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Commons Chamber

Volume 972: debated on Tuesday 23 October 1979

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House Of Commons

Tuesday 23 October 1979

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Private Business

British Railways (No 2) Bill

Motion made, That the Bill be now read the Third time.

[ Queen's Consent, on behalf of the Crown, signified.]

Question put and agreed to.

Bill accordingly read the Third time and passed.

West Midlands County Council Lords (By Order)

Order read for resuming adjourned debate on Question proposed [ 28 June], That the Bill be now considered.

Debate further adjourned till Tuesday next.

Oral Answers To Questions

Education And Science

16 To 18-Year-Olds (Awards)


asked the Secretary of State for Education and Science if he will make a statement about provision of maintenance grants for 16 to 18-year-olds in full or part-time education.

The Government have no plans to alter the position on 16 to 18-year-olds' awards, either by introducing a mandatory scheme for the age group, or by removing the present freedom of local education authorities to pay maintenance grants to pupils and students over compulsory school age, at their discretion and from their own resources.

Is the Minister aware that a substantial number of young people who gained good O-level results this summer left school to take dead-end jobs because they realised that it would cause too much financial difficulty for their parents if they stayed at school? What does the Minister intend to do to stop this waste of national resources and, in view of the economic climate being created by the Government, to encourage local authorities to make more grants available to pupils aged between 16 and 18?

The hon. Gentleman's record on this subject has been consistent over the years, but we made clear in opposition that we were opposed to the pilot scheme proposed by the previous Government. As to the longer-term plans for improving awards for the 16 to 18 year-olds, we believe that the case for any change in the present arrangements will receive attention during the review of the relationships between the school, further education and training which the Government are undertaking against the backgrounds of our public expenditure policies. We announced in the summer that we would continue that review period. As soon as there is any announcement to make, I shall see that the House hears it.

Is the Minister aware that in my city of Manchester we are pursuing our own endeavours to encourage young people to stay on for higher education and A-levels, but we have been informed by the Department of Education and Science that if maintenance allowances are made by my city part of the grant will be offset, thereby prejudicing the chances of those children taking advantage of the benefit and staying on at school? Would it not be more sensible if the Secretary of State spent £70 million on our own education system instead of on independent bursaries?

The hon. Gentleman should know by now that the financial support for the assisted places scheme does not come from the cuts announced by the Government some weeks ago. When he refers to Manchester as his city, I think that he should realise that he is sharing it with a few more people than himself.

Manchester city council has announced its own mandatory awards scheme, but the simple fact is that the ratepayers of Manchester will have a good opportunity to assess some time next year how effective and successful the scheme has been.



asked the Secretary of State for Education and Science what representations he has received about the £4·3 million cuts in education expenditure by Derbyshire county council; and if he will make a statement.

My right hon. and learned Friend has received no such representations. As the Government have made clear, it is for individual local authorities to decide, in the light of local circumstances, on priorities within and between services.

I have no doubt that the Department will be receiving representations shortly. Is the Minister aware that on top of the massive cuts proposed by the county council there is a threat by the Government, together with the Tory-controlled county council, to do away with free transport for hundreds of thousands of schoolchildren outside the two or three-mile limits? Will the Minister guarantee that such a proposal will not be carried through by the Government? If it is good enough for Tory Ministers to travel free, it is good enough for the schoolchildren of Derbyshire and elsewhere to do so.

The hon. Gentleman will know what is in the Education Bill within two or three days, when it is published. As to cuts in education expenditure in Derbyshire, the figure is not £4·3 million mentioned in the Question but £3 million, which is 2·5 per cent. or 1 per cent. less than the cuts announced in 1976 by the Labour Government for 1977–78.

If the Minister has not received any representations from Derbyshire, he must surely have heard that the Tory chairman of the Wiltshire county council—


asked the Secretary of State for Education and Science whether he will make a statement about the effect of the educational expenditure cuts on the universities.

I expect to set grant for the new academic year at a level in real terms about 1 per cent. above that for 1978–79. I hope to be able to make an announcement about grant for the following year shortly.

As the recently proposed cut of £100 million will inevitably mean cuts in the number of students, courses and staff in practically every university, can the right hon. and learned Gentleman give a guarantee that no university will be forced to close? Does he not realise that those who will suffer most from such a mean policy will be overseas students from the poorest countries, who will have to pay fees of £3,500 a year, thus making them the highest fees in the world?

The hon. Gentleman asked two questions. As to his first, we have still not announced our figures for 1980–81, although we shall shortly do so, but I do not believe that they will lead to the closure of any university. As to his second question, the fact is that in higher education today we have about 58,000 overseas students, whereas as recently as 1971 we had only 39,000.

Is my right hon. and learned Friend aware that there is growing public anger at the misuse of public funds by those student union bodies which disrupt activities and behave like hooligans? Will he now take steps to remove that money and ensure that it is used more effectively?

I obviously regret any action that causes disruption of any kind, and from time to time I appear to be the butt of some of that action. I do not know whether that has any direct involvement in the spending of public money. As I said, our proposal for the universities is a 1 per cent. increase in real terms from what it was last year, and I hope that when the figures for 1980–81 are announced it will be found that we are keeping that at constant levels.

Does not the right hon. and learned Gentleman agree that the proportion of students who go to British universities is still lamentably low compared with many of our industrial competitors? Does he not also agree that the views that he expressed earlier about the cuts are not shared by many vice-chancellors?

It is, of course, true that the percentage of those going on to our universities, although not necessarily to all forms of further education, is lower than in certain other countries. That I accept. As to the second part of the question, I repeat what I said earlier. I do not accept the wilder statements made about the effect of our reductions in expenditure in that area.

Does not my right hon. and learned Friend agree that too many universities were created in this country after the war, and that we are now paying the penalty for that?

I think I am right in saying that the entry into universities this year is at its highest ever.


asked the Secretary of State for Education and Science what representations he has received from teachers' unions regarding public expenditure cuts in the education service.

I have met delegations from all the main teacher unions to discuss a range of issues, including public expenditure. I have also received many letters from individual branches of those unions.

Does the Secretary of State appreciate that, with the widespread cuts and the jobs that will be lost in the education service, there has been much disappointment that, with all his liberal reputation and image, the right hon. and learned Gentleman has simply caved in to the Cabinet attack on the State schools and the standard of education in our country?

I am grateful for what I suppose was meant to be a compliment in the hon. Gentleman's question, but I do not accept his conclusion. We are planning for a 3 per cent. reduction in expenditure this year and a further 1 per cent. reduction in expenditure next year. I believe that that can be achieved without having the effect on standards of education which the hon. Gentleman implied.

So that the whole question of the so-called cuts can be put into a proper perspective, can my right hon. and learned Friend tell the House how much money his Department will be devoting this year to our education services, compared with last year?

I cannot do so without notice of the details. But I can tell my hon. Friend that in terms of overall expenditure we spend £8 billion on education, of which £6 billion goes through local education authorities, mainly on schools.

Will the right hon. and learned Gentleman check on his sums? Is he not aware that we are not talking about minuscule percentage cuts? When one considers the Government's refusal to take account of their responsibility to meet Clegg pay awards, the level of inflation, to which they have substantially subscribed, the cuts in rate support grant and the cash limits, one realises that the figure for education cuts, on 1978–79 estimates, is nearer 17 per cent., rather than the figure that the Secretary of State has given hitherto?

I am grateful that, according to the hon. Gentleman, our proposed cuts are, in his own word, "minuscule". I shall remember that, and I am grateful to him for saying it. As to his other comments, he is, with great respect, wrong. We have not reneged on any Clegg commission report. Indeed, the Clegg commission has not yet reported. As to inflation, the hon. Gentleman must surely realise that when we talk of expenditure cuts, or otherwise, in real terms, we take account of inflation in arriving at those figures.

Schools (Parental Choice)


asked the Secretary of State for Education and Science whether he will make a statement on his proposals for strengthening the legal rights of parents regarding the education of their children.

The Education Bill which my right hon. and learned Friend will present to the House shortly will contain provisions to ensure that parents' wishes are taken into account in the choice of schools for their children, and that there is a local appeals system, and provide for parents to be represented on the governing bodies of their children's schools.

Is my hon. Friend aware of the great importance that many parents attach to being able to send their children to the school of their choice, especially if it is a traditional school outside their own catchment area? Will he bring forward the appeal procedures, which will be widely welcomed, as soon as possible.

The Bill to be published shortly will contain proposals for parental choice, including the publication of results, what goes on in schools and how parents can apply for a certain school. There will also be an independent tribunal, whose decisions will be binding upon the local authority, to which parents can appeal if they do not get the school of their choice. I am sure that these proposals will be welcomed throughout the country by supporters of both major parties.

Will the proposed Bill apply, or in the usual way be applicable, to Northern Ireland? If not, may it be taken that the principle of the policy that is to be applied in the rest of the Kingdom will be applied in Northern Ireland?

I do not think that this Bill will apply to Northern Ireland, but the principles that we hold within the Conservative Party will, in the long run, obviously influence legislation throughout the United Kingdom.

What value will these measures be to parents if the Bill establishes operating limits which local authorities can apply to schools, thereby declaring that they are full when they are not really full at all, if the same legislation takes away existing parental rights and if expenditure cuts lead to many small village schools being closed?

The Bill will give full details of how these matters will be dealt with. The Bill contains requirements with regard to local authorities which desire to reduce the intake into schools, and there is a right of appeal to the Secretary of State. Therefore, there is no power within the Bill for local authorities indiscriminately to reduce the size of schools against the wishes of people in the area.

Is it not time that the Minister was honest with the House and, indeed, with himself? Whatever we may build into any Act of Parliament about legal rights and other matters, the great mass of our children and their parents will have no choice at all about the schools they attend, and the hon. Gentleman had better direct his attention to improving standards in and the supply of resources to the State system. The only choice that will be left is to those who have the money to exercise that choice.

I do not see that the question of money comes into the matter at all. This is a State system, and no fees are being charged. That may amuse Labour Members, but that is what happens. In answer to the point made by the right hon. Member for Durham, North-West (Mr. Armstrong), it is important to say that there is no means by which there is absolute choice of school for all children. In any form of society there is no absolute choice. If one then says that one does not want any choice at all and that this matter is all phoney and dishonest, that is fair enough. That is usually the view of Labour Members. It is the view of this side of the House that where we can extend choice, whether in owning houses, in schools or in other ways, it should be done. That is the great division between the two sides of the House.

School Meals And Milk


asked the Secretary of State for Education and Science if he will now make a statement on the future of school meals.


asked the Secretary of State for Education and Science when he will relieve local education authorities of their obligations to provide school meals and school milk; and if he will make a statement on the latest annual cost of such provision.

I shall be asking Parliament, in the Bill which I propose to introduce, to give local authorities greater flexibility over the provision of school meals and milk. Annual expenditure on these services in England and Wales is currently about £400 million and I expect the new measures to enable local education authorities to make substantial savings in 1980–81 and subsequent years.

Will the right hon. and learned Gentleman come clean and admit that his proposals will make school meals either unobtainable or available only at a prohibitive price for the great bulk of working-class families? Does he accept that he is turning the clock back 50 years, so that we shall see again undernourished children in our schools?

I do not accept that. The purpose of the Bill is to give wide flexibility to local education authorities to decide the type of meal that they wish to provide and the charges that they wish to make. I have no doubt, from what we have heard, that most local authorities will continue to provide perhaps a different type of meal at a charge that will be within the pockets of the parents of the children.

Does my right hon. and learned Friend agree that it is high time that this £400 million was taken out of the education budget, where it does not belong? If there is a social service requirement for the provision of school meals and school milk to poor families, this should be dealt with in that way and under that heading. Education money should be devoted to education.

I accept what my hon. Friend says, that although this matter comes in the education budget it is not central to education needs. That is why, in looking for reductions in expenditure in education, I have examined areas such as school meals rather than the provision of education in the classroom itself. It is right, basically, that the school meals service, which started during the war, has become a social service provided by the Department of Education rather than by the Department of Health and Social Security.

If the Secretary of State is so proud of these reductions in expenditure in the financial year 1980–81, will he tell the House why he failed to consult any trade unions about the proposals being made by the Government? Is he aware that the last time the price of school meals was increased, in 1977, the numbers taking meals fell by 600,000, on a price increase of 10p a day? Is he aware that children in school playgrounds are now calling himself and the Prime Minister milk snatchers and meal stealers?

Let us deal with the question in the past decade. First, why have I not seen the unions? I have seen both the National Union of Public Employees—

and the TUC on these matters. I have seen both the unions that requested to see me. I have also seen the local authorities. My colleagues have met some of the teacher associations. On the second part of the question, on reduced numbers, the hon. Gentleman might care to reflect that at the time the party that he supports took office in 1974 the price of a school meal was 12p. According to plans when they left office, the price had gone up to 30p. That was a 150 per cent. increase during the period in power of his Government.

Is my right hon. and learned Friend aware of the great disparity between administrative and food costs in school meals provision by local authorities, especially in the Inner London Education Authority, which seems to spend more on administration and less on food than most other local education authorities?

It is not only in inner London that this situation applies. The cost to the public of every school meal produced is 54p. Of that amount, the parent pays 30p and the taxpayer pays 24p. The value of the food in that meal, which cost 54p to produce, is only 16·58p.

School Standards


asked the Secretary of State for Education and Science what steps he intends to take to improve the quality of primary and secondary education.


asked the Secretary of State for Education and Science if he will make a statement about the Govenment's policy to raise standards in schools.

An all-graduate entry to the teaching profession is being introduced. Action to promote higher educational standards will also be based on forthcoming reports on local authorities' curricular arrangements and Her Majesty's Inspectorate's national survey of secondary schools. Her Majesty's Inspectorate has recently published guidelines on primary mathematics following its national survey of primary schools. The first report from the assessment of performance unit, on mathematics performance by 11-year-olds, will be published in 1980, and other reports will follow.

Will reducing expenditure on education improve or reduce educational standards? Will reducing the number of textbooks available to children improve or deprive them of their educational standards?

The share of the gross national product that has gone to education over the past 25 years has almost doubled, but I do not think that anyone can claim that schools' standards have doubled. Education standards depend upon the calibre of teacher intake, which we are improving, upon the curriculum that is taught, which we are examining, and how that is tested, which we are also looking into.

Will my hon. Friend give the House some indication of when we can expect Her Majesty's inspectors to play a much greater role in the Government's policy to increase education standards? Will he accept that it is vital that Her Majesty's inspectors once again play a central part in the Government's policy of ensuring rising standards?

The inspectorate, in numbers, is lower than it has been for many years. This restricts the number of times that it can visit individual schools. But the number of reports that it has issued recently has been far in excess of previous years. A report on primary schools, another that is coming on secondary schools, and reports on mixed ability teaching and language teaching leave no doubt in my mind that the inspectorate has helped to raise the level of achievement in schools.

As the Minister believes that he will improve the quality of education in schools by promoting selection, can he say what co-ordination exists in his Department on policies for promoting selections and the cuts? Is he aware that one local authority that is giving children practice tests in the 11-plus examination has been obliged, because of the cuts, to use old papers containing questions in pounds, shillings and pence? As the children taking these tests were aged 3 when this country converted to decimal currency, what effect does the Minister consider that situation is having on their education? How can the Minister square that, and many other examples, with improvements in education standards?

Selection is applied not only between schools but inside schools. Selection inside schools is part of the education debate. It has always been understood that it is advisable to have one or two trials before sitting an examination such as the 11-plus. What better way is there than to include history and mathematics at the same time? That, presumably, is what is known in schools as integrated study. Shillings and pence were abolished some time ago. We have had a Labour Government since then, and one can only wonder what happened during that period.

National Union Of Teachers


asked the Secretary of State for Education and Science when he expects to meet the general secretary of the National Union of Teachers.

Has the NUT withdrawn its objection to the Professional Association of Teachers being represented on the Burnham committee? Apart from the PAT's numerical claim, has not its no-strike policy much to be said for it, especially when compared with the alarmist statements and disruptive action of the NUT?

Obvously I welcome the statement by a union that it does not propose to take action to disrupt provision for children. The composition of the Burnham committee is a matter not for the NUT but for me. I have told the Professional Association of Teachers that I propose to review the position in September 1980.

When the right hon. and learned Gentleman meets the general secretary of the NUT, who yesterday described him as abysmally ignorant and frighteningly complacent, will he discuss the dossier which shows that already the draconian cuts are having terrible effects on the fabric of State education, including nursery and adult education, education for the disadvantaged, in-service training and school buildings?

Of course I shall be willing to discuss the document which was sent to me today by Mr. Jarvis and the NUT. The hon. Member said that Mr. Jarvis had described me as being abysmally ignorant. I understand his reason was that I challenged his claim that I was presiding over the dismantling of the education system. When I received the document this morning I asked for one figure to be checked. I asked what a 70 per cent. cut in supply teachers would mean in Barnsley. When my office inquired, the Barnsley education authority said that no such decision had been taken and that it had no knowledge of such a proposal.

Will the Secretary of State now answer the question which my hon. Friend the Member for Newton (Mr. Evans) asked? Is he aware that there is a grave shortage of books in many schools? Is he aware that in my child's State school class one textbook has to be shared between four and that children cannot take home textbooks for homework? What is he going to do about that?

That is a fair question. There is a shortage of books. One of the troubles is that the price of textbooks has increased by far more than other items have in recent years. I am anxious to see that there is an adequate supply of textbooks in schools. For that reason, when examining reductions in Government expenditure generally, I have attempted to make education cuts in areas that do not affect what happens in the class room.

Assisted Places Scheme


asked the Secretary of State for Education and Science when he expects to bring forward proposals on aid to assisted schools.

I assume that the hon. Member is referring to the assisted places scheme, the establishment of which is provided for in the Education Bill which my right hon. and learned Friend will present to the House shortly.

Is it not outrageous that the Government are going ahead with this wretched scheme to provide an extra £90 million for the tiny 5 per cent. elitist sector in education while making cuts of hundreds of millions of pounds which affect the other 95 per cent. of school children? How can the Minister pretend that this is not the most blatant discriminatory action to create two nations in our education system?

This legislation is discriminatory. It discriminates in favour of poor children who cannot afford to go to such schools. I remind the Opposition that between 1974 and 1978 the percentage of blue collar workers' children who attended universities fell from 28 per cent. to 25 per cent. Practically everything done by the Labour Government since 1974 reduced education chances for working-class children.

Is the Minister aware that the undertaking given yesterday by the Secretary of State at the Assistant Masters and Mistresses Association conference that cuts will not be made in education expenditure to provide for the assisted places scheme holds mathematics teachers spellbound? There seems to be a new law in mathematics, that one can take hundreds of millions of pounds out of the State maintained sector and give scores of millions of pounds to the independent sector without there being a connection between the two. Does the Minister expect anybody to believe that nonsense? Does he think that it will be accepted by anyone involved in education administration, by trade unions, or even by public school headmasters?

The money for the assisted places scheme is not drawn from the rest of the education system. The scheme was a specific commitment in our manifesto. Many people in the Labour Party believe in fulfilling manifesto commitments. So do we. A means test will be operated. Therefore, the average cost of sending children to independent schools under the scheme will be approximately the same as the cost of sending them to a State secondary school. The scheme will, therefore, have little effect on the overall budget.

Do not questions such as that asked by the hon. Member for Oldham, West (Mr. Meacher) smack of dubious intent since he and some of his colleagues were educated at public schools? Is this not yet another example of "Do as I say, not as I do"?

I am grateful for those comments. All the recent reports from the inspectorate indicate that there are problems in inner city schools and deprivation among the children there. We are going ahead with the scheme, with those children in particular in mind.



asked the Secretary of State for Education and Science if he will make a statement about the effect of public expenditure cuts on education.


asked the Secretary of State for Education and Science if he will make a statement on the effect of expenditure cuts on education standards.

I have confined reductions in planned expenditure for 1980–81 as far as possible to those areas of my programme which do not form an essential part of the provision of education for young people. I do not anticipate any adverse effect on education standards.

Is the Secretary of State aware that that reply is not in keeping with the estimates made by local education authorities? Does he realise that the Mid-Glamorgan education authority estimates that a 5 per cent. reduction in resources will result in the closure of all adult education centres, three education centres, a reduction of 100 nursery school teachers and the closing of three library services? If the Secretary of State is not going to battle in the Cabinet to ensure that the education service receives more resources, will he do the right thing and resign?

How a local authority chooses to reach its target of what will be a 4 per cent. reduction in present expenditure in any year is a matter for that authority. We, as a Government, have a duty to see that we, as a country, live within our means. We cannot do that without making reductions in the plans that we have inherited. Unfortunately, education has had to take its share of those reductions. I am satisfied that we have made them in a way that will not affect the standard of education.

Will the Secretary of State please come clean and admit to the House, and the country, that the cuts in education expenditure will have, and will increasingly have, adverse effects on the standard of education? Will he admit this publicly instead of hiding behind a facade of pretence that these cuts will have no such effect?

We must keep this in proportion. The situation is that the Government have asked this year for a 3 per cent. reduction in expenditure, and a 5 per cent. reduction in what was planned expenditure for next year. That means spending £96 for every £100 spent last year. I do not accept particularly because of the freedom that I propose to allow over meals, milk and transport, that authorities cannot achieve that figure without having the effects that the hon. Member implies.

I fully support and endorse the views expressed by my right hon. and learned Friend. Is he aware of the recent inquiry undertaken in the North-West by the CBI into the activities of Cheshire county council? That inquiry found that for every 100 teachers at least 70 administrative and ancillary staff were employed. Will he encourage the CBI to undertake further such surveys and inquiries into other local authorities and county councils? Does he agree that this kind of inquiry and the public expenditure cuts which the Government are requesting could well produce a reduction in expenditure and an increase in standards in education?

I should welcome the CBI undertaking an inquiry into any other county of the kind that it undertook in the county which my hon. Friend and I represent. On his wider question, the proposals for 1980–81 envisaged, overall, no reduction in the pupil-teacher ratio, which is as good as it has ever been.

Does the Secretary of State agree that those local authorities that are trying to save money by cutting down, or even abolishing, nursery education are making very short-sighted decisions? Does he agree that nursery education is a particularly important investment, and that its absence will put an even greater strain on primary schools? Will he include nursery education in the category of essential education that he mentioned his first answer?

Having said that I believe that local education authorities should be free to decide how they spend their moneys, I am not prepared to comment on the individual ways in which they choose to do it. Our plans for this year provide for an additional 4,000 places in nursery education. Our plans for 1980–81 provide for a further 2,000 places.

Does my right hon. and learned Friend nevertheless agree that although he is leaving this to the local education authorities, quite rightly, he must use all his power and influence to see that school textbooks, which are central to education, are the least affected by these cuts? I add my plea to that of the hon. Member for Southampton, Itchen (Mr. Mitchell), that textbooks, which are the centre of our education system, should not suffer. If necessary, peripheral matters should.

I fully accepted the point made by my hon and learned Friend in the answer I gave to the hon. Member for Southampton, Itchen (Mr. Mitchell). Of course textbooks are important. I remind the House again that, in the end, we can spend only as much money on education as the country can afford. What we can spend and afford in the future depends upon our ability to expand the economy of this country, by leaving more money for the potential wealth-creating sectors.

Overseas Students

asked the Secretary of State for Education and Science how many overseas students were in higher education over the past two years; and how many he expects to be there over the next two years.

In higher education in Great Britain there were 57,600 overseas students in 1977–78 and about 58,400 in 1978–79. The planning numbers for expenditure purposes, continuing the policy of the previous Government of restricting the number of foreign students, were 46,000 in 1979–80 and 45,000 for 1980–81, but plans for 1980–81 are under review and an announcement will be made shortly.

Is the Minister aware that this is all completely changed by the Government's recent announcement, whereby fees in British higher education will be the highest in the world? They will be double the size of those even in California. Is he aware that this policy, in the opinion of the vice-chancellors, will destroy many technological courses in our universities? There is a mix there, and if overseas students leave there will be no viable courses left for the home students. Does the final paragraph of the letter from his right hon. and learned Friend to the vice-chancellors yesterday mean that the Government will have second thoughts on this matter if the University Grants Committee gives as its considered opinion that this will decimate—not just reduce—the number of overseas students in Britain?

There is a considerable number of American colleges where fees are at least equal to, if not higher than, those in this country. It is as well to remember that when, in 1977–78, there was an increase in fees by the previous Labour Government of between 40 per cent. and 105 per cent., there were 2,500 more foreign students in this country the following year than there were the year before. It is also as well to remember that one-quarter of the foreign students come from countries where the average income is higher than in this country and that many of them come from wealthy families. It is not a question of taking away from the poor of the world.

Prime Minister (Engagements)


asked the Prime Minister what are her official engagements for Tuesday 23 October.

In addition to duties in this House I shall have meetings with ministerial colleagues and others. This evening I hope to have an audience of Her Majesty The Queen.

Will the Prime Minister find time today to repeat her sister-bountiful speech—the first thing she has ever said with which I partly agree—because I, too, am thoroughly disgusted with her Government cutting expenditure on housing, health and education while dishing out £1 billion a year to the Common Market? Even if it means our getting out of the Common Market, will the Prime Minister take unilateral action, if necessary, to cut our contribution? Otherwise, she will end up like Old Mother Hubbard instead of sister bountiful.

I am glad to have pleased the hon. Gentleman with at least one of my speeches. As far as cutting our contribution unilaterally goes, we must observe the law, and I think that such a course would be outside the law. We shall try to negotiate these things at the Dublin summit but, believing in the rule of law as we do, we cannot go outside it. We must try to get change by agreement.

Will my right hon. Friend today have another look at the speech made by President Brezhnev during the Summer Recess about the reduction of Soviet troops in Germany? Is she aware that if 20,000 Soviet troops were withdrawn from East Germany there would be 380,000 left, and that if 1,000 Russian tanks were withdrawn from East Germany there would be 6,000 Russian tanks left there? Therefore, was not her reaction in her speech to this recent rather token gesture of disarmament correct?

I wholly agree with my hon. Friend, and I am certain that the speech by President Brezhnev must not divert us from modernising our theatre nuclear forces and from making a decision by the end of this year.

I agree with the Prime Minister that we must obey the rule of law, but does not she agree that the rule of law of the United Kingdom is made in this place and that she has adequate powers to act unilaterally if she wishes?

The law of the United Kingdom is to observe the edicts of the European Court.

Anticipating many weasel words from the Opposition today, and in the months ahead, about the effect of stabilising public expenditure, may I ask whether the Prime Minister has had an estimate made of the extent to which income tax, VAT and rates would have to go up if all the Labour Party's pre-election promises were to be fulfilled and there were no public expenditure cuts?

The fact is that expenditure this year, on the same price basis as obtained under the previous Government last year, is slightly up. In 1978–79 the Labour Government spent £69,766 million. This year we plan to spend £69,796 million. Those figures are in the same real terms. Expenditure this year is therefore slightly up on last, which should give the lie to those who accuse us of savage cuts.

With reference to the answer which the Prime Minister gave to my hon. Friend the Member for Newham, North-East (Mr. Leighton), is she saying, on the question of the Common Market budget, that there are no circumstances in which, no matter how obdurate the French and their colleagues are on the matter of our contribution, she would bring forward amendments to the European Communities Act?

I advise the hon. Member to be a little more patient. We shall try to achieve what we want to by negotiation. I do not make threats to break the rule of law, either nationally or internationally, since we believe that we should have no future if we did.

Fraserburch And Peterhead


asked the Prime Minister if she will visit the fish processing factories in Fraserburgh and Peterhead.

I very much regret that it is impossible for my right hon. Friend to visit the fish processing factories in my constituency. However, will she press her Ministers to hold a meeting with those responsible for fishing in order to secure a negotiated agreement for the industry and remove the threat of unemployment that hangs over thousands of people as a result of high costs and lack of supplies? Is she aware that the industry has been asking for that for four years without success and that during that time almost every sector of the industry has had to apply for temporary employment subsidy to remain in business?

I know the problems that my hon. Friend is facing in this area. The overriding necessity is to conserve herring stocks, and until they have recovered there will be very little supply for that branch of the fish processing industry. My hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food and my right hon. Friend the Secretary of State for Scotland will be discussing the problem with representatives of the industry this week.

Ministerial Broadcasts


asked the Prime Minister what are her current criteria for making a ministerial broadcast.

In view of the cuts, and rumoured cuts, in health, education and social services, and the proposed disappearance of foreign husbands from the hearths of English wives, does not the Prime Minister feel that it is about time she spelt out her programme for this parliamentary Session in a ministerial broadcast?

I think that the place to spell that out is in this House, and it will be spelt out each day. As for the hon. Gentleman's comments about cuts in health and personal social services, last year the Labour Government spent—and these figures are corrected and are on the same price basis—£9,055 million on health and personal social services. This year the figure will be £9,109 million, which is an increase in real terms.

Will my right hon. Friend make as many ministerial broadcasts as possible so that we may all enjoy the sight of the Parliamentary Labour Party and the National Executive Committee of the Labour Party arguing about who replies?

I am not over much in favour of either ministerial or party political broadcasts. I think that people prefer to watch "Tinker Tailor Soldier Spy".

Will the Prime Minister take the opportunity of a broadcast to reassure the British people that she did not mean what she said in her bellicose response to the Soviet initiatives in Europe? Is it not true that the Foreign Office is privately saying that when she shoots from the hip on these occasions she betrays an immaturity in international affairs? Will she now welcome the detente which it is possible for her to take up and accept on the next occasion?

I think that the complaint of the Soviet Union was that I shot with deadly accuracy.



asked the Prime Minister when last she met the Confederation of British Industry.

In view of some of the absurd wage claims that are apparently being lodged in the private and public sectors, will my right hon. Friend lose no opportunity to stress that excessive wage settlements will lead directly and inevitably to higher unemployment?

I entirely agree with my hon. Friend. If excessive wage claims lead to excessive wage settlements a number of people will price themselves out of the market and there will be higher unemployment. The alternative is that they take more money themselves at the expense of others, because we shall not increase the money supply to accommodate higher wages.

Is it still the Prime Minister's view that a combination of a strict monetary control and a wages free-for-all, whether or not it leads to absurd wage claims, will reduce inflation and unemployment?

The way to reduce inflation, as the right hon. Gentleman knows, must be not to print more money. If we print more money, if we increase the money supply, that will be next year's inflation. Within the money supply we expect management and employees to be able to negotiate responsibly, and if they do not they must bear the consequences of their own action.

Are we to take it from that, then, that the right hon. Lady intends to stick to a policy of strict monetary control, irrespective of the effect on unemployment?

The alternative is to print money—[HON. MEMBERS: "Answer."]—and to lead, as the right hon. Gentleman once said to his own party conference, to increased inflation and, thereby, to increased unemployment.

I am much obliged to the right hon. Lady for referring to my past speeches, but I wish that she would refer to her present policy. What is it?

Exactly as I have said. If we print money, that will lead to extra inflation and extra unemployment. Therefore, I can only urge people to realise that if they ask for pay settlements in excess of productivity they are leading either to extra inflation or to extra unemployment, and the extra unemployment would be their fault.

Order. From time to time the Leader of the Opposition is allowed extra latitude. I said that in the last Parliament. Mr. James Callaghan.

Is not the conclusion, therefore, that this winter we shall have higher inflation and higher unemployment? When did the Prime Minister promise that in her election speeches?

We had both of those in very big measure under the previous Government, which is why I am changing the policy.

How does the Prime Minister square her commitment to free collective bargaining with the letter sent by the Secretary of State for Industry to the chairmen of nationalised industries setting pay limits and asking for Government consultation on pay settlements? Surely the kind of pay policy that is private and applies to only one sector of the economy is the last kind that will work.

I think that the right hon. Gentleman has misinterpreted the letter. That letter said that we are setting cash limits—a system which relies on the nationalised industries to improve their productivity performance and to reduce real unit labour costs.

When my right hon. Friend met the Confederation of British Industry, did she discuss the future role of the National Enterprise Board? Was the view expressed that that body should have its role reduced and that it could act very well as a loan board for smaller businesses, enabling the Board to buy equity in a private company requiring funds for technological invention and for the company to repurchase that equity after a fixed period, thus allowing the private company to remain a private and free enterprise?

I did not discuss that matter with the CBI. As my hon. Friend knows, we are intending to change the role of the NEB, and we shall be publishing, or have published, a Bill accordingly.

Will the right hon. Lady confirm that the Government intend to keep to their present public sector borrowing requirement ceiling? If so, will she indicate whether it is her intention, or merely the by-product of her policies, that unemployment will rise, according to The Economist, to 9½ per cent by the end of 1981?

We intend to keep to the public sector borrowing requirement ceiling. I have vivid memories of what happened when we did not in 1976, when we had to call in the IMF. On that occasion we had real cuts in public expenditure of some 6 per cent, from the level of the previous year. We intend to keep to the ceiling. The hon. Gentleman is inviting us to spend our way out of the difficulties that we are in now. That would lead only to increased inflation and increased unemployment.

Railway Accident (Invergowrie)

(by private notice) asked the Minister of Transport if he will make a statement on the train crash at Invergowrie on 22 October 1979.

At about 11.10 yesterday morning at a point about half a mile to the east of Invergowrie station the 9.35 express passenger train from Glasgow to Aberdeen, running at speed, collided with the rear of the 8.44 stopping train from Glasgow to Dundee which had just called at Invergowrie. The force of the collision threw three coaches of the Dundee train, which was at a standstill, on to the shore of the Firth of Tay. I regret to inform the House that four people, including the driver and assistant driver of the Aberdeen train, were killed and 40 were taken to hospital, of whom 11 were seriously injured.

I have ordered a public inquiry, which will be held by the inspecting officer of railways as soon as possible. Until that inquiry has been held it would be wrong to speculate on the cause of the accident.

I am sure, however, that the House would wish to express its deepest sympathy with the families of those who lost their lives and our hope for a speedy recovery of the injured. I should also like to pay a special tribute to the prompt and effective assistance rendered by the emergency services.

First, I extend my sympathy to the relatives of the dead and injured. Is my right hon. Friend aware that the line has been the subject of many complaints about time-keeping? Secondly, does the line have the most up-to-date signalling equipment?

My information is that it is a perfectly adequate and safe signalling system. The other part of my hon. Friend's question is one of the matters that will have to be taken into account by the inquiry. Indeed, that is why we are having a public inquiry.

On behalf of Liberal Members may I express our regret over this sad accident and extend our sympathy to the relatives of those who were killed and to those who were injured? Will the right hon. Gentleman confirm that among the matters considered by the inquiry will be the reason why the slow train broke down?

I cannot direct the inquiry to consider any one matter, but I am certain that that is one of the issues that will be examined by the inquiry.

I associate myself with the sympathy that has been expressed for the bereaved and the injured. I welcome the fact that a public inquiry is to be set up so rapidly, with a full-ranging remit. May we take it that the result of the inquiry will be published in full?

Yes, that will be the position. The inquiry will be held as soon as possible. First, British Rail will conduct an internal inquiry. A public inquiry usually begins after about 10 or 14 days. The details and the findings of the inquiry will be published.

Is my right hon. Friend aware that one of those sadly killed in this event was the driver of the train, Mr. Robert Duncan, who lived in my constituency? Mr. Duncan leaves a wife, son and daughter. Is my right hon. Friend aware that within his community Mr. Duncan was a well respected person? He was both a special constable and an elder of the kirk. It causes considerable anxiety to the families of drivers when there is the possibility that erroneous assumptions will be made—for example, that there may have been some fault on the driver's part. Will my right hon. Friend say that it would be an error to make such an assumption?

I entirely agree with my hon. Friend. I am sure that the whole House will wish to express its sympathy to the families of those who lost their lives. My hon. Friend is correct when he says that we should not jump to any conclusion about the cause of the accident until the inquiry has taken place.

Order. I shall call both the hon. Members for Dundee, West (Mr. Ross) and Dundee, East (Mr. Wilson).

Is the right hon. Gentleman aware that the accident occurred on the boundary of my constituency? I take the opportunity to associate myself with the expressions of sympathy to the bereaved families and to those who were injured in the tragedy. I commend the work of the rescue emergency services, which worked under hazardous conditions. All the parties involved in the tragedy were full of praise for the efficient and sympathetic manner in which the rescue services carried out their work. The Minister has said that there will be a full inquiry into the cause of the tragedy. May I assure the right hon. Gentleman that in the discussions that I have had with the local trade unions involved in the tragedy their representatives have made it clear that they are anxious to co-operate to ensure that the reason for the tragedy is made known?

May I, too, asociate myself with the expressions of sympathy that have ben made to the families of those who were killed in the accident, including one of my constituents, and to those who were injured? There has been a dreadful tragedy and there is nothing very much that one can say on occasions such as this to measure the loss that families will feel. However, I ask the right hon. Gentleman to take into account and to extend the remarks made and questions asked about the timing of the trains in relation to the inquiry. Does he agree that one train had broken down and that the other one was about 22 minutes late? Will he ensure—this follows expressions made to me in the past by British Rail employees—that an inquiry is made into the state of the rolling stock on the stretch of line involved, as it has been prone to breaking down in the past?

I cannot direct the inquiry to the matters that it should take into account. I am sure that those responsible will have heard what the hon. Gentleman has said.

May I also express my sympathy to the relatives of the bereaved and to those who were injured? I express my thanks to the emergency services. We are grateful that there is to be a full inquiry into the tragedy and that the report will be published. Perhaps even now, before the inquiry has reported, British Rail will look again at its safety procedures. It has an excellent safety record, but there have been a number of disturbing incidents recently. It would be reassuming to the public if, even now, British Rail were to give that sort of assurance.

I am grateful to the right hon. Gentleman. It is important to emphasise that British Rail's safety record is extremely good. If British Rail's internal inquiry reveals the need for immediate changes in practice, those changes will be implemented.

Exchange Controls

With permission, Mr. Speaker, I wish to make a statement about exchange controls.

In my Budget Statement on 12 June I announced our intention progressively to dismantle these controls. I made a number of relaxations at that time; and again on 18 July, when I informed the House of the first major move towards liberalising outward portfolio investment.

I have now decided to remove all the remaining exchange control restrictions from midnight tonight, apart from those still needed, I hope not for long, in relation to Rhodesia.

With that single exception, there will from tomorrow be full freedom to buy, retain and use foreign currency for travel, gifts and loans to non-residents, buying property overseas and investment in all foreign currency securities. Portfolio investment will be wholly freed, and the requirement to deposit foreign currency securities with an authorised depositary is abolished. Foreign currency accounts can be held here or abroad. Passport marking for travel funds can now be abolished The necessary Treasury orders are being laid this afternoon.

The removal of controls will lead to public expenditure savings of about £.14½ million a year, which represents the current cost of about 750 staff at present employed on exchange control work at the Bank of England and about 25 at the Treasury. I should like to take this opportunity of thanking all those who have had the task of administering the controls—not only in the Treasury, the Bank of England and Customs and Excise, but those in the private sector, whose co-operation has enabled the system to work.

Under arrangements announced in this House in 1971, exchange control has been used to prevent United Kingdom tax incentives supporting the leasing abroad of foreign equipment. I propose to introduce in the 1980 Finance Bill provisions, which will take effect from tomorrow, to continue to prevent this. Further details on this matter are available in the Vote Office.

From tomorrow, we shall be meeting in full our European Community obligations on the freedom of capital movements.

Exchange controls have been with us in one form or another for just over 40 years. They have now outlived their usefulness. The essential condition for maintaining confidence in our currency is a Government determined to maintain the right monetary and fiscal policies. This we shall do.

The Chancellor made an important statement. It betrayed a baffling sense of priorities. He has just given Britain the highest inflation rate in the industrial world. He started unemployment moving up again after two years of continuous decline. He has produced a collapse of industrial investment. The whole of British business now faces a severe cash crisis. Yet he comes along this afternoon not to offer any measures to remedy the situation but to announce a reckless and doctrinaire decision which can only make the situation worse.

In the light of our improved performance since 1976 there has been a case for some time for a relaxation in exchange control, but the right hon. and learned Gentleman is not only suspending all the rules governing the control of our exchanges; he is abolishing at a stroke the whole apparatus of control, so that if the balance of payments, or the position of our reserves, or the value of the pound, moves in such a way that it is necessary to restore controls it will be impossible for him to do so.

First, what does the Chancellor think will be the consequences of his decision? We were told by the Bank of England last month that the £500 million outflow the previous month was largely caused by the relaxation of exchange controls following the Budget. Can the Chancellor say what proportion of that sum was due to rich men buying property abroad and moving their wealth abroad? Secondly, what is the value of the applications that he has received for foreign exchange at the official rate since the relaxations in the Budget?

In the light of the answers to those questions will he say how much the financial institutions in Britain will invest abroad rather than in British industry, which is already suffering from a serious cash crisis? How much are the financial institutions likely to invest abroad rather than in Government securities so as to keep the money supply under control and finance the public sector borrowing requirement?

What does the Chancellor believe will be the effect of this decision on our exchange rate and consequently on the rate of inflation in Britain, and on interest rates? Finally, can he tell us no more about the reasons for his decision than that there will be a saving of £14½ million in public expenditure? Does not he recognise that to change in a moment an environment in which industry and finance have lived for 40 years risks as disastrous consequences as the decision of one of his predecessors to institute competition and credit decontrol some years ago, which were directly responsible for the fringe bank crisis and speculation in the property markets in 1973–74?

The right hon. and learned Gentleman must realise that this is one more reckless, precipitate and doctrinaire action, which the Government will regret no sooner than those who lose their jobs or go bankrupt as a result.

I understand the right hon. Gentleman having difficulty in addressing himself to this argument. At one point he asserted his recognition of the strength of the case for some changes in our regime of exchange control. I welcome his limited support to that extent. However, at the commencement of his questions he emphasised the reckless, doctrinaire, unprincipled folly of making these changes. He must recognise that the changes that we are making are not undertaken in a moment; they are the third step in the programme of progressive dismantling of these controls which I announced at the time of the Budget. They have been undertaken stage by stage, not with a view to influencing the exchange rate but with a view to removing some of the restrictions that unjustifiably remain on investment decisions by our people.

The right hon. Gentleman suggested that these decisions would diminish the investment resources available in this country. He knows that that is not true. He knows from his own recollection of his days at the Treasury that the overwhelming body of evidence to the Wilson committee showed that there was no lack of resources available for capital investment in this country. The problem of one of the many inheritances from him is the lack of profitable investment opportunities. The idea of promoting additional investment overseas is that it will promote the expansion of the British markets. It is far better, in a period when oil adds strength to our resources and our currency, to acquire income-producing assets overseas than to shelter behind an apparatus of control.

The right hon. Gentleman began his questioning by suggesting, in an astonishing opening, that the inflation rate, the unemployment level, and the collapse—as he described it—of confidence in British industry were events for which the Government were responsible. He could not have more accurately described the inheritance that he passed on to us at the Treasury. During his period at the Treasury the pound was not protected from adverse consequences by the existence of the exchange control regime. It is not a regime of that kind that can produce economic strength—it is economic policies of a kind to which the right hon. Gentleman is not accustomed.

Is the Chancellor aware that I envy him the opportunity and the privilege of announcing a step that will strengthen the economy of this country and help to restore our national pride and confidence in our currency?

I am grateful to the right hon. Gentleman for his support. I am not unaware of the historic importance of the decisions that I announced today. They mean a major break with the regime of control with which we have lived for almost 40 years. I am indeed grateful to the right hon. Gentleman for the recognition that he gave to that fact.

Is my right hon. and learned Friend able to estimate the enormous increase in the earnings of the City of London as a result of being freed from the interminable barriers and paperwork that were required by the contols that he has so rightly abolished?

I should not like to put an estimate upon that, but I have no doubt that my hon. and learned Friend is entirely right to draw attention to the extent to which these changes will add to the attractiveness and effectiveness of the City of London as the world's financial capital.

Is the Chancellor aware that his announcement will be very welcome to all who opposed the attempts to insulate Britain from the rest of the world? Will he confirm that if one of the early effects of his measures is to reduce somewhat the sterling exchange rate, that will be good news for the millions of our people engaged in the exporting industries?

I indicated in an earlier reply that this change is announced not with a view to influencing the exchange rate; it is announced on its own merits. It is right to give this additional degree of freedom and to allow the pound to operate in the world unrestricted by restraints of that kind.

Will British nationals also be free to open bank accounts abroad if they so wish?

That is one of the freedoms that will be restored under the changes that I announced.

Does the Chancellor accept that one of the features of post-war Britain has been the signal lack of enterprise by private enterprise? Does not he accept that that is a signal for those enterprises to shovel money abroad and reduce the amount of investment for the British worker, and that the trade union movement will see this as a classic betrayal of the workers of this country by a Tory Government who are the lickspittles of the capitalist sector?

I would not begin to follow the hon. Gentleman in his emotional view of the world. My own judgment is that the enterprise of private enterprise has been the main factor in defending the economy of this country from the ravages of Socialism.

Will the Chancellor of the Exchequer accept not only our congratulations on making this move but that there will be major encouragement to the City that he has seen fit to do this not in a number of little bites, but has had the courage to sweep it away instantly in one full measure?

Will the right hon. and learned Gentleman please tell the House what he predicts will be the net effect on industrial investment of his decision this afternoon, and what will be the net capital outflow?

It is not possible to make any net prediction of that kind, but those economies that have achieved greater strength and success than our own have been notable for the extent to which they have been expanding their overseas investment. Germany, Japan and the United States are good examples. The evidence of the inquiries that have been made suggests that a willingness on the part of our economy to invest overseas will be reflected in an enlargement of our market opportunities overseas, and the prospect of a continuing flow of income to this country that we would not otherwise have. I am quite certain that is right to allow those decisions to be taken that will contribute to the strength of our industrial economy and to the growth of jobs in this country, rather than the reverse.

Will my right hon. and learned Friend agree that this move is most of all to be commended for the enhanced freedom that it gives to individual citizens, and for the further discipline that it will impose upon this Government and all Governments in maintaining the value of our currency?

I have one small and perhaps carping point to make. Does my right hon. and learned Friend agree that it is a practice of very dubious constitutional propriety to introduce even a small control, to take effect from today, when he is not to have, on his own account, the support of legislation or of Parliament until the spring of next year? Is that not a rather dubious slip into the principle of retrospective legislation?

I appreciate, as always, my hon. Friend's concern about the point of principle to which he has just referred. I assure him that I have had it well in mind. We shall be continuing a necessary fiscal provision that has prevailed until now. By announcing it in the House today I am giving clear warning that that is our intention. There is nothing that I judge to be improper in so doing and in asking the House to enact it when the time comes.

Will the Chancellor at least attempt to answer my questions, which were repeated by one of my hon. Friends? The Chancellor must have made some estimate of the effect of this decision on the readiness of the financial institutions to buy Government securities and the readiness of the financial institutions to invest in British industry rather than abroad. Can he tell us what the consequences will be? He must have noticed that the only case put by his supporters on the Government Benches was based on a totally doctrinaire belief in the validity of market forces, which has been exploded time and again in our recent experience.

It is clear that any change of this kind is likely to lead to some capital outflows across the exchanges out of this country, but it is just as likely to be matched by capital inflows in the opposite direction, without producing any substantial impact on the exchange markets. The right hon. Gentleman must understand that the prospects of promoting successful and effective investment in this country do not depend upon the preservation of a ring fence around our economy. They depend on the establishment within our country of conditions of co-operation by trade unions and their members, as well as anything else, which will make investment in Britain effective and successful. These changes do nothing to impede that. On the contrary, they give us the opportunity of acquiring income-producing investments abroad. There is total sense in that.

Is the Chancellor aware that his statement today provides real cause for dismay? Is he further aware that he has been presiding over the collapse of British industry? His answer to this, rather than to intervene in the exchange rate, is to provide means of spending money overseas in acquiring capital assets. This decision will mark a turning point in the fortunes of this country, which I believe that he and many others will bitterly regret.

The right hon. Gentleman appears to have overlooked the fact that all the representations made to me by and on behalf of British industry have been to the effect that I should announce precisely this change. It requires this change to be made as part of sensible economic management. It is not I who have been presiding over the collapse of British industry but the right hon. Gentleman and his colleagues in the last Government. There has indeed been a marked change of direction as a result of the change of Government. British industry recognises that we are taking the steps, which have been needed for too long, to begin restoring the conditions in which it can re-acquire prosperity.

Will my right hon. and learned Friend indicate in some way how the £14½ million will be saved? Will he assure the House that an enormous element will be the release of civil servants to more productive and useful work?

The figures that I have quoted for the saving are the figures that will be achieved. The staff at present employed on exchange control are in most cases staff of high skills and qualifications, for whom I have no doubt other opportunities will be forthcoming in areas of the economy where their services will be much needed and well used.

The Chancellor has given no reasons for undertaking this step, except in the most vague terms. Will he indicate what is likely to be the effect of these measures on the exchange rate of the pound? Does he anticipate, as all theorists suggest, that the exchange rate will now begin to decline? Is this acceptable? Is this what he is seeking? If this is what he is seeking, would it not have been much simpler to reduce the minimum lending rate, to stop funds coming into this country?

As I have indicated, this change is not announced with a view to producing a given consequence in terms of the exchange rate of the pound. It is announced on its own merits. It would not be wise to accept the advice of the hon. Gentleman and to begin reducing interest rates as a means of influencing the exchange rate. The decision follows from our determination to establish and maintain effective monetary control as the foundation of conquering inflation. That in itself is the foundation for a sensible outlook for the exchange rate.

I warmly congratulate my right hon. and learned Friend for his wholly admirable statement today. Can he explain to us, in the light of the remarks of his predecessor this afternoon, why that predecessor was so keen to move in the same direction last year but was frustrated by the obscurantism and sheer illiteracy of the general council of the Trades Union Congress?

I dare say that the right hon. Member for Leeds, East (Mr. Healey) would find it hard to answer that question. Far be it from me to try to penetrate the mysterious working of his mind.

As the Chancellor has said that the main determinant of confidence in the pound is monetary and fiscal policy, will he confirm that it is still the Government's policy to achieve a yearly reduction in the public sector borrowing requirement?

We have announced our target for the public sector borrowing requirement for the present year and it is our intention to achieve that target.

May I thank the Chancellor of the Exchequer for a verbal reply to a written question that I have tabled for today and ask him his view on two things? First, manufacturing industry will welcome this relaxation. Secondly, when we had exchange control regulations the pound still dropped to 1·54 dollars during the Labour Party conference of that year. The pound will be kept firm by a realistic Government policy to ensure that this country can compete, can work, and can thrive. The pound will then be at a higher level than today, backed by resources and not by theory and dogma.

I think that the Chancellor misunderstood the question put by my right hon. Friend the Member for Llanelli (Mr. Davies). Several times since the Budget the Chancellor has said that it is his intention progressively to reduce, year by year, the public sector borrowing requirement and the monetary targets. If he is not prepared to reassert that determination today, it would constitute a very important change of policy, which the official Opposition would welcome. I hope that he will come clean on that.

The right hon. Gentleman knows that, as I stated in my Budget speech, we are determined to secure a reduction in the burden of public borrowing and, as he said, a stage-by-stage reduction in the monetary targets. We shall be making announcements in due course.

Is my right hon. and learned Friend aware that the last people in the world from whom we need lectures on the subject of the exchange rate are former Treasury Ministers, under whom it reached its lowest level ever? Will he confirm that if we cannot defend our exchange rate by our own economic performance rather than by a blanket of controls there is something wrong with our production?

Yes. My hon. Friend makes the point that I have already made in answer to the right hon. Member for Leeds, East (Mr. Healey). The existence of a regime of control of this kind failed altogether to protect our economy from the impact of the disastrous realities of the management of the economy by the right hon. Gentleman. It is not the regime or the controls that will be effective; it is the way in which we manage our economy and perform within it.

The right hon. and learned Gentleman has referred to British industry. Will he confirm or deny that the TUC and/or the CBI agree with this decision? Does he agree that the reason for this change is the increase in revenues from North Sea oil and that it will be a poor inheritance for the people of this country to buy Howard Johnsons and have closed shipyards and steelworks, and a decline in manufacturing investment?

The CBI has been urging us to make this change in policy. The underlying justification for this change includes, among other things, the proposition that when we are acquiring substantial revenues from North Sea oil—itself a capital asset—it makes sense for us to use our resources to acquire income-producing capital assets in other parts of of the world. It is a long-term change, which makes total and complete economic sense, as well as the additional justification for sweeping away unnecessary controls.

Will my right hon. and learned Friend draw comfort from the fact that support this afternoon comes not only from this side of the House but from the Ulster Bench and the Liberal Bench? Does he agree that he should equate the gibes from the former Chancellor of the Exchequer and his colleagues about freedom and market economy with the kind of mentality that allowed the post-war Labour Government to keep sweets rationed rather than to allow market economy forces to get to work on those, too?

I agree that the breadth, quality and nature of the support that I have received this afternoon for the decision that I have announced tends to confirm me in the view that it is a correct decision.

We have heard from the Prime Minister this afternoon that Britain is now subject to what she calls the edicts of the Common Market, and the Chancellor has told us that he is now fulfilling a Treaty commitment for the free movement of capital. Does he agree that as capital has no nationality, no patriotism, but is solely attracted by the highest rate of profit, the most likely result of his move will be that the entrepreneurs, of whom we hear so much, will now shovel their capital on to the Continent, where they will get a higher rate of return and will accelerate the deindustrialisation of this country?

The capacity of capital to move from one corner of a market to another and around the world market in search of opportunities for higher profit is one of its greatest justifications. Our economy has performed less well than it should have done because during the years of Socialist direction and over-taxation there was a lack of profitable and effective investment opportunities in this country. When we change those conditions, as this Government are doing by their policies, capital will find more fruitful opportunities for central investment in this country. Meantime, it makes good sense for capital to be employed in producing income from overseas and building up additional assets and opportunities for exports as a result of this measure.

For those reasons, does not the Chancellor's statement represent a total and final abdication to the multinational companies? Is this not now the prelude to the sale of public sector assets to overseas interests?

I do not think that the hon. Gentleman understands the essential requirements of how our economy can work. Our economy is attractive and will be the more attractive to multinational companies as well as to British investors—British entrepreneurs—the greater our success in creating conditions in which investment here can be profitable and successful. If the hon. Gentleman will join me in seeking to persuade his friends in the trade union movement of the crucial importance of recognising the legitimacy of profit seeking investment here, this country will be a great deal more prosperous than it was under the Labour Government.

The Chancellor reminded the House that this move was fully in line with our obligations under the Treaty of Rome. Will he assure the House that it has nothing whatsoever to do with other monetary obligations of that Treaty under current discussion? Will he confirm that, as the Government's object is to give full freedom to the pound and let it find its own level in world markets, the Government have ruled out sterling from joining the EMS?

No decision has been taken on the relationship between our currency and the exchange rate mechanism of the EMS. This decision has been taken entirely on its own merits.

Will the Chancellor confirm that the Government's strategy hitherto has been to try to push investment away from the public sector to the private sector, presumably with a strong emphasis on small firms? Will not today's announcement, which is a continuation of the policy announced in July, mean that more money will, in the main, go into the multinationals abroad as opposed to the small firms that the Tory Party seems bent on supporting? Has the Chancellor not a duty to tell the House what effect this will have on the balance of payments, especially when we take into account that, within only four months of this Government being in office, the invisibles have become invisible?

The hon. Gentleman must understand that this decision in no way impairs the capacity of small firms to expand their investment in this country. As I have several times said today, there is no lack of capital for investment in this country. The shortage has been lack of suitable and effective opportunities for that investment. The Government are committed to policies that will increase those opportunities for both small and large firms.

Does the Chancellor agree that flows of capital into and out of this country are influenced by the question whether our rate of interest is higher or lower than that of other industrial countries? Will not the steps that he has announced today leave him particularly dependent upon the rate of interest as a weapon and therefore delay into the long and distant future any significant reduction in the high interest rates that are now crippling our economy?

Rates of interest are not a significant determinant of flows of that kind. The underlying health of the ecenomy is far more significant in the long run. Interest rates are a necessary weapon in securing proper and effective monetary policy—control of the money supply—and they remain to be used and will be used for that purpose.

Will there be any restriction on investment in or the acquisition of property in South Africa?

There are no special provisions in relation to that matter in my announcement this afternoon.

Post Office (Reorganisation)

Yesterday the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) raised a point of order with me. I have looked very carefully into the matter that he raised and I am entirely satisfied that it is not a matter for me.

Bills Presented


Mr. Secretary Joseph, supported by Mr. Peter Walker, Mr. Secretary Younger, Mr. Secretary Edwards, Mr. John Biffen, Mr. Adam Butler, Mr. Michael Marshall and Mr. David Mitchell, presented a Bill to make further provision in relation to the National Enterprise Board, the Scottish Development Agency, the Welsh Development Agency and the English Industrial Estates Corporation; to amend the Industry Act 1972 and the Industry Act 1975; to remove the requirement for a register of the financial interests of members of British Shipbuilders; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow. [Bill 51.]


Mr. Secretary Joseph, supported by Mr. Secretary Pym, Mr. Secretary Prior, Mr. Secretary Younger, Mr. Secretary Atkins, Mr. Secretary Nott, Mr. John Biffen, Mr. Adam Butler and Mr. Michael Marshall presented a Bill to raise the limits imposed by section 11 of the Aircraft and Shipbuilding Industries Act 1977 in relation to the finances of British Shipbuilders and its wholly owned subsidiaries; and to extend the application of section 10 of the Industry Act 1972 to include the alteration of completed and partially constructed ships and mobile offshore installations: And the same was read the First time; and ordered to be read a Second time tomorrow. [Bill 52.]

European Communities (Greek Accession)

Sir Ian Gilmour, supported by Mr. Douglas Hurd, Mr. Adam Butler and Mr. Cecil Parkinson, presented a Bill to extend the meaning in Acts, Measures and subordinate legislation of "the Treaties" and "the Community Treaties" in connection with the accession of the Hellenic Republic to the European Communities: And the same was read the First time; and ordered to be read a Second time tomorrow. [Bill 53.]

Statutory Instruments, &C

By leave of the House, I shall put together the six questions on the motions relating to statutory instruments.

I believe that it is No. 5 to which hon. Gentlemen seek to object. Perhaps by leave of the House I may put the first four together, unless there is an objection.

The Question is, That the four instruments be referred to a Standing Committee on Statutory Instruments.


That the Legal Aid (Financial Conditions) (No. 2) Regulations 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[ Mr. St. John-stevas]


That the Legal Advice and Assistance (Financial Conditions) (No. 3) Regulations 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[ Mr. St. John-Stevas.]


That the Fruiting Plum Tree (Planting Grants) Scheme 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[ Mr. St. John-Stevas.]


That the Plum Material and Clearance Grants Scheme 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[ Mr. St. John-Stevas.]

Motion made, and Question put,

That the draft European Communities (Definition of Treaties) (International Wheat Agreement) Order 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[ Mr. St. John-Stevas.]

Not less than 20 Members having risen in their places and signified their objection thereto, Mr. SPEAKER declared that the Noes had it, pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.).


That the Customs Duties (ECSC) (Quota and Other Reliefs) (Revocation) Order 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[ Mr. St. John-Stevas.]

Business Of The House


That, at this day's Sitting, Standing Order No. 3 shall apply to the Motion relating to State Aids for the Steel Industry with the substitution of One o'clock or three hours after it has been entered upon, whichever is the later, for the provisions in paragraph ( b) of the Standing Order.—[ Mr. Le Marchant.]

Transplant Of Human Organs

4.13 p.m.

I beg to move,

That leave be given to bring in a Bill to allow hospitals to take the organs, such as kidneys, of any patient, once clinical death has been established, other than those of a deceased person who has contracted out during his life-time by registering, on a central computer, his desire not to donate organs.
This Ten-Minute Bill seeks to amend the Human Tissue Act to allow hospital authorities, once clinical death has been established by two doctors, to remove kidneys from any person other than those who have contracted out through a central computer during their lifetime.

This is the seventh occasion on which my sponsors and I have put forward a contracting-out Bill, and I candidly say to the House that the sponsors of this Bill and myself would fully agree that kidney donation on a voluntary basis would be preferable to the contracting-out scheme, if voluntary donation had succeeded in producing anything like the number of kidneys needed. The bleak truth is that the kidney donor card scheme, put forward with the best of intentions by the present Secretary of State for Industry when he was Secretary of State for Social Services in the early 1970s, has not worked and has fallen painfully short of expectations.

Nor is the disappointment surprising, for a very basic human reason. Accidents are things that occur to other people. At least, if an accident is going to happen to me, it will not be today. Few of us concern ourselves with the possibility of our own demise tonight. Therefore, we should not be astonished to find that the Marplan inquiry, made for the Department of Health and Social Security, entitled "Public Attitude to Kidney Donation", states that at most 5 per cent. of the population carries donor cards.

In the same breath as I mention that survey, I should concede—as the Minister knows well—that the general findings do not suit the case which the contractors-out are deploying. In response, we challenge the whole basis of the survey for a number of reasons, and I give just two examples.

On page 10, it is revealed that Marplan spatchcocked all sorts of other issues into the kidney donation survey, such as attitudes to prison visiting and to voluntary work with the mentally handicapped. This is an assault on the spirit of the undertaking given on 3 March 1978, when I initiated a Friday debate on the whole issue of transplant law.

In paragraph 4, Marplan undermines the authority of its report because it states:
"Additionally when specifically told about the current shortage of kidneys, respondents tended to claim this would increase their inclination to donate. Similarly, when told about the current shortage of kidney machines, and of the disadvantages to the patient of this form of treatment, compared with a transplant, respondents attitudes towards donation tended to become more favourable."
In other words, when people are brought face to face with the realities of kidney shortage, their attitudes change.

The gut realities are, first, that many people, with potentially useful working lives, die because of shortage of matching tissue. Besides that, as Harry Thomas, of the National Federation of Kidney Patient Associations puts it:
"A plentiful supply of kidneys means not only more transplants, but better transplants, because the more kidneys there are available, the better the chance of a good match."
Secondly, many others have endured the draining agony of renal dialysis, often with consequential family misery, and always at £5,000 per machine with £14,000 per year for running costs. This all comes from the finite resources of the National Health Service.

Thirdly, since the deterioration of kidneys sets in 30 minutes after death and no kidney is of use one hour after death, immediate decisions have to be made.

Can any hon. Member present imagine himself or herself in the position of a doctor contacting, usually by phone, the shattered parents of a lad killed in a motor cycle accident to ask "Can we have your boy's kidneys?" Can we imagine that situation when the Mum or Dad has been told of the bolt-from-the-blue tragedy a minute earlier? Most of us could not bring ourselves to do it. That is why decisions about donations should not be made at the moment of maximum grief, and partly the reason why hon. Members should allow my sponsors and me an opportunity under the Ten Minutes Rule procedure.

Question put and agreed to.

Bill ordered to be brought in by Mr. Tam Dalyell, Mr. Jack Ashley, Mr. Lewis Carter-Jones, Mr. Dennis Canavan, Dr. John Cunningham, Mr. A. E. P. Duffy, Mrs. Gwyneth Dunwoody, Mr. Peter Hardy, Dr. J. Dickson Mabon, Dr. M. S. Miller, Mr. Laurie Pavitt and Mr. Phillip Whitehead.

Transplant Of Human Organs

Mr. Tam Dalyell accordingly presented a Bill to allow hospitals to take the organs, such as kidneys, of any patient, once clinical death has been established, other than those of a deceased person who has contracted out during his lifetime by registering, on a central computer, his desire not to donate organs; And the same was read the First time; and ordered to be read a Second time upon Friday 16 November and to be printed. [Bill 54.]

Orders Of The Day

Competition Bill

Order read for resuming adjourned debate on Question [23 July], That the Bill be now read a Second time.

4.17 p.m.

If I may resume, Mr. Speaker, may I say that there is sometimes a tendency in politics to dress up minor changes in gaudy clothes and to describe policies of some inconsequence as turning points in history. As politicians we have all been guilty of that offence. Yet when an annoucement of great significance is made, often within a day or two, it becomes a recognised or even accepted fact of economic life, almost as if no change had been made. I believe that the statement which the Chancellor of the Exchequer made at this Dispatch Box today was, by any measure, a major event. It signifies greater freedom and a more outward-looking economic policy. There is no reason why my right hon. and learned Friend's announcement should not have a profound effect on business attitudes in this country; only time will tell. I believe that it is evidence that politicians can change attitudes and influence the climate of opinion.

Not more than a year or two ago, the suggestion by my right hon. Friends and I, then in opposition, that we could and would remove exchange controls—and, indeed, price controls, one of the subjects in this Bill—was greeted with disbelief in many circles, including many circles in the City. Today it is not only accepted but greeted with enthusiasm, and copyright to such a major liberalisation in our economic affairs is now claimed by countless economic commentators. Therefore, it is a privilege to follow my right hon. and learned Friend the Chancellor by reopening a debate which signals the removal of one control, and also a burden, on our domestic economy, the burden of price controls, just as the abolition of exchange controls signals the ending of another control and a burden which has persisted for the past 40 years.

The House must excuse my enthusiasm for my right hon. and learned Friend's statement, but it represents, as does the Competition Bill, an important step away from the recent trend in this country towards an inward-looking, control-ridden and over-centralised society towards an environment of greater freedom, with perhaps a touch of risk and adventure—certainly there is some risk attached to these policies—that I think was the embodiment of an earlier and more successful period in our history.

I noted the reaction from the right hon. Member for Leeds, East (Mr. Healey), the former Chancellor of the Exchequer. Where we move step by step towards greater freedom of thought and of action, I regret that the Labour Party seems to move away from it. In overseas trade, where competition and open markets remain the greatest stimulus to trade abroad, just as greater competition remains the greatest protection to the consumer here at home, I feel that the Labour Party has resiled from these positions.

The hon. Member for Tottenham (Mr. Atkinson), interrupting my right hon. and learned Friend today, made what I thought were some characteristic comments. A few years ago, the hon. Gentleman said:
"import controls are not temporary expedients to effect protection. They are essential instruments of planning. If the whole of the Socialist case is about planning the economy, how can we plan it in the absence of controls on our external trade?"—[Official Report, 3 Nov. 1975; Vol. 899, c. 10.]
That was a characteristic statement, and I quite understand that it came perfectly sincerely from the hon. Gentleman. But it is a pity that one of the two great political parties in our country should now be dominated by what I might call a sort of ration-book mentality which is the privilege of little minds.

I take it that the Secretary of State recollects that he is speaking by leave of the House because of his failure to explain the Bill, although he was given an opportunity to do so, on an earlier occasion. Will he now concentrate at least part of his speech on an explanation of the Bill that he is recommending to the House?

Of course I will. I do not want to go on for too long. I have already spoken on the Bill for about 23 minutes, and I am sure that the right hon. Gentleman would not like me to go on very long today. But I want to say that a protected Britain—by which I mean a Britain with price controls, exchange controls and import controls—would inevitably be a Socialist Britain, with planning agreements, rationing and central controls.

I respond to the right hon. Member for Lanarkshire, North (Mr. Smith) by recalling that when we began the debate before the Summer Recess I was asked to place the Bill in the broader context of the Government's economic policy. I will respond to that request in a moment, but before doing so perhaps I should remind the House, in view of the three months which have elapsed, of the three principal elements of the Bill.

First, it strengthens the power of the Director General of Fair Trading and the Monopolies and Mergers Commission to investigate practices which restrict or limit competition in both the public and private sectors. Secondly, it gives a new power to the Secretary of State to refer nationalised industries and other public undertakings to the Monopolies and Mergers Commission for an investigation into their efficiency and costs and into any possible abuse by these public sector bodies of their monopoly power which might work adversely for the consumers. It is under these powers that the Monopolies and Mergers Commission will investigate the London commuter services of British Rail. Thirdly, the Bill abolishes the Price Commission.

When the debate began on 23 July, I explained the new procedures which we are giving to the Director General of Fair Trading to investigate anti-competitive practices. They are on the record in Hansard, and I will not go through them all now, but for the benefit of those hon. Members present who were not here on that occasion I should explain that we have avoided in the Bill the approach embodied in the United States anti-trust legislation. We have avoided it partly because it would have involved a very long statute setting out an extended list of anti-competitive practices. That would have brought the whole procedure into the courts and created most of the burdens on industry and commerce which are a well-known feature of the American practice.

Instead, we decided to build on the approach, already embodied in the Fair Trading Act, of taking a broad definition of anti-competitive pratice and then seeking in each case to establish by a short investigation without sanctions whether a prima facie case of limited competition was evident or not, and if it was, whether it was appropriate for a fuller investigation by the Monopolies and Mergers Commission as a practice which might operate against the public interest. That is the principal basis of the Bill.

What is new in the legislation is that, for the first time, an individual practice by an individual firm can be investigated to see whether it is anti-competitive, and if it is found to be against the public interest it can be stopped. Formerly, it was necessary to involve every firm in an industry in order to decide whether a monopoly situation existed. Furthermore, the Bill allows the Director-General of Fair Trading in his investigation into anti-competitive practice to treat the public sector and the private sector alike.

Example is always a good educator. Can the right hon. Gentleman say whether these practices would be regarded as referable?

I shall come to that point. Clearly the House would like a few examples.

I believe that the new procedures will considerably strengthen competition policy without imposing the uncertainties and burdens on industry of temporary price restrictions and pre-notification, which, of course, were two of the main elements of the Price Commission Act.

I understand what many Labour Members feel about the Price Commission. They feel strongly about it. I suppose I felt the same when HMS "Ark Royal" was towed, with flags flying and hooters hooting, to the breakers' yard in Devonport. I felt a pure nostalgia that a great British institution, our aircraft carrier, had made her last journey. The Conservative Party feels the same pride and affection for the Board of Admiralty and the Royal Navy as hon. Members below the Gangway opposite seem to reserve for the Board of Inland Revenue and the Price Commission. I can understand that, but I think that the difference of view across the House somewhat explains the voting swing of 10 per cent. to the Conservatives from Labour among skilled and unskilled workers between 1974 and 1979, which is evidence that we now speak for the Labour Party's traditional constituencies.

Do I gather from the right hon. Gentleman's remarks that the Government are proposing to abolish the Inland Revenue also?

If it was in my power to abolish taxes I certainly would. I am sure that the right hon. Member for Battersea, North (Mr. Jay) would like to see all taxes go as well. I do not expect quite to achieve that ambition, but it is one that I hope never to abandon. But we are making a good start.

It would, however, be appropriate at this stage for me to acknowledge the final report of the Price Commission, on car spares, published yesterday. My right hon. Friend the Minister for Consumer Affairs and I spent many hours endeavouring to bring forward what is a very good report, and I congratulate the Price Commission on it. I believe that the report demonstrates one of the greatest areas of consumer concern—cars. In passing, may I say that I wish that all husbands in the country treated their wives as well as they do their cars, because the pride of the great British public in their cars is, I think, second to none.

My right hon. Friend and I had a considerable dilemma. We wanted to bring the report forward because we thought it important, but we did not at the same time wish gratuitously to damage British interests. The right hon. Member for Lanarkshire, North, if confronted with that great problem, would have made similar deletions. It would clearly have been better from the consumer aspect had we made none at all, but we felt that we did not want to damage British interests in the process.

The publication of what is a good report is not a reason for keeping the Price Commission in being. Under our proposals, where anti-competitive behaviour exists, the Monopolies and Mergers Commission would not merely be able to expose it but would have powers to deal with it. The Director General of Fair Trading may seek to look into the practices set out in the report. I do not accept the arguments advanced by the hon. Member for Norwood (Mr. Fraser) on the radio this morning that the abolition of the Price Commission will in any way adversely affect our capacity to make useful reports and investigations.

Mr. Charles Williams, who has now left the Price Commission, his board and all his staff deserve not necessarily our approval of the policies set forth for them by the previous Government—as the House knows, we did not approve of those policies—but they should have the gratitude of the House for conscientiously fulfilling their duties. Mr. Williams handled the difficult task of running down the Commission with discretion and tact, and I am grateful to him.

Clause 2 defines an anti-competitive practice and provides the power to make exceptions. I have it in mind to exclude firms with a turnover of less than £5 million unless they have more than a 25 per cent. share of a particular market, but I do not intend to use the powers to exempt particular areas of industry or commerce in other than special circumstances. Any such exceptions would be far more limited than those in the Restrictive Trade Practices Act. I am concerned with the areas primarily involved with international jurisdiction, and they can be discussed in Committee.

On the subject of the Restrictive Trade Practices Act I should mention that the findings of the court take immediate effect. I propose to amend the powers of the Restrictive Practices Court to enable it, should it so decide, to defer the effect of its declaration so that the parties to a case have time to make revisions in the light of the findings. A revised agreement would then have to be submitted to the court for clearance.

Are the anti-competitive practices revealed in the report the sort of practice that could be investigated under Clause 2(1)? Is it such a practice that, if carried on by a multitude of persons or companies, could have been investigated by the Price Commission?

I do not wish to be drawn into a debate on what is or is not an anticompetitive practice so far as the report is concerned. It will be for the Director General of Fair Trading to make these judgments and not for Ministers. He will have the option of deciding, as he does now, whether he should refer a particular practice for major monopoly investigation based on the existing Fair Trading Act procedures or adopt the new procedures in the Bill. He will be free to carry out a prima facie investigation into some of the practices illuminated in the report and decide whether they might be appropriate for investigation by the Monopolies and Mergers Commission as being against the public interest.

There are two criteria in the Bill. There is first the question whether a practice is anti-competitive, but it is only if it is acting against the public interest that the Commission under existing legislation will make a recommendation.

Several possible examples of the kind of practice that the Director General might seek to investigate were set out in chapter 6 of the Labour Government's Green Paper. I should make it clear, however, that the decision as to what might constitute an anti-competitive practice that might operate against the public interest is not for Governments but for the Director General of Fair Trading. Consumers and business men adversely affected by what they believe to be an anti-competitive practice must take their complaint to him.

We believe that conduct that imposes a barrier to a new entrant into a market is a good example of a possible anticompetitive practice. Powerful firms may try by certain practices to eliminate competition from small firms. Powerful firms may insist, for instance, that wholesalers or retailers stock the full range of their products so that the wholesaler is unable to stock a rival product. A manufacturer may insist that a stockist does not sell the products of a competing manufacturer. A manufacturer may not allow a retailer to advertise his product except at a minimum price specified by him. I can go on and on. Anticompetitive practices may lie in the conditions of supply, in a refusal to supply or, indeed, in such areas as predatory pricing.