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Commons Chamber

Volume 961: debated on Tuesday 23 January 1979

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House Of Commons

Tuesday 23 January 1979

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Private Business

CHESHIRE COUNTY COUNCIL BILL [ Lords] ( By Order)

COUNTY OF MERSEYSIDE BILL [ Lords] ( By Order)

EAST KILBRIDE DISTRICT COUNCIL BILL ( By Order)

WEST MIDLANDS COUNTY COUNCIL BILL [ Lords] ( By Order)

Orders for Second Reading read.

To be read a Second time upon Tuesday next.

West Yorkshire Bill Lords (By Order)

Read a Second time and committed.

Oral Answers To Questions

Employment

British Exhibition Contractors Association

1.

asked the Secretary of State for Employment what increase in unemployment he estimates will result from Her Majesty's Government's sanctions against the British Exhibition Contractors Association.

None. Discretionary action against companies is no longer taken.

Does the Minister recognise that, if the Government had persisted in sanctions against the British Exhibition Contractors Association, all official work would have been placed with foreign contractors and inevitably British men would have been made redundant? May I turn to another of the Government's punitive policies? Does the Minister realise that at a time when unemployment is the second highest for January since the war, the safeguard regulations safeguard investment and jobs and should be upheld by any Minister who represents the interests of employment?

I shall deal with the hon. Member's second question first. I do not wish in any way to minimise the seriousness of unemployment. However, the hon. Member must recognise that January is the worst month of the year. Serious as the figures announced today are, they are significantly lower than the figures were at this time last year.

As to the first of the hon. Member's questions, I must tell him that I do not answer hypothetical questions. The behaviour of the Opposition when they attempted to pull the plug out of the Government's pay policy was irresponsible. They must carry a heavy share of the responsibility for what is now happening.

Does not the Minister realise that the real attack upon the Government's pay policy is coming from his hon. Friends below the Gangway? Is it not absurd to suggest that the vote of the House on sanctions had any significant effect on the present pay demands and industrial unrest?

If the hon. Member believes that, he will believe anything. By their repeated and sustained attacks on the Government's pay policy, culminating in the defeat of sanctions, the Opposition are heavily responsible for the present state of industrial relations.

Health And Safety At Work Etc Act

2.

asked the Secretary of State for Employment whether he is satisfied with the operation of section 6 of the Health and Safety at Work etc. Act 1974.

I am generally satisfied with the operation of section 6 of the Health and Safety at Work etc. Act, but I am informed by the chairman of the Health and Safety Commission that the matter is of course kept under review in the light of the Health and Safety Executive's enforcement experience.

Is it not correct that there have been practically no prosecutions under this crucial section, despite the fact that manufacturers, designers, importers and suppliers are still marketing goods which are dangerous for use by other people at work?

There have been about 50 prosecutions. I do not think that we should try to measure the effectiveness of legislation by the number of prosecutions. That might be a good measure of the prosperity of lawyers, as my hon. and learned Friend will agree, but it is not the right way to measure the effectiveness of legislation.

As section 6 requires that there is extensive research before a substance is marketed for industrial use, are the Government satisfied that imported substances from EEC countries undergo as rigorous research as they would if they were manufactured here?

I am assured by the chairman of the Commission that the same conditions or qualifications and the same tests are applied to imported substances as to manufactured goods and substances from this country.

Does not the Minister agree that more action needs to be taken before goods are in the distribution chain? So often, we find that defective goods are on sale and perhaps on the point of causing injury before action is taken. Could section 6 be a real means of ensuring that imports are properly controlled by perfectly valid and legitimate means? Should we not now exercise it? Will he pass on these views to his right hon. Friend the Secretary of State for Trade?

Yes, I will certainly pass on those views. If my hon. Friend is suggesting that there should be more examination at the port of entry, that would involve a considerable extension of the Health and Safety Executive's resources.

Unemployed Young Persons

3.

asked the Secretary of State for Employment how many young people were unemployed at the latest available date.

At 12 October 1978, 141,885 young people under 18 years of age were registered as unemployed in Great Britain.

Is not the figure for youth unemployment still unacceptably high, especially as the youth opportunities programme has now been going for some time? When does the Minister expect to be able to make a statement about the review of the programme to which he referred late last year?

The youth opportunities programme is proving very successful. All the reports from the Manpower Services Commission show that we are on target. The figures that I have quoted include some not covered by the Government commitment to school leavers.

Will the youth opportunities programme fully achieve by 1st April this year the targets originally set for it? Will the balance of provision within the programme be that which was originally intended?

We believe that the target set for Easter will be met, but we do not believe that the balance of the programme will be that forecast when the scheme was announced.

Is the Minister aware that considerable numbers of young people in Plymouth are unemployed because jobs in the catering and service industries which would otherwise be open to them are taken by citizens of the Common Market who come over on short term engagements, pay no tax and take off after making maximum use of the Health Service? We all know that the indirect effects of Common Market membership on unemployment have been disastrous, but would the Minister care to comment on the direct effects, such as those that I have just mentioned?

I ask the hon. Member to talk to employers and hoteliers in Plymouth to rectify that situation.

Technologically Advanced Industries

4.

asked the Secretary of State for Employment what steps he is taking to create employment in technologically advanced industries.

Success in achieving the objectives of the industrial strategy, for which my right hon. Friend the Secretary of State for Industry has overall responsibility, should help provide an economic climate in which new jobs in the technologically advanced industries can be generated. The Department of Employment and the Manpower Services Commission are ensuring that the appropriate employment and training services are contributing towards the success of the strategy.

Is the Minister aware that skilled engineers, particularly in the aerospace industry, who have found themselves particularly hard hit by the Government's incomes policy, are hardly likely to throw their hats in the air over that reply? Will he at least give a categorical assurance that his right hon. Friend the Secretary of State and all his Department fully support the Prime Minister's determination to sell the Harrier aircraft to China? This will create technologically advanced jobs in British industry. Will the Minister say what he is doing to bring that to fruition?

The answer to the first question is "Yes". The other question is a matter for other Departments.

Is not the corollary of creating employment in technologically advanced industries that employment in the more traditional and labour-intensive industries will decline and that, overall, there will be a decline in demand for employment, particularly in manufacturing industry?

We believe that it is absolutely essential to develop technology in order to cerate wealth, from which services and jobs can be provided elsewhere within the community.

Is it not the case that many employers, even with today's unemployment figures, cannot find men with sufficient skills for the jobs they are able to offer? Does the Minister recognise that, unless differentials are altered to reward skills, the situation will get even worse?

All the examination that I have made of what I recognise as a special problem of skill shortage leads me to believe that differentials are not the most important aspect of the question. The most important aspect is the insecurity felt by many craftsmen and technicians in the engineering industry compared with jobs in other occupations.

How many extra jobs does my hon. Friend think will be necessary to offset the effects of silicon chip technology during the next five years?

Unemployed Persons

5.

asked the Secretary of State for Employment what is the latest rate of unemployment.

11.

asked the Secretary of State for Employment what are the latest figures for unemployment; and if he will make a statement.

At 11 January, the unemployment rate in Great Britain was 6 per cent. and 1,391,220 people were registered as unemployed. On a seasonally adjusted basis, this results in an increase of 17,600. This is disappointing, but does not invalidate the picture that has emerged over the last 16 months of a general downward trend. However, we must not relax our efforts to reduce inflation still further and improve our industrial performance. In the meantime, the special manpower measures continue to make a substantial contribution to alleviating the worse effects of the recession.

In view of such depressing statistics, which make these the second worst January figures since the war, and particularly in view of the further rise in the number of unemployed school leavers, is it not time that the Government started to implement the policies of the Labour Party and the TUC by introducing the 35-hour week, by lowering the retirement age, and by increasing public expenditure in order to provide better social services and also more jobs?

The figures that I have quoted represent a drop of 81,000 on the seasonally adjusted figures of last January and 94,000 on the crude total figure. They should be seen in that perspective. The numbers of unemployed school leavers—there is a slightly different pattern in Scotland due to the different school leaving age—have been declining rapidly, due to the success of the youth opportunities programme, of which my hon. Friend the Under-Secretary of State has just spoken. I could not agree more with my hon. Friend about the desirability of operating joint policies with the TUC and this is a matter of continuing discussion.

Whatever the Secretary of State's intentions, his reply must seem extremely complacent to the 190,000 people out of work in Scotland, which seems, as usual, to have been hardest hit by the latest troubles? If the present measures that he has introduced are not satisfactory, will he come back to the House with fresh measures to deal with the situation?

I certainly did not intend to indicate any sign of complacency about unemployment anywhere in the United Kingdom, particularly in Scotland where we have been giving special attention to the effectiveness of measures run by my Department. Up to now, these have had a considerable impact. I have checked and find that nearly 136,000 people have been assisted by measures, including 56,000 helped by the temporary employment subsidy. I will certainly continue to consider how these measures can be expanded, developed or refined to be more effective.

What advice is the Secretary of State giving to his parliamentary colleagues about the likely consequences for the unemployment figures of the complete collapse of the Government's pay policy? Does he still maintain, in the light of the figures he has given, that he has a unique and special relationship with the trade union movement?

The advice that I give to colleagues about the collapse of pay policy, if that is the way that the hon. Gentleman wishes to describe it, is that this must have serious implications for problems in a number of areas. But these are matters to be taken very much into account when claims are being presented and when we are seeking to settle disputes. It should have been taken into account by this House when it voted on the issue of the Government's use of powers to deal with the pay policy situation.

Does my right hon. Friend accept that the lack of purchasing power of a large number of low-paid people is, in many ways, directly responsible for their inability to buy the goods that are being produced and will therefore create a great deal more unemployment? Does he also accept that we had many thousands of people lobbying hon. Members yesterday and complaining bitterly that, although they had supported us through thick and thin, they were taking home less than £40 a week and that they can no longer face that? Further unemployment will be on the agenda unless something is done quickly about that state of affairs.

I accept that the purchasing power of a large number of very low-paid people is an important factor in the level of demand in our economy, but if we have a rapidly rising inflation rate it will reduce the effective purchasing power of those people. We need to be able to increase the supply of goods and services in order effectively to use increased demand to reduce unemployment, otherwise such an increase may result only in more imports being sucked in.

Why has the Secretary of State avoided giving the House the true increase in unemployment, which, according to his Department, is 90,968? Does he not agree that, in view of our present strike-bound circumstances, that augurs badly for next month?

I resent the suggestion that I have not given the House the true figures. I gave the figures that I was requested to give, together with the seasonally adjusted change—the figure normally taken by the House as the best indication of the way in which unemployment is moving.

Will my right hon. Friend tell the Governor of the Bank of England and the Financial Secretary to the Treasury that their speeches yesterday implying cuts in public expenditure are completely unacceptable to the Labour movement, particularly as what they implied would be bound to increase unemployment and thereby add to the Treasury's expenditure? Will he explain that, on the contrary, we think that a 2 per cent. increase is not enough and that more public expenditure should be used to help in housing, health, pensions and the social services?

I hope that my hon. Friend will accept that I am more likely to be guided by what he says than by the remarks of the two gentlemen to whom he referred. In discussions of the effects of public expenditure, I shall certainly express to any colleague the view that any reduction in public spending is likely to be detrimental to the employment figures.

Does the right hon. Gentleman agree that, if every demand made upon us yesterday by the local authority workers is to be met, there will have to be a massive increase in the rate support grant for rural counties because otherwise unemployment will continue to rise in those areas?

If some of the demands being advanced were met, it would mean a massive increase in the wages bill for a number of public service employees, including those in local authorities. That is one of the reasons why I and other Ministers are seeking to reach an agreement about solving some of the problems of lower-paid public servants without bringing about the undesirable effects to which the hon. Gentleman referred.

Will my right hon. Friend institute an inquiry into the relationship between unemployment and illness, so that his Department is not stimulated to take that action following a forthcoming Granada Television programme?

I see it as part of the role of my Department, working with the Health and Safety Executive, to watch carefully the relationship between unemployment and illness and to take steps to institute good health and safety practices to avoid loss of employment in that way.

Is the right hon. Gentleman aware that I had intended to ask why he could not be more communicative and give up his Trappist vows? However, having heard his answer to his hon. Friend the Member for Salford, East (Mr. Allaun) about the Financial Secretary and the Governor of the Bank of England, may I ask the right hon. Gentleman to maintain the silence that he has managed to maintain in the past few weeks while unemployment has gone from bad to worse?

I am surprised that the right hon. Gentleman, as an ex-Minister, should not expect me to be influenced and guided by hon. Members in the first instance.

Times Newspapers Limited

6.

asked the Secretary of State for Employment how many representations he has now received about the continuing dispute at Times Newspapers Limited.

12.

asked the Secretary of State for Employment what further talks he has had with the management of Times Newspapers Limited.

Since March last year I have received 32 letters about the dispute at Times Newspapers Limited from Members of Parliament, trade unions and others. I have also had discussions with the parties, most recently on 13 and 15 December when I held joint meetings to seek an agreed basis for further negotiations.

Is my right hon. Friend aware that, if Times Newspapers closes permanently, the secondary unemployment effects could involve well over 10,000 people and that this is a serious matter? Does he recall that about 13 years ago, Lord Thomson pledged to the Monopolies Commission the whole of his considerable personal wealth in this country to continuing Times Newspapers in being? Since he has taken nearly all that personal wealth to Canada—[HON. MEMBERS: "He is dead."] Since nearly all that wealth has gone to Canada, is my right hon. Friend aware that the Government bear a heavy responsibility to make proper arrangements if the titles of Times Newspapers, which are all they own, are sold to someone else?

I certainly accept that permanent closure of The Times would have serious secondary effects on employment in a number of places, including Odhams Press. It is, of course, the aim of the Government to seek to keep as many titles as possible in existence. I refer, of course, to newspaper titles. It is our aim to keep as many in existence as possible, in the Provinces as well as on Fleet Street. All my efforts so far to bring about an agreement between the parties have not succeeded, but we have defined a way in which negotiations could proceed to resolve the dispute and I urge the parties to implement that agreement.

As a month has gone by since my right hon. Friend's last discussions with the management of TNL, is it not time to draw in the parties, because, with every week that goes by, more people are being dismissed and many of them were not parties to the original dispute? Is it not clear that we are losing two great national institutions in what is really a management virility symbol?

I do not think that I could help in achieving my hon. Friend's first suggestion by endorsing his second proposition. The dispute is very complicated and it is only too easy to apportion blame to various parties. That is not what I am trying to do. We have agreed a way of proceeding to negotiate to remove many of the barriers to the recommencement of publication of The Times. That is what I want to do as speedily as possible.

Is the Secretary of State aware that, in many parts of the world, The Times, because of its special tradition, is regarded as very much more than a newspaper and that its continued nonappearance is doing great harm to Britain as a whole?

Yes, I accept that, and I would regret any dispute which prevented anything which carried the name of good British products and British contributions abroad from continuing. We shall not see The Times back in production, in the way in which the hon. Lady and I would wish to see it produced, without resolving this industrial dispute.

Is not the main reason why The Times is not being published that the management has gone on strike? With the support of Conservative Members, will the Secretary of State summon the chief executive of that newspaper and instruct him and his colleagues to end this strike as a contribution to settlement of at least one of our industrial disputes?

No. I do not think that I shall summon the unions or the management to end the dispute, but I will call the attention of my hon. Friend, and many others who are seriously interested in the dispute, to the degree of agreement that was reached in the talks in my Department. I know that my hon. Friend and others have some influence with the parties concerned and may help me to persuade them to go along the lines of that agreement.

Is the Secretary of State aware that we support the true and real efforts that he has made to bring about a settlement to the dispute, and that we shall go on supporting him? If the time is ripe now for a fresh initiative, will he please take it?

Yes, I will watch for any occasion when a direct initiative from me or from ACAS might produce an advance along the lines that I indicated previously.

Wages Councils

7.

asked the Secretary of State for Employment when he intends to meet chairmen of wages councils.

Will the Minister confirm that wages councils set the basic rate for many thousands of low-paid workers in the private sector? Will be give a clear assurance that he will not call in or otherwise seek to delay any awards made by wages councils substantially in excess of current incomes policy guidelines?

I entirely agree with the first part of my hon. Friend's question. The wages councils have had their attention drawn to the Government's White Paper and now to the latest low pay provisions which the Prime Minister announced recently. We shall do no more than that.

Does not my hon. Friend agree that a little more action would be appropriate at the moment? Does he not further agree that those wages councils which fail to take advantage of the provisions for low-paid workers should be specifically and quite definitely reminded of these provisions?

We do not intend to interfere with the independence of wages councils in that way. The provisions which have been announced were targets. They were not binding on anybody.

Northern Region

8.

asked the Secretary of State for Employment whether he is satisfied with the level of unemployment in the Northern region.

No. The level of unemployment in Northern region remains far too high, but we are determined to do all we can to reduce it substantially. The Government's special employment and training measures have so far benefited over 91,000 people in the region.

I thank my hon. Friend for that answer. How does he account for the increase in unemployment in the Northern region over the past month? How much of it was due to the road haulage dispute, if any?

It is too early for me to be able to state the reasons for the redundancies which have been declared and which have led to that increase in unemployment.

On a day when, for instance, there is still hardly any movement out of the Manchester and Liverpool docks, and hardly anything going into the Winsford and Kirkby districts, will the Minister recognise that in the North-West region and in the Northern region, and in all the regions affected by regional unemployment, the present stoppages are causing more unemployment than anything the Government have yet done?

When will my hon. Friend recognise that the policies being followed by the Government in relation to regional and general unemployment are simply not working? When will the Government adopt policies as outlined by my hon. Friend the Member for West Stirlingshire (Mr. Canavan) in order to deal with the problems of the North-West region and the Northern region, where private enterprise is closing down factories and creating redundancies at an alarming rate?

The Government are aware of the problems faced by the regions in this country and have pursued their regional policy because of that.

If the Minister is not able to give us the information today, will he make an early statement to the House about the number of people in the Northern region who are unemployed as a result of the present industrial disputes, and indicate the number of people who have lost their jobs permanently as a result of those disputes? Will he also accept the fact that today there is no significant improvement in the position, in spite of the code of the Transport and General Workers' Union, and that secondary picketing continues particularly in respect of petroleum sites on Teesside?

If I were to write to all small employers in the Northern region, asking them for the reasons for the redundancies which have been declared, there would be an outcry from the Opposition for a further inquiry. I do not think that it is possible to give details month by month of the reasons for the redundancies, and it will not be possible in this case.

Manpower Services Commission

9.

asked the Secretary of State for Employment how many people are employed in the Manpower Services Commission; and for how many people they are providing some kind of employment.

I am informed by the Manpower Services Commission that at 1 December 1978, it employed some 25,600 staff. The MSC is responsible for the operation of the public employment and training services, and of certain programmes of special measures introduced by the Government to combat unemployment. These include the youth opportunities programme and the special temporary employment programme. As such, the MSC serves the entire working population of some 26·5 million people.

Will the Minister answer the question? How many people are involved in these programmes? Does he not agree that those employed at the MSC and the people on those programmes should be added to the true figure of those put out of work by a combination of the Labour Government and the union activities?

I answered the hon. Gentleman's question. I will now try to answer his other and different question by saying that I thought the Opposition were fully in support of the Government in introducing a programme of special measures to diminish the effects of unemployment. Currently, 255,000 people are benefiting from those programmes.

As the job centres are working successfully at this time of high unemployment, will my hon. Friend encourage all employers to use the job centres, and to notify them of job vacancies, rather than going to the private agencies?

I welcome what my hon. Friend said, because it is now becoming clear that the recent substantial investment in job centres has had a significant effect on employment placing. If we could place the people seeking jobs in their work one day earlier than might otherwise have been the case, that would result in a saving of production time which would be in excess of what is lost in the industrial disputes in an average year.

Could some of the 25,000 people be employed to draft the Bills to ban secondary picketing straight away, so that this House can make some contribution to increasing the number of people employed?

The hon. Gentleman has shown once again his cynical indifference to the plight of the unemployed and his abysmal misunderstanding of the problems.

Intermediate Areas

10.

asked the Secretary of State for Employment what is the average level of male unemployment in intermediate areas.

At 7 December 1978, the latest date for which figures are available, the number of males registered as unemployed in the intermediate areas was 175,345, a percentage rate of 6·4.

Is the Minister aware that in Hove and Brighton the male unemployment level is higher than the average level in the intermediate areas? How, in those circumstances, does he justify the wide range of Government incentives—including those under section 4 of the Development of Tourism Act 1969, recently extended to intermediate areas, and others operated by his Department—being available in areas with lower unemployment than Hove and Brighton?

The designation of assisted areas is a matter for my right hon. Friend the Secretary of State for Industry, and I will draw the hon. Gentleman's views to his attention. Unemployment is only one of the factors taken into account in deciding which areas shall receive assisted area status. That has been true not only of this Administration but also of the last Conservative Administration.

With regard to the cotton textile industry, which is largely in an intermediate area in the North-West, will my hon. Friend tell us by how much unemployment has increased among textile workers arising from the inefficiency of the industry in the face of competition from the Common Market, where our balance of trade deficit last year increased by 400 per cent. compared with the preceding year? Will my hon. Friend approach the Department of Industry with a view to setting up, as a matter of urgency, a sector working party for that industry?

Knowing my hon. Friend's concern for employment, not only in his constituency but throughout the North-West, I shall draw his views to the attention of the Secretary of State for Industry.

Since the outlook for jobs in the intermediate areas is being made worse daily both in the short term and in the long term by the current round of trade union actions against Government policy, why did the Government not feel able to trust the unions to bargain responsibly in the first place?

There are two sides to a bargain. The difficulty that the Government faced was the vote by the Opposition against sanctions before Christmas.

Government Measures

13.

asked the Secretary of State for Employment what further measures he has for reducing unemployment; and if he will make a statement.

Consideration of a programme of measures for 1979–80 is at an advanced stage.

Is it not apparent to my right hon. Friend and others in the Cabinet that, as free competition could not solve unemployment, and as bribing private enterprise to the tune of £12 million a day is not solving the problem, the only way out is to plan unemployment away completely? Does he agree that the proposals laid out in the Labour Party's draft manifesto, namely, the 35-hour week, planning trade, restoring cuts in public expenditure, early retirement and mandatory school grants are the only way forward? If my right hon. Friend takes these on board, urges his hon. Friend sitting next to him to vote for them on the National Executive and challenges the Tories, we might get back into power in order to plan unemployment away.

I am highly interested in my hon. Friend's manifesto proposals, as I am in those of other members of the National Executive, including my colleague in my Department. But we have considerable experience in this Government of the exent to which we can use special measures, including those that my hon. Friend calls bribes. We have experience on which to judge whether we want to include more extensive measures of planning, including planning agreements, in an election manifesto with a view to dealing with specific employment problems.

Do the Government's plans for dealing with unemployment in 1979–80 which are at an advanced stage, take account of the likely cuts in public expenditure which the Prime Minister seemed to indicate would be necessary?

No, they are not based on propositions for cuts in public expenditure. They are based upon ways in which we might make more effective some special measures that we are already running, and upon introducing other measures which will take over the role of the temporary employment subsidy, which has to be terminated as a result of the restrictions placed upon us by the EEC.

I represent an area which has one of the highest concentrations of unemployment in the country, namely, Sunderland. Does not my right hon. Friend agree that, if there is a continuation of vastly inflationary wage increases, it will only exacerbate the problems of places like Sunderland?

If we have highly inflationary wage increases, particularly in the manufacturing industry sectors which put up our unit costs, they will certainly seriously exacerbate the situation.

Is it not abundantly clear to the Secretary of State from all the questions that have been asked today by his own supporters that they are absolutely split on their policy? Is he not aware that the Government are being constantly undermined by the Left wing of the Labour Party? We have now had five wasted years in which unemployment has got steadily worse. Have we not now reached the end of the road for the present Government?

No. What is clear from the questions that have been put to me this afternoon is that my hon. Friends are deeply concerned about the continuing problem of unemployment, about the effectiveness of measures which we have already introduced, and about finding ways, including better planning, of bringing about a return to full employment in this country.

Prime Minister (Engagements)

Q1.

asked the Prime Minister if he will list his public engagements for 23 January.

This morning I attended and addressed an industrial strategy conference organised by the Trades Union Congress to review the progress of the electronics sector working parties. In addition to my duties in this House I shall be holding further meetings with ministerial colleagues and others.

Is my right hon. Friend aware that the House will support his firm reaffirmation this morning of the Government's policy on inflation and his statement about the continued application of pay limits, productivity bargains and help for the low paid? Is he further aware that this formula cannot work for the public sector if those workers see that every private sector group that enters into a strike achieves its objectives, often with the active support of the Opposition?

My contribution to a very good conference this morning—and it was composed of a number of representatives working in microelectronic industries—was to emphasise two points. The first was that, if firms are to plan four or five years ahead with their new investment, it is necessary that inflation should be low. That demands, among other things, moderate wage settlements. The second was that higher productivity and a willingness to change, retrain, and move into these new industries is essential if Britain is to take advantage of them.

On the last part of the question, of course the private sector is in a different position from the public sector. There is at least some operation of market disciplines in the private sector and people can lose their jobs, as indeed they are losing them at present, especially in industries where they price themselves out of work. The difference between that and the public sector is that nobody so far has lost his job as a result of wildly inflationary wage increases over previous years. It is essential to be absolutely frank, and I must point out that there are limits to what the Government are prepared to ask Parliament to vote in the way of votes for public expenditure. Therefore, if more money is taken out in higher wages because of the comparisons to which my hon. Friend correctly draws attention, there is less money for the services which the public employees are there to provide. That is an inescapable truth.

Is the Prime Minister aware that there are more people on strike now than when we debated this matter this time last week? At that time we made an offer to him to support him should he bring forward legislation to deal with picketing, the closed shop and secret or postal ballots. The Prime Minister said that he did not like secondary picketing, was not a closed-shop man and would prefer to have more secret ballots. Therefore, does he propose to take up our offer of support for legislation for the future? Also, will he do anything to assert the right of ordinary people to carry on working without interference?

The Leader of the Opposition has raised a number of important questions. However, I do not think that legislation on postal ballots or on picketing would do anything to affect the fact that there are more people on strike this week than there were last week. Although she may advance these remedies for particular purposes, they would not affect that situation. As regards the present situation, I assert very clearly, as I always have done, that everyone has the right to work and everyone has the right to cross a picket line. It is not a sacred object. If, when people are stopped—if they choose to stop—they desire to go on, there is nothing in the criminal law or the civil law to stop them from carrying out their duties. I hope that they will so do.

I asked the Prime Minister what steps he proposes to take to assert that right, because that right is not being honoured at present. But if the right hon. Gentleman has no immediate proposals, will he at least persuade the Attorney-General to do what the Attorney-General in the 1970–74 Government did—make a clear statement about what the law of picketing is, particularly as it has been changed by the 1974 and 1976 legislation?

I shall consider that suggestion by the right hon. Lady. But the law of picketing is well known. It is clear. It has been frequently stated. It is for the police to take action if complaints of intimidation, threats and, obviously, violence are made to them. I hope that the police will carry out their responsibilities in this matter if they see any cases of intimidation or threats of any sort.

Will my right hon. Friend tell us where he and members of his Government were yesterday when the low-paid workers came to see them in this House? Surely we have not reached the stage when they consider themselves too good to rub shoulders with the workers. [HON. MEMBERS: "Oh."]

I can assure my hon. Friend that I think that I have known as many workers in Britain as she has known, and for a long period, and I rub shoulders with them very often and will continue to do so. I think that I know what a great many of them are feeling at present. They are feeling that a great deal of what is going on is totally unnecessary and should be stopped.

Q2.

asked the Prime Minister if he will list his official engagements for Tuesday 23 January.

I refer the hon. Member to the reply which I have just given to my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas).

Will the Prime Minister try to take time off today from his other troubles to look at the drastic increase in unemployment in Scotland, where the number has risen by 18,500? Even allowing for the fact that many of these are school leavers, Scotland seems to be the worst affected area of the United Kingdom. Will he, therefore, say whether the Government have any intention of honouring the promise that they made at the last election to give economic powers to the Scottish Assembly to make it a powerhouse for Scotland? Will he seek to transfer those powers from the Treasury immediately after the referendum?

The position is that seasonally adjusted unemployment in Scotland, which is generally regarded as the best trend to look at, was stable or falling throughout 1978. That is the truth of the matter. There has been an increase this month, which is due partly to normal seasonal factors and to the flow of school leavers at Christmas. Therefore, I think that we can take comfort from the fact that the rate of unemployment has been declining steadily over the past 12 months. But, of course, the hon. Gentleman will know better than I about the adverse weather conditions which have existed in Scotland, which have had an impact on unemployment.

As regards giving additional economic powers to the Scottish Assembly, the Act is quite clear on the powers of the Assembly, and it would be quite foolish to say that we intend to change that.

Does not my right hon. Friend agree that, in a very difficult industrial situation, the way in which the Leader of the Opposition and her cohorts vent their spleen on strikers and spew bile into the situation can only exacerbate this very difficult situation? Would it not be much better to concentrate all our efforts on finding constructive ways in which we can assist the lower paid?

Yes, Sir. I agree that it is far better that we should try to do this. Indeed, in my speech last Tuesday, I put forward certain proposals, which stretched over the whole range of the public service and the private sector.

Concerning public sector employees, a very fair proposal has been made to study the conditions and pay of public service workers to see how far they are comparable with those of other workers. That offer should be taken up. In conjunction with the pay negotiations that are now being undertaken, I believe that it will both do justice to the local government workers and, at the same time, enable the Government to continue with the primary task of overcoming inflation, and not increasing the money supply in order to pay out confetti wages which would have no value at all.

Will the Prime Minister take time today to have a discussion with his right hon. Friend the Secretary of State for Education and Science? Is the right hon. Gentleman aware of the intimidation which accompanied yesterday's action by the National Union of Public Employees, whereby a school which many of my constituents attend was forced to close although the headmaster and all the teachers were determined to carry out their statutory obligation to educate our children? Is the right hon. Gentleman further aware that the headmaster was told that, if that school opened, there would be heavy picketing of both the teachers and the children—[An HON. MEMBER: "Rubbish."]—and that his school would be indefinitely blacked? How does this match up with the Prime Minister's oft-proclaimed boast that only his Government can come to terms with the trade unions?

I have never made that last remark. What I have always said and continue to say is that I believe that the trade union movement would work with any Government of this country. That has always been my approach and my principle on the matter.

Of course, I do not have details of the school to which the hon. Member has referred. He did not name it—probably very properly. However, I really do not see why anyone is forced to cease work in this situation. [HON. MEMBERS: "Oh."]

I am using the word that the hon. Gentleman used. Everyone in this country is entitled to cross a picket line if he disagrees with the arguments that are put to him. There is nothing to stop any citizen—I would not hesitate to do it myself—from crossing a picket line if he believes it to be right to do so.

When my right hon. Friend replied to my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas), he said that this morning he met representatives of the microelectronics industry. Will he please tell me whether at that meeting there was any discussion about Inmos, and where the factories that will arise from this industry are to be situated?

Secondly, will my right hon. Friend promise me that he will send to the right hon. Lady the Leader of the Opposition a copy of annex 6 to the Royal Commission's report so that she can see how useful legislation is in relation to industrial disputes?

There was no discussion at the TUC conference which I attended this morning about the situation of Inmos, although there was support for the Government's decisions to give it financial backing. As I think my right hon. Friend knows, the headquarters will be at Bristol, but the factories to which he refers—they, of course, will provide by far the overwhelming proportion of the employment—will be in the development areas, although I believe that the sites have not yet been chosen.

As regards the impact of legislation on trade unions and on the behaviour of individuals, I have always expressed my scepticism about its efficacy. Indeed, we have had practical experience of it. There do come times when a nation's patience may run out, and then, despite the unwisdom of the legislation, it might be shackled upon the trade unions, to the overwhelming dislike of the country in the long run and, I believe, to a great disintegration of our society.

Will the Prime Minister today make arrangements to meet his right hon. Friend the Minister of Agriculture, Fisheries and Food and tell him two things—first, that the complacent statement made by the right hon. Gentleman in the House yesterday, particularly on the subject of animal feeding stuffs, was quite intolerable and, secondly, that the fact that the right hon. Gentleman is a member of the Transport and General Workers' Union, and that he is sponsored by the TGWU, in no way precludes the right hon. Gentleman from condemning violence and excesses against the law which have been perpetrated by various members of the union to which he belongs?

I repeat again that, if examples of violence are known to the hon. Gentleman, and which can be vouchsafed, they should be brought to the attention of the police. I have repeated my hope that the police, who are independent in these matters, will not shrink from taking action if there are cases that they believe should be brought before the courts. Knowing the police, I do not believe that they will hesitate to do so.

As to the supply of foodstuffs, the situation varies from day to day. I am told—I can only repeat the advice that I am given by those concerned with these matters—that there seems to be some improvement today, including the supply of animal feeding stuffs and also the movement of salt and sugar, which apparently were in rather short supply. Indeed, the principal concern today, where I hope that those concerned will stop any picketing in respect of this matter, is about chemicals needed for pharmaceuticals. In some areas they are being held up. I know that the union itself is doing its best to ensure that they are moved. If it cannot ensure that, of course in the long run we simply cannot permit an interruption in the supply of raw materials for pharmaceuticals which are necessary for medicine, and we would have to take the necessary action.

In his grasp of the very real problems which face the lower paid after three years, will my right hon. Friend accept that the nurses are not just a special case but that they are an exceptional case? However, they have no intention of withdrawing their labour at this time. Will he bear that in mind in his economic policies in relation to the nurses?

Yes, I shall bear that in mind. I would be very happy indeed to look into that matter in greater detail. But I am bound to say that every special case becomes an exceptional case until it runs right across the economy. In view of what is happening at present in the private sector in respect of pay negotiations and pay settlements, it is doubly essential that the Government give no indication that they are likely to depart from a very strict application of their monetary and fiscal policies. I repeat that now, because that is bound to affect the extent to which we can assist public service employees in the way that they think is right.

Is the Prime Minister aware that with regard to the crossing of picket lines, a number of people have the very real fear that their union cards will be taken away and that they will be excluded or expelled from a trade union without any recourse to a court of law, thereby losing their jobs without being able to claim damages for the loss of their jobs? Is he aware that this is a direct result of the legislation that was introduced by his own Government and that this is industrial relations legislation which he has put on the statute book? In view of what he himself has said today, would not it now be right to accept the offer from the Conservative Opposition to reform this piece of legislation, so that the practices which the Prime Minister says are correct can be followed?

It is a matter of dispute between us as to whether the action taken by this Government has led to the kind of picketing to which the right hon. Gentleman referred. In our view, it is the case—certainly history bears it out—that this kind of picketing, but not in this intensive way, went on long before any amendments to the Act. It is a matter of very great doubt as to what extent the law can deal with this issue. I assume that the right hon. Gentleman is now moving his position. I understand that recent events may have made him do so. But up to 10 days ago he was saying that it was the policy of his party to reaffirm the existing law and to try to secure a voluntary code. I quite understand that he may have changed his mind, but at least it is only in the last 10 days that he has done so.

House Of Commons (Freedom Of Access)

I have a brief statement to make. Yesterday the hon. Member for Macclesfield (Mr. Winterton)—[HON. MEMBERS: "Where is he?"]—he has been held up—supported by the hon. Members for Hazel Grove (Mr. Arnold) and Hampstead (Mr. Finsberg), raised on a point of order the difficulties facing Members in making their way to the House, which in their case had resulted in their arriving late for Question Time. I undertook to look into the matter and to report to the House.

The Commissioner of Police informs me that there were about 25,000 members of the National Union of Public Employees and other unions in the vicinity of the House, of whom some 3,500 were in possession of letters inviting them to see their Member of Parliament. In such a situation it is always a problem for the police to identify Members and afford them the necessary priority: for example, by allowing them through streets closed to the general public. But I am assured by the Commissioner that every effort is made to do so, and will continue to be made in future.

I am sure that the House will agree that the Sessional Order requiring the police to keep free the
"passages through the streets leading to this House"
must be interpreted reasonably and that their responsibilities in this regard cannot extend, for example, to Hampstead, or, for that matter, to the end of the Embankment. I have written to the Commissioner of Police to thank him and his officers for the work that they have done.

On a point of order, Mr. Speaker. In view of what you have just said, is not there a cause for some concern? You said that 3,500 people were in possession of letters inviting them to come to this House. It is my understanding that the authorities have done their best to restrict the numbers of people who come to see Members of Parliament during these vast demonstrations, so that the police and the authorities can have some sort of control. Are you yourself entirely satisfied that there are not Members of this House who are seeking deliberately to encourage large numbers of members of the public to come to the House just in order to create the kind of disturbance that most people wish to see not taking place?

I wrote to my constituents, but in the event I was not able to meet them. Clearly, when there is a mass lobby such difficulties are bound to occur, because hon. Members do not consult each other before writing back to their constituents.

May I thank you Mr. Speaker, for your remarks, and particularly the tribute to the police, so well deserved? Will you please include in your thanks and appreciation the Serjeant at Arms and his staff, and the trade unions which so well organised the lobby, and pay tribute to them for the way in which their members behaved?

The hon. Gentleman has raised a very important point. I should tell the House that I also wrote a letter to the chief steward on the union side, who I understand was tremendously helpful in organising the lobby and ensuring that there was good order within our premises.

On a point of order, Mr. Speaker. I am grateful to you for your statement. I made it clear yesterday that in my comments I implied no criticism of the police. I also made it clear that I was not prevented from getting here. I was much more concerned, and still am, with the constitutional side of the problem. I do not think that the House had any complaints about those who came here. The problem is that of getting to the Palace. Further consideration needs to be given to the matter during the next two or three weeks to prevent a repetition of what happened yesterday to at least two hon. Members.

Further to the point of order, Mr. Speaker. In view of your statement about the difficulties yesterday, do I take it that the hon. Member for Macclesfield (Mr. Winterton) will be sent a bill for the police escort that he had to the House?

I should have thought that, knowing that a massive lobby was taking place yesterday—the Tories were talking about it for several days before—most hon. Members would think it sensible to use the Underground. Then, none of that palaver would have taken place.

On the more important point, Mr. Speaker, will you take on board once again the possibility of ensuring that when large lobbies arrive at the House all those with letters to hon. Members have improved chances to see their Members? It is well known that some hon. Members are not always too anxious to see them, but in order to ensure that those who come have a better chance, instead of being stuck out in the rain, could not many thousands be brought inside Westminster Hall, as was done when the disabled came to lobby? The people could be separated into segments and regions for hon. Members to see them. That would give a better opportunity for those who wish to see their Members to lobby their Members—even Cabinet Ministers. It would give people a better chance to get a message across after coming all that way.

I say to both the hon. Member for Bolsover (Mr. Skinner) and the hon. Member for Hampstead (Mr. Finsberg) that their suggestions will of course be studied by those responsible for helping us with lobbies.

May I, from the Opposition Benches, respectfully associate myself with the tributes so well paid by the hon. Member for Newham, North-West (Mr. Lewis) both to the conduct of the police and to those participating in the mass lobby, which resulted in such an orderly and friendly proceeding?

Supplies And Services (Scotland)

With permission, Mr. Speaker, I should like to make a statement on essential supplies and services in Scotland during the current industrial disputes.

Supplies of food remain, in general, adequate, especially fresh foods such as bread, milk, meat, fruit and vegetables. The main items in short supply, varying between localities, are sugar, salt, margarine and cooking fats, cereals and frozen foods.

The difficulties experienced with some food items have been reflected in the Scottish islands. Although there are shortages, no major or unusual problems have been reported. Supplies are reaching the Orkney and Shetland islands from Aberdeen, but there is a problem over catering supplies for Sullom Voe. Difficulties have arisen, too, over transport of supplies to Arran, but I am hopeful that these will be resolved following discussions between the chief executive of the district council and the local strike committee.

The agriculture industry in Scotland has in general been able to obtain adequate supplies for its needs, although the supply of animal feedingstuffs to the intensive production sector has been difficult. Liquid milk supply has remained satisfactory. Livestock markets for store and fat animals have continued, but at a reduced level. After an initial setback, the export market is now improving.

Bad weather has prevented some Scottish vessels from fishing, but most fleets have been operating. Virtually all landings have been sold and fish markets have been cleared, though at a slower rate than normal, by merchants and processors who have their own transport, On the whole, fish supplies are moving. But some fish processing plants have closed down because of distribution problems. About 760 fish process workers have been laid off, mainly at Aberdeen and Fraserburgh.

The effect on the Scottish economy is becoming increasingly serious. The interruption in the regular flow of raw materials and finished products has caused many firms to lay off workers and others to cut back production and concentrate on maintenance activities. To date, the estimated total of workers laid off is some 32,000 in manufacturing industry. This number is likely to rise sharply if the dispute continues. Small businesses are particularly badly affected and the flow of exports from manufacturing premises through the docks is severely curtailed.

Good contact has been established both centrally and locally with officials of the Transport and General Workers' Union and we are in frequent touch with them over the operation of the code of practice. The indications that I have yesterday and today are that the code of practice is increasingly being applied in Scotland.

Industrial action yesterday by other unions badly affected hospital and health services. In those parts of Scotland where ambulance men totally withdrew their labour—much of the West of Scotland and parts of Fife and Grampian regions—the police appear to have coped admirably with what was fortunately a very low level of emergency calls, and the community is once again much in their debt. In other areas ambulance men heeded their union's advice to ensure that essential services were not interrupted. Indications this morning are that in most areas the full normal service is being provided.

In general there were no laundry, portering or domestic services in hospitals and catering services were greatly reduced. Administrative and senior nursing staff helped to serve meals. Operating lists were reduced or cancelled and admissions restricted. Some outpatient clinics functioned. I understand that today hospital services are returning to normal, but the prospect of further industrial action remains.

Other services also were affected. Many schools in Borders, Fife, Grampian, Lothian and Strathclyde regions were closed, as were some elsewhere in Scotland, and a wide range of other services provided by local authorities were not functioning.

There were no serious effects on water and sewerage services as a result of the one-day strike. Some discolouration of water supplies was experienced, mainly in the west of the country. It was found necessary to direct some sewage into rivers.

I shall continue to keep closely involved in all aspects of the current disputes as they affect Scotland.

Is the Secretary of State aware that the House will be very grateful for his statement, which at least accepts the seriousness of the situation facing industry, commerce and the whole community in Scotland?

First, as regards yesterday's strike in the public services, does the right hon. Gentleman agree that some hospitals were kept open only by the devotion of administrative staff, some of whom worked for 24 hours without sleep, and that such efforts could not cater for any prolonged disruption? In this connection, has the right hon. Gentleman noted the reported statement this morning by Ron Curran, the Scottish organiser of the National Union of Public Employees, that the union is planning to take out on more lengthy strikes key groups such as boilermen and telephonists, which would have a devastating effect on public services, particularly hospitals and schools? What contingency plans are being made to cope with such an alarming possibility?

Secondly, with regard to the serious problem facing the island of Arran, which the Secretary of State mentioned, does the right hon. Gentleman agree that the problems stem from a road haulier on the island making public the fact that he had been invited to make payments to the strike committee for each lorry going on the ferry and had made such payments, and that since that disclosure a total ban has been placed on his lorries carrying even essential supplies, such as drugs to the local hospital?

Thirdly, is the Secretary of State aware of the enormous damage being done to education, particularly at an important examination time in Scotland, when we have had lengthy closures, partly owing to the weather, partly because of the oil shortage, and now because of the public service strike? Will he take all possible steps to ensure that in any future sporadic strikes by NUPE schools will be kept open as far as possible?

Fourthly, on the growing shortage of some items of food, to which he referred, can the Secretary of State report on the discussions with the Retail Consortium to ensure that pensioners and others unable to accumulate food will get special consideration in the distribution of what supplies are available?

Finally, is the Secretary of State aware that there has been some resentment at his own and his officers' response to reports of acute problems? To give just one example, last night I was advised of an urgent telex from the Edinburgh fruit market on 12 January appealing to the Secretary of State for help over secondary picketing, which was disrupting supplies. The response was a five-line letter—which I have here—from the Scottish Development Department dated 16 January and advising that the situation had improved—which it had not; the pickets are there this morning in greater numbers than ever—and adding that specific difficulties might usefully be taken up with the local strike committee. Is this not a negation of responsibility, and will not the Secretary of State at least confirm that in Scotland and England the Government and Parliament, and not local strike committees, are responsible for the maintenance of essential services?

On the question of food supplies, particularly to the elderly, I was in touch with the social work departments of the local authorities about this early last week. I have also been in touch with the Scottish Grocers' Federation, which has promised full co-operation in seeing that where there is hardship preference is given to elderly people and disabled people, who may not be as able as other citizens to fend for themselves.

I discussed the Edinburgh fruit market with the chief constable for Lothian region last Saturday. I understand that the position there has improved.

On the schools situation, I agree that it is extremely unfortunate that there should be this continued closure of schools, particularly as there were earlier closures because of the weather and difficulties over fuel supplies. I would certainly ask regional authorities to make every effort to keep schools open, even if this kind of industrial action should continue.

On the question of Arran, the situation is being discussed with the chief executive of the district council concerned and I hope that we shall get a satisfactory solution there. I accept, of course, that if essential supplies should be cut off it is the responsibility of the Government, ultimately, to see that such supplies get through to Arran. I have made that clear and I make it clear again. We shall see that that island is not cut off from essential supplies.

As for the hospitals, I mentioned the help that we got from administrative staff yesterday, but if there were prolonged disputes there would be very serious disruption. I understand that the unions concerned are meeting tomorrow. I should deplore it very much if they were to take decisions that had the effect, as one union official has been quoted as stating to be his aim, of evacuating major hospitals in Scotland. I think that would be absolutely deplorable behaviour, and I am sure that the people of Scotland as a whole would resent it very much indeed. But I hope very much that that kind of action will not be taken.

What assessment has the Secretary of State made of the losses in foodstuffs, which he did not mention in his statement? I know that these have occurred in my area, certainly in meat and potatoes. What assessment has he made of the loss of exports, which he mentioned in passing but did not quantify? Thirdly, what directions or advice is he giving to local education authorities? Is he aware that in the Borders region all schools were closed, including those attended by my own children, where no strike action was contemplated? Surely this is an unnecessary measures if some schools can continue despite these difficulties.

This is, of course, a matter for the regional council. I think that the right hon. Gentleman ought to take it up first with the council. But if no industrial action is contemplated there is no reason at all why schools should close, and I would appeal to all education authorities to keep open as many as possible.

It is not possible to quantify the loss of exports, because it is not certain at the moment whether it is simply a delay in exports or whether in some cases export opportunities will be lost altogether. What I am saying is that the trouble in the ports is certainly having a substantial effect on exports, and that is a very worrying feature of the present situation.

I do not think that it is possible to quantify food losses, but the general situation in Scotland during the whole period of the strike is that the majority, at least, of fresh food supplies has been moving freely.

Is my right hon. Friend aware that, following representations from Transport and General Workers' Union officials and members of other trade unions, secondary pickets seem to have been withdrawn in Lanarkshire? I have checked this myself. Is he further aware that the statement by the hon. Member for Glasgow, Cathcart (Mr. Taylor) that there were cases of secondary picketing and extortion at Stevensons' dairy, Bellshill, is totally false? I checked myself at the dairy and have assurances from the manager that there have never been any pickets on the dairy. Is my right hon. Friend further aware that this kind of irresponsible statement by Members of the Opposition only aggravates the very strong feelings?

Some charges have been made about extortion which in the event have not been substantiated, but I have made the general statement, which I repeat here, that if there are suggestions of extortion or intimidation the proper course is to inform the police. I have been assured by the chief constables that they will pursue these questions quite rigorously. It is not any use presenting me with these allegations, particularly in these wide and rather unsubstantiated terms. The proper people to complain to are the police. I repeat that they will look into these allegations, and if they are substantiated I have no doubt at all that the Crown Office, the Lord Advocate and the local procurators will see that prosecutions take place.

Is the Secretary of State aware that we welcome the fact that he has made this statement today, since this is the first chance that Scottish Members have had to question him on the situation in Scotland since the troubles began? Can he say a little more about the question of foodstuffs and food processing? Has he any information on the supply of containers, canisters and bottles, which has been a serious problem for the food processing industry? On the supply of food in the shops, are small grocers getting supplies as easily as large ones?

Finally, has the right hon. Gentleman any indications at this stage that he can usefully give the House that there might be a settlement on a regional basis in Scotland before too long?

I do not think that I can give any information on the last point. I understand that the possibility of regional discussions, which would mean Scottish discussions, follows from what happened yesterday during the national negotiations, but I really cannot comment on that.

The question of containers for the food industry has been a problem. We have take up individual problems and in some cases have managed to solve them, but the situation is by no means completely satisfactory. Where difficulties are reported to us, we do our best to eliminate them, sometimes with success.

On the retail side of food distribution, I think that some small shopkeepers have suffered very badly compared with the larger supermarkets. Again, the situation is very patchy, but where there are particular difficulties we are very happy to try to solve them. In many cases we have been able to solve local difficulties.

Can my right hon. Friend give the House any estimate of the number of jobs likely to be lost permanently or otherwise if this strike goes on for another week or fortnight? Is he in consultation with the trade union leaders concerned, not on negotiation of the wage but directly on the effect of their action on other workers? What will his response be in respect of the rate support grant in the event of the local authorities offering a substantial wage increase to the lower-paid manual workers?

It is possible to make an offer now. Indeed, an offer has been made taking account of the low pay provisions. That is a considerable step forward for low-paid workers. There are also opportunities for a comparability exercise. These are matters best left to negotiation between the local authority representatives and the trade union representatives. On rate support grant, we have said—this is a general statement—that settlements outside the Government's guidelines and without Government approval will not receive RSG support.

I gave the figures for the effect on employment in my statement. The figures are likely to increase if the dispute is not settled. I am not able to say what the ultimate permanent effect will be, but there will be instances where those laid off will not be taken on again when the dispute is over. I have made that clear to the trade union concerned. I met regional officials and other officials of the Transport and General Workers' Union at the beginning of the dispute.

Will the right hon. Gentleman tell the House what reply he gave to the telegram sent to him by Rankin's Fruit Markets? As the right hon. Gentleman will know, that undertaking has a large number of shops and branches, and was in considerable difficulty.

Without notice I cannot say what reply was sent in response to that telegram. I have had a large number of telegrams and letters over the past few days.

Is my right hon. Friend aware that his calm and reasonable statement does not minimise the seriousness of the situation and contrasts markedly with the forecasts of doom, gloom and disaster coming from the Opposition? Will he take into account that public sector workers in Scotland will have to be concerned in the problems that we shall have in the days ahead in no less favourable a way than those in the private sector of industry, they being deeply involved as they are often low-paid workers?

What has been said about a comparability exercise is relevant to my hon. Friend's question. During any pay policy there are special problems about the relationship of the public sector to the private sector. What we have suggested on comparability represents a possible way forward. I am well aware of the trade unions' views in Scotland. During the lobby that took place yesterday I met senior officials from Scotland from the four unions concerned. We had a useful discussion about the various problems.

Will the right hon. Gentleman re-examine the position of exports? Will he give consideration to the exports awaiting shipment and the imports necessary to fulfil the present export orders within the time scale written into the contract? There is lamentable failure on both scores. In the end, that can result only in massive lay-offs and, more important still in the long term, no repeat of export orders from these quarters.

Some of the difficulties rest at the ports, and that is where there has been in particular the problem of secondary picketing. Yesterday's reports suggested that there may be some slight easing of the position at certain ports. I am anxious to ascertain whether we can get the code of practice fully implemented and secondary picketing much reduced. If that can be achieved, the problem of the ports will be considerably lessened. That will have its effect on exports. I am anxious about exports, because at the end of the day a loss of exports could mean a loss of jobs.

There have been reductions and cancellations of hospital operations. Will the right hon. Gentleman give assurances on critical and necessary operations and outline the action that he will take should the situation worsen?

In an emergency, when the services are much reduced, it is possible to perform only emergency and essential operations that cannot wait. If such operations are allowed to take place, some restrictions on other operations will have to be put into effect. That is what happened yesterday. It is worrying. I said yesterday that if there were major disruptions of major hospitals in Scotland many patients would suffer and many operations would not take place. Even if these were not in the normal sense of the word emergency operations, there would be involved a considerable amount of pain, inconvenience and discomfort to patients. I should like that to be avoided.

Has my right hon. Friend yet had a report from the procurator fiscal on the tragic incident in which a picket in Aberdeen was killed? Will he follow up his remarks about having discussed with the representatives of public service employees the offer that has been made of an increase plus comparability? Taking into account the disruption that has been caused, we must not only condemn action that has led to tragic results in hospitals but deal with the root cause and follow up what seems to be a helpful suggestion and a constructive way forward.

Offers are now available for low pay payments and for comparability. I believe that they represent a way forward. I had a preliminary report from the police following the death of the picket in Aberdeen last week. My hon. Friend will know that reports to the procurator fiscal and the subsequent consideration of the reports are matters not for me but for my right hon. and learned Friend the Lord Advocate. I hope that the full explanation of the circumstances of that death will be made available as soon as possible. I shall pass on my hon. Friend's comments to my right hon. and learned Friend.

Order. If hon. Members will ask questions that are as brief as possible, I hope to call those who have been rising to be called.

Does the right hon. Gentleman appreciate that my constituency of Aberdeenshire, West is heavily dependent upon the paper-making industry, and that the situation has deteriorated as a result of its reliance on such a large percentage of its raw materials being imported, there having been an effect both on goods coming out of the factory for export and on goods for internal use in the United Kingdom? The right hon. Gentleman probably knows that the two main newspapers in the area, The Press and Journal and the Evening Express, are probably more reduced in size than any other newspapers, for allied reasons. Does he appreciate that the position in Aberdeenshire, West has not improved; it has deteriorated?

I accept what the hon. Gentleman said. What he said about the paper-making industry applies to many other industries. Industries that are not at the top of the priority list as essential industries are suffering substantially. It is for that reason that we have had an increased number of lay-offs and difficulties about imports and exports. If we could reduce secondary picketing and get the code of practice fully implemented we could improve the situation, but we could not restore it to normality.

Will the right hon. Gentleman tell the House what talks his emergency committee has been having with the union to introduce some rationale? In the North-East it is necessary for men to make a 140-mile round trip merely to get a permit to enable them to get stuff moved. Does he realise that the situation is deteriorating daily, as fish boxes are not being returned from the ports in the South? Secondly, slaughtering will have to stop because no salt is getting through to the slaughterhouses.

Finally, what does the right hon. Gentleman propose to do to recompense the hauliers for their loss of earnings during the strike? Will he ask his right hon. Friend the Secretary of State for Transport to make a refund of road licence fees for the lorries that have been laid up for so long?

I cannot give any promises on compensation. We were in touch with the union about fish boxes, and I gather that the position at Aberdeen has improved slightly this week. Conditions tend to vary from one day to the next. Sometimes there is an improvement and a subsequent deterioration. However, I believe that there has been some improvement at Aberdeen. I shall consider the difficulties brought about by distance in the North-East.

Is my right hon. Friend aware that branches of the National Farmers' Union in my constituency are broadly satisfied with the relationship that they have with the TGWU in the present situation and that essential feedstuffs are geting through to farmers from sources not only in Scotland but from the Liverpool docks? However much the Opposition might like to have a crisis, there is not a total crisis as yet. Is my right hon. Friend interested to know that there are many lorry drivers in my constituency who would like to settle for 15 per cent., which is now being offered?

I gather that there are a number of drivers who would like to accept. It is a generous offer. It is well beyond the Government's guidelines. I know that there are some areas where local arrangements made between the NFU and the local union have worked well right from the start of the strike and where local difficulties have been settled at local level. Through my emergency arrangements we have maintained contact not just at regional level but at local level, and most of our contacts and the solution of most of the problems are taking place at local rather than at regional level.

Would the right hon. Gentleman the Secretary of State acknowledge that, but for the stupendous voluntary effort of countless individuals throughout Scotland yesterday, the effects of yesterday's strike would have been even worse than they are? Despite that, does he realise that such strikes affect the voluntary services, such as meals on wheels, and is it not crazy that it should be the old, the housebound and the sick who are suffering as a result of this industrial action?

I agree that it is a tragedy that the old and the sick should suffer in these situations. Unfortunately, when action of this kind is taken these sufferings are inevitable. I was particularly concerned that the unions' own recommendations to their members that they should maintain emergency services, for example in the ambulance service, were not always followed locally. Again, the situation yesterday was patchy. There were areas of Scotland where there was no strike action at all in the whole of the ambulance service, and the emergency and non-emergency services operated normally yesterday.

Will the Secretary of State continue to use his good offices and influence to persuade those presently on strike to go back to work? In doing so, will he remind them that the kind of so-called free collective bargaining in which some trade union members believe—a belief in which they are aided and encouraged by the Opposition—can lead only to lower living standards for everybody in the community, and especially the lower-paid?

I can only say that I absolutely agree with my hon. Friend, who speaks from his own experience as a trade union organiser before he entered the House. The idea that free collective bargaining is a panacea or a help to the low-paid worker is not at all borne out by past experience. I believe that offers of the kind now being made to low-paid workers, of special payments and a comparability exercise, are a much more fruitful way forward.

Contrary to what the Secretary of State has said, is he aware that the Edinburgh fruit market has confirmed in the last half-hour that picketing is far more serious than it was previously and that his own efforts as Secretary of State have done nothing to ameliorate that? Will he indicate whether he, unlike the Home Secretary, has at least given advice to chief constables on ways of ensuring that members of the public have free right of access to property that they wish to visit, rather than that this should be at the whim of strike committees?

I do not believe that chief constables need that kind of advice from me. They are very well aware of the law on picketing in Scotland, but I can tell the hon. Gentleman that I have discussed the situation with representatives of the chief constables in Scotland. They are well aware of the picketing law and of the respective rights of strikers and those wishing to work. I was informed that the code of practice of the TGWU had been distributed to policemen who are involved in these matters.

The hon. Gentleman says that that does not have any legal effect. I know that absolutely, and so do the chief constables. They are really not quite as stupid as the hon. Gentleman apparently believes them to be. They are perfectly well aware of the situation and they know the rights and duties of pickets and of those wishing to work, respectively. I have discussed these situations with them and they are well content with the discussions that they have had with me. I will again look into the situation in the fruit market, but I did discuss this position specifically at the weekend.

Does my right hon. Friend accept that there will be a very wide welcome for his information that the voluntary code on picketing is now being widely observed in Scotland? Will he join me in hoping that if, as would appear to be the case, the hon. Member for Glasgow, Cathcart (Mr. Taylor) has been energetically spreading stories about specific incidents that are not well founded, that hon. Member will withdraw them at a very early date? Secondly, will he urge particularly upon the lorry drivers in Scotland that if there is a settlement that is to any significant extent above the offer that is now on the table, it will make it very much more difficult to give as just a settlement to the lower-paid as I believe the trade union movement as a whole would wish?

I believe that those who are on strike in the road haulage dispute are not among the lower-paid in terms of their average earnings, and if we are to have special protection for the lower-paid it will mean that those who are not themselves lower-paid will have to exercise a certain amount of responsibility and restraint. If that does not happen, we shall simply have runaway wage demands and runaway inflation, which is not to the benefit of any member of the community. On my hon. Friend's first point, I have already told the hon. Member for Glasgow, Cathcart (Mr. Taylor) that if he has specific information he should ensure that it is passed to the proper authorities. Being a law-abiding citizen, which I believe he is, no doubt he will have done that. We shall be interested to see the results.

Is the Secretary of State aware that those who allege that they have been and still are being required to pay money to pickets for going across picket lines have been told quite clearly that they will be blacked permanently if they complain to the police? What is the right hon. Gentleman able to do, as Secretary of State, to relieve them from that situation so that they can exercise their rights as citizens?

I believe that the unions have said that there will be no blacking of that nature, but the hon. Gentleman has been very free with his allegations. I have told him, and I tell him now, that if he has information he should pass it to the police, who I am sure will look into it.

Is the right hon. Gentleman aware that milk is still not allowed to go by private hauliers from farms to creameries in South-West Scotland, and is he also aware that non-union drivers are not permitted to take livestock to the SMP slaughterhouse or to haul feeding-stuffs generally throughout the area? Is this within the code of practice?

I believe that some of the things of which the hon. Gentleman has spoken probably are not. If he will supply me with further details, I will look into them.

Will the Secretary of State ask his officials to pay particular attention to the information about increased secondary picketing that has been given to them today by the Fife and Kinross branch of the National Farmers' Union?

Again, I will look into it, but it is absolutely impossible for me to know exactly what is happening at any time everywhere in Scotland. There have been particular difficulties in Fife, because the strike committee there has been taking a very hard line on the code of practice. We have made representations there, and we are in touch with the union on the matter. If I have information on particular instances, I will see that my Department looks into them.

Does the Secretary of State not consider that for a Government such as this one to have passed a law that enables anybody to victimise innocent citizens, and for that law to have to be interpreted by codes of conduct so that it is not too severe in its application, is an abominable condemnation of the Government? Does he appreciate that in my constituency there are farms—I will give him details—to which hauliers and contractors and grainsmen refuse to allow goods that belong to them to pass, despite the fact that they are accompanied by police officers, because of the threat by pickets that if they do so they will never get supplies when the strike is over? If I give the right hon. Gentleman details, will he act upon them?

Certainly, I shall act on any information that is supplied to me, but, as my right hon. Friend the Prime Minister said a little earlier this afternoon, there is a perfect right for people to go through picket lines and there is nothing legally to stop them doing so if they wish to do so. On the law of picketing, I do not accept what the hon. and learned Member has said. Not for the first time, he shows a rather inadequate grasp of the law.

Water Supplies (North-West England)

I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,

"to call attention to the dangers and hardships caused to thousands of families in Lancashire because of the unofficial strike of 600 workers in the Ribble division of the North-West water authority."
I can be brief, because the dangers and hardships of having no clean water, and the dangers of sewage, were well described last week by my hon. Friend the Member for Stretford (Mr. Churchill). I adopt my hon. Friend's argument in respect of the urgency in the case of another division, the North-West water authority.

The Pennine division settled yesterday on a general offer of 14 per cent. Almost immediately the neighbouring Ribble division, in which the bulk of my constituents live, came out on strike against 14 per cent. Therefore, besides the argument relating to hardship and misery which I advance, there is a need to inquire whether there is some kind of domino effect when each division takes up the struggle when another has settled.

In this weather it is appalling that anybody should be deprived of clean water, or indeed in some cases of water at all, and, furthermore, that people cannot get taps or pipes mended when they burst. The resulting sewage problem is a danger to public health. As it appears that further divisions are threatened because another division has settled, we should be told who, if anybody, is in control, and who is behind the matter. We need an urgent debate to enable us to find out.

The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) gave me notice before 12 o'clock this morning that he would ask leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,

"to call attention to the dangers and hardships caused to thousands of families in Lancashire because of the unofficial strike of 600 workers in the Ribble division of the North-West water authority".
I listened with great care to the hon. and learned Gentleman but, as he knows, it is not for me to decide whether the matter is to be debated. I merely decide whether it is to be debated tonight or tomorrow.

As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the order but to give no reason for my decision. I regret that I cannot rule that the hon. and learned Gentleman's submission falls within the provisions of the Standing Order, and therefore I cannot submit his application to the House.

Railways (Industrial Dispute)

I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,

"the national rail strike and the threat of continued disruption of the nation's railway system".
When I made a similar application last Thursday, you, Mr. Speaker, indicated that you would look again at this matter on Monday with a view to the possibility of our having a debate. In the event, a general debate was held on the industrial situation. It is a measure of the depth of chaos into which this nation has been plunged that a debate of that kind took place with only a passing reference to the critical situation on the railways, but the fact remains that the debate did take place with hardly any reference to the problems on the railways. I submit that it is important and urgent that the House should now discuss this vital topic.

In support of the urgency of the case, I pray in aid the fact that the nation today is facing the third daily stoppage of the whole railway network, causing massive inconvenience and hardship to hundreds of thousands of people as well as great financial loss to the nation and to British Rail. We are told that the loss is about £5 million a day rather than the £2 million which was widely quoted last week.

We face the prospect of further daily stoppages and other industrial action and the possibility of escalation of the dispute if British Rail takes action to minimise loses by suspending the guaranteed week.

All the reports about efforts to resolve this complex dispute are gloomy in the extreme. In addition, there is the threat that ASLEF drivers on the London Underground could add to the chaos and disruption by joining the daily stoppages.

Finally, I emphasise that the already hard-hit commuter is now told that one consequence of the dispute could be yet further rail fare increases in the coming year. I submit that this matter should receive the urgent attention of the House.

The hon. Member for Faversham (Mr. Moate) gave me notice before 12 o'clock that he would ask leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,

"the national rail strike and the threat of continued disruption of the nation's railway system".
The hon. Gentleman has raised a very important matter, and I listened very carefully to his application. As the House knows, it has instructed me to take account of all the factors set out in the Order, but it has also instructed me to give no reasons for my decision.

I have given careful consideration to the representations made by the hon. Gentleman, but I have to rule that his submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

Lead In Petrol

4.25 p.m.

I beg to move,

That leave be given to bring in a Bill to reduce the permitted lead content of petrol; and for connected purposes.
Every day in our cities and on our roads, every hour of every day, uncounted thousands of our children, with every breath they take, are being silently and furtively poisoned by minute particles of lead. These particles are tasteless, odourless and invisible. This atmospheric lead comes almost entirely as to 90 per cent. from exhaust gases of petrol engines in motor cars and other vehicles.

I am satisfied, and I hope to satisfy the House today, that there is now overwhelming evidence that the amount of lead ingested by certain of our children can cause subtle and permanent damage to their brains. There is also some evidence that at slightly higher levels it can cause damage to the health of adults.

The Government have it in their power drastically to reduce the lead content of the atmosphere in Britain at one stroke by about 60 per cent., but, astonishingly, they refuse to do so, despite repeated urgings from distinguished hon. Members.

No doubt the Government will say that they are doing a great deal and that they are conducting consultations, and setting up committees. In other words, they will give us all the usual complacent nonsense. However, nothing effective is being done.

Other countries have already legislated. In 1976 the West Germans reduced the level of their lead additives in petrol to 0·15 grammes per litre; the Swedes plan to do so by 1980. The Japanese have had a maximum level of 0·06 grammes since 1975 and the Americans are removing lead from petrol altogether. All we in Britain have managed to do is to order a reduction from 0·45g per litre to 0·40g per litre by 1981. We have taken that action only because we have been directed to do so by the EEC.

The House debated this subject on 12 December last. I pay tribute to the admirable work carried out by the hon. Members for Birmingham, Perry Barr (Mr. Rooker), Wood Green (Mrs. Butler) and Coventry, South-West (Mrs. Wise) and by my hon. Friend the Member for Reading, South (Dr. Vaughan), who have all concerned themselves with this problem for many years.

Before I deal with the arguments, I propose that we should ask ourselves a question. Do the levels of lead particles in our atmosphere give rise to reasonable doubt for the safety of the health of children in this country, particularly those who live in inner cities or close to motorway junctions? We must ask ourselves that question because, if there is a reasonable doubt, I am clear that it is the duty of the House to act immediately.

There is now a growing body of evidence showing a direct relationship between lead intake and brain and other neurological damage to children. The latest research of which I am aware, conducted by the University of Pittsburg, Pennsylvania, and recently published, concluded that low levels of exposure to lead, although not causing any apparent and obvious damage to the health of infants, interfere with a child's ability to learn complex tasks. Equally disturbing, it appears that if a mother is exposed to lead during pregnancy the child is born with similar levels of lead in its blood. This takes a very long time to disappear, even in a lead-free environment.

The evidence also shows that impairment of complex learning abilities can lead to abnormal social behaviour. Thus, not only do individuals suffer but the community suffers.

Other work has been done in various countries and it has been brought to the attention of the House. The message is clear. All the research leads us to the conclusion that we have reasonable grounds to fear for the safety of children who are exposed to the levels of lead in the atmosphere in the cities and on the roads of Britain.

Indeed, in Small Heath, Birmingham, the constituency of the Minister responsible for these matters, the level of lead in window dirt, when analysed by Birmingham university chemists, was found to be about 20 times higher than recommended levels of lead in dust. That information emerged from an excellent television programme transmitted on 29 June by Thames Television. The Minister refused to answer any questions submitted to him in writing by the producer. He refused to appear or to contribute in any way. I find that disturbing.

I turn to the position of the motor manufacturers. In the past few years we have heard much about the fears for engine life if lead additives are reduced. I have made inquiries of the two largest car producers in the country. Both confirm that for them the proposed reduction would present no problems. Indeed, all Ford cars manufactured in England can run on petrol which complies with the West German lead additives limit—the limit which I advocate in the Bill.

Ford further informs me that the threshold lowest limit of lead content at which wear is likely to increase is 0·05g per litre—two-thirds less than the level that I wish to see in the United Kingdom.

What of the oil companies? I believe that Government interference should be kept to a minimum and that society is best served by free enterprise. However, a free society must also accept its responsibilities. I should be only too happy if the oil companies had voluntarily reduced the level of lead additives already. But they have not. It is now necessary for Parliament to act.

Each oil company that I have contacted has said that it will conform to whatever standards the Government set, but I received the overwhelming impression that not only do they not want a reduction in the levels of lead additives in petrol but that they are putting pressure on the Government to persuade them to do nothing. Alas, that is a pressure to which this Government seem willing to succumb.

The only manufacturer of lead additives in Britain belongs in part to the major oil companies. The oil companies have a vested interest. Their views, therefore, must be examined with care. Of course, the oil companies have problems. They might have to invest in new refinery equipment. They might require more crude oil to obtain the same amount of high octane petrol. How much is entirely dependent upon the technology of the refinery. I understand that estimates provided by the oil companies to the West German Government were four times higher than the actual cost.

I return with no pleasure to the Government's attitude. They have informed us that the quantity of lead entering the atmosphere each year is 10,000 tons and that it has remained at that level since 1971. How can anyone regard that as satisfactory?

As with cigarettes and lung cancer, and like most Governments, this Government are not prepared to do anything until the pressure is overwhelming. Soon it might be too late. The effects of our poisoning our children today might not be seen for many years, until somebody notices that the standards of numeracy and literacy have fallen even further. Perhaps the increase in lead in the atmosphere, occasioned by the enormous increase in the number of motor cars and other vehicles, is partly responsible for the disquieting fall in our national education standards.

It is the duty of the House to protect our children from dangers to their health as soon as there are reasonable grounds for suspecting a substance or substances to be harmful. We have no right to gamble with children's health.

The purpose of the proposed Bill is to reduce lead additives in petrol to 0·15g per litre by 1 January 1982. That will give the oil companies three years, and I have heard that they are prepared to accept that. The Government have the opportunity and means to provide time for this reasonable Bill. I urge the House to give me leave to introduce it without further delay.

Question put and agreed to.

Bill ordered to be brought in by Mr. Archie Hamilton, Mrs. Joyce Butler, Mr. Tony Durant, Mr. Geoffrey Finsberg, Mr. Robin Hodgson, Mrs. Jill Knight, Mr. Andrew MacKay, Mr. David Penhaligon, Mr. George Robertson and Mr. J. W. Rooker.

Lead In Petrol

Mr. Archie Hamilton accordingly presented a Bill to reduce the permitted lead content of petrol; and for connected purposes. And the same was read the First time; and ordered to be read a Second time upon Friday next and to be printed. [Bill 52.]

Orders Of The Day

Industry Bill

Order read for resuming adjourned debate on amendment to Question [18th January], That the Bill be now read a Second time.

Which amendment was, to leave out from "That" to the end of the Question and to add instead thereof:

"this House, while accepting the usefulness of a significant part of the work of the Scottish and Welsh Development Agencies, declines to give a Second Reading to a Bill which is based on totally inadequate documentary evidence of the performance and prospects of the National Enterprise Board."

Question again proposed, That the amendment be made.

4.35 p.m.

The five depressing days that have passed since this debate was adjourned have done nothing to make less miserable the unhappy political plight of the National Enterprise Board, which is caught in the fatal zigzag of British politics. Last week we heard the Government's attempts to make the NEB play a grotesque charade, pretending to be the embodiment of the Labour Party's 1974 manifesto. Plainly, part of this transparent ploy is that Socialist zealots for the 1974 manifesto and its original grotesque concept of the NEB will be appeased by Labour Members flourishing this Bill and its provision for £4½ billion.

That essentially moderate man the Secretary of State for Industry has no time for the original pretentious role of the NEB, but he is resorting to this ploy, much to the disadvantage of the admirably managed NEB. In response to his gross exaggeration, which amounts to a hoax, the official Opposition say that qualified euthanasia should be practised in relation to the Board. They say that it should continue with its rather depressing inherited assignments until they can be cast off. That will be the end of the Board.

A great disservice is being done to those who are doing admirable work on the Board and who do not have a pretentious attitude towards their activities. They must be embarrassed by the inclusion in the Bill of the horrific figure of £4½ billion.

It is well known that the Liberal Party has a considerable regard for the concept of the NEB—but on certain conditions. There must be a reasonable amount of recycling. We feel that the NEB should not be run down but that there should be recycling of money as the Board restores important companies to health and vigour. Unfortunately, there is no sign that any recycling is embodied in the calculations of this Bill. There is not even a token or a gesture of money being obtained by the return of companies to private enterprise after some years in the care of the NEB. That is one of the reasons for the stupendous sums in the Bill.

The second condition on which we, as democratic parliamentarians, feel bound to insist is that Parliament must find ways, and, in the meantime, must use the ways open to it, to establish direct accountability of the NEB to this House. I am the first to concede that this is a difficult operation in which to achieve anything like perfection. It will take time to adapt the role of the Comptroller and Auditor General, which is wrapped in history, to a new concept like the NEB. We had a welcome announcement from the Secretary of State in the first part of the debate last week on the Comptroller and Auditor General's role, but while that is being worked out the mechanism on which we must insist to keep some kind of parliamentary control is what I would describe as a version of the mechanism of supply.

For the NEB to be assured of its continuance, the Secretary of State must ask this House at fairly frequent intervals for a further ration of capital. The Board should certainly not be given five, six or seven years' ration all in one go so that, after one fairly major debate, parliamentary control can be abdicated for an appallingly long period, apart from brief late-night debates.

Does the hon. Gentleman agree, touching on a theme earlier in his speech, that an essential part of the Secretary of State's coming to the House should be to give up-to-date operating accounts overall? We had no overall results from the Secretary of State. I hope that the Minister of State will bring us up to date.

I expressed that hope last Thursday in the overture to our debate and I am glad to repeat it now. It would be intolerably wet of this House even to consider passing this Bill without a great deal more up-to-date information both on profit and loss and on balance sheet items of the National Enterprise Board. Unless the Government produce that information tonight, before the matter is put to the vote, they will be open, as I hinted last Thursday, to a charge of sharp practice in bringing this Bill forward when it can only be a matter of weeks before some unaudited figures are freely available from the National Enterprise Board.

We on this Bench have no desire to starve out the NEB or to deny it and its very important subsidiaries the funds which they need to keep the operations going and to maintain the skill and enterprise that the NEB has gathered around it. If the Government would present the House with a more modest and reasonable Bill, scaling down its requirements in line with the Government White Paper on public expenditure, which gives the show away and indicates exactly what the Government expect the NEB to need over the next few years, we would give that sort of legislation a fair wind and, indeed, our full support. But we are not prepared to abdicate parliamentary control by voting tonight such a vast increase in borrowing powers that there will not be any need or any real chance of major debates on the NEB for a very long time to come.

I remind the House, although it will already be present in many hon. Members' minds, that since the establishment of the NEB we have had only two major debates on this subject, one in April 1978, when there was an important motion to extend the financial limits on an order, and again in December, when there was a big debate on the Public Accounts Committee requirement. Otherwise there have been two other brief debates initiated by Bank Benchers. That is all.

In my view and that of my colleagues, that does not amount to adequate parliamentary scrutiny and, if necessary, control of a body with such wide-ranging operations and using so much of public credit and public money. I repeat the offer that if the Government will come forward with realistic legislation embodying sums that bear some relation to what can be required in the next 12 months or so, we shall be willing to support it. But a measure that is grotesquely designed for propaganda purposes and which, if taken seriously, means that the NEB is not to do any serious recycling of its funds but is to grow bigger and bigger, with the abdication of parliamentary control, requires that I shall recommend my right hon. and hon. Friends to support the Opposition amendment.

4.45 p.m.

I was glad to hear what the hon. Member for Colne Valley (Mr. Wainwright) said about the Liberal Party's attitude towards this Bill. His speech was a cogent argument against a Second Reading of the Bill being given by the House, for we are asked in the Bill to provide another £3,500 million to the National Enterprise Board on grounds that the Secretary of State himself described last week. He said:

"The NEB is by any objective assessment one of the great success stories of British industry."
I think that the objective assessment that he described was founded on the fact that, as he said,
"It was an essential feature of industrial policies put forward for the Labour Party's manifestos in 1974."—[Official Report, 18th January 1979; Vol. 960, c. 2022.]
Using perhaps rather different assessments from those employed by the Secretary of State, I would only say that so far as the accounts show, and what the taxpayer has had to bear, the National Enterprise Board has a ragbag of investments that have run at a sustained and continuing loss ever since it was founded. I see the Minister of State shaking his head. Clearly, he takes into account the figures produced by National Enterprise Board reports. During my remarks, I shall show why the Minister of State is wrong and why the report and accounts of the National Enterprise Board are grossly misleading.

I must recognise, of course, that the National Enterprise Board has been bequeathed a number of problems which it did not seek. I refer to British Leyland, Rolls-Royce and Alfred Herbert. These are the giants of the motor industry, the aircraft engine industry and the machine-tool industry. It is a deplorable commentary on the state of industry in our country that those important elements should be in the hands of the National Enterprise Board and causing such grave problems for it.

We know from the last report of the National Enterprise Board that the problem companies of the NEB, namely British Leyland and Rolls-Royce, are required to obtain a return of 10 per cent. by 1981. If the Government were so confident that this would be done, I do not see why the House is expected to provide so much money as it is. It must follow that if 10 per cent. can be achieved by 1981, the cash flow from these companies will enable these businesses to be run very effectively without too much recourse to these funds.

There is no attempt whatever to justify this enormous sum of money. When the Secretary of State said that it had very little effect on the level of public expenditure, it is true that there is little relationship between £3,500 million set out in this Bill and the £270 million annually for the next four years in the public expenditure White Paper. What the Secretary of State did not say is that every penny borrowed by the National Enterprise Board is borrowed from the capital market, and that is every penny less available for the productive industry of our country.

These are enormous sums of money. They are not mere trifles. It is no good saying, as the Government do, that the Bill will have no impact on public expenditure. What about the impact of the debt interest? That would be very considerable. It would be a good idea for the Secretary of State for Industry to get in touch with the Chief Secretary to the Treasury to tell him what he is doing and then tell the House what are his proposals for this enormous sum of money.

The problem stems from the fact that the Government are not clear, even now, about the proper role of the NEB. We have been told that one of its roles is to provide, maintain or safeguard productive employment. It stands to reason that if the Board runs at a loss, it can provide employment only at the expense of productive employment in the private sector.

If the Government are serious about controlling the money supply, the money that they borrow must be in competition with private industrial borrowing, and the weight of Government borrowing is so huge that they cannot borrow at an interest rate of less than 14 per cent. Profitable companies in the private sector are deterred from expansion because interest rates are at a level that allows the Government to lend money to the NEB in order to get a pre-interest return of 10 per cent. from British Leyland and Rolls-Royce and of 11 per cent. from its other investments. Even the figure of 11 per cent. falls well short of the Government's cost of borrowing.

The Minister of State does not agree that the NEB is running at a loss. The objectives of the Board are plainly set out in the report and accounts. They include the achievement of a pre-interest return of 15 per cent. I do not know many companies that are asked to get a pre-interest return. If we take interest charges into account, the profit is reduced by a substantial margin.

In addition, the public dividend capital on which the NEB largely rests does not entail any interest charges, and it is time that the House realised the taxpayer's true penalties for this system. The same applies to nationalised industries. Neither the NEB nor nationalised industries can have public dividend capital unless that money is borrowed from the taxpayer. What is really important is the cost to the taxpayer. Since he now has to pay 14 per cent. on the sum that the Government borrow, the whole of the public dividend capital should bear a proper interest charge of 14 per cent. The crucial test should be the profit, post-interest, allowing for a proper level of interest to be charged on the public dividend capital.

These matters have been discussed in the Public Accounts Committee and are on the record. It is unwise for the House to continue to swallow the concept of public dividend capital which increases yearly and shows precious little return for the taxpayer. That is why I reject the view of the Secretary of State and the Minister of State that the NEB runs at a profit. It runs at a significant loss.

It is beyond argument that employment, health, education and all our social services can be provided only by profitable industry and business. Many people say that they believe in a mixed economy. Sir Leslie Murphy says so in the NEB's latest annual report. We certainly have a mixed economy—a mixture of a profitable private sector, though it is declining in profitability, and a loss-making public sector.

It is not widely recognised that the national income accounts apparently do not show the full scale of loss-making among the public corporations. Unlike the private sector, the public corporations have no deduction for capital consumption from their trading profits. If that were done, it would be sufficient to remove the entire reported surplus in most of the past 10 years.

Since the NEB makes a true post-interest loss on its capital, it seems sheer folly to increase the scale of its operations by £3,500 million. That money could be employed and borrowed by profitable private industry. In his last report, Sir Leslie Murphy said:
"We have evolved a satisfactory method of dealing with the companies in which we invest. We will not involve ourselves in day-to-day management. Our concern is with the quality of the management."
That is our concern as well. The quality was certainly not very good under Lord Ryder, and although it is too early to pass judgment on the management ability of Sir Leslie, I do not think that he can altogether escape responsibility for some of the real stumers that the NEB has perpetrated. I refer particularly to British Tanners Products, Hivent and Thwaites and Reed as glaring examples. If the new as opposed to the inherited investments are taken into account, the losses greatly exceed the profits on the NEB's investments.

In an important passage in his speech last week, the Secretary of State discussed the role of the Comptroller and Auditor General. That is another matter that the Public Accounts Committee has examined at length, and that all-party Committee has made clear its view that the Comptroller and Auditor General should be allowed access to the books of the NEB.

I am sure that there is no question of the Comptroller and Auditor General interfering with the commercial freedom of the Board. It is important that he should be able to make the House, through the PAC, aware of anything that seems, on the face of it, to be going wrong, so that an early inquiry may be carried out. If that had been done, some of the stumers to which I referred may have been avoided.

It is not satisfactory that the Government should carry out an inquiry into the role of the Comptroller and Auditor General and the Exchequer and Audit Department. It is rather like a judge acting also as a jury. I hope that the inquiry will be sufficiently wide-ranging and that the committee will be composed of people other than those in the public service so that it can make an up-to-date survey of what the Exchequer and Audit Department is doing, and what it ought to do.

There is no case for the extra funds provided for in the Bill and the Secretary of State has not attempted to make out a case for them. He is interested in extending his empire, and that ought not to be the interest of the House. While that attitude and this Government remain, we are, it seems, condemned to high interest rates and high personal taxation. It is a fitting tribute to the work of the NEB and the state of our industry under a Labour Government that their cheap troubleshooter, Sir Michael Edwardes, should have said in his latest reported statement that if the level of taxation is not substantially reduced in three years' time, he will leave his country.

4.58 p.m.

There was a notable contrast between what the hon. Member for Colne Valley (Mr. Wainwright) said and the pronouncements of the hon. Member for Horsham and Crawley (Mr. Hordern) and it concerned the question of support, or lack of support, for the National Enterprise Board. It is well known that the hon. Member for Horsham and Crawley is opposed to the NEB, and he is therefore inclined to produce arguments against it anyway. That is why he was not constructive and why he spoke without evidence. There was a contradiction in his complaining that he did not have sufficient information yet claiming to have an abundance of evidence for condemning the NEB.

I am sure that the Government will accept that when the House is asked to agree a substantial increase of moneys for the development agencies and the NEB, we should have a great deal of information available to us. In addition, there is a contradiction in treatment if the development agencies are subject to the scrutiny of the Public Accounts Committee and the NEB is not.

It may well be that the Government approach on this matter is correct, but I hope it will be agreeable, in view of the comments made by the Public Accounts Committee, the Expenditure Committee and the Procedure Committee, that the argument may continue in the House in order that we can see for ourselves where the strength of argument lies concerning the future treatment of the NEB.

It is quite clear to me that the Secretary of State for Industry rightly claimed, on 18 January, at the beginning of the debate, that the SDA, the WDA and the NEB have been success stories in industry. In order that I may not excite the hon. Member for Horsham and Crawley too much, I place emphasis on the word "success". I do not want to get into an argument about profitability. We are dealing, in historical terms, with a very new venture, and it would be wrong to presume too much, or to expect a great deal of profitability at this stage. There have been several teething troubles which I am sure have been overcome, and we should not condemn it on the rather questionable arguments put forward by the hon. Gentleman.

The House is aware that the Conservative Party voted against the establishment of the development agencies, as the right hon. Member for Leeds, North-East (Sir K. Joseph) confirmed last week, following an intervention from me. He said:
"I have nothing new to say about our intentions in relation to the NEB. We have explained them a number of times. We shall keep the Board"—
that is, the NEB—
"to run its existing portfolio, with the instruction that it should, with due care for the public interst, sell its assets when it can, which will, no doubt, mean that it will retain British Leyland and, perhaps, Rolls-Royce for a little longer than it will retain a number of the other assets."—[Official Report, 18 January 1979; Vol. 960, c. 2046.]
That really means the strangulation of the enterprise upon which many thousands of jobs and valuable industries have depended.

It is not without significance that the right hon. Gentleman, in addition, began his speech last week by stating that his Conservative colleagues the hon. Members for Pembroke (Mr. Edwards) and for Glasgow, Cathcart (Mr. Taylor) and others of his hon. Friends had told him that the work of the Scottish Development Agency and the Welsh Development Agency was very much appreciated in those parts of the United Kingdom. As that came from members of a party which was opposed initially to these agencies, one can only presume that its conversion has taken the form of a convulsion brought about by an unwillingness to learn and a readiness to avoid the embarrassment of denying the success of these agencies. The right hon. Gentleman reserves his condemnation, therefore, to the NEB. He was rather mealy-mouthed about the agencies, but at the behest of his hon. Friends he gave them some qualified support.

Having regard to the right hon. Gentleman's opposition to the NEB, I wonder whether he will take note that the 1977 annual report on the company shareholdings, involving 12 subsidiaries and 16 associated companies, with 287,292 jobs—and by December 1978 more than 40 companies and an estimate of well over 300,000 jobs—is of significant importance to this House and to the country.

Can anyone deny that, between 1977 and December 1978, the support for Rolls-Royce, British Leyland, Ferranti and ICL, to mention only a few companies, provided for them a long-awaited turning point and, indeed, considerable success? These are companies which are of signal importance to the United Kingdom economy, and no responsible Member of the House of Commons can deny that. The House of Commons could not, in any case, having regard to the recent history of those companies, stand aside and let them fall. Whether the Conservative Party likes it or not, these companies know the wisdom of the NEB being established in this country by my party.

Looking at the 300,000-plus jobs over the total range of the NEB holdings, and considering the dependence of other occupations—this is another important factor—as a result of which many hundreds of thousands of jobs have been protected by NEB activity, it is clear that we have already a considerable work force protection which has come from the work of the Board. Where we have companies such as Rolls-Royce and the need to maintain a very substantial car manufacture in this country—and also ICL and Ferranti in computers and engineering—it is important to understand that, if these areas of the economy were not protected, hundreds of thousands more jobs would be placed in jeopardy.

We can reasonably conclude that the Scottish Development Agency and the Welsh Development Agency, and the record of the NEB, have been justifiably praised by the Secretary of State. But the Bill seeks to raise the limits substantially—the SDA to a maximum of £800 million, the WDA to a maximum of £400 million, and the NEB to £4,500 million. These figures may well be justified, but here I come nearer to the position of the hon. Member for Horsham and Crawley. At this stage, bearing in mind that we shall be dealing with some of these matters in Committee, it is not for me to question the word of my right hon. Friend. I take it for granted that he has discussed with the NEB the full financial limit implications of the proposals.

To that extent, I accept that this illustrates the need, at this stage anyway, to support the Bill in the vote to be taken later today, but it also illustrates another matter. There is, in my view, an imbalance of treatment which can be seen, in relation to the Northern region in particular, if the present trend of the NEB investment continues. Here we have an indication that the Northern region has suffered a lack of investment support. For instance, by April of last year, only five Northern companies and three subsidiaries attracted NEB investment, involving 1,679 jobs. In the North-West region, as the Secretary of State mentioned last week, there were 35,000 jobs involved. But, with NEB investment at the level of which we are now aware, there was a total job involvement of 287,292 jobs at the relevant date. Quite clearly, in the North-West region and the Northern region, as compared with Scotland and Wales, we are certainly in the less favoured position. If I may say so, the Northern region is at the bottom of this league.

If the NEB strategy in the regions is to help medium sized and smaller firms, as was claimed in the annual report of 1977, why is there this disappointing level of investment in the Northern region? As I understand it, the purpose of the Board is to promote industrial efficiency and market competitiveness and provide, maintain, and safeguard productive employment. Why is there such little impact in the Northern region where for decades there have been intolerable levels of unemployment and an outstanding potential for development of new skills? There is also a high level of regional activity to attract new industries and the advantages of improving communications and port facilities which are ideal for home and international trading.

Assistance to the Northern region up to the third quarter of last year by regional development grants and payments under sections 7 and 8 of the Industry Act 1972 amounted to £143 million. For the financial year 1977–78 Northern region it was £145 million. The NEB is not matching by any investment activity the level of aid to the region. It is suggested that the NEB has taken the view—and I hope that it is wrong—that the North is largely made up of what are described as slave companies, which have their parent companies outside the region. Consequently, when the economic winds blow cold the first action of the people at head offices is to cut their losses and run. In Hartlepool we have a great experience of that. Such a move was announced just a few days ago. There may be an element of truth in the suggestion.

Is it not time that large inputs of finance to induce companies to settle in this region had a more active response from the NEB to provide the confidence which the parent companies apparently lack? Especially with this new input of financial limits, the NEB now has an opportunity to correct this regional imbalance of investment.

I understand that the location of INMOS, the micro-electronics company associated with what is popularly known as the silicone chip production proposals, backed by the National Enterprise Board, has not yet been decided. I am informed that the Government have granted an industrial development certificate to INMOS for its United Kingdom technology centre at Bristol. This move is to accommodate some 50 design and development personnel, but a report in the press suggests that the force will be built up by the early 1980s to between 400 and 500.

On 13 December my hon. Friend the Member for Easington (Mr. Dormand) and my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans), on behalf of the Northern group of Labour MPs who have been diligently working on this matter and preparing as usual a constructive and formidable case for the Secretary of State to consider, made representations to him. They learned that no decision had been taken on the matters referred to in press reports. They were also informed that a certain advertisement was unauthorised. I make no further comment because, as I appreciate the position, the chairman of the NEB has courteously taken the initiative to put that matter right.

There has clearly been a decision regarding the technology centre. There was a later press report on 5 January of this year following a meeting of my hon. Friends. It adds that the Government have also granted—I hope the Under-Secretary of State will listen carefully to what I say—an industrial development certificate in Bristol for 100,000 sq. ft. for a manufacturing centre. Will the Secretary of State clarify the position? He stated last week in the House:
"About 90 per cent. of the expenditure and 90 per cent. of the jobs"
in the manufacturing side—and I believe he may well have included the head-quarters—
"will be in the assisted areas."—[Official Report, 18 January 1979; Vol. 960, c. 2035.]
I am aware that the consultant managers who are engaged on this matter are studying sites. Indeed, on 13 December 1978 the Secretary of State informed the Northern group of MPs' officials that 90 per cent. of the jobs and 90 per cent. of the capital investment would be in the assisted areas. His statement last week confirmed that. Clarification is needed in the light of the Bristol IDC press report of 5 January.

The Secretary of State will understand that on a number of other industrial development matters in the past Governments have expressed confidence that the claims of the Northern region would be carefuly considered. I am sure that he has expressed a similar view. But since we are dealing with the proposals for four manufacturing units involved in the INMOS plan, employing 1,000 people in each unit, and a substantial administrative centre in a new headquarters, the North regional claim requires a confirmation that INMOS will be establishing the manufacturing units and the headquarters in assisted areas. There should be a rebuttal of any press statements suggesting otherwise.

I wish to make this matter absolutely clear. It is true that the INMOS technology centre will be located in Bristol. Nobody in this House regrets that more than I do. I had hoped that it would be located somewhere nearer my constituency. But I wish to make it perfectly clear that the NEB have announced that INMOS has engaged a firm of management consultants to conduct a detailed study with the intention of locating the INMOS factories in assisted areas. It is expected that the headquarters will be alongside one of these factories in an assisted area.

On this reasonably satisfying note, I draw to a conclusion merely by giving a warning and at the same time expressing my thanks for my right hon. Friend's remarks. The North-West region, the Northern region and, indeed, England, are not making a plea that we are envious of the impact of the development agencies in Wales and Scotland. Quite the contrary; we understand their problems. But there does not appear to be the same impact in areas inside England, such as my region, which has many decades of experience of high levels of unemployment. On many occasions we have made representations to Ministers where the industrial power structure has been such that in the end they have had their own way. It is no consolidation to have had the encouragement of the backing of a Government Department—in this case the Department of Industry—yet subsequently to find that the preconceived notions of those in industry influence them to go elsewhere.

Tonight the House of Commons is passing a Bill involving substantial additions to the financial limits of the National Enterprise Board. I am conscious of the fact that the chairman of that Board is jealously guarding his entrepreneurial rights, and I have the right to say to him that he must bear in mind that the NEB also carries a responsibility to this House which gave him the organisation that he now heads. He must be answerable to Parliament—to all Members of this House who have a stake in this undertaking, whether they oppose the NEB or not.

It is imperative in the functioning of our economy that the chairman must understand that the good will of the House and the support of its Members depend on his recognition that his entrepreneurial instincts must carry a responsibility to carry out the statutory powers that have been vested in the NEB. He must see that the regions get a fair crack of the whip in terms of investment and that the NEB will match the substantial amounts of money that the Government give under sections 7 and 8 of the Industry Act 1972.

There is no point in attracting industry to the regions if a powerful body like the NEB will not confirm the foundations of investment there. The absence of NEB activity in the regions indicates to parent companies outside those regions that the NEB has no confidence in them. If that is the case, why should the parent companies have confidence in the regions? I hope that this debate will convey our attitude to the chairman and that he will realise that our support for him depends on the fact that there are social, economic and regional judgments which he in turn must support and on which he must soon make some pronouncements.

5.22 p.m.

I was interested to hear from the remarks of the hon. Member for Hartlepool (Mr. Leadbitter) that he was not at all jealous of the Scottish and Welsh Development Agencies, even though he represents a constituency in the North-East. That is a measure of his sound judgment. However, I did think earlier that he had swallowed the Government's propaganda about those agencies rather too literally. Also, in the earlier part of his speech he made some play about the Conservative Party's attitude to the agencies. I hope that he will realise that there is a reason for the distinction that we draw between the SDA and the WDA on the one hand and the NEB on the other.

My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) was absolutely right to say that the Secretary of State was talking rubbish when he suggested that the Bill was vital to the SDA and WDA. The fact is that the existing financial limits for these agencies have not been stretched. For example, in the case of the SDA, which has spent or committed £170 million, the Bill provides a new financial limit of £800 million. This can only be described as a piece of political gimmickry and a commitment that could be put into effect only by a new Government and a new Parliament in the future.

In fact, the Bill is very much in line with the exaggerated claims that Ministers make in relation to the NEB and the two agencies. Of course Ministers have to find something to boast about in these rather gloomy days, but the suggestion that this Bill will provide a massive transfer of funds to development areas is totally illusory, and the Secretary of State must know that.

The amendment tabled by my right hon. Friend helps to put the SDA into perspective by distinguishing between its inherited functions and its new functions. There is no substantial disagreement across the Floor of the House about the importance of the inherited functions of the SDA. These include industrial estates management, advance factories, environmental improvement, the attraction of industry, and help for small businesses—in fact 90 per cent. of the agency's functions.

The management of industrial estates and the attraction of industry were previously carried out by the Scottish Industrial Estates Corporation and the Scottish Council (Development and Industry). Tribute is due to both these organisations for the tremendous contribution that they have made over the years to the Scottish economy on a very modest budget.

The difference today is not simply that these functions have been transferred to the SDA; it is that the agency is presented to the public as some kind of miracle machine—a new miracle cure for all of Scotland's economic problems. Ministers stoke up great expectations for the NEB and for the agencies just as, over the years, they have stoked up great expectations about the benefits of nationalisation, only to find that the extension of public ownership and Government intervention has stifled economic growth and left Britain lagging behind nearly all her international competitors.

In his opening speech the Secretary of State said:
"The Scottish Development Agency has firmly established itself in the industrial scene and has gained widespread and genuine acceptance and support from the Scottish banks and industry and commerce generally."—[Official Report, 18th January 1979; Vol. 960, c. 2040.]
But, as my right hon. Friend the Member for Leeds, North-East indicated in his contribution, industry's attitude is ambivalent, particularly in the present state of the British economy. Industry welcomes another source of funds which may be obtained below the going rate—it would be foolish not to do so—but few business men can be sure that tomorrow they will not be competing against the NEB or one of the agencies. Of course, industry very much resents the tendency of the NEB and the development agencies to invest in one particular company in a declining market.

Can the hon. Member give chapter and verse either of the institutions in Scotland or the industrial organisations in that country which have been specifically critical about the role of the SDA? Will he bear in mind the fact that in their evidence to the Wilson committee on the financial institutions, the Scottish clearing banks indicated that the SDA filled a noticeable gap in the equity market for small and medium-size companies?

I have already referred to that point. I said that business takes an ambivalent attitude to the SDA—and why should it not do so? I am sure that if the hon. Member were a banker he would understand that if he could reduce his own risk with a company and get a Government agency to put in some extra money he would do so. As long as the agency exists it will be a temptation for bankers and business men of all kinds to take advantage of it.

Of course, the agencies are under great pressure to spend money, and that is not a good discipline for any kind of Government body. There is pressure from Ministers and from trade unions every time a business runs into any kind of difficulty. Economic forces which should be disciplining a market economy are plagued by the belief that the Government or their agencies can always be relied upon to save the day whatever the problem and whatever the cost.

This pressure for Government intervention becomes more and more persistent with every extra £1 million that is made available to the NEB and its agencies.

The SDA denies that it is a rescue operation for sick companies. In its 1978 report it says that it aims
"to support companies showing long-term prospects of viability and profitability."
It all depends on what is meant by "long-term."

In view of the amount of funds already available from other sources for profitable investment in Scotland and elsewhere in the United Kingdom, it is not surprising that the SDA investments are more related to high-risk rescue operations than to viable and profitable concerns. That is a fact of life when considering the investments of the SDA to date. This is why Ministers, the NEB and the agencies need to be reminded of the excellent advice given to them by the Financial Times—a newspaper that knows something about these matters—on 25 April 1978. The leading article of that day said:
"The Government agencies ought to be guarding against two dangers—being used as a 'soft touch' by companies which are perfectly capable of raising money from market sources, and being used as a lender of last resort by companies whose future is so uncertain that no private sector institution will help them. If they turn away both these sorts of business, there will be very little for them to do and that will be all to the good."
What worries me is that this good advice is wasted as long as Ministers revel in using the NEB and the agencies as political tools with which to distort the market economy—a situation that must make life impossible for the executives and staff of the agencies as they try to follow the guidelines laid down by the Government.

That is why, therefore, in the case of the SDA in particular, a Conservative Government would introduce new guidelines. We want to ensure that economic realism and financial discipline are linked to the incentive to work, so that economic growth may be achieved and sustained. It is badly needed, for it is the only cure for our economic ills. That is why we must end the pretence that the NEB and the SDA can produce an economic miracle and work wonders for the Scottish economy.

Labour Members, in this House and in Scotland, are continually raising great expectations, the kind of miracle cures that the SDA will be able to achieve. That is completely false. What must be learned is that economic success cannot be based on more and more public expenditure. That has been tried time and time again and has failed miserably, and it accounts, to a very large extent, for the economic problems that face us today.

I am grateful to the hon. Gentleman for his reference to my party. I think that he might have read the remarks that I made when this debate began, when I said:

"The Government will have much more credit and respect if they make clear that the Agency can, at best, make only a marginal contribution to the Scottish economy."—[Official Report, 18 January 1979; Vol. 960, c. 2079.]

I am glad to notice from what the hon. Member said that he had read Professor Donald Mackay's report, which underlined that point very strongly—a report, indeed, which he quoted. Of course, the SNP cannot get enough agencies of this kind, and its manifesto is filled with agencies, Government funds, investment funds and everything else, which all support the kind of ideas which the Labour Party puts forward.

The hon. Gentleman referred to Professor Donald Mackay, of Heriot Watt university when he spoke last Thursday. It is quite true that the £24 million per year which the SDA is spending on industrial projects has been more than offset by a substantial fall in Government expenditure on industrial regional aid in Scotland. Therefore, again we can see that the Bill, to a very great extent, is a sham.

We should also reconsider the wisdom of combining financial aid to small businesses—which is essentially the investment function of the SDA—and the industrial and environmental functions into one single agency. It would certainly be worth while considering the effect of operating this investment function separately, as was the case for small businesses before the SDA was formed.

I think that we should re-examine the SDA's environmental functions with a view to introducing more privately funded investment, particularly for housing. It can be no coincidence that Scotland, with more council housing than any other country in Western Europe, still has some of the worst housing in Western Europe.

I was less than clear how the hon. Gentleman envisaged the SDA's role vis-à-vis the smaller companies. The SDA currently makes loans to a substantial number of companies. In the Lothian region, in which the hon. Gentleman is interested, about 25 companies have benefited to the extent of rather more than £250,000. I am not quite sure what the hon. Gentleman is proposing should now happen to assist these small companies either in the way of finance or of guidance and advice, such as the small firms sector of the SDA does at present.

What I am suggesting, and what I shall repeat, is that it might be worth reconsidering whether the investment function, the small business function, should remain with everything else that the SDA does. It might be worth while putting the investment and small business function into some other kind of Government-sponsored agency. The Minister will remember that the Small Business Council did this work before the SDA was dreamed of, and did it rather well. It may be that we could go back to that kind of arrangement.

Before the Minister intervened, I was referring to the question of housing and the environmental functions of the SDA. The fact that Scotland has some of the worst housing in Western Europe suggests that the remedy must be to increase the number of owner-occupiers. It may be that the SDA could help in this respect. That is the way in which I believe we should look at the SDA and its functions generally. I believe that we should do this with realism and common sense, to make sure that the Scottish people get value for money. This Bill is clearly an attempt to prolong the myth that Government spending and Government intervention can create prosperity when in fact the opposite is the case. That is why I shall vote against the Bill this evening.

5.37 p.m.