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Police Authorities (Powers)

Volume 973: debated on Wednesday 14 November 1979

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4.54 pm

I beg to move,

That leave be given to bring in a Bill to amend the Police Act 1964 and certain other enactments to establish and extend the powers and duties of police authorities in respect of the operations and organisation of police forces.
The last major examination of the accountability of the police was by the Royal Commission on the Police which reported in 1962. The Royal Commission discussed at length the relationship between the police and the public. It noted that a chief constable
"is accountable to no one, and subject to no one's orders, for the way in which for example, he settles his general policies in regard to law enforcement and the concentration of resources on any particular type of crime or area…
The question therefore arises whether the status of chief constable should continue in future to shield him from external control in the formulation and application of … police policies … Behind this too lies the broader question whether the community should have some voice through their elected representatives … in the maintenance of law and order."
The Royal Commission's conclusion was clear. It stated:
"It appears to us … that the chief constable should therefore, be subject to more effective supervision than the present arrangements apear to recognise."
The Royal Commission led to the Police Act 1964. The then Home Secretary, the right hon. Henry Brooke, on Second Reading echoed the Royal Commission's views when he said:
"The Royal Commission thought … that chief constables are not at present adequately accountable. I agree."
Earlier he said:
"One of the lessons of modern times is that a police system, instituted to defend freedom and maintain law and order, must itself be under effective control."—[Official Report, 26 November 1963, Vol. 685, c. 83–4.]
Unfortunately, as the local authorities and some hon. Members said at the time, these good intentions were translated neither into the small print of the Police Act nor into the general philosophy of the Home Office on the accountability of the police. Since the 1964 Act the accountability of the police, far from being increased, has been weakened.

There are other reasons for this lack of accountability than the inadequacy of the Act. First, the size of police forces has increased. In 1962 there were 123 police forces in England and Wales outside the Metropolitan area. Some of those forces covered populations as small as 60,000. Today there are only 41 police forces, each with an average population of 1 million and none with fewer than 400,000. Whatever the other arguments in favour of larger police forces—and I accept that there are some—their size alone tends to distance the police, particularly senior officers, from the public.

It is no coincidence that the loss of accountability and the feeling of greater distance between the senior officers and the public is most apparent in some of the large cities and towns. Manchester. Liverpool and Sheffield are examples. Before 1964 those cities and my constituency, Blackburn, had their own police forces. Each of them was controlled by a watch committee consisting entirely of elected members. Those committees had the power of promotion and dismissal over all the officers down to sergeant and constable. Today those cities are policed by much larger forces which are more remote. They are responsible to police authorities, only two-thirds of whose members are councillors. They have few effective powers.

A second reason for the loss of accountability and for the greater distance between the police and the public is that, as forces have become larger, a new breed of chief constable has developed. They are more assertive of their independence. The Association of Chief Police Officers has, according to The Guardian, adopted a
"deliberate policy to come out into the open more … attempting to influence public opinion and the courts via the media."
Some of the chief constables have not confined themselves to policing policies but have beer, willing to engage in explicit political controversy. The best publicised example of this new breed, although by no means the only one, is the chief constable of Greater Manchester, Mr. James Anderton. Not only has he sought to have the law changed on many questions, but on television recently, when discussing the sex discrimination laws, he pronounced that he might openly defy the law of the land. That is hardly the example which a chief constable should set.

There are other examples of the new assertiveness of police constables. It has led, and will lead, to increasingly strained relations between police authorities and their chiefs, as it did in South Yorkshire in 1977 and has today on Merseyside. The chief constable of Merseyside, Mr. Oxford, is reported to have told his police authority to keep out of his force's business. The authority has had to set up an inquiry into its powers.

The Police Act has not worked as intended. Today, 15 years after its enactment, it is time to translate the good intentions behind the Act into good practice.

My Bill seeks to make five improvements. First, it seeks to give police authorities the right to decide, subject to two important safeguards, general policing policies for their areas. I believe strongly that elected representatives have the right to a say on the general policing methods adopted in an area, whether they involve policemen on the beat or in panda cars or whether the new vogue of community policing is to be adopted.

I firmly believe, and share the view expressed by the Royal Commission, that chief constables must have independence in the deployment of police in particular cases and public order situations and over the prosecution of cases. There would be two important safeguards to chief constables—first, to delay a police authority decision for a period, and, secondly, to have the right to refer it to the Home Office for a decision where a chief constable thought that it had infringed upon his area of discretion. In that respect, that mechanism is similar to the present mechanism under section 12 of the Police Act 1964.

Secondly, the Bill would give authorities more power to obtain information from chief constables. Their present powers are woefully inadequate. That power would be subject to important safeguards in relation to personal, operational, and security information, and information that would be of use to criminals.

Thirdly, the police authority would have the power of appointment, promotion and dismissal extended downwards to chief superintendents and superintendents. Technically, the authorities already appoint chief officers. It would extend downwards because in today's large forces the superintendents and chief superintendents are in many respects fulfilling the roles formerly fulfilled by chief constables of the smaller forces.

Fourthly, the police authority's powers to supervise the complaints procedure would be strengthened and duties in respect of complaints against senior officers—which is a subject close to our hearts in Lancashire—would be more clearly specified.

Fifthly, there would be closer consultation and co-operation between Her Majesty's Inspectorate of Police and the police authority over the reports that are conducted each year on the police forces.

To those who say that police matters should be kept out of politics, I would say this. The Bill preserves the independence of chief constables over certain cases, but matters of general policing policy have always been, and always will be, a subject of legitimate political concern. In so far as the interest of politicians in general policing policy has been heightened, some chief constables have only themselves to blame. To adapt the late President Truman's injunction to politicians, having got into the political kitchen, chief constables should not now complain about feeling the heat.

It must be accepted also that the politicisation of chief constables is in part inherent in the present system. In some respects chief constables have been forced into politics by their lack of accountability for their decisions. They have become the final arbiters of many crucial policy matters and have been forced to adopt an overtly political role to defend these decisions.

The success of the police depends ultimately not on the number of vehicles, firearms, riot shields or computer terminals available but upon the confidence of the public. I share the view of the chief constable of Devon and Cornwall. Mr. John Alderson, who earlier this year wrote in The Daily Telegraph:
"It is of crucial importance that this debate"
—that is, about the police in a free society—
"leads to sensible social action if rocketing democracy is not to leave behind an authoritarian police system designed for 19th century England… The police have to learn to consult the neighbourhood people about their concerns, their wishes and their co-operation".
My Bill aims to provide a new framework in which that co-operation can be achieved.

Question put and agreed to.

Bill ordered to be brought in by Mr. Jack Straw, Mr. Stan Thorne, Mr. Allan Roberts, Dr. Oonagh McDonald, Mr. Ron Leighton and Mr. Michael Meacher.

Police Authorities (Powers)

Mr. Jack Straw accordingly presented a Bill to amend the Police Act 1964 and certain other enactments to establish and extend the powers and duties of police authorities in respect of the operations and organisation of police forces: And the same was read the First time; and ordered to be read a Second time upon Friday 7 December and to be printed. [Bill 78.]

European Communities (Greekaccession) Bill

Considered in Committee.


Clause 1

Extended Meaning Of "The Treaties" And "The Community Treaties"

5.6 pm

Question proposed, That the clause stand part of the Bill.

I assume that I may address myself, Mr. Weatherill, to the amendment that stands in my name and that of my right hon. and hon. Friends.

The amendment is not selected. The hon. Lady may draw attention to it while debating "clause 1 stand part", but not address herself to it.

I am grateful for that helpful remark, Mr. Weatherill. One of the joys of parliamentary life is that one is eternally having these little disappointments.

It is an important Bill and the Government have drawn it extremely narrowly. I must ask you, Mr. Weatherill, to consider some of the implications. One of the difficulties that we have encountered in the House of Commons since we entered the Community is that there does not seem to be an efficient way of informing ourselves about the details of the many negotiations that take place in Brussels.

The most important plank of Community policy is agriculture. With its subsidiary budget, it takes about 80 per cent. of the money available. The enlargement of the Community by three new largely agriculture-based economies must have a direct effect upon the budget. Since we entered the Community it has become the custom, a good one, for Ministers to come to the House of Commons to report on the negotiations that have taken place in the Council of Ministers, and in many instances directly with the Commission. However, even Conservative hon. Members would not suggest that the machinery is in any way efficient. On many occasions I have taken part in debates, with not only the present Government but previous Governments, about important subjects that were to be decided finally in the Council of Ministers. Governments take note of the opinion of the House of Commons but often take decisions in Brussels without reporting back on subsequent developments.

The amendment, which unfortunately has has not been selected, was aimed at giving the Government the opportunity to come to the House of Commons annually to report on not only the existing budget of the Community but, for example, on the effect of the accession of Greece. It would give them the specific chance to explain in detail what is happening. We are at a stage in the Community's development which some of us believe to be crucial. Will it continue to rush at great speed to the hour when all of the money runs out, or will it begin to discuss in a sensible manner how it may be funded in future? If it is, the accession of the new States must be a great element in the decisions that are taken about future financing.

The Government have been astonishingly modest in the amount of information that they have given the House of Commons about the effect of Greek accession. We have made it plain that we welcome countries such as Greece into the Community. We believe that it is essential for the maintenance of democracy in the battered State of Greece that it be allowed to accede if that is what the Greek people require. However, it is obvious from the papers that have been produced by the Commission that the effect on the budget will be considerable.

It appears from the Commission papers that it is suggested that Greece should have a long period of accession, and that during that period it should be guaranteed a certain amount of financial support. It is obvious that Greece will expect from the guarantee funds, for example, considerable transfers of moneys. It will require assistance with its infrastructure. It will certainly require assistance with irrigation. If it is to modernise its existing farm system, it will expect the same sort of support as farmers in the north have been receiving from the Community.

There has been no indication from the Government that they are even prepared to debate in the Chamber the effect that Greek accession will have on the Community budget and the moneys that will be available for Greece. There is no existing machinery for the transfer of large sums from the so-called richer nations to the poorer nations in the Community. It may be said that the regional fund and the social fund should be used to change any imbalance, but those of us who have spent some years sitting in the European Parliament have learnt to our considerable distress that the machinery for transferring such sums is unwieldy and slow-moving. It has only small sums at its disposal.

Order. I hope that I have not misled the hon. Member for Crewe (Mrs. Dunwoody). The Committee is debating "clause 1 stand part". I have not selected amendment No. 1. The hon. Lady's remarks seem to relate rather more to new clause 1, which I have selected. That clause will be taken after we have disposed of the motions that clauses 1 and 2 stand part of the Bill.

I stand corrected, Mr. Weatherill. I shall try to be a better girl in future.

Greek accession must automatically change the entire composition of the Community. The changes that it brings about must perforce affect Great Britain. If I may, I shall address myself to those changes.

The agriculture budget will inevitably be increased. Are we to see in Dublin the Prime Minister's boasts that she is demanding a broad balance carried out, or are we to have a climb-down and discover that the budget will become larger and that Britain's contribution will remain disproportionately large? If that is so, I think that the Minister has a great deal of explaining to do in Committee.

When Greece becomes a member of the Community, it will have a number of changes to make. Are we to see changes that will enable the system of State aids to continue? At present, Greece supports many of its most sensitive State industries. It supports shipbuilding. That is not a State industry, but it receives assistance. The Greek Government also support the textile industry. The British Government have been silent on the implications for British textile workers following Greek accession. These are sensitive subjects. There are not many trade barriers between Britain and Greece, but are the Government convinced that the long-term and even the short-term safeguards for our workers in the textile industry are sufficient to protect them in future? We seek the Government's view on these issues. There has been little indication of what will happen.

5.15 pm

Under the Treaty the effect of Greek accession must inevitably change the institutions of the Community. That will be tremendously important. What is to happen about languages? There has been a clear indication over a number of years that the cacophony of sounds created by instant translation makes life in the Community virtually impossible for those who are trying to communicate. Following Greek accession, it seems that we shall have even more interpreters and translators.

The institutions of the Community are already hardly the epitome of rapid decision-making processes. However, they are to bear an extra burden. Will there be a change in the number of Commissioners? If Britain reduces the number of Commissioners that it sends to Brussels, how is that to be arranged and what will be the effect on the machinery of the Commission? All these issues have been ignored by the Minister.

The Government have not told us what they imagine will come about as a result of the accession of Greece. I am disturbed that there has been no reiteration of the implications of the Copenhagen declaration. We are part of a multination Community. If by some dreadful mischance one member of the Community should cease to support a democratic system and should cease to take care of the human rights of the people inside that country, surely the declaration will apply. Surely it will apply to both old and new members of the Community. The Opposition would like to see it stressed by the House of Commons and by Her Majesty's Government that it is vital that new and old members maintain, adhere to, and understand the need for, human rights for all citizens of the Community.

There have been a number of Amnesty reports about the situation inside Greece. The reports have given rise to fears about some past practices in Greece. We all pray that they have now totally disappeared. However, I have received a number of letters from Greek citizens about human rights in Greece. These letters ask Her Majesty's Government to ensure that the subject is not lost sight of in the negotiations that must take place to allow Greece to enter the Community I give the Government a small but important example. Jehovah's Witnesses in Greece, as the Minister undoubtedly knows, are suffering considerably because they are not prepared to join the Armed Forces. In many instances, they are given extremely long prison sentences. When they leave prison, they are offered their call-up papers at the prison gates. When they refuse to accept them, the process starts all over again. It is important in the countries of the Community that religious freedom and political freedom should remain a part of our heritage. Britain has a special responsibility to draw the attention of all member States, and all new member States, to the essential aspect that those freedoms must play in a democratic organisation.

In terms of the entire agriculture industry, Greece is a tiny country. Many of its farms are small. A disproportionate number of Greeks are involved in agriculture. It produces products that are already sensitive in the Community. It is obvious that those products will add to the surpluses. I am not sure that even the Greeks have understood the extent to which their accession will affect their balance of payments problems. Greece, like Britain, imports certain basic commodities that are part of the common agricultural policy. Greece exports commodities as to which it will not necessarily benefit from the common agricultural policy.

Greece may find the need to renegotiate some points of agricultural policy after entry into the Community. Our long experience shows the inefficacy of such a move. I hope that these matters will be borne in mind in discussions about the agricultural budget and all aspects of the payments. At present the figures in the budget show that the split between north and south in the Community is a real one. In the north, there is support for farmers producing milk, cereals and products of a temperate zone. Although a Mediterranean plan has been started by the Community, the assistance going to sensitive products like wine, olive oil, fruit and early vegetables is minimal in comparison with the amount spent on milk. This inevitably means a long transition period for Greece in those products of her own that are extremely sensitive. It will be a seven-year period, we are told, for commodities such as peaches.

At the same time, Greece will have to accept Community laws in matters such as free movement of capital. This means that multinational companies will be able to go into Greece, set up industrial units and benefit from what they see as a low wage economy and move their capital freely backwards and forwards. The political implications of such arrangements for Greece may be considerable.

The extension of the Community should be welcomed, not least for the fact that it provides an opportunity to examine the existing machinery to see where it has been going wrong and how it needs to be changed. Her Majesty's Opposition have never made any secret of the fact that they regard the existing European agricultural policy as totally inequitable and unacceptable. There have been a great many emotive statements since this Government took office which directly contradict the view they took before the election. Any criticism of the Community's agricultural policy by the previous Labour Government was treated by Conservative Members as proof of the fact that we were bad Europeans. It is interesting that the Conservative Government have changed their view so radically in such a short time. But we welcome their conversion.

We believe that the agricultural policy and the Community budget are the most sensitive and important matters to be decided. Finn Gundelach made clear over 18 months ago that this monster was eating up the substance of the Community and the substance of the agricultural budget, leaving nothing for those aspects of Community policy that many would like to have seen developed.

What will be the effect of the accession of a new nation? Will there be a new transitional fund? Will there be a new mechanism for moving moneys from the Community into those areas most desperately in need? If so, what will be the cost? Whatever the future of the Community, and however great the pressures put on the new member States, a stable EEC can be maintained only if there is a degree of fairness between one country and another. That fairness must not exist simply between north and south. It must exist between those who are rich and those who are less rich. Until that balance is achieved, the Conservative Government will be failing in their duty if they do not spell out the implications of the changes that are to take place.

The size of attendance in the Committee fails to reflect the importance of this matter. I would like to associate myself with many of the remarks made by my hon. Friend the Member for Crewe (Mrs. Dunwoody), although we took a different view on the accession of Britain to the Community. I am glad that the circumstances allow us to talk, not stridently and not vituperatively, but quietly and seriously, to Foreign Office Ministers.

I wonder whether the Community has fully tumbled to what it is trying to chew off, if that is the right expression, in terms of enlargement. At this time last year I attended a lecture by Guido Brunner, the Energy Commissioner, at Heriot-Watt university, just outside my constituency. Talking about the enlargement of the Community to include Greece, Portugal and Spain, he said:
"To me this is an exciting challenge. We owe a duty to the new democracies of southern Europe. There will, of course, be problems. The British are already uneasy about the CAP. I cannot say that its workings will be made easier by the addition of large quantities of Mediterranean produce. There is also the problem of regional imbalances."
This was a speech by a very intelligent and concerned Commissioner. He went on:
"We have to admit that in the 20 years of the existence of the Community, it has made little progress in ironing out regional disparities in terms of employment, productivity and incomes. The man in Hamburg still earns six times more than the man in Palermo and this gap may get worse with enlargement. Just to quote a few figures; income per head in Portugal is only 32 per cent. of the Community average; in Greece, it is 44 per cent.; and in Spain, 54 per cent."
This is the rub. Commissioner Brunner went on:
"Enlargement will increase the Community's GNP by 10 per cent., but the population will grow by 20 per cent., and there will be 50 per cent. more farmers."
Something has to give. I do not object to the endless statements from the Minister of Agriculture and other Ministers—it is proper that they should come to the House to make them—but I wonder how many people, in the build-up to the Dublin summit, have tumbled to the fact that far from solving the CAP problems the number of farmers will be increased by 50 per cent. One cannot, of course, contest the entry of embryo democracies such as Portugal and Spain. I agree with Commissioner Brunner that he was not quoting these figures as an argument against enlargement. He said:
"I give them to reveal the magnitude of the task before us. We must not ignore them, otherwise our efforts may be inadequate. It is a daunting challenge. We must prove equal to it."
I realise that there is no easy answer to a question that I would have put to my own Government I do not pose it, therefore, in any vituperative way. One is, however, entitled to ask Foreign Office Ministers about their thinking on the matter. Do we really understand precisely what we are letting ourselves in for? It may be said that we have to face the fact that income distribution will be no different. If that is the case, the Greek and Portuguese farmers and the Spanish peasants had better be told. That is not their understanding of the position.

I speak with some knowledge, having been a member of the European Parliament Greek Committee that went twice to Greece and held many meetings in Luxembourg and elsewhere. I am not making these remarks off the top of my head. It is an extremely difficult subject. It is not a subject on which I would want to try to score cheap points off any Government.

My hon. Friend the Member for Crewe referred to the question of language, a matter of medium importance, which I raised in the previous debate on 30 October. I hope to be forgiven if I quote the letter that I received from the Minister of State, Foreign and Commonwealth Office on 5 November, which referred to my contribution on 30 October. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) said:
"The new Member States will expect to have their languages added to the list of official languages of the Community. (As you know there are six at present: French, German, Italian, Dutch, Danish and English.) It is right that Ministers and other represenatives of each State should be able to speak in their native language when they wish to; and authentic texts of Community documents must, for purposes of legal implementation, exist in the administrative language of each Member State."
One can hardly gainsay that.

5.30 pm

The hon. Member went on:
"Within the limits imposed by these principles, we would be happy to see a rationalisation of the use of languages at working level. A good deal of the work of the Community is already carried out in a limited number of languages common to the participants in a particular meeting, without being rendered into all six. This is a question which the Report of the Three Wise Men"—
that is the former right hon. Member for Birkenhead, Mr. Edmund Dell, and his colleagues—
"on the machinery and procedures of the institutions is expected to touch on."
Can we have any interim guidelines from Mr. Dell and his colleagues? If so, can the Minister of State say anything about it? How are they expected to solve the problem? Unless one is firm on the question of language, the machinery that has built up becomes impossible. It is very easy to talk about how many translators there will be from Danish into Portuguese and from Greek into Danish. One could go on like that. Nevertheless, as those of us who have had the privilege of being Members of the European Assembly or Parliament, according to taste, for four years know, this is a factory for documentation. To put it mildly, the Commission is no better now.

Unless the amount of documentation is cut down, it rises at an exponential rate. There must be some understanding at an early stage of what should be done. I do not make too much of the Cyrillic alphabet, but during the discussions the Greeks said "So many of us understand English and French so well that it is really no problem" Did they mean that? Every Minister has a right to insist on speaking in his own language. On the other hand, there are many peripheral documents, and one must ask what we intend to do about this. If everyone insists on his rights, the whole thing will become hopelessly and completely unwieldy.

That is a minor matter. I asked another question during the previous debate, and I repeat it because it was not answered. What will be the institutional effect of entry? One can understand that the Commission and Commissioner setups worked quite well when there were six nations. It became more difficult when there were nine. But just spatchcocking in three extra Commissioners because there are more States does not seem to me to be a sensible way of trying to build an efficient organisation. It might be better to go back to the drawing board.

For example, when people design aircraft they do not exactly add extra weight to an existing machine in order to make it bigger. Equally, it may not be all right to try to build on to the existing administrative machine. [Interruption.] There is no point in asking questions of the Minister when he is engaging in a conversation with one of his hon. Friends. There is no point in trying to build on to the existing administrative machine something that may have been suitable on previous occasions. However, now that circumstances are qualitatively different it simply will not work.

If and when there is a Turkish application, which is not quite so fantastic as it might have seemed even a year ago, what happens then? We can hardly deny the Turks. The truth about the Turks is that they think that they have the worst of all possible worlds in their present association agreement. They want either full membership or Third world status. It is one or the other. They do not want to go on as they are doing at the present time. This has been made clear by the Turkish delegation that came to Luxembourg last year. A problem will arise in that respect. I am asking for the thoughts of the Minister of State on the way in which the Commission and, indeed, the Council of Ministers should operate, given the new circumstances.

I should like to refer briefly to the question of the European Parliament. It is an absurdity that this should be a peripatetic Parliament. I read in the press this morning that there was a debate in Strasbourg yester day to which Mrs. Clwyd and others contributed. Everyone seems to be passing the buck. The Commission says that it cannot comment on the costs of other institutions travelling around like a circus and being peripatetic. The Council of Ministers seems to indicate that it is not exactly its busines to do so. Therefore, I suppose that it comes back to the national Parliaments.

Those of us who had the experience of four years in the European Assembly, whatever our views on membership, are all united in the view that this is an expensive and inefficient way of operating. It drains not only Members but officials, who have to spend much of their time deciding who wants such-and-such a document for a particular committee. This is not a serious way of going about things. I do not think that even anti-Marketeers would wish to bring the Community into disrepute by having a peripatetic parliament or circus.

The entry of new partners gives us an opportunity to rethink the important question of the siting of the institutions, which is far more than a logistic issue. This is related to another matter of efficiency that I also raised last time but which was not commented upon. That is the whole question of the revolving presidency. I can imagine that there will soon be another British presidency. As I understand it, that president will probably work extremely hard and will spend about four months preparing for the presidency. He will work in that capacity for about three months, and the following three months will be spent on the hand-over. That is no way to do a job. It is no way to set about matters at all.

It is not only a question of Ministers changing. As we all know, in a democracy Ministers change as a result of elections or Cabinet shuffles. However, the more serious issue relates to the Civil Service. To have civil servants spending a lot of time preparing for something and spending the last two or three months preparing to hand over to someone else is a lunatic way of operating a serious institution. It is all the more lunatic when the Six expand to the Twelve and even the Thirteen.

I want to raise two technical points relating to the Select Committee on European legislation. First, I asked a question of the staff of that Committee about the complicated issue of the road haulage quota arrangements. Mr. Frank Clark tells me:
"So far as I can find out this has not yet been considered in any detail. It seems likely that what will in fact happen will be that the total quota will be increased to accommodate Greece in the same way as when the UK joined the Community but this has still to be negotiated."
These road haulage quota arrangements have given enough trouble at this end of the Community. Heaven knows what kind of trouble will arise at the other end, because the Greeks seem to operate a very different system. When one actually tackles them about this, there is complete vagueness. When the Greek Government discover that they will have to accede to this kind of regulation, they may have many of the troubles that we have had here.

Let us look, for instance, at the road haulage regulations. I do not know whether there is anyone on the Front Bench who has knowledge of this subject, but if not I would be willing to accept a letter. When I am told that all these matters are still to be negotiated, it seems to me that there are many vital matters that have been left rather vague. I put it in a general sense: are there many outstanding matters that are still vague?

Finally, I asked whether the instrument regarding Commission participation in the United Nations Organisation discussions would be relevant, and Mr. P. D. Brittain, of the staff, went into it on my behalf. He wrote to me:
"In my view, the immediate question whether a Commission competence in a limited field (the Intergovernmental Working Party of Experts in International Standards of Accounting and Reporting) would have a very narrow application to the Greek situation. In the long term, Greece will inherit the Community legislation on Company Law that could be affected by the Commission proposal.
In the meantime, she is, presumably, free to be a candidate in her own right for membership of the Working Group concerned."
On the whole question of company law I ask again, do the Greek companies, not least the Greek shipping companies, really understand and comprehend precisely what they are letting themselves in for? If the Minister tells me that all this has been gone into in great detail in the negotiations, that all the spadework has been done by Mr. Natali and his colleagues, I will accept it. But I think it is worth asking from the Opposition Benches how much outstanding business remains in these negotiations.

. I gather that the Opposition Front Bench will not be voting on this clause. Though the Opposition may reasonably wish to express criticism of the EEC, as the hon. Member for West Lothian (Mr. Dalyell) has done, and invite explanations and point out various difficulties that will arise, I profoundly hope that, having reflected on the matters, they will not press to a vote the new clause to be debated later or vote against clause 1.

I say that because this country is the first to pass legislation to approve the accession of Greece as a new member of the Community. I know full well that His Excellency the Greek Ambassador and Greek Ministers and Members of Parliament recognise that what we are discussing is not intended to be an insult to or an attack upon Greece. It may well be argued that the Greeks are—as, indeed, they are—a highly sophisticated nation with an undoubtedly deep understanding of politics. But in the light of yesterday's debate, which happily ended with the result that the Greek external services of the BBC will continue, the words that we express tonight will be of much greater interest in Greece than they will be here. Every word that we say on this matter tonight will reach the Greeks.

The message that I want to go out from the House of Commons—it undoubtedly goes out from the whole Conservative Party and the Government—is that we are the first country to seek to secure that the accession of Greece meets with the approbation of the British people. I should like to be able to say that for Britain as a whole.

I know there are many on the Opposition Back Benches who share the view that I have expressed—some have served with me in the British-Greek parliamentary group. Many of them have been to Greece and recognise the immeasurably improved diplomatic and economic relations that have developed in recent years between Britain and Greece since Mr. Karamanlis again became Prime Minister. At that time, relations between the two countries were absolutely appalling. It was at the height of our difficulties with Cyprus.

5.45 pm

At that time, there was intense criticism of the approach of the then Labour Government and their policies in relation to Greece and Turkey. All that was overhauled. As a result of the different approach of the leaders of the Labour Party in recent years, we achieved a united approach in our attitude to Greece, both in terms of trade and in diplomacy generally. As a consequence, relations have much improved.

If this matter is carried to a Division and the Labour Opposition vote against the Bill, their action is bound to be misunderstood by the people of Greece. I ask the Labour Party not to do that. I know that there are many on the Opposition Benches who say that there should not be a vote tonight on anything that could in any way reflect upon the accession of Greece.

It is true that there is a general view among many hon. Members of the House, and among many people in the country, that there should not be the burden of additional expenditure for the EEC. An amendment was tabled that has not been called. I would have argued that that amendment was out of order anyway, but it sought to argue that there should be no increase in the total budget of the Community as a result of the accession of the Hellenic Republic. Whether the amendment is out of order or not, it is a fact of life that we, as Members of the House, cannot possibly control the budget of the EEC or influence whether that budget may, for a variety of reasons, be increased.

One thing that is fairly obvious is that if one, two, or, possibly, three other nations join the EEC it is inevitable that the budget must increase to take account of the advantages that those countries may or may not enjoy.

Order. In view of what the hon. and learned Gentleman has said, I hope that he will not address himself to an amendment that he thinks is out of order and that I have not selected.

As I pointed out, Mr. Weatherill, it is both out of order and has not been selected. What I am pointing out is that the raison d'être for the present debate is that there are those who do not share my approach, which is pro-Community, and who spend all their time at present attacking the EEC budget on ally pretext. One of the ways to attack the budget is to say that the accession of a new nation to the Community means an inevitable increase in the budget. I was venturing to point out that that is one of the arguments that led to an unselected amendment to which I made reference only en passant.

The reality of the situation is that Greece must understand that there are those who are opposed to the entry of Greece into the EEC. Indeed, Mr. Papandreou is opposed to it. For that reason I am speaking for the benefit of the people of Greece as opposed to those in Great Britain. There are those who are still bitterly opposed to Great Britain's remaining one of the EEC partners. All those people are entitled to criticise and to say "Well, we are paying far too much money to the EEC." Our own Prime Minister has made it plain that that is the view that the Government take, as, indeed, do many Members throughout the House.

That having been said, I do not think that it is either appropriate or fair to try to build on the suggestion that Greece, therefore, should not become a member because that might increase the overall cost.

We should seek to give the maximum possible support to this measure. We should strongly urge those in the Labour Party who do not wish in any way to reduce the opportunities of Greece to join in as one of our partners to give this measure their welcome and to make plain, in anything that they say from now on, that it is not intended to reflect upon Greek entry. We should also make it abundantly clear that the House of Commons has no intention whatever of voting against the Third Reading or expressing a view on something to which neither the Left nor the Right of the Labour Party, nor the whole of the Conservative Benches, has hitherto been opposed. I hope that the measure will pass with our warmest support to our friends and colleagues.

I fully support the substance of the views expressed by my hon. Friend the Member for Crewe (Mrs. Dunwoody) that the accession of Greece and the two Iberian countries to the Community will have the most significant effects for us in Britain and for the Community. However, I follow what the hon. and learned Member for Thanet, West (Mr. Rees-Davies) said—that it would be quite wrong if any decision were to be made here to vote against the accession for quite extraneous reasons. I am confident that there will be broad all-party support for the accession of Greece to the Community. Indeed, I could not support new clause 1 or new clause 2, for reasons that I shall outline, although basically I follow the argument of my hon. Friend the Member for Crewe.

My guiding principle is that we either accept the fact of Greek accession or we do not. Whatever the arguments for and against that accession—they have been ventilated in previous debates in this Chamber—we have to come to terms with the fact that we are beyond the point of no return and that Greece will become a member of the Community. If we accept that, we must do so, and be seen to do so in Greece and elsewhere, wholeheartedly and without reserve, in no way giving the impression that Greece will be put under greater scrutiny than any existing member of the Community or that she might be regarded in any way as other than a full member of the Community.

I say in passing that my view is that Britain as a whole has not taken on board the full implications of enlargement, including the accession of Greece, and much will be against our own economic interests. Indeed, it could plausibly be argued that the accession of Greece will have a destabilising effect on Greece itself, because of the considerable internal opposition to accession from PASOK, and it could have a destabilising effect on the eastern Mediterranean because of relationships with Turkey.

As my hon. Friend the Member for West Lothian (Mr. Dalyell) said, the accession will probably have major effects which have not yet been fully thought through by this country or the Community on the machinery of the Community. I shall not detail the technical points that my hon. Friend made relating to language, interpretation and the Com missioners. However, it will clearly be important also for the budget. We know that there will be a major crisis in the budget in the near future, in any event. If it is unlikely that, say, the proportion of the budget devoted to regional aids will be increased, that, on any basis of fairness, must mean that less cash will be available for disadvantaged areas in Britain when one compares their economic health with that of disadvantaged areas of Greece.

My hon. Friend the Member for West Lothian also set out the possibility, given this new opening to the south, of the development of olive oil lakes, as we have had with wine lakes, and the effects on United Kingdom industries such as shipbuilding and textiles. All those things, however important, are in this sense things of the past. They have been overridden because of the Government's view—and the Labour Party's view when in Opposition—that the accession of Greece must be accepted and welcomed for political reasons.

We know that a different EEC will emerge from enlargement. The vision of the founding fathers of the EEC, Jean Monet and his colleagues, an ever-closer union of the European peoples, will become that much less attainable as a result of the accession of these countries, whose economies are less powerful than our own. They will add further destabilising factors to Community development. But that development in itself, the fact of cohesion being much less attainable, will be welcomed by many people in Britain as being the sort of view of the Community that they had in any event and that is being brought about now as a result of these developments.

I return to the question whether we should have an audit of the effect on Britain of the accession of Greece, and no doubt similar demands in respect of Spain and Portugal. This would be to treat Greece differently. In any event, the information is available from Community sources. There is no case for treating Greece separately, as if it were an unwelcome addition to the Community. Greece will not be a second-class member; it will be a full member, as we are. To treat Greece in any other way would be seen symbolically by our friends in Greece as a most unfriendly act.

I certainly would not support either of the new clauses. I add my voice to those who, in spite of all the difficulties and the adverse economic consequences that we shall have to face, welcome Greece as a full member of the Community.

I endorse the views expressed so clearly by my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) and the hon. Member for Swansea, East (Mr. Anderson). I woud not wish to criticise those who have tabled the amendment. It is the business of Parliament to probe and to extract information from the Executive. Of course, we all know—

I was referring to the amendment in passing, Mr. Weatherill, but I take it that I am in order in addressing myself to the Question, That the clause stand part of the Bill.

But not to the amendment. Perhaps the hon. Member was not present at the start of the debate. The debate is on the Question, That the clause stand part of the Bill. Amendment No. 1 was not selected.

But surely, Mr. Weatherill, it is in order for me to say, in regard to the shape of the debate as a whole—whether or not amendments have been selected—that I do not wish in any way to criticise any hon. Members for tabling amendments which seek to extract information from the Executive.

I wanted to say that it would be extremely unfortunate if it were thought anywhere in Europe—and especially in Greece—that the debate reflects opposition to Greece's joining the Community. It would also be untrue.

6 pm

There are profound differences on some matters between the two sides of the Committee, but one of the happiest features recently in our relations with Greece has been the tremendous support given by hon. Members of all parties to the British-Greek group since the restoration of democracy in Greece. That group has endeavoured to establish close, cordial and developing relations between the two Parliaments and peoples, and Labour Members as well as Conservative Members have been conspicuous in that work. In earlier times, Mr. Weatherill, you showed deep interest in our work and can testify to what I say. It was no surprise, therefore, that almost 200 hon. Members, drawn from all parties, signed the early-day motion warmly welcoming the decision of the Greek Parliament to apply for membership.

I like to think that it is due to the efforts on both sides of the House of Commons that the Government have had second thoughts about cutting out the Greek language services of the BBC. In Greece there is immense interest in what is happening in this country and great warmth of feeling towards us. It would be a sad day if, as a result of the shape of this debate, the impression were given that there is any body of opinion in the British House of Commons hostile to Greek membership of the Community.

I say at once that I have sympathy with the view that there should be an annual appraisal of the effects of the Community budget, but the hon. Member for Swansea, East put the matter in clear perspective. Why pick on Greece? There is a financial crisis in the European Community, but that is no argument against Greek accession. I venture to think that the sooner we can weld together the democratic countries of Western Europe in close unity of function and purpose, the sooner we shall have institutions that reflect the needs and aspirations of its democratic peoples. The fact that there is an immediate financial crisis has no bearing on Greek accession.

I take the broader view. It was always sad that from the beginning our vision of Europe was limited. All the democratic countries of Western Europe should be together in the modern world, and I warmly welcome the Bill, which sets the seal of final approval by the British Parliament on Greek membership.

I hope that no message will go out from the House of Commons by word or vote which suggests to people in Greece, who are anxiously watching what we may say and decide, that there is any feeling of reservation about Greek membership. I believe that I speak for the vast majority of hon. Members in saying that, despite the budgetary difficulties which concern every member of the Community, the accession of Greece is a step forward. A Europe without Greece is unthinkable. We owe so much to the contribution of Greek culture to Western civilisation. I hope that the message will go out tonight that Parliament warmly welcomes the accession of Greece.

I have strong reservations about the accession of Greece. However, the accession of Greece, Spain and Portugal will have the beneficial effect of bringing the Cornmunity to a point where it will virtually break up, so I shall not express my opposition.

These glowing references to the Community are far from the truth. The economic ideal of the Community is free movement of labour and capital and not of working together, and that enables the evils of competition to decide which countries shall have which industry by driving the weaker ones out of existence.

Greece has a large textile industry. We want to work with countries throughout the world, but, as we constantly emphasise, the world does not end at the boundaries of the Common Market. We should go outside. The Common Market is comprised of nine countries, and there are over 30 in Europe. We want to work with them all.

I have reservations about clause 1 standing part of the Bill—and it forms the main part of it. I am particularly concerned about the effect of Greece's accession on the textile industry. I hope that the Commission will apply the multifibre arrangement and any transitional arrangements with greater vigour than hitherto because it has been singularly inert. The previous Labour Government spent much time and effort renegotiating the MFA in the hope that the EEC would apply it vigorously, as was indicated.

The British Textile Confederation circulated a draft letter to all hon. Members with textile constituencies. It said:
"Imports from the Mediterranean countries continue to be the weakest area of the EEC's textile policy, despite some limitations resulting from industry pressure. Restraint agreements have now been reached with Malta and Cyprus—but at the highest level of penetration yet achieved, and in breach of the global ceilings for the most sensitive products.
Greece and Spain have authorised the export to the UK market of larger quantities than the limits to which they had agreed."
If we approve the Bill, and if the clause stands part, will there be transitional arrangements to protect the United Kingdom textile industry; or will Greece be allowed immediate free movement of goods, to the enormous detriment of the British textile industry?

The British Textile Confederation gives a list of sensitive items. In category 3.2 we find woven pile fabrics, the country of origin of which is Greece. The quota ceiling for 1979 was 259 tonnes. Yet the imports between January and July totalled 512 tonnes—almost double the trigger level agreed by the EEC. That is not good enough.

When we talk in glowing terms of countries working together, we should recognise that a breach of international obligations of that sort puts people on the dole and has catastrophic consequences for industrial relations. We must be clear that arrangements of this sort must be undertaken properly. The EEC Commission must be more vigorous in the application of transitional arrangements.

In a research brief on the European Commission's general guidelines for a textile and clothing industry policy, the National Union of Dyers, Bleachers and Textile Workers points out on page 12:
"We feel that this move shows the lack of sincerity in the Commission's broad statement seeing the textile industry as essential to the Community, unless they intend it (the textile industry) to belong to the anticipated new member states such as Greece, Spain and Portugal. This possibility is not as remote as it may first appear. Only recently Greece has agreed to restrictions on its free movement of labour and agricultural goods on its accession in 1981. It would indeed be strange if it had nothing in exchange, and as its largest manufacturing industry is textiles, transitional provisions should also be agreed. But this does not seem to carry the political weight as does the prospect of Greek workers flooding into West Germany."
Therefore, West Germany has already made provision for the accession of Greece. I suspect that we have not. I suspect that in the usual way we shall obey the rules while every other country bends them to its own advantage.

The significance of this Bill is that it is not only sponsored by the Foreign and Commonwealth Office, which is blind to the problems of industry, and always has been, but is also sponsored by Ministers at the Departments of Trade and Industry, which means that they have set their seal on Greek accession. What else have they done about the products of Greece and the orderly marketing arrangements that they were talking about yesterday?

We do not want to see another Granada Television programme with stories from Greece rather like the one of 13 February 1979, which was entitled "The Shirt off our Backs". Statistics produced in that programme showed why 3,500 European clothing factories have shut in the last few years, throwing half a million people out of work. There must be some sort of parity of competition. That Granada programme talked about a woman called Jean Johnson, who has been a Stockport shirt machinist for 12 years. She is married, has three children, and earns £42 a week. In Hong Kong, 4,000 workers doing the same job get £27 a week each, while in Sri Lanka, Hema Pattirame, a girl working in a clothing factory leaves home at 4 am every day and gets back at 8 pm. She gets £2.50 a week—

Order. The hon. Member must understand that what goes on in Sri Lanka does not have great relevance to a Bill dealing with Greek accession to the European Community.

Then I shall try to point out the relevance, Mr. Weatherill. Having accepted that clause 1 should stand part of the Bill, we do not want to see future comparisons of that sort in a television programme which spotlights the differences in wages and working conditions between Greece and the United Kingdom when Greece has free circulation of textiles within the United Kingdom. Other hon. Members have pointed out that they wish to welcome Greece into the EEC without any inhibitions. I contend that, if that sort of programme is shown, it will cause deep resentment, contrary to the expressions of view that have been heard so far in the debate today. I am only sorry that the two new clauses were not incorporated in the Bill, because I feel that scrutiny of expenditure from the budget is important.

6.15 pm

Another important matter is the question of State aids. As it happens, textiles, footwear and clothing are the industries that have received most of the temporary employment subsidies. The European Commissioners stopped the last Labour Government from carrying on with TES and thus preserving vital jobs in the textile industry. In my constituency of Keighley, 2,000 jobs were supported by TES. Therefore, if State aids are to be warped in any way by Greece becoming a member of the EEC, we should know about it now and get the information from the Minister who is to reply to the debate.

The textile industries are vulnerable. This is causing concern. We have a modern wool and textile industry in this country, brought about by the wool industry reorganisation scheme, which was introduced by the last Conservative Government and developed by the Labour Government. Yet mills are still closing. In the first few months of this year, 6,000 jobs have been lost in Yorkshire and Humberside alone because of the advent of cheap imports. Greece is causing further concern to the British Textile Confederation, the wool textile delegation and the National Union of Dyers, Bleachers and Textile Workers, which deals with the wool and textile side.

In conclusion, I should point out that when the drum was being beaten for the referendum in 1975, when millions of pounds were being poured into a massive propaganda campaign, when the Eurofanatics, who were in a majority in the Cabinet of the then Government, failed deliberately to place any limit on expenditure, because that action benefited their side, the textile employers were saying that they wanted to get into the Common Market. It was a massive market in which they could do wonderfully well They would have a huge domestic market in which to sell their goods. The motor manufacturers and executives, with the exception of my hon. Friend the Member for Coventry, North-West (Mr. Robinson), were the same. Now it has all blown up in our faces. We have a massive balance of payments deficit with the Common Market, and that will continue.

Mr. Tom Hibbert, the chairman of the wool textile delegation, has pointed out that the wool textile employers actually supported the Common Market and inserted advertisements and messages about "jobs for the boys" in the newspapers. That has a rather sour ring about it now. Now that the EEC is being enlarged by Greece's accession, the message from Tom Hibbert is that the effect of the Common Market would appear to be so harmful that we should consider our position within it.

When this Bill is passed, the problems will not go away. We shall continue to hear concern expressed by the textile and other industries, and we shall not be able to exercise control over our own economy, investment, development and imports as long as we remain members of the EEC. By all means let clause 1 stand part of the Bill and let Greece and other countries come into the Community. This will help to erode this arrangement that is called the Common Market. Let us instead develop an arrangement whereby we meet equally as partners together, not only with other EEC countries but with those in the European Free Trade Area. Let us have a common negotiated trading arrangement. That is what the accession of Greece—and of Spain and Portugal—will ultimately mean.

The EEC will change as a result of the accession of Greece; and the supporters of the Bill know it. They are torn between two things. If they vote to keep Greece out of the Common Market, they will be denying what they call democratic rights—although there is not much democracy inside the EEC. Therefore, they are bound to accept the accession of Greece, but they know that the accession of countries with middle-range economies, such as Greece, will mean a radical change in the Common Market.

The accession of Greece will weaken and broaden the Community to a point where it will cease to be able to function as the political unit which the Eurofanatics on the Conservative Benches—and, alas, some Labour Members—would like to develop. We should keep the Common Market as a commercial trading organisation. I should like to see the Commission—with the Government prodding the Commission—make sure that Greece's accession does not bring dissension and grief because of the loss of jobs in the textile and other industries.

By all means, let clause 1 stand part of the Bill, but with the reservations that I have stated.

It is natural that Members from all parts of the Committee should seek an explanation of the Bill and of the whole question of Greek accession in the clause stand part debate. It is also right—I am grateful to my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) and my hon. Friend the Member for Essex, South-East (Sir B. Braine) for putting the matter in its essential perspective—to consider the future relationship between Greece, the EEC and this country. Both my hon. Friends are well known in the House, and have been for years, for their work in developing friendship between Britain and Greece. I echo what they said.

If I catch the eye of the Chair on Third Reading, I should like to repeat succinctly the political reasons that led the Government to introduce the Bill. I should like now to concentrate on some of the points on which explanations are required.

It is natural that the hon. Member for Crewe (Mrs. Dunwoody) should concentrate on the Community budget. That is a matter on which the whole House of Commons needs to be vigilant. It is a major issue here, in the country and in Europe.

There are two major aspects. The first is that of our own contribution, which has been discussed over and over again in the House. My right hon. Friend the Prime Minister will carry our case to Dublin. The second related major factor is the total imbalance between what is sensible and what is nonsensical in the present level of spending on agriculture. The proportion is far too high for common sense.

Incidentally, in the interest of historical accuracy, I tell the hon. Lady that she should not say that we on this side of the Committee discovered these absurd and expensive elements only after the election. I could, though it would be tedious, refer her to dozens of speeches made by my right hon. and hon. Friends, and by myself, pointing out these absurdities. We feel that the previous Government were setting about correcting them in the wrong way. History will show which tactics are the most fruitful. That is an unending argument, and the hon. Lady should not distort the record before it is complete.

The imbalance of the CAP as a whole will not drift on. The policy will hit its ceiling—we do not know exactly when—and when that happens it will compel a rethink of the policy.

Greek accession is a minor factor in the budgetary argument. I agree with my hon. Friends and the hon. Member for Swansea, East (Mr. Anderson) that it would be wrong to give Greece the impression that we are laying the blame for present difficulties on Greek accession, or that we think that they would be aggravated by Greek accession. We estimate that the size of the agricultural budget will be increased by about 5 per cent. as a result of Greek accession. That is not a figure to be wholly ignored, but it is not a figure to be blown up as being responsible for the difficulties.

I should like to give a number of other up-to-date figures in advance of the discussion of new clause 1. They are slightly different from those given by the previous Government early last year. We estimate now that after all the transitional periods are complete Greece will be a net beneficiary of the Common Market to the extent of about £390 million a year. Under existing arrangements, that means that the British net contribution will be increased by about £65 million a year at the end of the transitional period. It is precisely these arrangements that we are seeking to change. We regard our proportion of the total as unfair.

I am giving figures under the existing arrangements. The cost will be less in earlier years, because the figures that I have given are for the years at the end of the transitional period. Obviously, in the earlier years Greece will be receiving less and paying less. For example, in the first year after accession the net cost to Britain will be between £5 million and £10 million.

I turn now to the point made by the hon. Member for Keighley (Mr. Cryer) about textiles. The philosophy that he expounded about Europe contained many contradictions. First, we had the familiar cry that the concept of the Community was too small and too narrow with nine countries posing as Europe. He then used that argument against enlarging it to 10, and will no doubt use it in time against enlarging the Community further. The hon. Gentleman might say that even then the Community is too narrow and that the whole world should be in the Community.

Yet the hon. Gentleman went on to make a familiar case—I thought he made his case powerfully—for the protection of the British textile industry against the whole world. We had a thorough debate on that matter yesterday, and I refer him to the robust speech by my hon. Friend the Minister for Trade about the balance which any British Government have to keep between the legitimate interests of the textile industry and the legitimate interests of the British consumer. That is a real balance, and the consumer is becoming more conscious of it.

I do not wish to go back over that ground, except to say that, as regards Greece, I hope that the hon. Gentleman will draw the attention of the bodies whose declarations he read out to article 130 of the Treaty. That article lists action which can be taken by Community countries in the event of their industries being disrupted by imports from Greece during the transitional period. The article contains as reasonable an undertaking as can be given at this stage, short of telling Greece that we are so concerned about our textile industry that we shall slam the door in her face and not let her in.

I welcome the entry of Greece, Portugal and Spain into the EEC. Their membership will make a qualitative change to the Community, because the EEC is no longer just a rich man's club. Does not the hon. Gentleman see a contradiction in what we are doing? We have the possibility of free movement of labour from such countries as Greece and yet we showed earlier today that we are scared to death of allowing in any more workers from the Indian sub-continent.

The hon. Member spoke earlier this afternoon after the statement of my right hon. Friend the Home Secretary on immigration, and he will no doubt raise the matter again. I do not wish to be drawn into that discussion, though it is pertinent, and the hon. Gentleman has made his point.

6.30 pm

Both the hon. Member for Keighley and the hon. Member for Crewe referred to State aids. Here again, there is some confusion in their philosophy. The main discussion about State aids during the last Parliament resulted from the then Government's clinging to State aids. They said how wrong it was for the Commission to start undermining the marvellous process that we had in this country for sustaining jobs by State aids.

When we came into office, we found a whole series of rather excited arguments going on between the British Government and the Commission on these points. We are gradually and sensibly bringing those arguments to a close. Now we find that when it comes to Greece the hon. Lady is on the other side of the argument. She is now concerned to argue that it is very important that Greece should not be allowed the rights and privileges or the ability to have State aids, which Ministers in the last Government so closely embraced and so insisted on when it was on their side of the argument.

I must apologise if my inability to express myself in clear English is such that I did not make the hon. Gentleman understand. I have absolutely no objection to Greece's supporting those of her industries that are sensitive. Indeed, I wish that we had the same kind of protection. What I am worried about is that the Community is insisting that Greece should get rid of her existing supports. If nothing else, the hon. Gentleman must acquit me of being two-faced on this matter.

Then I must refer solely to the hon. Member for Keighley. I thought that the hon. Lady was on the same point, but I now understand that she was on a contradictory point. The hon. Gentleman was certainly anxious that the Greeks might be able to subsidise their textile industry and create unfair competition for British jobs.

I must enable the hon. Gentleman to grasp this point thoroughly. What I was saying was that the Commission should not expunge State aids from Greece in the same way as it forced us to get rid of temporary employment subsidy. What was valuable for this country should be permitted elsewhere in the Community.

But it is not sensible to have a competition in State aids through the Community. It simply leads to extravagance after extravagance. It is a con tinuing process, as each country feels compelled to match the State aids given by others. This is what has happened in practice. The philosophy of the Treaty in this matter is correct.

I am very interested in the Opposition's statement—I am sorry if I got it wrong originally—that they are now anxious that the Greeks should be able to subsidise their industries, including the textile industry, and that this right should not be impeded. It goes against the drift of the hon. Gentleman's argument.

As regards the provisions under the arrangements that we are now discussing for State aids, the Greeks on entering the Community will be subject to articles 92 and 93, which deal with State aids. Protocol No. 7 attached to the documents, which refers to the Greek Government's general industrial policy, says that their obligations under those articles will have to be weighed against the Community's endorsement of that policy.

That is an attempt in diplomatic language to state a balance, which I think on the whole the Committee would think reasonable, between the interests that the hon. Lady has just been talking about—the reasonable interests of a partly developing country such as Greece—and the Community's general concern not to allow a continuous auction of State aids, which, when exaggerated, could end in beggaring everybody.

The hon. Member for West Lothian (Mr. Dalyell), who I know must leave shortly, asked a number of important and serious questions, as did the hon. Lady, about the Community's institutions and the effect on them of Greek membership.

The hon. Gentleman dealt first with the problem of the tower of Babel, the problem of the burden on the Community and the confusion inside it created by the proportion of its resources, its time and its business involved simply in translating from one language into another. He quoted a letter that he had received from my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) which represented as much as we can say on the matter at present.

I am sure that all hon. Members grasp the essential points. First, a Minister or a Member of Parliament of a member State must be allowed to express himself in his own language. Secondly, a Greek farmer must have available in Greek the instruments of the Community that affect his livelihood. The hon. Gentleman did not dispute either of those points, but they add substantially to the problem of the tower of Babel.

Within those two clear needs, we should like to see some rationalisation, a commonsense approach to the question of how often there must be full deployment of all the languages. The problem is now being examined. The report of the Three Wise Men, including Mr. Dell, will be before the summit meeting in Dublin, but I doubt whether the Heads of Government will have a great deal of time at that meeting to go into it in detail. That is not because the problems are unimportant. I believe that on the whole they are extremely important, for the reasons given by the hon. Gentleman. But there are other problems that fall into the same category: the number of Commissioners, the whole question of the Commission's structure and the parliamentary consequences of enlargement.

There is the Spierenburg report, which was commissioned by the Commission, in addition to the report of the Three Wise Men. I cannot enlarge on those reports. They are not before us now, and the Government have not received the latter report. Therefore, it is too early to comment on it.

I simply make one personal comment, as someone who has tried to follow these matters for three or four years, as has the hon. Gentleman. I agree with him about the need to go back to the drawing board. We should not assume that we must simply add on what seems to be the mathematically right number of extra people.

The enlargement enables us—it forces us—to look again at the structures and see whether they are sensible. Therefore, I hope and believe, on the basis of what I have read and heard on the subject, that this opportunity will be taken not simply to make purely automatic adjustments upwards but to look again at the underlying concepts and see whether we can streamline these matters and make them better.

Certainly, as the hon. Gentleman said, there is outstanding business. We have the Treaty of Accession before us, but there is continuing business, as there is bound to be. Road haulage quotas are obvious examples. The whole system is being looked at again. It is not sensible to negotiate a quota for Greece when the whole system is being examined.

Another example is the relationship between Greece and the ACP countries. There is a whole series of consequential subjects that will take a considerable time to work out. Nobody needs to apologise for the fact that they are not yet cut and dried.

The hon. Lady referred to a very important point—the Copenhagen declaration and the whole question of human rights. We should be a little chary of telling other people how to run their countries. But it is fair to say that the previous Foreign and Commonwealth Secretary, with the agreement of the then Opposition, took the lead in working out the Copenhagen declaration, which was that the existing and future members should be good practitioners of democracy. Article 3, paragraph 3, of the Treaty of Accession says that the new member—Greece in this case—will be bound by declarations adopted by common agreement within the Community.

That matter should not obscure the remarkable achievement of the Greeks in this area. They have extricated themselves, without a great deal of help from anybody else, from one form of totalitarian rule without falling into the other and opposite form. If there were no other factor, that would be a reason why the Committee should give to the Greek application not a sour or crabbed response but a warm and wholehearted response, by approving the Bill.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

New Clause 1

Obligation Of Foreign Secretary To Report To Parliament

'The Secretary of State for Foreign and Commonwealth Affairs shall lay before Parliament annually a report analysing the effect on the Community Budget of the accession of Greece to the European Economic Community.'.—[ Mrs. Dunwoody.]

Brought up, and read the First time.

With this it will be convenient to take new clause 2—State aids in Community

'Nothing in this Act shall be taken to invalidate the existing system of State aids within the Community.'.

I beg to move, That the clause be read a Second time.

It is important that the House should be informed about what is going on in the Community. The hon. Member for Essex, South-East (Sir B. Braine) said that we must ask not only the Greeks but others to account to the Community for their activities. In my speech on clause 1, I made it clear that we welcome the accession of Greece to the Community. However, that does not mean that we are satisfied with the internal machinery.

One way in which the Government could adapt their existing procedures and keep the House more fully informed would be to give a close analysis annually or biennially of the effect on the budget of the accession of a new member State. That would not be a discriminatory move against a new member State, but it is a proposal that we would have wished to see put into operation some time ago. Some hon. Members would like to see a change in our own treaty so that the House would have the right to look at individual decisions before they are taken. However, that proposal is not before us today and I should be ruled out of order if I pursued the matter.

The budget is obviously the kernel of the development. Long and erudite discussions on how we wish to see the Community proceeding do not matter if there is no money to meet existing commitments. We have known that for a long time. It has not been thrust von us at short notice. The Agriculture Commissioner has spelt out that fact time and again. That is why he introduced the co-responsibility levy, which, in real terms, he was forced to withdraw, and why he suggested changes in commodity agreements. The Commissioner also hoped that the Tory Minister of Agriculture, Fisheries and Food would not agree to any price increases in the last price review. He specifically hoped that Britain would hold a line on the budget and demand that there should be no increases in the price of commodities in surplus.

The House never receives a proper account of the minutiae of the Community. That is understandable. Paper flows out of the Commission and the other institutions of the Community at the speed of light and it is difficult for hon. Members to follow all the details. Nevertheless, the practical result of that is that Ministers go to Brussels on our behalf, sometimes without even a discussion of the regulations or directives on which decisions are to be reached. They take the decisions and come back to this place to report on them. I believe that we are not fully informed. Yet we are being asked to pay a disproportionately high proportion of the budget.

6.45 pm

I welcome the stand that appears to be taken by the Government towards the imbalances. Nevertheless, if the right hon. Lady the Prime Minister returns from Dublin with egg on her face she will find it difficult to explain to the House why she was so convinced that the matter should be immediately put right and that the British taxpayer could no longer support the intolerable burden of our contribution to the Community. She will find it hard to explain why she has had to climb down when it comes to the crunch.

I hope that the Government will seriously consider accepting new clause 1. Indeed, they may take it as a pattern for our relationships with other countries in the new accession treaties. If the Government have the opportunity to say what they think is essential about the budget and what should be changed, I believe that they would receive much more support from all parts of the House. Any budget that spends 80 per cent. on agriculture and 20 per cent. on everything else is so manifestly unbalanced that it cannot conceivably continue as it is.

Agriculture welded the Community together, but I believe that agriculture will blow it disastrously apart. The political implications of the refusal of political will in the Community are great. There has been no real indication of a change of mind. It is all very well for us to say that our colleagues on the Continent have great sympathy with us and are aware of our difficulties. They will not accept a change in the make-up of the budget, because they know that if we pay less someone else must pay more. If Britain had taken a higher proportion of the regional and social funds, that would have been one way out. That proposal was blocked off by Conservative Members' refusal to allow any increase in the regional and social funds.

For four years I had the grand title of vice-president of the Social Affairs Committee in the European Assembly. I watched the tiny sum of money that was so desperately needed to help employment, youth retraining, and the position of women being snarled up in the machinery of elephantine incompetence. I learned that there was little likelihood that the Community, by using the social and regional funds, would be able to change the imbalance between rich and poor regions.

We should take care that we do not start to talk about the Community of the centre and the Community of the periphery. Greece is in real danger of joining us in an unenviable position—being part of the Community of the periphery. The investment, jobs and money go to the centre and those who are on the fringes are badly treated.

I hope that the Government will resolve that there must be changes in the budget. All the good Tory Europeans have failed to put forward one good practical alternative to the existing funding arrangements. The Minister of State said that the Government do not know when we will run out of money. We do know that it will be in 18 months' time—at the latest. That will come at a time when some other European States will be facing their electorate. When European politicians believe that their votes will be affected, they are hardly likely to agree to a vast change in the pattern of funding which will take money away from their electorate.

The agriculture policy is manifestly untenable. Not only is it not in the interests of the Eupropean consumer but it is not in the interests of the small European farmer. Large farmers have done well out of it, but many small European farmers have not received any real benefit from the CAP. If the money runs out and no political decisions have been taken, there is a real danger that the Community will blow itself apart. What is put in its place may be even more damaging than the existing funding of the Community, though that seems unlikely to many of us.

Why does the Minister not say that the Government wish that they had thought of the idea and that since the Opposition have been kind enough to put it forward they will accept it? They could explain to the House in detail the budgetary implications of what is happening in the Community. When we reach the brave new world in which Britain will, at long last, pay a great deal less and the French and the Germans will pay a great deal more, the Government will be able to explain in considerable detail how the funding is going and why countries such as Greece will find it difficult to get the transfer of resources that they will need for their structural changes.

The Minister did not mention the point that I stressed earlier, namely, that under the guarantee fund Greece will have considerable difficulty in getting the transfer of resources that it will need to bring its agriculture up to even a reasonable standard.

We are giving the Minister a marvellous opportunity. He is basically a gracious gentleman and he can accept the opportunity with grace. Instead of suggesting that we are distorting the picture, the hon. Gentleman can remedy a previous mistake and agree that the House should be given a great deal of information, more opportunities to debate that information, and an annual report making clear what changes are needed in the budgetary arrangements of the Community.

I support the new clause, and I am sure that the Government, with their new attitude towards Common Market expenditure, will welcome it. I may not be here for the Minister's reply, because I have to attend a meeting at 7 o'clock. I hope that the Minister will forgive me.

Since the Government are saying, as they were not before the general election, that Community expenditure and our contribution are out of hand, I am sure that they will accept the new clause as an element of accountability to this Parliament—a development that has not so far been noticeable as a consequence of our membership of the Common Market.

When the Labour Government were in power, the then Leader of the Opposition said that we were being too abrasive in our attitude towards the Common Market, because we were saying that £1 billion a year was too much. Since, according to all sorts of non-attributable briefings and statements made hither and thither, the Prime Minister has developed an abrasive attitude herself about what she intends to do at the Dublin summit, the rather gentle new clause, which sets out in such a succinct and reasonable way how the expenditure relating to the accession of Greece should be accountable to this Parliament, should be acceptable to the Government. It will enable them to express the view that our relationship with the Community should be accountable to the House.

We see our powers dribbling away to the Common Market and the decisions of Commissioners becoming increasingly important. We are told that we cannot take certain action without the approval of the Commissioners. Civil servants, particularly in the Department of Trade, which is staffed virtually from top to bottom with dedicated Euro-fanatics, tell Ministers that they cannot take certain actions because they will offend the Common Market. I have no knowledge of the Foreign and Commonwealth Office, but I have no doubt that the process is repeated there.

The new clause will help in a minor way to establish a relationship in which there is some degree of accountability to the House, so that we may debate the effects of Greek accession on the EEC budget. It is not unreasonable to suggest that elected hon. Members should have an opportunity to debate the real issues of the Common Market, the application of funds and the distortion, beneficial effect or whatever that the accession of Greece will have on the Community budget.

The most important and all-embracing topic of discussion at present is the massive amounts of money being poured away in the EEC. We are contributing a significant proportion of that money. Why should there not be some degree of accountability to us?

The hon. Members for Crewe (Mrs. Dunwoody) and Keighley (Mr. Cryer) have reasonably used the new clause as a peg on which to hang another discussion of the general problem of the European budget. It was a little puzzling to listen to them, since they gave the impression that the House of Commons had no opportunity to discuss EEC matters. In fact, they have both taken a prominent part in our elaborate procedures for discussing such matters. We have a Scrutiny Committee to enable us to have those discussions.

Over the years, I concluded that what was wrong was not so much the procedures, the legal situation or even the attitude of Governments, but that the debates in the House were usually rather drab and scanty and did not reflect the importance of the issues under discussion.

The EEC budget is a classic example. The hon. Member for Crewe gave the impression that the House had had no opportunity to discuss the budget. For several years, we have had a substantial debate in the House on the EEC budget, as a result of recommendations of the Scrutiny Committee. The first two such debates were dreary and I came away almost in despair because the Treasury Minister dealt simply with the dry sticks of the matter and did not encourage the House to launch into wider issues.

This year there was a change and a substantial and rather good debate on the budget. The opportunity exists and was used properly this year. Since we have a lively Opposition on this matter, I am sure that such debates will be important and influential in the history of the House and will match the importance of the subject.

It is not necessary to smuggle a new clause into an accession Bill for one new member of the EEC to secure proper consideration of the general matters that the hon. Lady discussed. The hon. Lady puts forward the new clause for reasons concerned with our position in relation to the European budget. We understand the reasons here. However, it would be widely misunderstood in Greece if we attempted to put a statutory obligation on our Government in respect of Greece alone—it has never happened before. The only explanation that would occur to our Greek friends is that there is some special reason, suspicion or doubt about Greek accession and that we were attributing to that accession some of the major problems facing us in the EEC budget. That would be taken amiss in Greece.

7 pm

In order to emphasise what my hon. Friend has rightly said, may I point out that we are the first country to move for Greece to become a member? When the matter passes to all the other member States, they will observe that the British have picked out Greece for this specific provision, which would then have to be discussed by all the other member States in their respective Parliaments.

My hon. and learned Friend is quite right. That may well be a consequence.

The hon. Member for Crewe and the Opposition are right in pressing for the fullest possible information on this as on other Community matters. Earlier I gave the up-to-date figures for the financial effects of Greek membership, particularly upon ourselves. I am quite willing to undertake that from time to time—maybe once a year, as was suggested—we shall make available to the House in what seems to be the most convenient form figures to show the effect of Greek membership. We are perfectly prepared to find a way of doing that. It should not be difficult, as it has not proved difficult today. I ask the hon. Lady, however, not to impose a statutory obligation which could lead to a good deal of difficulty of a kind that I am sure that she is not seeking to create.

Question put and negatived.

Bill reported, without amendment.

7.2 pm

I beg to move, That the Bill be now read the Third time.

As we come towards the end of the discussion, it is right that, on behalf of the Government, I should emphasise the warm welcome which we and our predecessors in the last Government have given throughout to the Greek application. Of course, as the debate has again illustrated, the application creates complications and problems for the Greeks, for ourselves and for our partners. But we should not let the complications disguise the fact that the Greeks are paying Europe the compliment of accepting that the European Community is now the focus of European co-operation.

Quite naturally, we are so absorbed in our own criticisms of the way in which the Community works that we sometimes forget that to those outside looking in, the Community, with all its failures, represents the most hopeful form of co-operation that Europe has ever achieved. One proof of that is the application and decision by Greece to join. Having thrown off one kind of totalitarian rule without falling into the grasp of another, Greece's record of democratic achievement is such that it has a very powerful argument to put to Members of this House, given our concern for democracy.

It is not open for us to say that Greece is not a European country. I do not think that anyone has ever ventured to make that remark. I do not think either that it is open for us to say that we in the Community are in such a muddle over skimmed milk, butter, wine and lamb that we propose to shut the door in the face of Greece until we have sorted it all out, whatever the consequences for them.

We must take a larger view than that, and both major parties in this country have taken that larger view. We accept that there is a good deal of work still to be done. There are a good many important matters of an institutional and economic nature still to be resolved. However, at the moment that Greece joins the Community one would have to be lacking in historical imagination not to regard that as a splendid step forward in the history of Europe.

7.5 pm

On behalf of the Opposition I have the greatest pleasure in welcoming the accession of Greece to the Community. Most of those words that we hold most dear in the English language, including "democracy" and even "politics" itself, basically come from the Greek language. The reason why many of us still enjoy what is lightly called the advantage of a classical education is that it has always been firmly believed in this country that Greece, with its great cultural heritage and its great dramatic and economic history, has a great deal to offer us and the Community as a whole. We have always believed that it would certainly be to the advantage of the Community that Greece should join.

However, the questions that we have raised today have, I hope, explored some of the difficulties that we envisage for the British Parliament in a larger Community and have put on record some of the difficulties that we frankly expect to face Greece after its accession. We do not believe that all will be sweetness and light, and there may even be occasions when—I know that this will surprise the Minister of State—we may not envisage the Community as the be-all and end-all of the future.

Nevertheless, we shall extend the very warm hand of friendship to the Greek people when they join us. This House has a long history of welcoming democratic States and helping them to maintain that democracy. We hope that their future in the Community will be a happy and prosperous one, and we know that the Greek people will understand that they can always rely on us for support in their democratic future and ideals.

7.7 pm

I was delighted to hear the speech by the hon. Member for Crewe (Mrs. Dunwoody). I thank her and Labour Members who obviously had collectively to consider whether they would divide the Committee on the amendments which they had tabled for deciding, in their sound common sense, not to do so.

I see on the Labour Benches the hon. Member for Hayes and Harlington (Mr. Sandelson), who has long been associated with the Greek parliamentary group. I am sure that he will echo the view that I have expressed.

I believe that when we pass the Bill tonight it will be regarded in Greece as a moment of some importance. Ours is the first country to grant and approve its accession. Others will follow, and it is right that with our joint heritage with Greece, Britain should have been the first mover in this matter.

These developments are of great importance, because Greece has been through an exceptionally difficult period in the last 30 or 40 years. There has been the closest liaison between Greece and certain great Members of this House and another place, whose memories are always treasured in Greece. I refer, for example, to Lord Jellicoe and the immeasurable and brilliant way in which he supported Greece in the war. I refer to Monty Woodhouse, a Member of this House for many years, who was a great friend of Greece and was of immeasurable assistance to it in the war. There are others. It is that link which provides a great political connection and a great link of friendship in times of war.

Greece had a civil war. Those who have been through a civil war realise that it is perhaps worse than any other form of war in terms of tearing person from person. Thereafter the Greeks suffered a great indignity, the period of the generals' dictatorship. It says much for them that they survived, threw off the yoke of dictatorship and subsequently created a successful and improving country. They are improving their quality of life, method of civilisation, and industrial production. They are now almost the world leaders of the tourist industry. I hope that as a result of their success in that area they will contribute greatly, in many ways, to the EEC.

Of course the Greeks have grave problems. Their country is poor. Their small population occupies a large area of land. They have considerable problems with agriculture and the exports that they can generate. Therefore, the deficit must largely be made up by tourism. Both the Greeks and ourselves recognise that we can follow the road of European civilisation. It is not only the money; we look forward to an improvement in the life of our civilised society.

For political reasons and for the sake of our associations with Greece, we believe that we are doing a good night's work when we pass the Bill. It will be of benefit to Greece and Britain. It will bring people of commanding thought to assist us gradually to conquer the problems of Europe, so that ultimately we shall see the light of an improved future.

7.12 p.m.

I do not wish to take up more than a minute or so as almost everything that I would wish to say has been said already, not only by the hon. and learned Member for Thanet, West (Mr. Rees-Davies) but by my hon. Friend the Member for Crewe (Mrs. Dunwoody), who spoke on behalf of the Opposition. I congratulate my hon. Friend on the warm way in which she expressed the feeling of the Opposition about the accession of Greece to the European Community.

There are many outstanding issues between the Government, the Opposition and the Community. It is important for the nation that they should be sorted out. We hope that they will be. We are all at one on that. However, the fact remains that the Community holds out the greatest hope for Western order and civilisation and the defence of Western values against those people in Europe and elsewhere, but primarily in Eastern Europe, who now threaten the values to which I allude.

For those reasons, especially for political reasons, the accession of Greece is to be welcomed by all hon. Members. The accession of Greece will add enormously to the strength of the Community in different ways, not detract from it. There will be a new atmosphere of deepening friendship between ourselves and Greece, to our mutual advantage.

7.14 p.m.

I was a soldier in the Greek Army 34 years ago. Understandably, at that time I came to have a great affection for things Greek and Greece. In the humble capacity in which I served, I never expected that the day would come when, in this House, I should welcome Greece as a member of a European community. I hope that my support tonight may be of more use to Greece than were my services as a soldier.

It is good to have Greece with us. The Greek soldiers used to say to me: "There was a time in 1940 and 1941 when it was just you and us alone." They were right. I hope that the combination now being set up will be as successful as the co-operation in more difficult days.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Shipbuilding Bill

Considered in Committee.

[Mr. RICHARD CRAWSHAW in the chair]

Clause 1

British Shipbuilders: Limit On Borrowing Etc

Question proposed, That the clause stand part of the Bill.

7.18 pm

I begin by declaring an interest. I am a sponsored member of the General and Municipal Workers Union, which represents a large number of men who work in the shipbuilding industry. It is important to put that on record.

I intended to welcome what the Minister had to say. However, as he did not say anything, I may move on quickly.

I give a general welcome to the intention of clause 1. It is an important provision. However, the Opposition have a number of questions about what is intended in raising the limits imposed by section 11 of the Aircraft and Shipbuilding Industries Act 1977 in relation to the finances of British Shipbuilders. We welcome the recognition of the need to do that and the Government's apparent commitment, on this occasion at least, to use public money. We wish that that commitment could be more widespread. The Opposition would have taken similar action if we had been in power. In that sense, we are satisfied with the provisions of Clause 1.

It is in the national interest to have an effective industrial capability in merchant shipbuilding, defence shipbuilding, marine engines and our oil industry requirements. However, the financial provisions relate to the two-year time scale that the Government set for the industry.

Are the new limits sufficient? Is the provision large enough in view of the situation obtaining in the shipbuilding industry? Perhaps, subsidiary to those questions, I may put a few more detailed points to the Minister. The strategy of British Shipbuilders is to maintain a capacity of about 400,000 to 450,000 tons in merchant shipbuilding. The orders situation leads us to conclude that that may well be difficult. The Minister of State made that point before. We understand it. The berth programme of British Shipbuilders is serious. There is a need for much more vigorous Government action on orders. If action is forthcoming, as we urge, will the limits set in the Bill be sufficient to enable British Shipbuilders to fulfil extra orders?

I recall the action taken by the previous Administration on the Polish deal. That deal was much decried, at the time, by right hon. and hon. Gentlemen now in Government. However, not only was it useful to British Shipbuilders but it met with the approbation of the Public Accounts Committee.

The berth programme prompts us to ask whether the financial provisions are sufficient because the situations on the Clyde, the Tyne, the Wear, the Tees and Merseyside are urgent. The second question of detail arises because of the lowering of support for the industry as a result of the reduced intervention fund. The Government have made much of their role in this matter, but the intervention fund is now a failure. In no way does it match up to the real value of previous provisions, nor does it match up to what British Shipbuilders demanded. The level of support has gone down to 25 per cent. The attitude of British Shipbuilders was that the previous rate of 30 per cent. should be abolished and that there should be no support element. This lower level, however, will have an effect on the financing of the industry.

Much has been said of the need for a scrap-and-build programme. We have not seen any progress in the provision of such a programme by the Government. We regret that. It is an important matter. If a scrap-and-build programme were agreed—as we urge that it should be soon—it would expose the need for additional finance for British Shipbuilders. I refer the Minister to the document adopted by the Confederation of Shipbuilding and Engineering Unions. The confederation recently discussed the general situation and in particular it argued in favour of the building of a much higher proportion of the United Kingdom tonnage in British yards.

It also argued for an early agreement on, and implementation of, a scrap-and-build policy, advance public sector orders and further defence orders. We understand that defence expenditure is to be increased, and perhaps the Minister will take on board the fact that some of that money should go to shipbuilding. The document also discusses the enforcement of the issue of segregated ballast tanks, the accelerated diversification of products and the installation of inert gas systems where necessary. These are proposals which could bring much-needed work to the yards but they require extra financial provision.

Are the Government really fighting for orders for the yards? We have not seen much evidence of great conviction in that respect. We would welcome more vigorous action because that would have an impact on the ability of the industry to finance itself within the provisions set out in clause 1 of the Bill.

Apart from the arguments which relate specifically to British Shipbuilders, there is also the question of the effect of inflation on the financial provisions. Inflation is rising rapidly and likely to go on rising and we understand that there is the likelihood of an increase in minimum lending rate which would affect the industry in many ways. Wages will have to be taken into account. It is against this inflationary background that we question the limits of the provisions. Capital investment proposals for the high technology and engineering sectors of British Shipbuilders prompt us to ask whether the limits set out in the clause are sufficient to meet the urgent and expanding needs of the industry.

The Minister of State was in doubt about these limits when he introduced the Bill on Second Reading on 1 November. He said that he hoped that there would be sufficient provision. I do not know what the Minister's hon. Friends would think if he had to come back to the House on a subsequent occasion to ask for increased provision. If he did, we would not hesitate to support him, though we think it is better to get the matter clarified now.

On industrial and employment grounds as well as on the grounds of national interest, British Shipbuilders should not be placed in difficulties. Because of the Minister's attitude to private capital in the industry, yet another question arises under the heading of financial provision. He referred to this matter also on 1 November. What effect would changes in the industry have on the provisions? The Government should be more forthcoming about this when asking the Committee to agree to the Bill.

I understand that British Shipbuilders in its corporate plan states that the worldwide industry is experiencing the worst crisis in memory. British Shipbuilders are not the only ones in difficulties, though the plan describes the crisis as a matter of survival for the industry. We want the industry to survive and we want a greater level of support through the intervention fund. The fund is now smaller. We want to see more capital expenditure in yards throughout the United Kingdom. Offshore activities are also a key factor in planning and should be given national priority. That could lead to a significant increase in the provision of jobs, particularly in. Scotland, where they are badly needed.

There is a measure of agreement between management and unions about financial needs and about the need for aggressive action by the Government on public orders, defence measures and the intervention fund. Do the Government intend to change gear on these matters since they seem to be losing momentum? Against the background of the world shipbuilding recession, what does the Minister expect British Shipbuilders' trading loss to be in the next couple of years? That is a relevant question.

These issues are vital and urgent. We expect a detailed response from the Minister. My hon. Friends also have many questions about their constituencies.

7.30 pm

I am pleased with the progress of the Bill. I have followed closely the interests of the shipbuilding and ancillary industries and I cannot add much that is new to the argument. I had the pleasure, or misfortune, to sit through the long Committee stage of the Bill introduced by the previous Government. It is difficult to begin a new argument when one agrees basically with the general principle. One can always argue for a more generous injection from public funds, but at present the money proposed is probably right in relation to the possible needs of the industry in the next three to four years.

I am sure that the Minister will persuade the executive board of British Shipbuilders to indicate how much of the money will be used for further research. That is important. We must keep in a healthy state the research establishment at Wallsend in my constituency. We must also ensure the well-being of the research establishment at Teddington, where a different type of work is done. Research must be maintained and the results must be incorporated in future since that could give us an advantage when we compete for orders in three or four years' time.

There is a slightly more optimistic mood on the Tyne following recent orders. They are welcome and we are also pleased about the orders obtained for the Birkenhead and Govan yards. I am sure that hon. Members who represent those constituencies will have more to say about that.

Naval contracts in the North-East have been completed on time and to the satisfaction of the contractor—the Admiralty. Perhaps the Admiralty will use its influence and encourage other contractors to use the North-East yards.

This is a difficult time for the shipbuilding and repair industries. Morale is low. Perhaps we shall be telling a different story this time next year. There may be some improvement. The longer that ships are at sea, the quicker their life expectancy diminishes. Inevitably, British ships will have to be replaced. If they are not, insurance premiums will increase and that will add to the operating costs. World shipowners will be looking for yards which can rebuild their fleets. The money provided in the Bill, if it is used wisely, will secure those future orders.

Hon. Members who represent shipbuilding constituencies have not been too critical of the Conservative Party. We could have rubbed our hands with glee at the possibility of the Minister having to do a partial about-turn on his party's philosophy. We have resisted that because the broad principle is generally accepted by both parties and by both the present and previous Governments. I hope that the Bill progresses merrily and speedily tonight and that it is placed on the statute hook as quickly as possible.

I apologise for being absent at the close of the debate on 1 November. If I had known in advance that I would be absent, I would have mentioned it. I received an urgent telephone message about the serious illness of a close relative. I had to depart immediately for home. I was well up the M1 when the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher), was making sarcastic remarks about my absence. I accept that he made those remarks in ignorance.

Clause 1 does not go far enough. My constituency relies a great deal on shipbuilding, ship repairing and marine engineering. The town in which I was born and which I now represent was built on a tradition of steelmaking, shipbuilding and ship repairing. In the 1930s we went through the traumatic experience which Shotton and Corby are now facing.

In his more enlightened remarks on Second Reading the Minister said:
"The main brunt of the contraction in recent years has been met in Merseyside and the North-East of England. Since mid-1977 over half of the 8,000 jobs lost in British Shipbuilders were lost in the North-East alone."—[Offical Report, 1 November 1979; Vol. 972, c. 1577.]
We all accept that. The male unemployment rate in my constituency is 16 per cent. The North-East relies on heavy engineering, shipbuilding and ship repairing. Any contraction in those industries adds to the already unacceptably high rate of unemployment.

A lack of recruitment in the industry amounts to the same as redundancies, because if wasted jobs are not replaced school leavers are not offered apprenticeships.

The shipbuilding industry is an important cornerstone of the industrial community. For economic, social and strategic reasons the industry should not be allowed to contract. The Tyne and Wear county council, to which I pay tribute, has done much to help the shipbuilding industry in the North-East. It held a conference, with other local authorities, in April this year to provide a national platform for discussion, among all the major sectors of the industry within the EEC, of the worldwide problems that face the shipbuilding and ship repairing industries. The conference carried the following resolution unanimously:
"This conference affirms its belief that a vigorous national shipping and shipbuilding industry is essential to this country. The aim must be to ensure that the industry survives the current world recession and remains effective in the face of increasing competition so as to take advantage of the recovery expected in the 80s. To this end this conference calls on all sectors of the industry to unite their efforts in a new spirit of partnership, to build on the skills and expertise within the industry and, with the full participation of Government, together with our partners in the EEC, to find ways of increasing its overall strength."
At the same conference the hon. Member for Wirral (Mr. Hunt), who was the chairman of the Conservative group on shipping and shipbuilding, said:
"There must be no doubt as to the necessity to maintain a merchant shipbuilding capacity, as it cannot be left to others to supply the ships which carry Britain's and industrial Europe's seaborne trade."
We would all agree with that. If the Prime Minister's nightmare ever comes true and we have those hairy Russians positioned across the Channel, it is as important to have merchant shipping to carry the supplies as it is to have warships.

Despite the present deteriorating position of the industry—much of it beyond its control, caused mainly by subsidies and import controls in other countries—Britain is still the fourth largest shipbuilding nation in the world. It has always suffered from periodic demands, feasts and famines. The Geddes report in 1966 recognised that the private owners' failure to invest and adapt was one of the underlying causes of the industry not meeting the demand of the changing pattern of competition. Investment by private owners in British shipbuilding was pathetic. A survey carried out in the early 1970s showed that for every man employed in the industry the assets were £825. In West Germany the figure was over £1,000, in Italy it was £1,200, in Sweden it was £1,800 and in Japan it was £2,800.

The following years did not help the British worker and his need for proper tools. After that survey the investment for every man in the industry was £80 In West Germany it was £162, in Japan it was £409 and in Sweden it was £554 It is small wonder that the efficiency of the United Kingdom shipbuilding industry was well below that of our competitors I referred in the debate on 1 November to platers' helpers pushing shell plates about in the shipyards on wooden barrows. Those were the sort of tools given to workers to compete with the rest of the world. Because of their greed for profit and their lack of investment, the private owners have much to answer for with regard to the state of the industry today. If it had not been for nationalisation, it is doubtful whether we would be discussing the industry tonight.

Massive over-capacity in the industry internationally has given rise to intense competition for orders. Savage price cutting to levels well below the cost of production has resulted in bankruptcies among shipbuilders in many countries. That led to widespread financial intervention by Governments in the form of various subsidies, either as direct or indirect price support or in the form of soft credit packages to developing countries.

In the financial pages of The Guardian on 4 July a report stated:
"Unofficially there is concern on the British front that competitors are playing dirty tricks. British shipbuilders will point to a ferry order they lost to a West German yard offering below cost prices. … The yard then went bust but they continued the work, sustained by the German Government—a device well within EEC rules".
The past 10 years have seen the cost of building ships double while the value of the ships has reduced by one-third.

I deal now with the conditions that prevailed in the shipbuilding industry not so many years ago. The chairman of British Shipbuilders has said:
"We are breaking down old-fashioned and deep-rooted attitudes and substituting informed, active and hard headed involvement with participation".
Let us consider those old-fashioned and deep-rooted attitudes and understand how they came about. I speak from experience when I say that the British shipyard management was the most reactionary in British industry. I have heard debates in the House of Commons in which remarks by Conservative Members were purely academic. I doubt whether many of them have been nearer to a shipyard job and the conditions that workers face than lying in a deck chair on a liner cruising round the Mediterranean.

7.45 pm

Markets in the shipyards were abolished a few years prior to nationalisation. It was a tradition that started in the cattle markets. Early in the morning, when it could be snowing, raining or hailing, we went to the gaffer's office and stood there for an hour or so until the gaffer came out—the rain was coming out of our laceholes—and said to some of us "You can start today, the rest of you go home". It is not so long since those conditions prevailed. I am sure that my hon. Friend the Member for Newton (Mr. Evans) will remember those days.

I was a shop steward in a shipyard where men working with welders were holding lugs about an inch and a half from the flame of the welding rod. The sparks went down our sleeves and we finished up with septic sores on our hands, yet the management would not provide us with gloves. They said "Why not look round the dock bottom and find some welders' old gloves?" I had to go to a central conference in York in my efforts to get these gloves. They cost 1s. 6d., or 7½p.

When speaking of profitability. Conservative hon. Members should remember that when the snow comes this winter the workers will probably have to walk from the gates for a mile through the snow, climb up the gangway, shift the snow and chip the ice from their job before they can start work. That should be taken into consideration. Conditions in the shipyards are deplorable. There have been improvements since nationalisation, but I am speaking of a time not so many years ago. Shipwrights received the princely sum of 7s. 6d. for greasing the slipways the day before a ship was launched. We were up to our ankles in mud and slush on the after end of the ship putting grease on the slipways. Gloves were supplied for that job. The management set that payment without consultation and said that it was trying to cut costs. At the same time it stripped the joiners' shop of machinery in order to have a champagne party for the visitors and management after the launch of the ship. Those are the sort of conditions that prevailed in the shipbuilding industry.

Few manual workers received pensions. Those who managed to live long enough to retire usually left with little or nothing, and often without a word of thanks. It was left to the workers to have a whip round to give them something when they retired.

My hon. Friends have raised many questions but the Minister is reticent in answering. Matters raised by my hon. Friends show where we stand. The Under-Secretary of State for Scotland said in the debate on 1 November:
"Let me make it clear at the outset that we wish to see a viable and competitive shipbuilding industry in the United Kingdom. Along with other shipbuilding nations we recognise that with the present state of the market such an objective cannot be achieved without a measure of Government support".—[Official Report, 1 November 1979; Vol. 972, c. 1568.]
Nobody would dispute that statement. The support has been given, but with a time limit that hangs over the shipyard workers' necks. This concerns many of my hon. Friends. We do not argue with that, but we emphasise that in a world where countries are giving subsidies to the shipbuilding industry, and while other countries have import controls, our industry requires a guarantee that it will be supported against unfair competition. No one is saying that shipyard workers have a divine right to work. However, Britain lives by exports and it will always need to build ships. We need a shipbuilding industry to build merchant ships.

I know that ship repairing is not featured in clause 1 but I shall refer to it briefly. We are now hearing a great deal about scrap-and-build. If and when it comes about, it will help the marine engineering industry but it will not help a great deal of the ship repairing industry. The more ships we scrap, the fewer repairs will be required on older ships.

There was a report in the Financial Times yesterday that suggested that, because of a shortage of scrapyards in Europe, many orders may have to go to the Far East. I hope that when the Minister has discussions on scrap-and-build he will keep in mind my comments about the ship repairing industry and the scrapping of ships if ever we see the scheme implemented.

First, I declare an interest in shipbuilding. I do so especially as the hon. Member for Jarrow (Mr. Dixon)—but for the hon. Gentleman's speech I should not have contributed to the debate—reierred to a ferry shipbuilding order that went to Germany because it was oversubsidised. That story has been put around for a long time and I am happy to record the true facts. If any hon. Member is interested, I am in a position to support my case with documentary evidence.

I am chairman of a company called European Ferries Ltd., one of the larger cross-Channel ferry companies. In May 1978 I said in my annual report to my shareholders that later in the year we would be placing a shipbuilding order that might be one of the largest orders placed by any British shipowner in 1978. I said that my board and I hoped that it would be possible to place the order in a British yard.

We invited 26 yards to tender, treating the 20 British shipbuilders as one yard, and 11 did so, including British Shipbuilders. The lowest tenders came from Japan and Hong Kong. They were ruled out by my technical director on technical grounds. The next lowest tenders came from Denmark and Germany, and were extremely close at about £48 million for the three ships. Of the 11 tenders, British Shipbuilders was eleventh in price at £62 million. We may have been able to live with that, but the most disappointing part of the tender was that whereas we had required two of the ships to be delivered by 30 June 1980—the German yard could deliver one by 31 December 1979 and one by 31 March 1980—British Shipbuilders could not deliver the first until 30 June 1980, and only then, incredible as it may sound, by subcontracting to a Dutch yard.

Will the hon Gentleman tell the House whether the Germans delivered the first vessel on time?

The first vessel is due for delivery on 31 December 1979. I am assured that it will be delivered on that date. It will certainly be launched on that date.

I am not seeking to blame British Shipbuilders. It may sound as though I am, but I want to be fair to it. The ships that my company ordered are specialised. Over the years British shipbuilding capacity has concentrated on much larger ships, such as tankers and bulk carriers. These are ships that contain a great deal of steelwork. Hon. Members who know a great deal more than I do about shipbuilding will know that the fitting-out skills that are required in a ship of the passenger liner type are different from those required in a bulk carrier or tanker. Sadly, our skills in that respect have been allowed to decline. I suspect that that is one of the reasons why the German yard was able to deliver so much faster.

I wish to put the record straight. It has been said widely—I do not know from which source—that there was a massive Government subsidy. I do not believe that to be so. It is my understanding that the reason for the difference in price was that the German yard was able to deliver in half the time, which would, of course, have a bearing on the cost of production.

It has been said that the German yard went bankrupt immediately afterwards. That, too, is not true. The confusion arose because, as a condition of the contract, my company had insisted, for obvious reasons, on sterling finance. That would not be a risk that any commercial shipyard would be able to take, even if it were large enough to do so. Therefore, the commercial risk was taken by the Bremen state government, who had to pass the necessary legislation to enable them to take the risk. That is how the myth of the yard's having gone bankrupt came about. It did not go bankrupt. It is in a surprisingly thriving state.

What I said was written in the financial section of The Guardian of 4 July.

Yes. I am not suggesting that the hon. Gentleman is saying anything that he does not believe to be true. However, I am happy to put the record right. The Guardian was wrong. It was delivery dates that caused my company to place an order, sadly, outside the United Kingdom. Difficulties about delivery dates are at the root of the troubles of the shipbuilding industry and most of our industry generally.

The hon. Gentleman had a vested interest as he was chairman of the company placing the order. Did he investigate whether there was a subsidy coming from the German Government to allow him to have his ship at £48 million as opposed to the price that British Shipbuilders was quoting?

It was £48 million against £62 million. One can only ask questions. Obviously one cannot go into the depths of what is taking place behind the scenes in Germany. I am assured by those who know the German political and legislative scene more than I do that if there had been a subsidy it would have been necessary for a state law to be passed by the Bremen state government, as there was for the sterling interest factor. I am assured by the chairman of the yard concerned, for what it is worth, that there was no such subsidy.

I am not so sure. The financial quotation from British Shipbuilders was well outside OECD terms. We, too, do not always strictly abide by the rules.

Delivery dates are the crux of the matter in industry generally. If, on both sides of industry, we can improve our methods and techniques so that we regard a delivery date as inviolate, we shall start to win back contracts that are now going elsewhere.

Is the hon. Gentleman aware that the German Government subsidise the German steel industry by means of a coking subsidy, which is an indirect subsidy to all the industries that use steel? As ships are produced in steel, it is clear that there is a subsidy. If we were to investigate other areas we would probably find that the Germans were effectively subsidising all parts of their industry that have a direct bearing on production of shipping.

In many respects that is a fair comment. I am delighted to say that the steel for the order that I am talking about was supplied by the British Steel Corporation. The hon. Gentleman has made a valid comment, but it does not apply to the order placed by my company. It is fair to say that throughout the world there are hidden subsidies, as there are in Britain.

When the hon. Gentleman, as chairman of his company, was informed by British Shipbuilders that it could not provide the ships by a certain date, did he seek to find out why? Did he seek to examine the reasons why it had made that decision? Did he not protest and stress the need for production to take place within the British economy? If he did so, what was the response?

Yes, my company made inquiries. My technical director, who deals with these matters almost excusively, had lengthy meetings with British Shipbuilders. My company wanted the order to go to a British yard if possible. Mr. Michael Casey, the chief executive of British Shipbuilders, advanced a reason to which I have already referred—namely, that the British shipbuilding industry has lost or allowed its fitting-out skills for the passenger liner type of ship to drift away. This is a type of ship that requires a great deal of fitting out. We have not built a significant passenger line-style ship for many years. Skills, I am sad to say, have drifted away.

8 pm

Another reason given was that British Shipbuilders was not proposing to build three ships in one yard. That was a dreadful mistake. It meant that a learning curve would be required in respect of each of the ships at each of three different yards. It also meant the second and third ships would probably not have been very satisfactory. When one builds a new type of ship with new technology—these were ships containing a considerable amount of new technology—in a series, the first is likely to be a bad ship, rather as the first car in a production line is more likely to have bugs in the system than is a later one. This order was for a series of three ships, possibly extending to seven later.

Although that was another reason, apparently, for delay in delivery, the primary reason was that skills had dirfted away. That is not a situation for which British Shipbuilders can be blamed. It has been in control of the situation for only a relatively short time.

The speech of the hon. Member for Dorking (Mr. Wickenden) goes to the heart of the problems that afflict the shipbuilding industry. It is depressing for management, the work force and the nation if a company—I accept that it was acting in good will— wished to place an order in Britain but was unable to do so. Germany is a high wage economy, a country comparable to ours in many ways. If the case set out by the hon. Member for Dorking shows what is happening, the situation is extremely depressing and distressing. I hope that Ministers and British Shipbuilders will try very hard to discover what went wrong. I should be fascinated to see the carcase of this failure dissected in an attempt to discover why we were so badly undercut. I have some sympathy wih the view that there must be some hidden subsidy. The German steel industry is an obvious competitor for such a subsidy. But the price differentials mentioned by the hon. Member for Dorking are startling and give no cause for comfort.

In clause 1, we are happily voting, or allowing, the borrowing requirements of British Shipbuilders to be increased. None of us objects to that in principle. In practice, there is no point in having wide borrowing requirements if the finance is not put to good use and we are incapable of attracting work. Without the work, the size of the borrowing requirement will not matter. At the end of the day, it will be money down the sink, if it is ever drawn. We will have a catastrophic situation in our industry. I do not object in principle to clause 1. What worries me is the practice. Hon. Members on these Benches would like to see more intervention and public support for the industry. The industry faces apalling difficulties although there are some signs, despite the case study to which the hon. Member for Dorking referred, that productivity has improved. There has been retooling to create modern yards and there are signs, according to the City pages, that freight rates and tanker rates, particularly the smaller end of the range, have recovered. There has already been a substantial drop in the amount of mothball tonnage. One hopes that more orders will soon be coming along for which British Shipbuilders can compete. Given that situation, we are happy that British Shipbuilders should have the finance to compete for those orders. It is not a case of saying, although we would like more, that we do not wish to accept the half loaf that the Government are offering. That would be a short-sighted policy.

In principle, we will give a fair wind to clause 1. It is easy to say that the borrowing requirement should be shoved up from £300 million to £600 million. That can be done. But if there is no sign of support from the Government of the kind that British Shipbuilders needs to get through this difficult period, all the efforts of this legislature and this Bill when enacted will have been in vain. The Government are telling British Shipbuilders that it has to be self-sufficient in two years. By putting this tight corset, if I may use a fashionable word, around British Shipbuilders, we are causing a great deal of dislocation and dismay in the shipbuilding industry. It seems that we are forcing British Shipbuilders to take actions which are so severe that they will be almost counter-productive in terms of the health of the industry and its long-term future at which the Government and the country should be aiming.

The hon. Member for Dorking said that Mr. Michael Casey had said that one of the reasons was that the industry had largely lost its skills. If the shipbuilding industry is further run down, chasing extremely tight and draconian financial targets, we may destroy not only those skills a lack of which led to the loss of this specialist order but our skills right across the range of merchant shipbuilding. That would be an absolute catastrophe.

Many hon. Members made the point in the debate on 1 November that it is not the British shipbuilding industry that has contributed to the vast over-capacity that the industry now faces. If we were to contract from our present point in the same proportion as the Japanese, or some of the mushrooming industries, might have to contract, we would be left with a base industry so small, having opted out of the skills that we need, that we would not be able to benefit from a recovery in the industry. That is one of the basic problems.

I am a Clydeside Member. I represent a constituency with big and substantial shipbuilding industries. It is not a traditional shipbuilding constituency in the sense that it is all a memory. It is a shipbuilding constituency at the moment. My constituents are heavily involved in and dependent upon the shipbuilding industry. I have no doubt that they would want me to give a blessing to clause 1 and to a raising of the borrowing requirement. They would also want me to say that there is a crisis of morale in the shipbuilding industry, certainly on Clydeside, that is now reaching worrying proportions.

I do not wish to be alarmist. I want, however, to lay down my marker. We are reaching a point where the whole credibility of the corporate plan is being called in question on Clydeside in a very fundamental way. We have the two yards, Govan itself and Scotstoun Marine, which are in a state almost of dislocation. About 1,300 to 1,400 people who work in the steel trades in Govan are standing around doing nothing. One factor that will clearly destroy skill and productivity, and devastate morale, is people standing around doing nothing with no certainty that any work will come forward. That tragic situation is occurring in the Govan yard.

At the other end of Govan Shipbuilders, about 1,100 to 1,200 men at Scotstoun Marine know that the yard is going on to a care and maintenance basis. The men have no idea what is to happen to them or to the yard once it is on a care and maintenance basis. This situation is perhaps due to the hurried way in which decisions have been taken and the tight limits that the Government are imposing despite the borrowing requirement contained in clause 1. It is understood that the yard will go to Yarrow's, an extremely efficient and flourishing naval shipbuilders in my constituency. It is not clear what Yarrow's will be able to do with it or whether it will ever have a potential use for it. In the short term, I understand, Yarrow's is not likely to have a use for it. The men are being invited to volunteer for redundancy. But, given the devastating situation in the employment market, very few are volunteering at this stage. The men understand that there are to be no compulsory redundancies. A hopeless impasse has therefore arisen in which no one knows what the future holds.

On 1 November I said that there was a particular and substantial worry in Govan shipbuilders about future ordering. I raised that as forcibly as I could. I received a reply from the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher), who stood in during that shipbuilding debate. He agreed that it was perfectly true that there would be two orders for 26,000 tonnes deadweight Cardiff class carriers coming to the Govan shipyards. He accepted that this had been included in the package when the corporate plan was unveiled, and that a letter of intent had been signed. He added that the letter of intent had not yet become a firm order. He said:
"It is not unusual for a considerable period to elapse between a letter of intent and a contract".
He went on to say:
"A letter can take six months or more before it becomes a firm order".—[Official Report, 1 November 1979; Vol. 972, c. 1575.]
That is not unusual in the industry, and it certainly applies in this case. I do not want to be critical of the Under-Secretary of State for Scotland, who is not in his place. I notice that he has just emerged through a trapdoor. In no way do I wish to be critical, but my colleagues on Clydeside, and the representatives of the work force, took his words as being a little casual and perhaps dismissive. I accept that that may be a false impression, because I have no doubt that the hon. Gentleman is alarmed and worried about the situation.

I met the local confederation the very next day. It is very worried about morale in the yards and about keeping control in the yards when there is absolutely no hard prospect of work coming in to take up the slack. It will not be news to the hon. Gentleman to learn that there will be a meeting of the shipbuilding negotiating committee of the confederation on Monday of next week. Immediately afterwards, it hopes to meet top British Shipbuilders executives to discuss the Govan situation.

I accept that British Shipbuilders would very much like to deliver these orders, but if we find that those orders are not delivered, and unless we can get some clear commitment from the Government about work in the yards, it will be very difficult indeed to continue in the sort of limbo in which the men of skill are now placed.

I appeal to the Government to show some indication that they will take a less non-interventionist approach to the problems of Govan and many other yards in the country. As I have said before, there is a danger that they will be seen to be doing a Pontius Pilate act and washing their hands on the sidelines. However, when a man's job and traditional skills are at risk in a yard where he has worked all his life, there is very little comfort in having a Government who say "We cannot intervene. We must leave it to British Shipbuilders, which has been told that it has got to take the kind of measures that will eliminate all financial debit within a two-year period."

We all welcome the higher borrowing requirement. But let me yet again appeal to the Minister to do something to reassure an industry that is now facing an extremely serious situation and cannot be left hanging as it is at present I recognise that it may be impossible to say anything now. Perhaps it is unreasonable to expect that, but I hope that my warning about the consequences of further inaction and no news coming forward for the men on Clydeside will be taken very much to heart and that Ministers will try to act in the near future, given a situation that is becoming intolerable. Because it is intolerable, action with regard to sanctions may be taken by the men which would be in no one's interest, but they may be driven to such action by the total lack of news and encouragement from the Government.

It would be a tragedy if we were to end up in that situation in default. Once we reached that situation, it might be very difficult indeed to undo the damage. I therefore appeal to Ministers to look seriously at the effect of their policies, and at their strict financial approach to the affairs of British Shipbuilders, given the tragedy in human and economic terms in areas such as mine.

I hope that the Minister will agree that the tenor of the debate has been moderate and positive. That is the way in which Labour Members have tried to approach the Bill. We recognise that the Government have undertaken a difficult task. We take them at their word when they say that they want a viable and competitive shipbuilding industry.

In essence, we are now talking about the borrowing requirement of the shipbuilding industry. We should like reassurance from the Minister on a number of points before deciding whether we shall divide the Committee. I hope that the Minister will be able to reassure us on these points, which stem from the question whether the amount of the borrowing requirement will be enough.

8.15 pm

In one way the hon. Member for Dorking (Mr. Wickenden) and my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said more or less the same thing. The hon. Member for Dorking said that British workmen have lost their skill in building this type of ship. My hon. Friend the Member for Garscadden talked about morale. I am sure that all hon. Members would agree that they aye one arm the same thing. They are one and the same reflection of a phenomenon, because we are talking about particular areas of the country that have a number of physical things in common, such as rivers and seas.

They have another thing in common. They suffer from incredibly high unemployment. My hon. Friend the Member for Jarrow (Mr. Dixon) said that male unemployment in his constituency was 16 per cent. My constituency is immediately next door, and it has an even higher rate of unemployment. I make that point because we are talking about areas of incredibly high unemployment. Therefore, in a situation in which men are worried about their futures, and when they see uncertainty, their morale and everything associated with it is bound to suffer.

The hon. Member for Dorking was honest and frank when he said that we cannot blame British Shipbuilders. We inherited this problem from the past. But it is no use looking to the past, we must build for the future. In doing so we must recognise the difficulties. We must appreciate that the two-year time scale about which the Government are talking should not be a deadline. I hope that it is not a sort of guillotine that is hovering above British Shipbuilders. If it is seen in that way, it will affect the morale and skill of the work force even more.

Having said that, it is worth while paying tribute to a certain number of workers in British Shipbuilders. I think especially of the Tyne Ship Repair Group, where, as the Minister knows, the men gave a commitment not to strike. They kept to that. They deserve every credit for doing so, and I am glad to see the Minister concur.

In talking about the borrowing requirement, we should also think about the future of British Shipbuilders in the immediate years. That future is inevitably entangled with the policy, or non-policy, within the Common Market. That brings me back to the scrap-and-build policy. As the Minister knows, I raised this matter on 1 November and I received an answer from him yesterday. I should still like a little more commitment.

The Minister says that he is committed to the scrap-and-build policy. I should like to know whether there is any money behind it. It is easy to say "We think that this is a good idea", but may we have an assurance that, if an agreement is reached within the EEC, money will come forward from the Government to support the scheme? If the EEC scheme does not come forward, will the Minister seek power from the EEC to bring in our own scrap-and-build programme? I understand that the document to be presented to the Council of Ministers contains a number of policies—first, those funded by individual Governments; secondly, those funded by the Community; and, thirdly, a kind of partnership. I understand that the Commission has a preference for one of those options in particular but that it is for individual Governments, quite rightly, to use their sovereign right to decide which one they should follow. Will the Minister tell us, one way or another, whether there will be money to help the scrap-and-build programme of British Shipbuilders? It would be most helpful if he could give us that undertaking.

I have probably expressed more support for the scrap-and-build scheme than any other Minister from the member States. Surely it goes without saying that if in principle I support a scheme that involves finance, I must be supporting the input of funds. The hon. Gentleman is correct. We hope that this measure will come before the Council of Ministers next week—and, of course, I shall be in there fighting.

I am reassured by that statement, and I publicly acknowledge the enthusiasm of the Minister. But the Opposition have a right to be sceptical, because they know that this Government are very keen to cut back money supply. I hope that the Minister will fight very hard within the EEC for the scheme to be brought forward.

When we are dealing with the borrowing requirements of British Shipbuilders, as we are under this clause, as my hon. Friend the Member for Glasgow, Garscadden said, it is no use having the money unless we can do something with it. I come back to the point on which we keep probing the Government and on which we are still not satisfied—public service orders. It is known that the previous Government carried out a survey of the public service to see whether there were any potential orders. I do not know what the outcome was, but I understand that there were certain discussions about hydrographic vessels. What has happened about those? Are we to get any orders from this area?

What about British Shipbuilders using its money, possibly under the borrowing requirements, to build ships not necessarily "on spec" but for lease? I have specifically in mind liaison between, for example, the British Steel Corporation and British Shipbuilders. As the Minister knows, the factor that brought this to my mind was that when British Steel, a nationalised body owned by the people, wanted to lease a ship it leased a Scandinavian-built one from Ladbroke's, a private organisation.

Could there not be more co-ordination and advance liaison about the requirements of various publicly owned industries with British Shipbuilders to try to bring things together?

On the question of finance, I draw the attention of the Minister to a problem that I face at present and on which I should like his help. What amount of money may British Shipbuilders borrow? On 1st November, I mentioned that Peter Johnston, a firm in my constituency, had gone into liquidation, with the loss of about 300 jobs. The company had been primarily involved in fitting out ships.

Though it is bad enough for men to lose their jobs, the real problem is that 37 apprentices also lost their jobs. I am sure that the Minister and the House will agree, as they did on 1 November, that we must de everything in our power to try to retain the skill of our people. Nowhere is that more true, and nowhere is there a greater danger of disillusionment, than among young people.

I ask the Minister to intervene with the shipbuilding industry training board. An approach was made to it yesterday by a group of people in the constituency, including North of England engineering employers, the various unions, the employment services and the South Shields marine and technical college. It would be a great help if the Minister could advise us on that matter.

Will the Minister make any further comments about the amount of subsidies available to the shipbuilding industry, even within the EEC? I know that Ministers of all Governments say "We play by the rules. As far as we can judge, the other side also plays by the rules." Unfortunately, some of us are beginning to doubt that. I was very impressed by the paper produced by John Parker, in which he listed the aids given to their shipbuilding industries by our European competitors. Has the Minister any more thoughts on the terms and conditions, and is he satisfied that those in Britain are adequate?

I remind the Minister of a point that I made previously. 1 am glad to hear that he will go to the Council of Ministers meetings to fight for the British shipbuilding industry, but recently one of his Cabinet colleagues, when asked what the Common Market had achieved, said that it had stopped France going Communist. What he really meant was that the Common Market had saved the traditional industry of France, which is agriculture. That is more important than sheep—I hope that that is not too emotive—cows and turnips. In France, agriculture is an economic sub-culture which has kept many people on the land and has brought prosperity to many areas that would have been severely depressed

I suggest that my analogy is not far wrong, because the shipbuilding industry not only builds ships but provides many related jobs. For every job in the shipbuilding yards there are three or four outside. There is a sub-economy in shipbuilding areas that is vital to maintain the employment level.

When the Minister begins to barter and bargain at the Council of Ministers I hope that he will not concede the point that there will be an equal slimming down of all industries within the EEC. It must be borne in mind that, just as agriculture is important to France, the shipbuilding industry is a traditional part of our culture. We cannot concede to the EEC that it must be cut down to the same level as in smaller nations.

I am proud to take part in this debate with my hon. Friend the Member for Jarrow (Mr. Dixon). Like him, I was born and bred in that town. I do not believe that either of us, when we were respectively union chairman and secretary at one of the major Tyneside shipyards in the 1960s, thought we would see the day when we would be discussing the problems of the shipbuilding industry in the House of Commons. However, time flies and it is interesting to note that we are both shipyard workers who left school at 14 and spent most of our working lives in the industry.

My hon. Friend gave a graphic description of the problems and conditions which shipbuilding workers have endured for so long. Part of the problem is that those who work and suffer—in many cases seeing fellow workers die—in the industry have long and bitter memories. There are deep-seated problems in the industry.

We welcome the Bill, for what it is worth. However, one of the problems facing the Government is the question of credibility—whether the workers in the industry or even the public feel that there is a true, meaningful commitment by the present Government to the British shipbuilding, ship repairing and marine engineering industries. The three industries are linked.

Although ships are not now built in my constituency, one of the largest factories there, the GEC Vulcan works at Newton-le-Willows, is a very large supplier of small diesel engines to the British shipping industry. That industry, like shipbuilding, is flat on its back at present. Considerable numbers of my constituents are facing redundancy because of lack of orders flowing from the shipping industry.

8.30 pm

I am not at all surprised that the Conservative Benches are empty, apart from the Government Front Bench. There is always very little interest on the part of Conservative Members in the problems of this industry. I am particularly sad that the hon. Member for Dorking (Mr. Wickenden) has left the Chamber. He made some very important points which deserve some answers. I think that we all recognise that the hon. Member was not attacking British Shipbuilders—indeed, he spoke in sad terms—but in cold print it will read as an attack upon British Shipbuilders. He referred particularly to three issues which concerned him, as the chairman of a major shipping company, in placing his orders in foreign yards and not British yards—price, delivery dates and lack of skills.

On the price issue, we should need a great deal of evidence and knowledge of what went on at the time of the order before we could pass judgment. From my experience in the House of Commons and my experience of three years in the European Parliament, I suspect that a very large subsidy was paid by the German authorities for the building of those ships. That may be disputed. We would need to see the evidence.

What concerns me was the hon. Member's concentration upon delivery dates. In this respect I feel that he may know a great deal about shipping but little about shipbuilding. One of the things we would all need to know on the question of the delivery date is whether British Shipbuilders had a berth available on which to put the ship. After all, one could hardly take a skeleton of a ship off a berth to put one of the hon. Member's ships on it. We would need to know a great deal more about the position before simply putting it on the record that British Shipbuilders was late in delivering, like every other British industry. We would need to know what would have been the starting date of the ship, and the completion time. That evidence was not given to us.

The other point which is of fundamental importance in the debate on this clause, which is concerned with the future of British shipbuilding, is the loss of skills. I refute the hon. Gentleman's argument that we are losing skills in the building of liners. I think that all hon. Members who have any knowledge of shipbuilding know that no one is ordering liners any more. Most people now travel in aeroplanes. Only a few liners are involved in cruising.

To be fair to the hon. Member for Dorking (Mr. Wickenden), I think that he almost made the matter clear, although perhaps to get it on record, as my hon. Friend rightly says, it is important to make it plain that the hon. Member was referring to orders placed in 1978, and he said that British Shipbuilders at that time did not have the skills. If that is so, as British Shipbuilders took over only in 1977, it must be made abundantly clear that the loss of skills, if it occurred, occurred under private enterprise and not under public ownership.

My hon. Friend has anticipated one of the points I wanted to make. One of the serious problems that will face what is left of the industry of the future will be the lack of skills which will be brought about by a lack of apprentices being taken into the industry. Nevertheless, I reject the argument that British Shipbuilders is losing any skills whatever. Today British Shipbuilders workers are building some of the most sophisticated warships which have ever sailed the seas.

The hon. Member for Dorking referred to fitting out. Although he may not have realised it, there is obviously a difference in fitting out a bulk carrier or a tanker as opposed to a liner or a cross-Channel ferry. Nevertheless, in fitting out those ships certain skills are involved which apply to all ships. It is important for that to be put on the record, because I should not like people reading the report of the debate in Hansard to think that we on the Labour Benches were prepared to listen silently to even a well-meant attack on British Shipbuilders on the two issues of delivery dates and skills. In this industry we have all the skills necessary. If the industry received substantial backing from the Government in financial terms and planning terms, we could assure the world that we could build anything that the world requires.

Given the lack of capital investment in private industry, which was referred to by my hon. Friend the Member for Jarrow, British Shipbuilders has a proud record on delivery dates. In the four years following the setting up of the Swan Hunter consortium on Tyneside, every single delivery date was met.

On 1 November, the Minister said that he hoped that hon. Members would not press him on borrowing requirement limits, but we are entitled to know what commitment over what period the Government have in mind for the industry. Yesterday there was an article in the Financial Times on the scrap-and-build policy, and my hon. Friend the Member for South Shields (Dr. Clark) covered much of that aspect. The Financial Times has a proud record of leaks from Government Departments which invariably turn out to be correct—and I am not talking of just this Government. The article says:
"The UK Government believes the scheme would be worthwhile if it was introduced quickly, before the expected upturn begins, and if it was organised on a national basis."
We are fascinated to know when the Government believe that that upturn will occur. I can see nothing on the horizon to indicate any upturn in world trade.

Most of the industry's problems result from the cataclysmic downturn in world trade over the past few years. If there was an upsurge and ships were in demand, I suspect that we should not be discussing the Bill. We are discussing the future of British shipbuilding in the context of a recession that is probably the worst since the 1930s.

I hope that the Government recognise the absolute necessity of retaining the British shipbuilding industry. We want not merely a shell but an industry that can cater for Britain's future requirements. Although we are members of the EEC—and some of us do not welcome that—we are an island and a trading nation. When world trade improves, we shall doubtless again supply ships to the world if we have a shipbuilding industry left.

I hope that the Government will give a clear undertaking to support the British shipbuilding industry during the few difficult years. Other countries are subsidising their industries, and ours should not be left to stand on its own feet to face competition that is patently unfair and in many cases discriminatory. The Government must have a long-term commitment to the industry.

It is not merely the shipbuilding industry on Tyneside, Clydeside, Merseyside or elsewhere that is affected. Other industries in other parts of the country are closely tied to shipbuilding. The shipbuilding and ship repairing industries are synonymous. They employ large numbers of people and their decline would also have an impact on other industries throughout the country. The shipyard provides only 30 per cent. of the components of a ship and 70 per cent. comes from other industries which are therefore dependent on a prosperous shipbuilding industry. They need the base of those orders to ensure that they produce the goods for domestic needs and for export. It is important to recognise that we are not discussing shipbuilding purely in terms of Tyneside, Clydeside or any of the other great yards. This industry is not only a major strategic industry but it is also one that has an impact throughout the country.

Does my hon. Friend also agree that one of the biggest customers of British Steel, which is now in such a perilous position, is British Shipbuilders?

That is obviously an important point. One of the great problems facing the steel industry is the downturn in orders, particularly in the shipbuilding industry, as a vast amount of steel is used in the production of a ship. This endorses the point that I have been trying to make about not looking at shipbuilding in isolation. It is a major and key strategic industry and its prosperity has repercussions far beyond its areas.

I hope that the Minister will cover these points when he replies to the debate. I hope that the Government will recognise that the industry is looking for a long-term commitment from them. The industry has heard enough about lame ducks being slaughtered and profitability being the essence. The Government and the British people must recognise that this industry cannot be profitable in the short term. A major upturn in world trade is needed before there can be any hope of profitability.

I wish to support the Bill, particularly clause 1. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) put his finger on an important point when he spoke about the atmosphere and morale in the yards. The atmosphere and morale in Cammell Laird is much the same as that in other yards. It is very much affected by statements from the Government Front Bench. I am sure that Cammell Laird people will carefully comb the pages of Hansard tomorrow to see whether the Government are prepared to be more forthcoming than they have been in the past.

I visited Cammell Laird very soon after the Minister of State paid his summer visit to the yard. I was struck by the fact that both management and men were united in their comments about the qualities of the Minister. They felt that it was a welcome change to have someone who was prepared to listen, but they both went on to say that they wished he would begin to give them answers to some of their questions. I cannot help but recall those comments when I think that this is the third or fourth time that we have tried to probe the Government's thinking on the substance of the initial policy statement by the Minister of State on the shipbuilding industry.

Like many other Members on this side of the Committee, I realise that Cammell Laird faces particular problems brought about by the decline of the shipbuilding industry in this country. The announcement earlier this week about the Government's plans for Shotton have important implications for Merseyside as a whole and Birkenhead in particular. Some of my constituents work at Shot-ton, and the Birkenhead dock is primarily dependent on bringing ore into Shotton. If Shotton is closed, the Birkenhead dock might also be closed and many people put out of work.

Birkenhead has two main industries—the port industries and shipbuilding. I hope that when the Minister replies he will say something about the whole series of policies that have been put forward by my hon. Friend the Member for Whitehaven (Dr. Cunningham) on a number of occasions. I hope that this time we will have a reaction from the Government Front Bench.

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In particular, I hope that the Minister will comment on two areas which are crucial to the North-West. In correspondence and in the House I have asked the Minister of State what he meant when he said that the Government would try to bring forward public sector orders. I had been a Member for only a few weeks when I realised that one's questions were answered only if the Minister had good news to give. I hope that I am present in the House when the Minister announces the bringing forward of public sector orders, because he will deservedly make the most of it when he has accomplished that task. Let us hope that soon he has good news.

Like many of my hon. Friends, I fought an election campaign against opponents who said that if a Conservative Government were elected the defence budget would be increased, as it has been, and that such an increase would bring orders to shipyards such as Cammell Laird. I look forward to the time—I hope it is soon, because of the effect on morale in yards on the Clyde and in the North-West—when Ministers can announce the bringing forward of defence orders.

My third point is one about which I have asked the Minister for details before. For once, I do not expect an answer. I hope that those who work in British shipbuilding will shortly see a change in Government policy. I am sure that the Minister and other right hon. and hon. Members saw the report in yesterday's edition of The Times by Peter Hill on the possible loss of an order worth about £200 million from the Hong Kong-based World-Wide (Shipping) Group. Peter Hill went on to say that Ministers had been made aware of what is now, I suppose, a new phrase which we shall hear frequently in the House, the "attractive soft credits" being offered by our competitors to win orders which might otherwise go to this country.

The report reaffirmed that the present Government, perhaps like the previous Government, are abiding by the spirit and the letter of the OECD guidelines on competition in this field. Peter Hill emphasised that executives at British Shipbuilders had made it clear to the Government that it was not that we were competing unequally with groups or nations outside the EEC, but that we were now not competing on equal terms with our EEC partners.

I hope that the Committee will bear with me if I bring up to date the contribution that John Parker of British Ship builders continually makes to our debates. In that report in yesterday's edition of The Times he was reported as saying:
'The United Kingdom has adhered to the OECD understanding on export credit for ships, but in situations where other countries have not, and do not, it is crucial that British Shipbuilders should have the opportunity to match such terms."
I hope that when the Minister winds up the debate he will for once have good news for those who work in British shipyards and for those of us who represent them. I hope that he will be able to answer some of our questions on the meaning in practice of the key policy statement which he made some months ago. I do not expect him to comment on whether the Government will change their mind about putting British Shipbuilders on equal terms with our competitors, both within the EEC and outside, when competing for orders. I hope that he will be supported by hon. Members on both sides of the Committee on any quiet directives he gave to British Shipbuilders to go out and win orders on terms equal to those countries which are snatching orders from us now.

The Minister may be surprised that I do not end, as I usually end my contributions to shipbuilding debates, with a whole string of questions. I hope that Government policies will soon be finalised and that the hon. Gentleman will be able to announce the effects of the increased defence budget on our shipyards and the bringing forward of public sector orders.

Every hon. Member who has spoken has said how disappointing it is to have an allocation of funds with which the clause deals but of which Government policy at present is making so little use.

The contributions to the debate have confirmed one thing—that shipbuilding is the Aunt Sally of the United Kingdom economy. We know the reason. Basically, the industry has suffered at the hands of private owners. In the good times, they said that they did not need to invest, and when the bad times came they said that they could not afford to invest.

That could be said of many other aspects of the British economy, but it is particularly true of shipbuilding. It is bad in my constituency, where we have Robb Caledon, the other half of the famous operation on the East Coast of Scotland. The part of that operation in Leith will remain, but we must look at that shipyard. It is called the Victoria shipyard, and is well named, because it is ancient. The yard finds it hard to compete in world markets, because it is not efficient. It is extremely backward, using equipment that should belong to a museum.

The same story could be told of other parts of the country. The world economic crisis has worsened the position, as we all recognise, but it has been helped along by Government policies, which are intensifying the recession and crisis. In that situation, fewer vessels, not more, are needed. When we are fighting for contracts, we find that there is the old 1930-style strategy of a trade war, which leads to arguments for further closures. That is the problem now.

I believe that the recently announced closures are only the first round. I must be realistic. I tell my constituents "Your yard has been saved for the time being, but be on the defensive." They are on the defensive, and rightly so.

The men are willing to co-operate with management. The former owners have gone, but unfortunately there are still the old ideas in management, and those ideas will not be moved. There may be various reasons. Perhaps the present Government have something to do with it. I believe that massive investment should come from the State, and I welcome the Government's measures. They are important for investment, but they are simply a drop in the ocean compared with the magnitude of the problem. Many hon. Members have spoken of the investment in other countries.

We must look to the future. We must examine the problems of British shipbuilding and wherever possible eradicate them. It would be wrong for anyone in Government or elsewhere to pussyfoot around with the jobs and the future of many families, whether in Scotland or in England. The problems are the same.

It is interesting that the hon. Member for Dundee, East (Mr. Wilson), a representative of the Scottish National Party, has disappeared from the Chamber. I should have thought that he would at least stay to make a contribution on behalf of his constituency.

What can we do about the problem? We can argue the case for shipping lines in this country investing in our yards. It is up to the Government to put on the pressure. We should insist that the lines buy British ships. Many ships need replacing. Possibilities exist with the scrap-and-build programme but pressure must be put on the Government. Any measures we can take are limited, but we must not say that the British shipbuilding industry will go to the wall and disappear. Shipbuilding workers are leaving the industry because they feel that it is doomed. It is ironic that some shipyards are looking for skilled workers. The CBI has said that it is difficult to get skilled workers for industry, including the engineering industry. Not enough apprentices are being trained.

The Government's attitude seems to be in favour of investing overseas. Perhaps industrialists have no faith in this country. No doubt, big business will go for the fast buck and speculate. That will not assist the country or the principle of nationalisation. We all accept that nationalisation is an important step forward. Even Conservatives support it to an extent. Of course, it is not perfect, and when it operates in a capitalist economy it does not operate on behalf of working-class people.

Talking in Socialist terms, we require the "commanding heights" of the economy—as pointed out by Nye Bevan—to run industry and help shipbuilding. I hope that the next Labour Government will give resources to the industry to modernise the yards. We must commit ourselves to that proposal and state it to the industry and its trade unionists. In that way we shall win their confidence. The electorate at large has little confidence in the Government's administration but at least we can state our commitment.

I welcome the opportunity to speak in the debate. On 1 November the Under-Secretary of State for Scotland did not clear up several matters. I should like to raise those today. I associate myself with the remarks made by my hon. Friend the Member for Edinburgh, Leith (Mr. Brown) when he regretted the absence of the hon. Member for Dundee, East (Mr. Wilson). I find it strange that at this vital Committee stage on the Shipbuilding Bill the hon. Member for Dundee, East, who is an honest and sincere man, should not find it necessary to be in the Chamber. We find ourselves in this position because of the actions of the hon. Member for Dundee, East and his colleagues. On 3 May some of his electorate were rewarded for their support by joining the unemployment register. It is sad that he is not here tonight, because I am sure that he would have made a valuable contribution.

I hope that the Minister has seen a copy of that new newspaper, the Dundee Standard. It contains a full page of photographs outlining some of the problems faced by the workers in the yard. I served my apprenticeship there 19 or 20 years ago. The pictures were familiar to me but it was unacceptable that, 20 years later, the platers who bring the plates from the yard to the ship are using the same broken-down, dilapidated barrow that was in use when I was an apprentice. That is the answer to the hon. Member for Surrey, North-West (Mr. Grylls) who tried, on Second Reading, to make play of the supposed losses incurred by Robb Caledon. The hon. Member for Dundee, East and I answered the hon. Gentleman on that point.

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Discussions are taking place in the joint working group on the Dundee yard and other yards, including Leith, where the situation is slightly worse than that at Robb Caledon. The majority of yards could do with more subsidy. The problem is that the sums contained in the Bill are not as large as we would like.

On Second Reading, the Under-Secretary of State for Scotland did not satisfy my hon. Friends and myself in relation to the two-year period. I quoted from the Cambridge economic forecast which states clearly that there will be a fall of 9 per cent. in shipbuilding demand this year and a further 7 per cent. fall in 1980–81. Labour Members have a right to press the Government to ensure that workers in the yards are convinced that there is not an exact time limit within the two-year period.

Despite the Government statements, reported in the Financial Times on Monday, it would be helpful to those in the industry if we could know which scheme the Government intend to pursue for the scrap-and-build programme. It would be relevant for the Minister to answer that point tonight.

In Dundee a joint working party has been set up between British Shipbuilders, the shipbuilding negotiating committee, shop stewards and the local community. It may not be appropriate for the Government to make a statement on discussions that are taking place, but I am confident that the group's report will make nonsense of the comments of the hon. Member for Surrey, North-West on Second Reading.

I have knowledge of the agreements in the Dundee yard and I am confident that the working party will confirm that the agreements made between the finishing trades, the general workers and the boilermakers are such that if they had been used properly by the management, some of the problems facing Robb Caledon would not exist. It is important to note that British Shipbuilders has made significant changes in its top personnel in that yard. I hope that those points are taken into account in any deliberations that take place.

I am also confident that the working party will acknowledge that many of the competitive yards in British Shipbuilders do not have the agreements that exist in Robb Caledon and that the lesson is that those yards could be even more competitive if they had such agreements. I hope that in these discussions there will be consideration of the idea that has been floated of having a synchro lift installed in the Dundee yard. The workers in the yard and I, and anyone with any knowledge of shipbuilding, fail to understand where the local district council got the idea that somehow if the synchro lift was introduced 2,000 jobs would be created in ship repairing. It stretches one's imagination to work out where one could employ 2,000 people in ship repairing anywhere in this country. That number of additional jobs is just not on.

If the study group concludes that Robb Caledon should have a synchro lift, I hope that there will be no problem with the funding. Some of the sums of money that have been mentioned are quite considerable. There has been talk of £6 million, and I hope that the Government will not prevent British Shipbuilders from getting the necessary funds to ensure that the project goes ahead if it is found to be viable.

The primary aim of the workers in the Robb Caledon yard is to retain shipbuilding there. The comments of the Under-Secretary on Second Reading demonstrated the need to retain shipbuilding at the Dundee yard. He suggested that one of the features that could be used under the Blackpool agreement was inter-yard transfers. I am sure that he realises that to apply that scheme to Dundee would mean moving workers and their families 60 miles to the next nearest yard. As my hon. Friend the Member for Leith said, that is not the most modern and up-to-date of yards. I doubt whether it could absorb workers from other yards, and anyway the problem of moving workers and their families from Dundee would make transfers unacceptable.

I hope that the Minister's reference to a sensible plan for recruitment is not meant to infer that apprentices will not be taken on. If we are to have a viable industry in the 1980s and beyond, we must continue to recruit apprentices, both in manual trades and for the design staff. If we do not train young people in the design skills, we shall never be able to compete with foreign yards. In particular, I should like to see the skills in the Robb Caledon design office retained. I hope that the Minister will indicate tonight that there is no intention of downgrading or eliminating the yard's design capability.

The workers in Dundee hope that the Government will be prepared to review the borrowing limits favourably and seriously if the upturn in demand is as certain as the Cambridge economic review has suggested. We hope that this is only the first stage of a commitment that in the 1980s and 1990s we shall have a viable shipbuilding industry.

The debate has ranged very widely. I make no complaint about that. However, it presents me with some difficulties, as to answer all the questions raised would take me well beyond the rules of order as they apply to a narrowly drawn clause.

We are discussing the doubling of the borrowing powers of British Shipbuilders. The hon. Member for Whitehaven (Dr. Cunningham) summarised the key questions relating to that aspect, and there was a helpful and constructive debate. I recognise the sincerity and deep interest shown by hon. Members on both sides of the Committee. The Government want to respond. Although, in the ambit of this debate, it is difficult to consider all the matters raised, we take on board many of the points made.

Perhaps the hon. Members for Edinburgh, Leith (Mr. Brown) and Dundee, West (Mr. Ross) were attempting to hot things up towards the end of this part of our debate. I remind there that we must consider another clause and the Third Reading, and I hope that we may return to some of the broader issues later.

The way in which the debate ranged reinforced many points that were raised on Second Reading. I shall try to pull together into five main areas the points raised by hon. Members on both sides. The debate highlighted the fact that the borrowing powers must be seen within a broader context. Frankly, I wish that we could answer some of the key questions that were raised. The question that dominates the minds of all Members of Parliament is this: to what extent can we predict the upturn in this market?

I was heartened to hear the hon. Member for Wallsend (Mr. Garrett) say that things were looking more optimistic in his part of the world. However, this is a difficult problem, whatever the mechanism we seek to balance the borrowing powers, including the intervention fund, and on whatever basis we seek to help this great industry. The trade unions have shown that by their acceptance of the proposals put to them by British Shipbuilders. We recognise that this will be a difficult, uphill task over many years.

Within the five broad areas, I refer first to the intervention fund. The detail was spelt out pretty well on Second Reading. We now have a two-year agreement, which will help us to move ahead with rather more certainty. Part of the importance of the intervention fund and its retention brings me back to a question raised by a number of hon. Members, including the hon. Member for Newton (Mr. Evans). It is natural for us all to distrust other areas and the subsidising of their industries.

This industry, almost more than any other, is one in respect of which our membership of the Community has been of great value. In setting the limits for the intervention fund—indeed, in looking at policies on scrap-and-build and many other questions—we have an opportunity to test and evaluate the sincerity and determination of other countries to play by the rules. The Government would want to move quickly, upon any evidence of unfair competition from hon. Members on either side. I urge all hon. Members, with their experience and constituency contacts, to help us if they feel that there is such evidence. The intervention fund is a key in that sense.

I now refer to the scrap-and-build scheme. My hon. Friend the Minister of State is grateful for the expressions of good will and support as he goes to discuss the matter with the Council of Ministers on 20 November. The House will understand why, in this delicate negotiating position, this is neither the time nor the place to declare the Government's hand in detail. We are looking for a cost-effective scheme. My hon. Friend has been well to the fore and, many would admit, pre-eminent in urging this cause. I know that he appreciates, as do all Government supporters, the way in which the Opposition gave help and support in that endeavour.

Looking at the wider context within which clause 1 has been viewed tonight, all hon. Members recognise that a credit race to replace the intervention fund race, or any other part of the shipbuilding war, will not help anybody. That is why there is common agreement that we should maintain the OECD limits on credit.

9.15 pm

Productivity, the fifth key element, has played a large part in the debate. Many of us were grateful to my hon. Friend the Member for Dorking (Mr. Wickenden), who was not able to stay for the whole of the debate and who was particularly anxious to hear the speech by the hon. Member for Jarrow (Mr. Dixon). My hon. Friend always gives a courteous and careful hearing to anyone who is an expert in his field and it was helpful to hear the views of someone who has to make purchasing decisions.

The key question on productivity is how we assess whether our industry is moving towards greater productivity. The trade unions have shown some recognition that all is not well. The hon. Member for Newton gave us some helpful advice about the technical assessment that would be necessary to establish fairly what is a late delivery. He also discussed the problem of start-up time. I think, however, that he would be the first to recognise that with a thin order book one might expect to find berths more easily than at other times.

It does not necessarily follow that an empty berth, which might be suitable for building a VLCC, woud be ideal for building a cross-Channel ferry. It is not just a question of empty berths. The important point to recognise is that the available berth should be suitable for the ship required.

The point is well made. However, I think that the hon. Gentleman will accept that, at a time when there is greater spare capacity, necessary adaptation and change is more feasible than at other times. The point about market opportunity that has been made in the debate is one that many in British Shipbuilders will no doubt take on board.

The delivery differential in the contract for the Esso support vessel which went to Finland—when so many competing firms were quoting a two-year delivery date against our three years—demonstrates that productivity is not an idle concept. Many hon. Members, with their experience of the industry, appreciate that this is a key issue and that it is part of the basis on which the trade unions and management of British Shipbuilders are striving to make the industry competitive in probably the most internationally competitive manufacturing game in the world.

The hon. Member for Wallsend was a little more optimistic, and I hope that that optimism reflects market trends. We must not get too excited at the prospect of a few more orders this year than last year for British Shipbuilders, because orders are still well below capacity. When talking to ship owners I find a remarkable degree of unanimity among them about the age of their fleets. They tend to say that their vessels are modern. The passenger liner industry, in which Clydeside made its name famous all over the world, is declining. More people are flying and so the liner market becomes increasingly limited. The hon. Member for Jarrow, with his trade union experience, was perhaps led astray when he referred to my hon. Friend the Under-Secretary of State for Scotland as being sarcastic. I am sure that if he re-reads column 1576 of the Official Report he will find that my hon. Friend was welcoming his contribution.

My hon. Friend made a valid point about scrap-and-build and the way in which that may be extended to ship repairing. The Government will consider it.

The contribution of my hon. Friend the Member for Dorking was followed by a speech by the hon. Member for Glasgow, Garscadden (Mr. Dewar). There was a degree of common ground. The industry is declining and there is a fear that the skills will slip away. There is evidence that some of the most able workers are leaving the industry.

Hon. Members have sought assurances that the Government are doing all that they can to deal with their anxieties. The Government understand the problems. Nobody would wish to stand at the Dispatch Box and say that we are doing anything but pursuing with the utmost vigour the opportunities to help this great industry. That applies to public purchasing and wherever there are opportunities to assist.

It is difficult to make off-the-cuff pronouncements in the midst of the negotiations within the Community and when we are reviewing the number of issues, including hydrographic vessels.

The hon. Member for Whitehaven described accurately the basis upon which the clause provides for the borrowing powers to be doubled in two tranches. The first tranche involves £500 million, with provision for a further increase, subject to the approval of the House. The borrowing powers cover the aggregate amounts that British Shipbuilders and its wholly owned subsidiaries can borrow, other than by way of interest and loans exempted under section 11(9) of the Aircraft and Shipbuilding Industries Act and public dividend capital received by British Shipbuilders.

The hon. Member for Whitehaven asked whether I could assure him that that was enough. When he asked the question, the hon. Member knew that it was unanswerable. The state of the market and the degree of international agreement must be considered. The hon. Member will recognise that borrowing powers and the revenue account are separate. Profitability can affect the degree to which borrowing powers are necessary.

Let us examine what has happened in recent months. British Shipbuilders has so far drawn £135 million from the Exchequer, against a ceiling of £300 million, plus £33 million by way of foreign borrowing in connection with the Polish deal. It also has a temporary borrowing facility of up to £30 million.

British Shipbuilders estimates that its limit will be exceeded by early 1980. This borrowing limit was set by the previous Government to cover a five-year period but it will probably be taken up in about three years.

Do the figures that my hon. Friend has just given take account of the expenditure of £170 million in excess of the expenditure agreed for the Polish deal?

I cannot give an answer, but I shall be happy to inquire about it. We are speaking of basic global sums to which British Shipbuilders had recourse.

The trend in borrowing reflects the adverse trading conditions facing the industry. It is important to stress that the increase in the borrowing limit in no way means support for British Shipbuilders additional to that which was outlined in my right hon. Friend's July statement, which set loss and cash limits for this year and a loss limit for next year.

Some of the borrowings that have gone in the past to capital investment reflect a continuing trend. The figures are interesting. In 1977 and 1978 capital expenditure, less grants, totalled £17 million. Last year the figure was £23 million. Expenditure this financial year is running at about the same level.

On capital expenditure, it seems that the order of magnitude is running at a steady level. A large part of that expenditure has been used for modernisation schemes, some of which were started prior to nationalisation. It may be of interest to the hon. Member for Birkenhead (Mr. Field) and other hon. Members to know that half of that expenditure has been spent on the naval yards. I recognise the hon. Gentleman's interest in the naval yards because Cammell Laird has been moving into that area.

The remainder of the borrowing is accounted for by losses that, after tax and interest, amounted to £93 million to 31 March 1978 and £64 million in 1978–79. In view of the uncertainty of the future size and shape of the industry and the problem of assessing market demand, I have tried to show that it is not possible to say how long the money will last.

It was explained on Second Reading that we have asked British Shipbuilders to make substantial progress towards viability. I hope that the new limits will be longer than the five years estimated for the previous limits. In general, the Government feel that this is the right measure and that clause 1 reflects a basic undertaking given to British Shipbuilders at a difficult time. It recognises the degree of agreement reached with trade unions on the present contingency planning. In that sense, and in that spirit, I commend the clause to the Committee.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 2

Guarantees In Respect Of Alterations Of Ships, Etc

Question proposed, That the clause stand part of the Bill.

I tabled an amendment, Mr. Crawshaw, that was not selected, no doubt for good reasons. I wish to put some probing questions to the Minister.

In 1976, during the Committee stage of the Aircraft and Shipbuilding Industries Bill, the then Under-Secretary said in response to an amendment to impose a duty on British Shipbuilders to enter some aspects of the offshore market:
"For all these reasons, it would be inappropriate to impose a duty on the new British Shipbuilders to enter this field. But if the corporation were to identify worthwhile opportunities for building rigs and sub mersibles and for diversions such as this, they would be encouraged and they could extend their activities to this area with the Secretary of State's approval."—[Official Report, Standing Committee D, 20 January 1976; c. 293.]
I do not wish to go over the whole area describing semi-submersibles and submersibles because I am sure that I should be called to order.

It is important to consider the definitions in section 10 of the Industry Act 1972 and to ascertain from the Minister what he means by a "mobile offshore installation". It is a subject of much discussion because of the new techniques and devices engaged in offshore operations. It is important to understand clearly what he means because of the nature of guarantees that may be asked for in relation to the new devices.

9.30 pm

I am not clear whether the section 10 guarantees and the guarantees that stem from the Bill would apply to what is called a tethered buoyant or tension leg structure. The difficulty is that we have not built any of these structures. I press my point by way of an illustration. It is becoming clear that if oil is discovered in deeper waters the fixed structure, be it gravity based or steel jacketed, will not be the means by which such oil discoveries will be exploited. The industry is not entirely clear what devices it would use. One of the devices that is likely to be used is a tension leg platform.

I am keen to obtain clarification because design studies are being undertaken by one of the oil companies that is operating in the North Sea, namely, Conoco. The studies have been the subject of letters between my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan), the Under-Secretary of State for Scotland and the Minister of State, Department of Energy. Unhappily, the Scottish Minister is absent from the Chamber, so I shall confine myself to reading the Minister of State's reply to my right hon. Friend. The hon. Gentle man wrote:
"I, too, am keen that the fabrication contract"—
that is the Conoco tension leg oil production platform—
"should come to the UK in view of its value and the employment that it will provide and also because this will be the first full-scale platform of this type to be ordered. The award of the contract will of course be a matter for Conoco's own commercial judgment, but the Offshore Supplies Office (OSO) of my Department will certainly ensure that UK companies, including Scott Lithgow, have a full and fair opportunity to compete. OSO could not, however, seek to influence Conoco to favour one UK company over another.
The timing of the fabrication contract is uncertain because the development plan for the Hutton field has not yet been received, but we do not expect Conoco to invite bids before May 1980. Scott Lithgow's experience may give them an edge but they will have to be competitive to get the contract."
All that is perfectly fair so far as it goes, but one of the factors to be considered is the mobility of the structure. It is distinctly possible to have the structure built a considerable distance away from the North Sea and towed to site, not for completion, but in a completed state. That is a consideration that the Government must have very much in mind if they are anxious, as I am and as I hope my right hon. and hon. Friends are, to have the structure built in a United Kingdom yard.

Other structures that have been used in the North Sea are not necessarily suitable for building in shipyards. We had to build special facilities by means of huge Government subventions. We had to build special yards to enable the building of concrete, gravity-based structures. They were towed out and placed on the oilfields. There is now a distinct opportunity to build structures of the type that I have described. Indeed, on occasions they could be specifically designed to be built in shipyards. I want to know how the Government propose to assist in terms of the guarantees that could be given. They are not expensive guarantees. By no means are they the type of guarantees that would be offered by the Japanese or other nations in order to be the first to build this type of structure.

I have declared on previous occasions my interest in this matter. My interest in one device goes back over five years. In July 1974, I went to Los Angeles and began discussions with Deep Oil Technology in order that United Kingdom companies, or one company in particular, could become interested in this device and build it in the United Kingdom. That was a five-year planning haul. It would be ridiculous, after this time, when we are reaching the point when one company, Conoco, is anxious that this structure should be built—I would hope, in the United Kingdom—if we found ourselves not fully competitive because companies are not offered the necessary type of financial incentive.

I rest my case on this detailed, almost legalistic point in terms of the interpretation of section 10 of the 1972 Act and of clause 2 of this Bill. I recognise that this can be interpreted as a narrow legal point. I know there are difficulties for the Minister who will be replying. I wish, however, to avoid the situation in which the Minister says that he cannot take action because the matter does not fall within the section of a particular Act.

We welcome the extension of the power of the Secretary of State under section 10 of the Industry Act, provided by clause 2 of the Bill. As a man who professes not to interfere in industry and who almost daily takes more powers to himself, the Minister is again giving himself more power. We welcome the proposal. It is much in accord with the statement made by my right hon. Friend the Member for Chesterfield (Mr. Varley) on 4 April this year, which appears in column 831 of Hansard of that date. It is a limited measure, but it will be welcomed throughout industry. The amount of money involved—about£2 million a year is the Government estimate—is small, relatively speaking. Why cannot some effort be made to enlarge the opportunities that may be available under this provision? There is a desperate need in the ship repairing industry and in shipbuilding for more work. As the nation still with the fourth largest merchant fleet, we must have a good, soundly based ship repair industry in the United Kingdom.

I turn to the case set out by the Confederation of Shipbuilding and Engineering Unions. Two of the points in its programme may be apposite in respect of the provisions under the clause. The enforcement—if it could be agreed to—of segregated ballast tanks in ships and the provision for the installation of inert gas systems where necessary are two proposals that could perhaps provide work under the provisions of the Bill, and may provide opportunities for more work. I shall be grateful if the Minister can deal with this point.

I think that I am right in assuming that this extension of the home credit schtme will make our ship repair industry not only more competitive but more attractive to United Kingdom owners. Therefore, we call upon the Government to do everything that they can to persuade the owners of this large fleet to have their ships repaired in United Kingdom yards. I should add that here I am referring to the yards of both British Shipbuilders and those of the private sector of the industry, where there are real problems as well.

In his remarks on the debate on clause 1 stand part, the Minister did not answer the point raised by my hon. Friend the Member for Dundee, West (Mr. Ross) about apprenticeships. Since that is important in terms of ship repair, I hope that he will now deal with that point. He mentioned our obligations under OECD and EEC treaties when he referred to aid to the industry. In his informative and now widely quoted paper on 17 October this year, Mr. John Parker made some categorical statements about the situation that exists in other EEC member States, as well as in regard to others which ostensibly at least have the same obligations under OECD as we have.

One is bound to ask what the point is of the Government playing the game of cricket when everyone else is apparently playing under Rugby Union rules. We shall get no support for our industry if we are the only people playing the game according to that particular set of rules. While I accept that we cannot go on bidding up indefinitely, the evidence is clear that nowhere are market forces operating, especially in regard to shipbuilding and ship repair. It is all very well to say that we are the only people who are behaving properly, but that will not prevent our industry from being severely undermined by our partners and competitors.

These statements have not been challenged by anyone, so far as I am aware. If they are not correct, I would be pleased if the Minister would say so. If they are accurate and authoritative, we would like to know the Government's view of the situation. Will they pursue this matter wihin the EEC and in OECD, or will we merely accept the situation and see our industry further undermined? The Minister mentioned the Esso orders—a classic example of the kind of situation about which we are talking in terms of the lack of market forces operating in the industry at large.

We are talking about survival. We are talking about the ship repair industry. We welcome the Bill's provisions. We urge the Government, as we did in the previous debate, to show a little more vigour and determination in the discharge of their responsibilities to Briish industry.

A number of interesting points have again been raised in this debate on clause 2. I pay tribute to the hon. Member for Dunfermline (Mr. Douglas) and to his ingenuity in managing to speak on the subject he raised while staying within the rules of order. The Committee recognises that the hon. Gentleman has a long-standing interest in the tethered buoyant platform systems. We all recognise that he has a particular interest in Scott Lithgow and the connection between the two. It is only right and proper that he should ask to what extent this can be regarded as being within the ambit of the Bill.

Without going beyond the rules of order, it is difficult for me to give the hon. Gentleman a definitive answer. I shall try to avoid getting into a legalistic interpretation. However, the reference to "installation" which already appears in section 10(9) of the Industry Act 1972 is the relevant reference that the hon. Gentleman was seeking.

9.45 pm

Section 12(1) of the Industry Act 1972 already defines mobile offshore installations as follows:
"any installation which is intended for underwater exploitation of mineral resources or exploration with a view to such exploitation and can move by water from place to place without major dismantling or modification, whether or not it has its own motive power;"
Tethered buoyant or tension-legged platforms are among a variety of offshore installations, each of which can be considered on its merits for inclusion in the home credit scheme. Part of the problem is, as has been said, that TLPs are in an early stage of development and, therefore, we shall have to await further development to see to what extent advantage can be taken of the provisions of the home credit scheme.

The hon. Member for Whitehaven (Dr. Cunningham) reminded me of a point that I had not had the opportunity to pick up earlier. The points made by the hon. Members for South Shields (Dr. Clark), Dundee, West (Mr. Ross) and Newton (Mr. Evans) about the help that the shipbuilding industry training board might give to apprentices are important, and I undertake to write to them on the matter. It is something that is worthy of further examination.

I turn to the general ambit of clause 2. The home credit scheme, which was first established under the Shipbuilding Industry Act 1967, is aimed at enabling United Kingdom shipyards to compete for orders—

I am grateful to the Minister for acknowledging the point about apprentices. If I give him details, will he give me an assurance that he will, as a matter of urgency, look into the case of the 37 apprentices laid off by Peter Johnston's?

I appreciate that the hon. Member is referring to a specific case, and if he cares to write to me I will look into the matter. He will appreciate, of course, that it may not fall within the orbit of my Department's responsibility. If it does not, I will make sure that it goes into the right hands.

I was explaining the purpose of the home credit scheme. The point of the scheme is to give United Kingdom shipyards the opportunity to compete for orders from United Kingdom owners on equivalent financial terms to those available from overseas yards which can offer advantageous credit arrangements under their countries' export credit guarantee schemes.

That leads to wider opportunities for conversions or alterations by United Kingdom owners which, for example, can involve jumboising or re-engining ships in the interests of greater fuel economy. The hon. Member for Whitehaven mentioned segregated ballast tanks. That is also an area where I would want to look at the precise way in which the market might develop. What perhaps was in the hon. Member's mind was that the Government support the February 1978 International Maritime Consultative Organisation conference on tanker safety and pollution prevention. We shall ratify the 1978 protocol to the international convention for the prevention of pollution from ships in line with the recommended target date. This means that the protocol will progressively require most oil tankers to be fitted with segregated ballast tanks. This, perhaps, is an area where we might well see some useful work, and I hope that the scheme will be of assistance.

I have referred to the jumboising or re-engining of ships and I also want to pick up a point made by the hon. Member for Newton. The Government fully recognise that here we are speaking of business not just for the shipbuilding industry, the engine industry, or the ship repairing industry but for the whole of the engineering industry that supports the shipbuilding industry. So I recognise the importance of this scheme in that wider context. Therefore, in looking at re-engining we are, in the wider sense, looking for opportunities where greater fuel economy can offer worthwhile opportunities for shipbuilding, ship repair yards and other ancillary industries.

Such conversions or alterations have not hitherto been eligible for cover under the home credit scheme, although guaranteed credits have been available to foreign customers through the Export Credits Guarantee Department.

Ships and mobile offshore installations will both be eligible. For ships, the minimum size will be 5,000 gross registered tonnes, although we shall be able to go down to 1,000 gross registered tonnes to match evidence of competition from outside the EEC. The conversion must entail the radical alteration of the hull, the cargo plan or the propulsion system. Similar eligibility rules will apply to mobile offshore installations.

The normal terms of the cover offered will be a guaranteed loan of up to 80 per cent. of the contract price of the conversion, excluding any expenditure on the acquisition of the ship or structure to be converted, at an interest rate of 7½ per cent. for up to five years from delivery. These terms are in accordance with our EEC and OECD obligations, and therefore they fall squarely within the matters to which reference was made earlier tonight. As we judge them, they are within the present practice of our main competitors. In very exceptional circumstances—this is an important point—such as very large orders of particular importance to the industry, we may be able to extend the credit period to a maximum of eight and a half years from delivery.

The cost of interest rate support depends on the volume of business, and we are back to the difficulty of the market projections. It will also depend on the prevailing market rates of interest. It cannot, therefore, in overall cost terms, be estimated with immediate accuracy. It is not, however, on present estimates of the market for conversions and current interest rates, expected to average more than £2 million per annum. This cost reflects the shorter term of credit proposed—five years—compared with that available for construction of ships—eight and a half years.

As for the present home credit scheme for new ships and structures, the Ship Mortgage Finance Company Ltd. will act as the Department's agent. Applications will be made to the company and it will advise the Department on the granting of guarantees and on the security which should be obtained, arrange for the necessary legal documentation to be prepared and monitor the performance of the owner's obligations to the Department during the guarantee period.

I thought it right to give the details, so as to put on the record the way in which the scheme will operate. We recognise that no commitments can be entered into by the Department before the enactment of the Bill. To ensure that the benefits of the scheme are available at the earliest opportunity, provisional offers may be made, subject to Royal Assent, if this is considered necessary to secure important orders which might otherwise be lost.

What we have before us tonight is, therefore, a useful addition to the way in which British Shipbuilders will have opportunities to look rather more widely than at present. It is yet another piece of evidence of the Government's earnest in these matters. I recommend the clause.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Bill reported, without amendment.

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

9.53 pm

I do not want to detain the House for very long. We had quite a remarkable debate on clause 1, which was very much an action replay of the Second Reading debate. The Government have no complaints about that.

I remind the House that we have taken the Committee stage on the Floor of the House because of the urgency that we attach to the Bill and because we think that there will be benefits from its obtaining Royal Assent as soon as possible.

I think that I described the Bill on Second Reading as small but important. In itself, as we expected, it has proved to be uncontroversial. However, it has given occasion for considerable criticism—I think it was unjustified—from those who think that the Government are not doing enough to protect the industry. Therefore, I should like to make it clear again that the Government wish to see a viable and competitive shipbuilding industry in the United Kingdom.

Together with the other shipbuilding nations, we recognise that in the present state of the market such an objective cannot be achieved without a substantial measure of Government support. The Bill gives effect to part of the policy that I announced in July in response to British Shipbuilders' corporate plan and is an indication of our determination.

British Shipbuilders, in drawing up and presenting that plan, advised us that an industry of the size obtaining at that time could not be sustained, and the previous Administration admitted that contraction was inevitable.

I hope that this will be my only contentious remark, but it is totally unrealistic and financially imprudent to call for the unlimited provision of public funds. The hon. Member for Whitehaven (Dr. Cunningham) said that there should be no upper limit for the intervention fund, which implies that he is prepared to find 100 per cent. of the cost of any ship.

The Minister was being his usual careful self until making that point. I said that I believed that British Shipbuilders had expressed the view that there should be no upper limit. I did not say that it was my view.

I am pleased that the hon. Gentleman is not inciting others to hold that view. I was misled into believing that he was giving support to the view put forward by British Shipbuilders. Even if he did not specifically suggest that, the weight of his arguments as official Opposition spokesman and those of other hon. Gentlemen have been once again to spend more and more money.

The hon. Gentleman also accused us of lack of vigour. When the corporate plan was put before the Labour Government in the late autumn of 1978, they refused to face the issue. They displayed no vigour. They refused to accept or reject British Shipbuilders' advice and finally, just before the election, said that they would proceed on a step-by-step basis.

I repeat that when we came to office the intervention fund had lapsed, which made it difficult for British Shipbuilders to obtain orders. Even the provision that the previous Government made for intervention fund assistance before it lapsed was much under-utilised. The annual provision of £85 million was much vaunted, but in practice only £12½ million was spent. The unions have been more realistic than the Labour Party in accepting a contraction in British Shipbuilders' preferred strategy.

As hon. Members pointed out, there are signs that the market is picking up, but straws in the wind are not firm orders, and as yet there are no solid grounds for optimism. With worldwide over-capacity, we remain of the view that British Shipbuilders will find it difficult to reach its target. Orders remain the key, and in order to compete British Shipbuilders will need to make determined and continuing efforts through improved productivity, design and marketing. We all want to see jobs preserved, and the only way to do that on a sure and long-term basis is for the industry to be competitive.

The Government have taken decisive action to support British Shipbuilders in its strategy. Substantial sums of public money have been made available and we have negotiated an intervention fund until the end of the EEC fourth directive and its management is largely in our hands. We have set financial targets for British Shipbuilders and ended the period of uncertainty for the industry about the support that it can expect from the Government. The industry knows the terms on which it must meet the challenge of a tough and competitive environment.

I believe that there is an almost unprecedented spirit of co-operation within the industry at present. There is mutual understanding of the roles and responsibilities of Government, management and unions. This gives real grounds for optimism.

It being Ten o'clock the debate stood adjourned.


That, at this day's sitting, the Shipbuilding Bill may be proceeded with, though opposed until any hour.—[Mr. Waddington.]

Question again proposed, That the Bill be now read the Third time.

There is general recognition that survival can come only through hard decisions taken and acted upon, and that the future ultimately rests in the hands of those whose future it is—namely, the management and workers of British Shipbuilders. For them the challenge is tough. It is bound to be, given the excess of world capacity in shipbuilding. But it is a challenge they will do their best to meet. As for the Government, we pledge that within the framework of the support we have announced, we will do all we can to help. Therefore, I ask the House to give the Bill its Third Reading.

10.12 pm

I wish to intervene briefly in response to one or two comments made by the Minister of State. I welcome his total commitment to the maintenance of the British shipbuilding industry. I am sure that this will be welcomed by hon. Members on both sides of the House and all sections of the industry. I hope that he will understand why we raised these issues in the first place. It appears that what the Government are saying now in relation to the shipbuilding industry is somewhat at variance with what they said during the election campaign. I welcome their conversion and their desire to maintain the industry.

The Minister was a little unfair to my hon. Friend the Member for Whitehaven (Dr. Cunningham), who referred to lack of vigour. My hon. Friend asked the Government to show increased vigour in their dealings with the EEC. There are many serious problems about world shipping and therefore it is essential that the Government should be vigorous in relation to scrap-and-build and the many other problems that face the industry.

One problem is that of unfair competition from Eastern European countries and other countries in the Western world which are diminishing British fleets. In doing this they are diminishing the work that is available in British yards.

The Minister referred to the necessity to ensure that the industry is competitive. We all accept that. But it is not just a question of the British worker working harder and making the industry more competitive. There is the question of the worldwide practices adopted by countries on both sides of the Iron Curtain which are detrimental to the British industry. We urge the Government to examine these practices with vigour and to ensure that the British worker is placed on a fair competitive basis with workers of other countries. At present, no matter how hard the British worker works, he cannot compete with such practices.

Every country in the world regards the building of ships and the provision of a merchant fleet almost as a matter of national conscience and concern. I ask the Minister to take on board that, when he talks about the growing spirit of co-operation between unions and management, which we on the Labour Benches greatly welcome, it is also a question of there being a third party involved in the deliberations and negotiations—his Government. It is essential that they be the third party at the table in all the talks to ensure that Britain retains a viable industry.

The Bill provides modest assistance to the industry. I made the point in Committee that we needed to know whether the Government's commitment to the industry was for two years or even longer. I do not believe, and I suspect that the Government do not believe, that worldwide trade will recover from the doldrums over a two-year period. I hope that the commitment that the Government have shown tonight in the Bill will be for longer than two years.

With that, I welcome this modest Bill.

Question put and agreed to.

Bill read the Third time and passed.

Welsh Grand Committee


That during the proceedings on the matter of the Economy of Wales, the Welsh Grand Committee have leave to sit twice on the first day on which they shall meet; and that not-withstanding the provisions of Standing Order No. 64 (Meetings of standing committees), the second such sitting shall not commence before Four o'clock nor continue for more than two hours.—[Mr. Boscawen.]

Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Boscawen.]


10.5 pm

I feel rather like the number three batsman after the opening partnership has scored 200 runs: it was jolly good, but I have been waiting a hell of a long time.

Since this debate was announced. I have been the butt of a certain amount of humour from some of my colleagues. Anyone who again says to me "Mind your step" will cease to be my hon. Friend.

The control and licensing of dogs are very serious matters. As my hon. Friend the Under-Secretary of State for the Environment knows, there is nothing quite so powerful as an idea whose time has come. This is the time when we must seriously consider introducing changes. Why now? The first reason is that the number of dogs in this country has increased. It is now 5½ million, and half of them are probably not licensed. Secondly, we have a great deal of new knowledge about the problems and the diseases caused by dogs. Thirdly, there is a tide of public opinion, which is about to become a surge.

As we all know, dogs are man's best friend. They are a part of life, a part of the family. For many people they are very important companions. But, unfortunately, there is a small but growing minority of dogs that cause a great deal of trouble and disruption.

The hon. Member for Hammersmith, North (Mr. Soley) and I have discussed with the Royal Society for the Prevention of Cruelty to Animals and the British Veterinary Association the proposals that I shall make tonight. I am happy to say that our views are almost identical. I think that they agree with my proposals. What we are putting forward is in the interests not only of the public but of dogs.

I said, Mr. Deputy Speaker, that this was a serious debate, and it is. I should like you to think for a moment of one of the most attractive things known to man—a small child of two years, with fair hair and blue eyes, learning to walk and to talk, romping in a play area in a park. Twenty years ago one such child was doing just that and picked up a worm from the ground which got into his system and eventually found its way to the back of his eye. All that the child knew was that things were getting a bit fuzzy, a bit blurred. A child of two years could not articulate, could not say what was wrong. He did not know that it was not happening to other people, did not know that there was anything strange about it, did not know how to complain.

Eventually, at the age of four years, the child was taken to see a doctor and then to another doctor. The doctors looked at the back of his eye and saw a growth there. They thought that perhaps it was malignant, so they enucleated it, to use the trade term. They struck it out, pulled it from the child's body to examine it, and when they did so they discovered that the child had been affected by the worm toxocara canis.

Since that day a great deal of research has been carried out. The research continues. We now have real knowledge of the problem. One in four of soil samples taken from parks contains the worm. When the worm is in the ground it can stay alive for four years. The disease can attack the lungs. It is estimated that about 30,000 people in the country suffer from asthma possibly as a result of the worm. It can attack the brain. It is estimated that between 12,000 and 15,000 people suffer from epilepsy as a result of the worm. The case which I have mentioned illustrates the fact that it also attacks the eye. It is estimated that—we know 50 cases, we know100—perhaps 200 people a year can have a severely damaged eye as a result of this menace. If one-tenth of such problems were caused by nuclear-energy, the House would be besieged to such an extent that for a month we should not be able to get in or out.

Before I make some brief proposals, I have a few other facts and opinions to put forward. About 4,000 sheep per year are destroyed as a result of the disease. I said that we are also concerned for dogs. Dogs are often ill-advisedly given away because they are not properly looked after, and, regrettably, 300,000 dogs a year are destroyed because of the disease. The National Farmers' Union, when it heard that this debate was coming, wrote to me and asked me to mention the very real problems of its members from livestock worrying. My local authority says that it is the consensus of both political groups on the parks committee that dogs should be banned from children's play areas and rugby and soccer pitches. However, at this stage, they are powerless to do anything about the matter.

The World Health Organisation says that dogs should be excluded from children's play areas. One of many constituents who have written to me said that there is a toddlers' play area in her area which is safe from traffic but a "lovely loo for animals". The Association of District Councils has written to say that its member authorities are concerned about the matter and have pressed the Government to introduce legislation on the basis of the report of the working party on dogs, which was published three years ago. They would particularly like power to be removed from the police to local authorities and they would like to see an increase in the licence fees. They have been concerned at the inflexibility of the Home Office in confirming byelaws.

The hon. Member for Hammersmith, North will refer to other matters, but in the meantime I should like to make a few brief proposals. First, in view of the menace of toxocara canis, the full reality of which is only just coming home to the general public. I should like it to be made a notifiable disease. Secondly, when I write questions on the subject I find that they are shuffled among three or four Departments. Surely one Department can take on the responsibility for dogs. Thirdly, the police are already over-burdened but they have the responsibility for dealing with stray dogs. The local authorities are willing, keen and able to take on the responsibility. Let us transfer it. Fourthly, there should be an increase in the licence fee. It is now the same as it was 101 years ago.

I suggest that before a dog is licensed a certificate must be produced to show that it has been adequately wormed, because in that way we can deal with the menace. That would mean, perhaps, that many people would have to take their dogs to the vet to get a certificate, but once a year the dog could have an annual check-up. This would be of great benefit not only to society but to dogs.

Fifthly, the possibility of having a differential licence should be investigated. I suggest that unspeyed bitches should carry a larger licence fee than speyed bitches and dogs. Sixthly, we need to adopt a different attitude to byelaws. Local authorities have been queueing up to get byelaws passed, but since the controversy at Burnley the Home Office has been loth to confirm them. Please let us have a change in that attitude.

We face a serious problem which will not go away. Public opinion is building up. Day by day, I and other hon. Members get more correspondence on the subject. It is not an insignificant problem. The lower figure of 50 people a year losing the sight of one eye may not seem much to some people, but to a person who loses the sight of an eye it seems a great deal.

I was addressing a small meeting earlier today at which I discussed this issue—this shows that it is a present and real threat, something that is actually happening—someone came up to me and said "It is strange you should mention that. My father lost an eye through this cause 20 years ago". We shall be irresponsible to the humans and the dogs of this country if we do not act, and act quickly.

10.16 pm

I am grateful to the hon. Member for Northampton, North (Mr. Marlow) for giving me the opportunity to speak, to my constitutent Mr. Athans, who has done a great deal to bring the problem to my attention, and to Professor Woodruff of the London School of Hygiene and Tropical Medicine, who has done much of the research work on the subject.

I stress that this is not a move against pets. The hon. Member for Northampton, North and I want people to have pets, but there is no such thing as an irresponsible animal and there are, alas, some irresponsible owners. The views put forward in the debate have the support of the RSPCA and other animal welfare groups.

Toxocara canis exists in dogs and cats. It seems that dogs are the major problem, presumably because the areas that they frequent are also frequented by children. It is estimated that there are 840,000 infected faeces a day in England and Wales—276 million a year. At one level, that may seem a humorous figure, but at another level it is a serious one.

The disease is not notifiable, and one of my first requests is that it should be made a notifiable disease. At the moment we do not know the figures. Sample estimates suggested one case in 1974, two cases in 1975, five cases in 1977 and 10 cases in 1978. On a simple, and not necessarily accurate, statistical measure, the disease is on the increase.

Control is important, not only for public health, but for a more balanced and healthier animal population. Dogs can be a nuisance in a number of ways: by incessant barking, particularly at night, by straying into the road and causing accidents—there are an estimated 20,000 accidents a year caused by that and in 1977 13 people were identified as having been killed in such accidents—by attacking and threatening people, including children, and, as hon. Members who have served on local authorities will know, by fouling pavements.

There is an additional area to which we need to turn our minds. Rabies is a horrific disease that we do not yet have in this country, but there is a constant threat of its being imported, and I suggest that if we have adequate controls it will be marginally easier to control an outbreak of rabies. It would be only marginally easier, but any assistance is particularly helpful in that horrific disease which cannot easily be prevented.

We should also consider the appointment of dog wardens, as recommended by the 1976 report of the working party on dogs. The idea is supported by the Association of Metropolitan Authorities, the Association of District Councils and many animal welfare groups. Such wardens would have an educational role with the owners of dogs and, to some extent, a welfare role in looking after stray dogs.

It is estimated in my constituency that there is a major problem of a surplus of dogs, many of which are strays. Recently there was a complaint from a school that the fouling of a council football pitch by dogs was resulting in children being fouled by dog faeces.

I should like the Minister to consider the suggestion of the hon. Member for Northampton, North that one Department—preferably the Department of the Environment—should assume responsibility for this matter. There are too many areas of overlap. The dog licence scheme needs to be looked at because the time for a review is long overdue. However, we do not want to price out of the market people who, because they live in an isolated area or are elderly, need pets.

We need to change the park byelaws and how they are made. It took Hammersmith two years to get agreement on exercise areas, and it cost between £16,000 and £20,000 to fence off the relevant areas. Responsibility for strays should be transferred from the police to the local authority, and dogs should have to carry some identification of their owners.

There is a host of other possibilities, but I simply suggest now that the 1976 report indicates the way forward. I strongly urge the Minister responsible to look into this matter and to pursue what is becoming an increasing health problem which affects both the community and anyone who is in any way concerned about the health and welfare of his pet.

10.22 pm

I am grateful for the opportunity to reply to the debate, and I say that for a number of reasons. One is that it must be the first time in history that a fox has replied to a debate on dogs.

My hon. Friend the Member for Northampton, North (Mr. Marlow) has raised a matter which touches many people deeply. I am left in no doubt about the national feeling that exists on the matter, and anyone who cares to examine the volume of correspondence that I receive on the subject would arrive at the same conclusion. We all know that the British are thought of as a nation of dog lovers, but even people who love dogs can be justifiably angered by the behaviour of irresponsible dog owners, as the hon. Member for Hammersmith, North (Mr. Soley) has said. Many people are indeed frankly hostile to dogs, though it would be more logical if they were hostile to irresponsible owners.

The present law on dogs is complex. This reflects the long history of concern about dogs, and also the fact that dogs have to be considered from several points of view: amenity, health, livestock worrying and so forth. Before the Government can come to conclusions on the suggestions and recommendations made in the working party's report, several of my right hon. and hon. Friends will have to have an opportunity to consider the issues and their implications for local authorities' resources. This debate has helped to underline and clarify several of them and for this I am duly grateful to my hon. Friend. He is right to draw attention to the fact that the report has been in existence for three years. The Government, however, have had only six months in office.

To reach conclusions on what action would be desirable is one thing; to be able to conclude that a desired course of action can actually be implemented is another, especially at a time of severe constraints on public expenditure and on parliamentary time. I remind the House that my noble Friend Lord Mowbray and Stourton has already said in another Place that there was little prospect for legislation in the present Session to implement any of the working party's proposals.

My hon. Friend is already beginning to give a chapter of reasons as to why the Government should do nothing about this problem. It should be well understood that there is a natural reluctance among neighbours to report those who allow their dogs to foul places where it ought not to happen. Does it require great Government expenditure and great Government thought to introduce legislation or measures which would stop people allowing their dogs to foul at least children's playgrounds and play areas?

If my hon. Friend will be patient, I shall deal with that point. Perhaps the minute that he has taken away will prevent me from doing so, but I shall do my best.

My noble Friend in another place has explained that such legislation is unthinkable in this Session. I repeat that there are many issues before the House, and there is no way in which we can give a commitment to deal with this matter. I shall certainly deal with a number of points that hon. Members brought before me for my attention.

The working party went into a great many questions. Its main proposals for fresh legislation were in the areas of the control of stray dogs, with which my hon. Friend is very concerned, and indeed dog licensing. It is noteworthy that it regarded even licensing as a matter subordinate to its main concern for improving dog control. On the proposal that the licence fee should be £5 it remarked:
"The primary need … is to raise enough money to meet the costs of any effective Dog Warden Scheme."
This emphasis reflected its belief that the problem of strays is not only a predominant cause for concern but is also a major element in almost all aspects of the dog problem.

As my hon. Friend said, and indeed on the basis of police records, the estimate is that 200,000 dogs a year are taken to police stations as strays. But those recorded estimates have been put much higher. One million out of a total estimated population of 5 million to 6 million dogs are strays, as far as we can ascertain.

There are clearly a large number of dog owners who cannot or will not control their pets properly. The total number of dogs is probably greater now than ever before.

Am I not right in thinking that it would be perfectly possible for the Government to increase the dog licence fee without the necessity for fresh legislation?

My hon. Friend is not correct. It would need legislation.

I was talking about dogs and irresponsible owners. We know that many families nowadays are working and that their children are at school. Dogs are turned out for the whole day. It does not need much imagination to visualise what happens during the day. Perhaps our rising standards of amenity and public hygiene have something to do with the deeper concern on these matters.

First, I shall deal with the question of dog wardens. The working party considered this matter. The suggestion is that we should provide money to offset the expenditure by increasing the dog licence fee. Some people are opposed to that. They do not understand why the revenue should be raised in this way and think that it should come out of the general rate. That policy is unacceptable to the Government at present.

The working party's single most important proposal was for local authority dog wardens. It envisaged that the appointment of such wardens would be discretionary but also favoured a general duty on local authorities towards dog control. We in the Government cannot contemplate a new mandatory local authority function at a time when local authorities are having to make real and sustained reductions in the level of their expenditure. I am sure that my hon. Friends agree. However, it is important to be clear that local authorities already have powers to control dogs in a number of important ways. They may make bye-laws in respect of the control of dogs in parks and similar public open spaces, to which my hon. Friend turned his mind. They may prohibit the fouling of footpaths and exclude dogs from certain enclosed parts of parks where they might cause a particular nuisance. I remind my hon. Friend that it is not always easy to do that. We know about the case of the local authority in Burnley and the difficulties that it encountered. The Home Secretary or the Secretary of State for Scotland is the confirming authority for such byelaws. I cannot say to my hon. Friend that there is any hope of bringing the control of dogs within one Government Department. My hon. Friends must satisfy themselves that the proposed byelaws strike a fair balance between the need to protect amenity and the reasonable interests of the large numbers of people who wish to exercise their dogs. However, the powers are there for the local authorities—and they are there to be used.

Local authorities can also make orders designating roads in their area on which it is an offence to allow a dog without a lead. Above all, we should remember that in England and Wales dog wardens can be, and indeed in many cases are, appointed by local authorities under general powers. Those wardens have no official status and rely on the co-operation of the police in booking in stray dogs under the provisions of the Dogs Act 1906. Nevertheless, 80 councils in England and Wales have voluntarily set up dog warden schemes.

The Minister may have been in danger of giving false information, although I am sure it was well- intentioned.I understood him to say in response to an earlier point that the licence fee could not be increased without new legislation. Appendix A of the working party report says:

"Recommendations which could be implemented under existing legislation:
1. The annual licence fee should be increased (to £5)."
That, of course, would pay for dog wardens.

The hon. Member for Hammersmith, North Mr. Soley and I, in talking about increased dog licence fees, would wish to see protection for old-age pensioners, the blind and other people of misfortune.

It is impossible to go into detail but the hon. Member for Hammersmith, North is right in saying that it would not need new legislation to increase dog licences. However, I am sure that all hon. Members understand that the issue would have to be brought before the House for discussion. Many people would take exception to licences being increased if those increases applied to retired people.

I accept that it is ridiculous that the cost of the licence has remained unchanged since the nineteenth century. The Labour Government said that dog warden schems would have to pay for themselves, that is, out of licence revenues This was a decision of the Department of the Environment. The local authority associations have been similarly insistent that dog wardens should not be a burden on the rates, but there are contrary opinions.

The working party did a lot of work on the fouling of and access by dogs to public open spaces, and heard a great deal of evidence. However, it recommended no change in the present law. The question of byelaws governing the access of dogs to public open spaces is one on which few generalisations can safely be made. Certainly the exercise of detailed control requires every case to be looked at on its merits, in the light of the local situation.

The working party said that it had received more letters of complaint, and expression of concern, about fouling than about any other subject. It came to the conclusion, however, that this is a problem which cannot easily be solved by law and did not subscribe to the view that central legislation would succeed where byelaws have proved difficult to enforce. On the contrary, it recommended continued use by local authorities of their existing powers to make byelaws. In particulars, it encouraged the use of bye-laws in relation to children's play areas and put some faith in educating owners, as a way of producing a change of attitude towards fouling by their pets.

In reaching its conclusions, the working party had the benefit of medical advice about the extent of the risks of infection transmissible through dog dirt, including the condition associated with the worm toxocara canis. The working party concluded that the riks of serious infection was small. Nevertheless, the Government are well aware that there is continued concern about toxocariasis. My hon. Friend asked whether we would consider making the disease notifiable. I will consider that point. There are no firm figures for the number of people affected by it. Estimates have been bandied about and an article I read recently suggested that 200 people a year are blinded, or partially blinded, by the disease. On the other hand, Professor Woodruff of the London School of Hygiene and Tropical Medicine quotes around 50 cases a year.

We are not aware of any evidence for the figure quoted in the article in regard to asthma and epilepsy. They may be based on the fact that, whereas 2 per cent.of otherwise healthy people give positive results when tested for toxocara, those suffering from certain eye, lung and liver disease give much higher positive results. From this it sems to have been deduced that toxocara is responsible for the suffering of 30,000 asthma victims and 15,000 epileptics. The Government's medical advisers have cast strong doubts on the accuracy of these claims, which seem to be supported by no authoritative published evidence.

I can assure my hon. Friend, however, that we will carefully consider all the points that he has made since we know that the question of dogs is of deep concern to many people. The hon. Gentleman raised the question of rabies. This is a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food who is keeping a very careful eye on that issue.

In conclusion, I have to say that while the Government have no intention of neglecting the question of dogs, we must consider this matter in the context of the current constraints on public expenditure and manpower. However, contrary to what my hon. Friend has asked, I hold out no hope that this matter will be dealt with in the near future. That does not mean that we will not give it the highest priority when the time comes.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes to Eleven o'clock.