act?

We have given guidance. The evidence of the working of the Act in the past six months is that housing authorities generally are now beginning to use their housing stock to fulfil their requirements under the Act. That will attract grant and probably, ultimately, the cost to local authorities of providing for homeless people might be less.

Local Authority Tenants (Charter)

17.

asked the Secretary of State for Scotland when he expects to announce his proposals for a local authority tenants' charter in Scotland.

24.

asked the Secretary of State for Scotland if the proposed legislation providing for a charter for public sector tenants will cover Scotland.

My right hon. Friend is currently preparing proposals for legislation on a number of matters including a tenants' charter. He will announce details as soon as possible.

Does my hon. Friend accept that there will be a great deal of satisfaction in Scotland with that answer? Does it not confirm beyond all doubt that claims that Scotland is being neglected in relation to a tenants' charter are totally mistaken?

I can confirm that misleading statements in specific terms were issued by Shelter on this matter. I do not want to give the impression that we always have to follow England and Wales. Scottish housing problems are different and we shall come up with our own solutions. But I can give the general assurance that if there are any benefits to be gained to the public sector we shall share in them.

Does the Minister appreciate that Scottish housing problems are often different because they are usually worse? Does he appreciate that what he said earlier about home ownership affects this matter, because what we are trying to do is to end the kind of serfdom which exists in relation to council house tenants?

I always find it difficult to follow the hon. Gentleman, and I say that with great respect. I do not regard council tenants as serfs. I could not afford to admit that, because too many of them vote for me. But there is a serious point here. We are trying to give rights and responsibilties to council tenants. A whole range of subjects will require further discussion and the details will require a lot of examination. But, on the general point, we shall certainly consider what legislation is suitable to deal with the problems in Scotland.

In view of his constituency and ministerial experience, does the Minister agree that one of the major complaints by council tenants is about lengthy delays in the carrying out of repairs, sometimes, although not exclusively, by direct labour departments? Is he considering the possibility of giving a council tenant the right to have a repair carried out privately and charge it to the council if there is a proved, unreasonable delay on the part of the local authority?

I know that that was one of the recommendations in the recent Consumer Council report. I must say that it was one of the woolliest ideas that I have seen for a long while. It would be wrong to give any undertaking in that regard until we have had full and adequate discussions with all the housing authorities. However, the need to improve housing repairs is certainly one of our housing priorities.

Borders District General Hospital

18.

asked the Secretary of State for Scotland if he will make a statement on delays in the planning of the Borders district general hospital.

Because of the complexity of this project, the pre-design cost limit which the Borders health board submitted to my Department in April of this year has taken longer than usual to consider. The right hon. Gentleman will, however, be glad to learn that the board has now received approval.

I am always glad to learn that the board receives such approval in advance of a Question in the House, but a Question of this kind really ought not to be necessary. Will the Minister undertake to look at the procedures within his Department and within the Common Services Agency in order to ensure that these delays do not recur? Can he guarantee that the timetable for the hospital is still on course, and will he recognise that the Borders health board, of which his new hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) was until recently a member, has expressed dissatisfaction about the delay?

The timetable for the project is certainly on course. I imagine that the right hon. Gentleman will acknowledge that there were particular difficulties because of the greenfield site at Huntlyburn and the particular problem of Melrose cricket club. All these peculiar problems related only to this development. But I shall look at what the right hon. Gentleman says, because I share his desire to avoid delays wherever that is possible.

Is my hon. Friend aware that this decision was supposed to take 13 weeks whereas it has taken 32 weeks? Will he ensure that no further unnecessary delay takes place in this vital project?

I have explained the reason for the delays—the problems of Melrose cricket club and of the greenfield site at Huntlyburn—but I assure my hon. Friend, knowing his great interest in this project, that so far as we can be certain no further delays will occur.

Court Proceedings (Blackmail Victims)

37.

asked the Lord Advocate if he is satisfied with the arrangements for anonymity of blackmail victims in any court proceedings.

Prior to the trial the prosecution can take steps to ensure that the address of a blackmail victim is not pub- lished. At the trial the address of a victim would not normally be given in open court if he did not wish it to be disclosed. Where the court indicates to the Press that anonymity is desirable the practice is not to publish the name and address of a witness. I have no reason to suppose that these arrangements have proved inadequate.

I thank my right hon. and learned Friend for that answer and for recognising that the victim has the right to request that his name and address is not published. Will he reconsider the view that he has advanced in correspondence with me that clearly it would be wrong for the Crown Office to advise the victim of that right? Does he agree that it is very much in the Crown Office's interest that the victim should be protected from publicity, as it is fear of publicity which deters many victims from reporting to the police an offence which many people find particularly distasteful?

I certainly agree with the third point which my hon. Friend has made, and I think I agree with the sense of his second point. With regard to the first point, I must assure my hon. Friend that we are not talking about a right. The victim does not have the right of anonymity. However, we—I am speaking for the prosecution here—take all steps that we can to ensure anonymity of a victim or a witness who is in fear when giving evidence in court.

Custody Of Children (Court Orders)

38.

asked the Lord Advocate whether he has had any discussions with the legal representatives of other Governments about reciprocal recognition of court orders regarding the custody of children.

This subject was discussed at a meeting of the Council of Ministers of Justice of the European Communities in Luxembourg, which I attended along with my noble and learned Friend the Lord Chancellor on 9th October 1978. I expressed the views of the United Kingdom on the matter, and laid stress on the necessity, while seeking more effective enforcement of custody orders, to have the interest of the child as the paramount consideration.

Will my right hon. and learned Friend bear in mind the great public concern about the recent case of Mrs. Sarah Campins who was sent to gaol for almost a week, to Cornton Vale prison in my constituency, because the law was unable to guarantee that her children would be returned to her if they went on a holiday abroad with their father? Does he agree that the best way to avoid repetitions of such unfair imprisonment is to get some kind of reciprocal agreement with other countries?

I certainly agree with my hon. Friend that we must have in this case an appropriate agreement with other countries. He suggested a reciprocal agreement. With respect, I think that it must be rather wider than that. But I can tell my hon. Friend that prior to my visit to Luxembourg I received a petition signed by more than 1,000 people and a deputation which, in connection with the Campins case, stressed to me the importance of early action on this matter. I took into account what was said to me when I spoke for the United Kingdom at Luxembourg.

It will perhaps be of interest to the House to know that at the Council of Ministers a decision was reached to instruct a working party of experts to examine whether what was being done by the Council of Europe in this area—which has the objective of a convention which would bind 21 nations in Europe —is likely to resolve the relevant problems in the reasonably near future or whether there ought to be a smaller scale convention binding the nine members of the Community.

Juries

39.

asked the Lord Advocate if it is his practice to screen juries for their opinions and records in cases of a political nature; and if he will make a statement on present procedures.

Persons being cited for jury service in Scotland are not screened for their opinions or past records by me or by anyone else. Objection to particular individuals being selected as jurors can be taken by the prosecution in open court. The defence has the same right. Under present procedure juries are balloted from a list prepared by the clerk of court of persons whose names are drawn from the general jury list of those in the locality qualified and liable to serve as jurors.

Will the Lord Advocate accept my thanks that he has not followed the reprehensible practice which the Attorney-General admitted recently in relation to the secrets trial at the Old Bailey, whereby prospective jurors were screened in advance for their opinions?

I do not think that it would be appropriate for me to comment on what my right hon. and learned Friend does in England. Indeed. I would not accept that the hon. Gentleman has put his practice correctly. However, that is a matter for him and not for me.

Does the right hon. and learned Gentleman accept that one of the essentials of justice is speed, and that in the United States it can take up to two weeks to empanel a jury whereas under the Scottish system it can take only a few minutes which has many advantages which should not lightly be thrown away?

Will my right hon and learned Friend remove the need for further debate on this subject in Scotland by giving a categorical assurance that at least while his party is in power there will be no move towards allowing the political screening of potential jurors?

Quite frankly, in the light of the nature and traditions of the office of Lord Advocate, I can give that assurance probably for any party which would provide a Lord Advocate in this House.

Does the Lord Advocate accept that there is a powerful case for objections to a potential juror by either prosecution or defence being permitted only on cause shown?

I think the hon. Gentleman is suggesting that peremptory challenge should be limited—in other words, that it should be abolished—and that objections should be simply on cause shown. I do not agree that that is a good idea, and I think I am reflecting the hon. Gentleman's own view on this matter.

Well, whether or not I agree with the hon. Gentleman, in my view the present practice of having five peremptory challenges on each side —that is, for the prosecution and for each accused—is highly desirable, and I hope that it will continue.

Northern Ireland (Bomb Incidents)

(by Private Notice) asked the Secretary of State for Northern Ireland whether he will make a statement on the bombing attacks yesterday on Belfast and six other towns, causing serious damage and casualties.

In a series of bomb attacks against commercial premises in Northern Ireland yesterday, a total of six car bombs and nine other devices exploded; eight devices were defused. Car bombs exploded in Omagh, Dungannon, Cookstown, Enniskillen and Newry. In Londonderry and Castlederg incendiary devices caused considerable damage. In Strabane a car bomb was successfully defused by the security forces, while in Belfast a blast incendiary caused some damage. No one was seriously hurt.

I understand that the Provisional IRA has admitted its guilt for these criminal attacks. As its support dwindles, it demonstrates its concern to disrupt the life of the Province. More significantly, it has betrayed its anxiety at the growing evidence of the people's wish and determination to be able to live an ordinary life. Yesterday's bombings have been condemned from all sides in Northern Ireland.

My right hon. Friend and I have never disguised the fact that the terrorists still have the capacity to mount attacks of this kind. Our security policy is flexible and the security forces will maintain their pressure on the terrorists.

The people of Northern Ireland have reacted with courage and steadfastness. There have been calls to the security forces not to be stampeded into re-erect- ing security barriers in town centres. Our policy is soundly based, and the terrorists cannot succeed against the will of the people of Northern Ireland.

I hope that I do not sound complacent if I conclude by saying that the PIRA has a well-organised propaganda machine, as right hon. and hon. Members know from their postbags, and I only trust that the House will not today do half of the propaganda work for the PIRA machine.

We thank the right hon. Gentleman for that very necessary statement, and we express our sympathy with the injured and those who suffered damage. Mercifully, I was mistaken yesterday when, in addressing you, Mr. Speaker, I spoke of loss of life. But is it not clear that, thanks to the vigilance of the security forces, a far worse outbreak in Belfast was avoided, and are they not to be congratulated on that? Although this was a carefully planned attempt to disrupt commercial and social life, will the right hon. Gentleman take it there would be great reluctance to return to security barriers in the towns to which he referred? Is it not plain that these attacks are designed to hinder the efforts of his right hon. Friend the Secretary of State in America to promote Northern Ireland industry and therefore employment for both communities, and will the Minister of State take it that we wish his right hon. Friend every success on his visit?

I thank the hon. Gentleman for those remarks. Certainly, these attacks are not designed to help my right hon. Friend's work in America to attract industry; they are designed, so to speak, to give the Province an image in other countries which it does not deserve. I shall pass on the hon. Gentleman's remarks to my right hon. Friend the Secretary of State. As I said in my original answer, the towns involved are coming out very strongly about the re-erection of barriers, and I am sure that this is the right decision to make, but these matters arc kept under continuing review.

Is the right hon. Gentleman aware of the overwhelming desire in the Province that this temporary setback should not be the reason for any reaction towards negative and defensive attitudes, and that the normalisation which has been taking place is greatly welcomed and supported? Will the right hon. Gentleman give an assurance that this event will bring no delay in the process of Ulsterisation of the security forces? [HON. MEMBERS: "Oh".] Very well. If the House does not like the single word, I shall speak of the entrusting of security duties predominantly to Ulster forces. Will the right hon. Gentleman guarantee that that will go ahead notwithstanding this event?

As I have said, we are convinced that our policy is right and we shall continue with that policy. I take that to be entwined in what the right hon. Gentleman said. I must point out to the House that, despite yesterday's events, the indicators of violence within the Province are continuing on a downward trend. As my right hon. Friend and I have often stressed, the PIRA terrorists are capable of doing these things, but of doing them not weekly or daily as they used to do but in more spread-out fashion.

Is it not possible for a quite small number of terrorists to maintain a campaign of this kind for a very long time? Indeed, is it not likely that they will do so as they become more frustrated in their attempts to force a decision their way, and ought we not therefore to make clear that we listen not to that but to the ballot box?

I trust that the House will send that message out loud and clear—that no one here will be forced to talk to the terrorists through the bomb and the bullet. I am grateful to the hon. Gentleman for what he said.

Will my right hon. Friend say which was PIRA's greatest success—the damage, destruction and casualties in Northern Ireland yesterday or the rushed statement which was shot off yesterday afternoon and today's questioning?

As I said in my original answer, I want to be very careful that we do not do half of the PIRA's job for it today. If I went down the avenue that my hon. Friend is opening, I think that I should be doing that. From experience in the Province, I take the view that although I look at statements and listen to rumours in Northern Ireland, I should take no notice of them until I have heard the third denial.

Does the right hon. Gentleman agree that some satisfaction can be taken from the fact that the police managed to apprehend one load of bombs, no doubt destined to destroy more of Belfast? Can he say whether those bombs and the other bombs used in the attacks had their origin in the Irish Republic? In view of the concern in Northern Ireland that the Provisionals have to restore their morale, can the right hon. Gentleman say whether, in the coming days, other town centres will receive adequate patrolling to ensure that a similar occurrence does not take place?

We shall continue to pursue our policy as we have been doing over these past years. As I say, we are convinced that it is the right policy. We have no evidence whatever of the explosive material coming from south of the border. In fact, all the evidence points of its being home-made—and I think that the hon. Gentleman knows how easy that can be.

Does the right hon. Gentleman agree that although, obviously, there must be no over-reaction to this outrage, it confirms once again the contemptible irresponsibility of the "Troops out" movement and those hon. Members who give it their support?

I repeat that I am very careful on these matters at all times. As Ministers, we are always fighting propaganda battles with the PIRA, or—I should say—fighting the PIRA's propaganda. Many right hon. and hon. Members know from their postbags how well oiled that machine is. In all that I do, I certainly do nothing to add to the work of that machine.

Pay And Prices

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

For the past five weeks, the Lord President of the Council, the Secretaries of State for Employment, Prices and Consumer Protection and Industry and I have been engaged in intensive discussions with the six trade union leaders who represent the TUC on the National Economic Development Council to see whether we could reach a better understanding on how to handle pay negotiations in the current round. We have also seen the CBI regularly during this period and have given it the opportunity to make representations to us.

We finally reached agreement with the six representatives of the TUC last Friday on a statement covering collective bargaining, costs and prices. I shall arrange for the text of the draft statement and associated TUC guidance to negotiators to be circulated with the Official Report. The economic committee of the TUC endorsed the statement yesterday morning. The general council of the TUC, however, found it impossible to take a decision either for or against the statement yesterday afternoon. Nevertheless, I think it may be useful if I describe to the House the nature of the statement and comment on the situation that has developed.

Both sides in our discussions started by agreeing that the fundamental objective of economic policy in the coming year must be to keep the annual rate of inflation from rising above its present level and, indeed, to bring it down further if possible, because otherwise it will not be possible to reduce unemployment, promote growth and improve real living standards.

In their White Paper in July, the Government committed themselves to the view that inflation cannot be kept down unless the level of pay settlements is not above 5 per cent.

The White Paper allows some flexibility around this limit by permitting the use of the so-called "kitty" principle within groups, by allowing self-financing productivity deals and by envisaging exceptional treatment in certain circumstances which are very closely and carefully defined.

In our talks with the TUC, the Government Ministers were exploring ways in which additional flexibility might be achieved or particular problems eased without endangering our control over inflation. We ranged over the role and effectiveness of the Price Commission, the problems of the low paid and comparisons between pay in the public services and the private sector. The progress that we made is recorded in the draft joint statement.

An important disagreement on the methods of achieving our common inflation objective remained at the end of our discussions. The Government were unable to discover a satisfactory substitute for the policy that they set out in the White Paper last July. So we reaffirmed in the draft statement the views that we expressed in that White Paper, including the 5 per cent. limit on settlements and the use of discretionary action where necessary to support it.

On its side, the TUC remained committed to voluntary collective bargaining and expressed the view that, provided that negotiators observed the guidance which is set out in the annex attached to the joint statement, voluntary collective bargaining would result in settlements consistent with keeping inflation at its present level. We made no attempt to paper over that disagreement in our statement.

In our talks with the CBI over the period, it repeated its belief that the clauses now inserted in Government contracts which oblige contractors to observe current pay policy could enable the Government to take action in support of their policy which would have an unreasonably adverse effect on some contractors. The Government will now be discussing the operation of the clauses with the CBI and will consider any proposals to extend the scope of the provisions for arbitration which they contain in the light of the need both for fair treatment for Government contractors and for an effective counter-inflation policy.

Perhaps the most important element in the statement that we agreed with the six representatives of the TUC was our agreement to keep a close watch on progress towards our inflation objective and to consider action which may, from time to time, be appropriate to make sure that we stay on course. I should like to invite the CBI to meet us from time to time on a similar basis, because I believe that we could all learn a lot by regular contact in this way to ensure that we keep the rate of inflation down.

And this would make an important contribution to the success of the wider-ranging annual discussion of the prospect for pay and prices, the first of which is planned for next year.

I do not pretend that our problems would all have been solved if the TUC general council had joined the Government in supporting the statement. They can be solved only in the wide range of individual negotiations and settlements which will take place over the next nine months. Even if the statement had been agreed yesterday, there would still have been very important differences of approach between the Government and the TUC, but I believe that a firm commitment to achieve a common objective and a determination to look honestly at the facts, month by month as the round proceeds, would offer us a significantly better prospect of achieving our common objective of keeping inflation down.

There is no question now of trying to renegotiate the statement which the general council was unable to support. The general secretary of the TUC made this clear yesterday. However, the Government and the TUC have both asserted their belief that there must be each year a thorough discussion between them so that there is a broad understanding on pay and prices for the period ahead. The Government will, in any case, continue their regular contacts with the TUC on the whole range of other questions in which we recognise a common interest.

Meanwhile, the Government, of course, remain committed to their 5 per cent. pay policy, as they would have been also if the TUC had accepted the draft agreement. The policy described in the White Paper remains the best basis for the attack on inflation and we know that this view is shared by the great majority of the British people.

Does the Chancellor understand that there is total agreement throughout the House on the need to lower the rate of inflation and on the need, if that is to be achieved while unemployment is kept down, for continued moderation in the general level of pay settlements? Do not yesterday's events show that the Government's attempts to achieve those objectives by the imposition of a rigid, arbitrary pay limit have proved not only wrong-headed but wholly counter-productive?

I should like to ask the Chancellor some questions about his policy on sanctions in pay bargaining. Does he intend to apply the 5 per cent. limit across the board in respect of settlements at that level, or some other level? Does he intend to apply those sanctions in every case, and, in particular, does he intend, and if so when, to apply them in the case of the Ford negotiations? Does he realise that a commitment to entirely arbitrary action of the sort that he has so far outlined is likely to do far more harm than good?

Can the right hon. Gentleman give us an assurance about the Government's intentions on price controls? Does he realise that any tightening of price controls will destroy profits, discourage investment and destroy jobs?

Can the Chancellor also say something about the outlook for mortgage interest rates? Does he remember, at the time of his Budget Statement last year, congratulating himself on the fact that the average couple would be paying £20 a month less than the year before? Has not that benefit now been entirely swept away, and is that not a direct consequence of the Chancellor's folly in increasing public spending by £4,000 million this year?

Now that the Government have been driven to rely, in what the Chancellor described as
"the wide range of individual negotiations and settlements",
on the good sense and responsibility of average trade unionists, does the right hon. Gentleman not bitterly regret that every piece of industrial legislation passed by the Government in the past four and a half years has served only to diminish the authority of the moderate and responsible trade unionists and to strengthen the hand of the militants?

Does not the failure to reach agreement in yesterday's talks finally show that the myth of the social contract—the very foundation of the Government's claim to have support from the people—has been totally destroyed?

I could answer the right hon. and learned Gentleman by saying "No, Sir", but I shall try to answer the individual points one by one. First, I do not agree that the inability of the general council to agree with the joint statement yesterday has the implications that the right hon. and learned Gentleman suggested. He should recognise that the trade union leaders who represented the TUC in the talks with my right hon. Friends and myself, and who represent half the total membership of the TUC, fully supported the statement which the general council found itself unable to support. Those leaders were joined in the general council by, for example, representatives of the National Union of Mineworkers, the National Union of Railwaymen, and many others.

Secondly, on the question of the 5 per cent. pay policy, I recall that the right hon. and learned Gentleman and his right hon. Friend the Member for Lowestoft (Mr. Prior) have both made clear that they support 5 per cent. as about the average level by which settlements should increase. [Interruption.] The right hon. and learned Gentleman must not mutter in his beard, as he is so used to doing. Some of us are getting rather tired of being pursued by the Sheep of the Baskervilles during questions about a statement of this nature.

The right hon. and learned Gentleman must not deny that he supports 5 per cent. as the average level for settlements this year. His right hon. Friend the Member for Lowestoft has said the same. The question has been to what extent 5 per cent. should be the level for every settlement. The Government have listed —I referred to this matter in my statement—some areas where settlements other than 5 per cent. are permissible—for the low paid, for people who make self-financing productivity deals, and so on—within the existing policy. Some day, perhaps, the right hon. and learned Gentleman will tell us how he proposes to achieve a 5 per cent. level of settlements without giving the sort of guidance that we have given.

As for the question of sanctions against companies that breach the guidelines, the Government will continue to use the discretionary powers that they possess, taking into account factors such as the effect on employment in areas of very heavy unemployment, as was done in the case of the Otis Elevator Company last year.

The Government will, of course, now consider the question of price control on its own merits, in the light of their own view of the situation, but the particular commitments that we were prepared to make in the statement can no longer be considered as necessarily binding in the light of the general council's decision.

The right hon. and learned Gentleman's attempt to pose as the workers' friend does not convince any of us on the Government Benches when we recall the abuse that he has hurled at responsible trade union leaders in every other speech over the past 12 months. We on the Government Benches regard good working relations with the trade union movement as an important element in our policy. The general secretary of the TUC made it clear that the TUC took the same view. On the question of pay policy there has been a disagreement over the past 18 months. It continues, but the Government will do their duty honestly and courageously by the nation as a whole.

Although there is general disappointment that agreement with the TUC has not been reached, the Government should take heart from the fact that the vast majority of the people of this country, including trade unionists, support the Government's fight against inflation.

I give this message to my right hon. Friend, loud and clear: "Stand firm to what you are doing at the present time. The people of this country will thank you for it in the end."

I am grateful to my hon. Friend. In what he said he was echoing the words of Lord Allen, the chairman of the economic committee of the TUC, and of Mr. Tom Jackson, the chairman of the TUC general council, over the past 24 hours. Lord Allen rightly said that the disappointment that he felt at the general council's decision yesterday was unequalled and unparalleled in his 16 to 17 years' experience on the general council. But he also said—and I agree with hint—that he was convinced that the bulk of the general council, if they have to put their hand on their heart, would be violently opposed to a free-for-all.

I believe that the Government's policy is right. I think that the electors of Berwick proved that. I think that the members of the public who took part in the last Gallup poll and preferred the right hon. Member for Sidcup (Mr. Heath) to the right hon. Member for Finchley (Mrs. Thatcher) by such an overwhelming majority showed the same judgment and insight.

Is the Chancellor of the Exchequer aware that the most pathetic part of a rather pathetic statement was his assurance that the Government of course remained committed to their 5 per cent. policy? Of course? What policy?

Is the right hon. Gentleman also aware that it was always ridiculous to expect the TUC to enforce what this House itself has miserably and abjectly refused to enforce? Will he refuse to accept a suggestion from the Conservative Front Bench spokesman on employment that the TUC, the Government and the CBI should get together in some kind of forum? Does he recognise that this House is the only forum that is needed to do the job, that this House must take the decision, and that the time has come for this House to govern or go?

I always defer to the hon. Gentleman's experience when he refers to the pathetic. On the question of pay policy, I believe that the House would be very unwise to try to take a decision without the most careful consultation with those who are actually involved in pay negotiations, as represented by the TUC and the CBI.

I do not believe—if the hon. Gentleman wants an answer—that his approach to the matter, which is as exceptional in relation to his colleagues as are his views on Northern Ireland compared with those of the hon. Member for Berwick-upon-Tweed (Mr. Beith), who intervened a moment ago, should be taken too seriously by the country.

Is it not a fact that success in holding down inflation does not of itself create jobs, and that, on the contrary, manufacturing output is falling, so that any further deflationary measures would make matters worse? Will the Government concentrate more of their attention on bringing into operation the industrial strategy that they have worked out in detail with the TUC, so that we can expand the economy without sucking in imports?

I agree with my right hon. Friend that success in holding down inflation in itself is not sufficient to raise output and employment. The point that I have been trying to make in recent months is that the reason why this country has succeeded in reducing the rate of inflation by half and simultaneously increasing output and reducing unemployment by 90,000 is that it has added to fiscal and monetary policy a responsible and effective policy for pay. We propose to continue on that route.

As the main burden of the Chancellor's statement was to the effect that the talks did not really matter, so that failure did not matter, will he explain why he went into them? Can he reassure the House that after he has accounted for the Government's economic policy to the TUC in his annual meeting with it he will be good enough also to account to this House?

I think that the right hon. Gentleman and his hon. Friends, and indeed many of my own hon. Friends, would always ensure that if I were ever tempted to conceal from the House the results of my discussions with my trade union friends I should be unable to do so, but I give the House an assurance that the outcome of any discussions that we have on this matter will be reported to the House regularly and at the appropriate time.

With regard to the right hon. Gentleman's first remark, I do not believe that the statement that the economic committee endorsed without a vote and the six leading trade union members of the TUC agreed with the Government is without importance. I think that it was an important agreement, and I regret as much as many members of the TUC do that the general council found it impossible yesterday to take a decision on it.

May I ask my right hon. Friend whether he will reflect a little now on minimum lending rate, and on the question why there was the unnecessary increase? Will he stop trying to make the trade unions a scapegoat for our inability to control the Bank of England, the City and the money market?

If my right hon. Friend took my advice he would not get into trouble as often as he does. Will he put away his blunderbuss and pick up his diplomatic bag, because we must put this jigsaw together again? None of us wants a Thatcher Government. Nobody in the trade union movement wants that.

May I ask my right hon. Friend to do two things? One concerns sanctions. I hope that he will not run around imposing sanctions on everybody. Certainly sanctions should not be imposed on trade unionists who are trying to get a decent bargain. Secondly, may I also ask my right hon. Friend about comparability in the public sector? I know that he made proposals yesterday. What does he propose to do about that?

Order. Before the Chancellor answers, may I say that if every question is as long as that one, many hon. Members will be disappointed, and, indeed, cut out?

I assure my hon. Friend that we share the same objective—to make sure that hon. Members on the Conservative Benches never again have responsibility for the affairs of this country. Of course I agree with him on that. Let me make it clear to him, as I hope I made it clear in my broadcast on Sunday, that the increase in MLR last week had nothing to do with the present pay situation. I know that he disagrees with that. We can discuss it next at Question Time, if lie has a Question down. As to whether I would have less trouble if I associated myself with all my hon. Friends' views, it is possible that I might have less trouble with some people but more with others. I shall have to make a judgment on the balance of advantage in that regard. Finally, I assure my hon. Friend that I have no intention of imposing sanctions on him.

In the Chancellor's many deliberations with various organisations, was any reference made to regional variations in prices, earnings and employment opportunities? Does he accept that, in Scotland, for example, where on any objective analysis, prices are higher, average family incomes are lower and unemployment, despite pay policies, is continuing to rise, there can be little sympathy for a policy that freezes differentials? Does he envisage any positive and early action on these issues, which would do a great deal to win the sympathy of trade unionists in Scotland?

I assure the hon. Lady that I am deeply concerned about the regional variations in the matters that she mentioned and take some comfort from the fact that the policies that the present Government have pursued over the last five years have substantially reduced these regional variations, both in pay and in employment, between Britain and Scotland. In case she had not the opportunity in August to see the detailed facts and figures that I gave to support this view, I should be glad to send her a copy of the speech that I made to the chamber of commerce in Edinburgh at the end of August.

What action will the Government take to ensure that the policy outlined in the White Paper on inflation will succeed? Is my right hon. Friend aware that if a tighter monetary and fiscal policy were introduced, it would surely be a confession of the failure of that policy, which would be deeply disliked on the Government side of the House?

I entirely agree with my hon. Friend that the case for a tighter monetary and fiscal policy will not exist unless there is the sort of wage explosion that we had three years ago and that I described the other day. However, in the case that we had such an outturn, the Government would have to accept their responsibilities to the nation, and I hope that they would have the support of my hon. Friend in accepting those responsibilities.

What consideration has the Chancellor given, in his so-called battle against inflation, to the overriding need to reduce Government expenditure and a borrowing requirement of £8,500 million for the current year? Does he understand that with that borrowing requirement there will he no prospect of success in the battle against inflation?

I think that our success in reducing the rate of inflation by half in the last 12 months, with a PSBR which, as a percentage of GDP, was somewhat higher than that now in prospect, is sufficient proof that the hon. Member's views on this matter are totally at variance with the facts.

Will the Chancellor bear in mind the fact that, when it comes to opinion polls being in favour of wage restraint, throughout the period from 1971 to 1974 the same thing applied, until the opinion polls ran out, the British people voted and the last Prime Minister but one was defeated on the same argument? Will he now understand that on this, which has not been his happiest day by far, it is time for him to stop the posturing about 5 per cent., understand that the outturn on wages next year will be over 10 per cent. and concentrate his gaze on things like prices and jobs? If he does that, he will ensure that he gets the support of hon. Members on the Government Benches and that those on the Opposition Benches will be defeated.

I draw my hon. Friend's attention to the fact that an important section of the British people did have the opportunity to express their view at the by-election at Berwick and East Lothian recently. In a by-election in which pay policy was a central matter of discussion, we actually increased our majority as a percentage of the total vote. My hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson), whose presence here we welcome as a result of that, was present at the by-election and my hon. Friend the Member for Bolsover (Mr. Skinner) was not.

On the second question, I accept that the Government will direct prime importance to the questions of prices and jobs, but my hon. Friend must accept that increases in wage costs are bound to send up prices. That is accepted by the trade union movement, which, in its resolution at the TUC conference, said that the containment of unit costs was one of its objectives in pay policy. I hope that my hon. Friend will accept the implications of that and support the Government's attempts to secure that outcome.

Does the right hon. Gentleman recognise that the failure to reach agreement on what was in any case an agreement to differ is no great catastrophe and in any case would probably have done more harm than good? When will the Chancellor stop blaming the people of this country for inflation and start to control the level of public expenditure and the borrowing requirement, which between them are the root cause of inflation?

I must confess that I find myself, if anything, slightly amused by the Opposition's difficulty in deciding whether what happened yesterday was a catastrophe for the Government or rather a good thing in disguise. Perhaps when they have taken their decision on this matter we can pursue it to more benefit. On the question of the money supply and the PSBR, Britain's PSBR is now below the average of many of our competitors. [HON. MEMBERS: "No."] Yes—as a percentage of GDP, it is well below those of many of our competitors. We have public expenditure under far better control than ever when the hon. Gentleman's party was in power, and he knows this as well as I. Why does he continue mouthing this monetarist gibberish, which he picked up from what his hon. Friend the Member for Horncastle (Mr. Tapsell) rightly described as adolescent scribblers in the City columns?

Does my right hon. Friend accept that many people will be sad about the apparent breakdown of talks with the general council of the TUC—not least the unemployed, the sick, those on small fixed incomes and the old-age pensioners? What was said to him by the trade union leaders whose members are applying for increases far in excess of the 5 per cent., and how would he deal with such matters? How did he explain to them what was different about the 8½ per cent. for Vauxhall's, l6½ per cent. for Ford's and the requests for 100-plus per cent. for agricultural workers and 40 per cent. for mineworkers? How did he explain those differences? Did he say that there was any difference between someone demanding a high price for a commodity and a trade union leader asking a high price for his commodity?

As I said in the statement drafted by my friends and myself—the six leading trade union leaders of the TUC and the economic committee of the TUC —all these issues must be faced squarely. Mr. Lawrence Daly is quoted today as saying that the agreement provided sufficient flexibility for unions to make sensible agreements. He is the representative of the NUM. Mr. Sid Weighell. head of the NUR, said:

"We are voting against a great opportunity".
and Mr. Barnett described the rejection as "incomprehensible". I must confess that I share their views.

Does the right hon. Gentleman recognise that his by now traditional abuse of my hon. Friend the Member for Cornwall, North (Mr. Pardoe) does not camouflage the failure to answer the basic question why the Government will not bring forward proposals and seek the approval of the House to make the pay policy effective?

The only difference between the abuse that I am occasionally compelled, in reciprocation and self-defence, to offer to the hon. Member for Cornwall, North (Mr. Pardoe) and the abuse that the right hon. Gentleman gives him is that I do it in public and he does it in private. I see that he agrees with that. We shall seek to make our views prevail by pursuing the policies in the White Paper.

Is my right hon. Friend aware that those Tories who argue that there is no special relationship between the Labour Party and the TUC are absolutely incorrect? There is a special relationship, which was shown in the vote by the trade unions at the Labour Party conference.

Is my right hon. Friend further aware that that special relationship can continue if the Government decide to carry out Labour Party policy, and that it is time not only to carry out party policy in relation to incomes but to concentrate on dealing with unemployment and the alternative economic and industrial strategy which the Labour Party proposed at its conference?

My hon. Friend and share the same objectives. I think that he would agree with me about that. He disagrees with the Government on many aspects of economic policy, as do some of his friends in the trade union movement. The chairman of the TUC general council, with whom I understand my hon. Friend had a friendly altercation at lunch today, shares the Government's view rather than his.

Are we to understand that the Government are determined to prevent any pay settlements in the nationalised industries which exceed the Government's 5 per cent. guidelines? It so, how do the Government propose to achieve that?

The answer to the first question is "Yes". The answer to the second question is, by pursuing the policies in the White Paper.

Does my right hon. Friend agree that one of the reasons why the general council was unable to agree to the statement was the Chancellor's own words last weekend, when he said that the only difference between his own monetarist policy and the monetarist butchery advocated by the Conservatives was a matter of Christian semantics? Is my right hon. Friend now saying that the Government's policy is to reduce the money supply and the borrowing requirement, irrespective of the damage that that could do to recovery and full employment?

I never used the word "semantics". I am not quite sure what it means. I said that there are as many types of monetarists as there are Christians. I said that I regarded the Leader of the Opposition as Torquemada in this instance. I would not assume the central role in Christianity by contradistinction, but I would regard myself as a more charitable person than the Leader of the Opposition, if we are comparing one sort of monetarist with another.

The Chancellor of the Exchequer has a great knowledge of history. Is he aware that he is assuming the mantle of Lord Snowden—that is, Philip Snowden, not the present Lord Snowdon? Is the right hon. Gentleman aware that it looks as if he is about to produce the biggest split in the Labour movement since 1931, for which we shall not condemn him? Is he aware that he is inclined to dwell on Conservative divisions, but on these matters we are all united against him?

In his rather bizarre comparison the right hon. Member is perhaps confusing my interest in photography with my interest in economics. My impression was that the right hon. Member's memory of history was defective last week, when he expresed views about a piece of recent history involving military aid to Zambia.

Does my right hon. Friend agree that the failure of the general council to endorse the statement yesterday is a set-back to the low paid and the workers in the public services?

I believe that the situation could be so regarded. But the Government remain concerned with the plight of the low paid. We are anxious to ensure that people in the public service receive comparable pay for comparable work. That element in the discussions still remains in the Government's mind.

Does the Chancellor of the Exchequer realise that more and more these days he sounds like the chorus in the Greek tragedy that the relations between this Government and the TUC have become? Does he not think that in the few months that are left to the Government the time has come to make one more attempt at reforming union power, restraining their unfettered demands and introducing democratic procedures to replace their undemocratic ones?

I am a little bemused by the continual switching of the Opposition from recent political history to ancient literature. I do not regard myself as the chorus in a Greek tragedy. As the Prime Minister said when he opened the debate on the Queen's Speech, because of the interdependence of our society and economy, the problem of the power of individual groups, whether or not they are trade unions, creates problems for all of us. These problems can best be resolved by persuasion and common sense.

Does my right hon. Friend agree that the progress that we have made in recent years in tackling inflation has been due to the co-operation that he has obtained from the trade union movement? Will he and the Government continue their efforts to overcome the present difficulties and to achieve cooperation and understanding on general economic policies? In particular, does he realise that, psychologically, the increase in the minimum lending rate to 12½ per cent. came at the wrong time in the discussions? Will he therefore consider taking international actio·1 so that there is disarmament on interest rates?

I confess that l believe that in the circumstances if I had delayed the increase in interest rates until this week it could have been badly misunderstood by our friends in the trade union movement. I am comforted that Mr. Murray, when he spoke on television last night, said that, although it was not welcome to many members of the TUC, he thought that it had not determined the way in which the voting took place finally.

I made it clear in my statement that the Government are determined to continue discussions with the TUC on all matters on which we accept a mutual interest. I hope that we shall be able to implement our joint agreement in the document "Into the Eighties: An Agreement"—which was agreed without dissent at both the TUC and the Labour Party conferences—to discuss by spring next year the outlook of pay and prices for the following year and to try to reach agreement on how to deal with the situation.

Is the Chancellor of the Exchequer aware that his description of the consultations with the CBI and the discussions about contracting and other matters implies that the discussions were on a narrow front? In view of the breakdown of the Government's talks with the TUC, will the Chancellor undertake to hold much wider ranging discussions with the CBI, including discussions on the unemployment effects of sanctions on pay and the whole range of issues? Does he agree that the CBI showed in its conference last week that It has more chance of a constructive dialogue with the Government than does the TUC?

I am always anxious to have constructive discussions with the CBI, as with the TUC, but the hon. Member is wrong if he thinks that our discussions with the CBI do not range as widely as our discussions with the TUC. They cover every aspect of economic policy. The question of the impact of price policy on company liquidity and profits has been a matter of almost continuous consultation between my right hon. Friend the Secretary of State for Prices and Consumer Protection and the CBI.

As I made clear in my statement, in the last few weeks we have agreed that we shall pursue the question whether it is possible to extend the arbitration procedure in the operation of the pay clauses without damage to our co-anter-inflation objectives.

I seek the help of the House. If Hon. Members co-operate and ask brief questions, I hope to call all those who have been rising in their places.

If the talks with the TUC have revealed that there is a capacity to control prices more effectively than in recent years, has not my right hon. Friend a responsibility to implement that course of action regardless of whether there is a formal agreement with the TUC?

My hon. Friend must understand that the central element of the TUC input to our discussions was the proposed guidance to negotiators that asked them to concentrate on containing unit costs, increasing productivity and having regard always to the price effect of settlements to ensure that the price effect of individual settlements did not jeopardise the achievement of our common counter-inflation objective.

Of course, we shall want to discuss these matters with the TUC, but the extent to which the Government could accept a responsibility for tightening price control would inevitably have to depend in some part on the will and ability of the TUC to prevent increases in unit costs which would be bound to lead to a loss of market share and a fall in investment.

Does the Chancellor agree that if he is to take on the role of arbitrator between prices and pay he must show that he is scrupulously fair? Does he appreciate that his failure to reply to the question of my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) about what he will do over sanctions with Ford shows that he is incapable of being fair on issues of this sort?

My inability to reply to the right hon. and learned Gentleman's question about Ford was based upon total ignorance of the sort of settlement that Ford will finally make. As soon as we know the final settlement we shall tell the House what sanctions, if any, we propose to impose. I do not think that the hon. Gentleman should be under any misapprehension that if the settlement reached is outside the guidelines we shall use our discretionary powers in consequence.

Does my right hon. Friend share my view that there is nothing Socialist about free collective bargaining? Will he say a word about the longer-term development of incomes policy as being the only way of establishing some fair relativity and preserving and improving the position of the low paid?

I agree very much with my hon. Friend. Do not let us forget that the economic committee and representatives of a majority of members of the TUC supported the agreement. Even if the agreement was not finally endorsed by the general council, it has enabled both the Government and the TUC to get a better feeling of how to deal with the longer-term problems of pay policy. I think that our discussions will stand us in good stead when we come to the annual discussion to which we are committed by the document "Into The Eighties: An Agreement" about the prospect for pay and prices in the following year.

Is the Chancellor aware that his view and, apparently, that of Mr. Murray, that MLR has no relation to pay policy and restraint, will not be shared by the thousands of people who will face much bigger mortgage bills? Will he tell the House whether he believes that the crippling rates which he, and not any foreigner, has imposed are likely to increase or decrease the likelihood of his achieving his mythical 5 per cent?

Mr. Stow, who is head of the building societies' national association, made it perfectly clear when he announced the increase in building society mortgage rates that it was due to the increase in market rates which had taken place in the previous months—

The hon. Member may disagree with what Mr. Stow said, but he is the man who is responsible and he said it. He said that it was due to the increase in market rates, which was simply emphasised by the increase in MLR.

In adopting his 5 per cent. norm, what assumption did my right hon. Friend and his colleagues make about the rate of increase of commodity prices, in particular of the prices of food, and of the rate of increase of the prices of manufactured imports during the coming 12 months?