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Commons Chamber

Volume 974: debated on Monday 26 November 1979

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House Of Commons

Monday 26 November 1979

The House met at half-past Two o'clock

Oral Answers To Questions

Oral Answers To Questions

It will be a great help if hon. Members who are called to ask supplementary questions will limit themselves to one question.


Departmental Staff (Technical Qualifications)


asked the Secretary of State for Energy whether his Department has a need for technically qualified staff who would be seconded from the major oil companies.

In the oil sector, the Department's main requirement for technical staff concerns the exploration for, appraisal, development and production of offshore oil and gas deposits. Commercially confidential information is involved and, whilst I do not rule out secondment of technically qualified staff from the oil companies to my Department, care and caution in their deployment and utilisation would obviously be necessary.

I thank my hon. Friend for that reply. In view of the rapid pace of technological change in the oil industry, does he agree that it will be necessary to ensure that the technical officers in his Department are seconded to the oil industry if the reverse cannot happen?

I can assure my hon. Friend that the closest co-operation will continue between those employed by my Department and the companies within the oil industry.

Has the Minister approved the massive advertisement that is appearing in the press under the title

"Squeezing the most out of Britain's North Sea assets",
in which the Department of Energy purports to engage many highly paid staff, mainly in London? Will he attempt to explain why these staffs should be recruited from London and not from Glasgow, where the British National Oil Corporation has its headquarters?

The staff that is being recruited will not necessarily remain in London all the time. There are certain conditions that may necessitate some of the staff being moved to Glasgow, or even Aberdeen. My Department will give consideration to the most appropriate place for the staff to be located when it is engaged.

To what extent in future will the Government be relying on advice from the BNOC?

The Government do not intend to continue the statutory obligation involving the corporation. Advice from the corporation will be received in exactly the same way as advice from other oil companies.

Energy Saving


asked the Secretary of State for Energy what target he has set for energy saving.

There is no formal quantitative target for overall energy saving. However, the Government are fully committed to international efforts to conserve energy. This was an essential feature of the agreements reached at the Strasbourg and Tokyo summits.

Is my hon. Friend aware that, although the House will welcome the statement that has been made, especially the implementation of the Conservative Party election manifesto, it will wish to know the factors that he is taking into consideration in the energy-saving programme?

My hon. Friend is considering the longer term. We assume savings of approximately 20 per cent, through added conservation methods to the end of the century. We envisage savings in industry of about 28 per cent, or more. In the domestic sector, we estimate that there will be savings of 27½ per cent., in transport 34½ per cent., and in the commercial and public sector about 22 per cent.

As an additional contribution, especially in the commercial and business sector, will my hon. Friend consider the possibility of amending the Offices. Shops and Railway Premises Act 1963, which makes legislative provision for temperatures in commercial premises?

We are examining any areas that inhibit conservation and any areas in which the relaxation of regulations may lead to improvement.

Will the hon. Gentleman look again at some of the detailed recommendations made by the Select Committee on Science and Technology on energy saving about two and a half to three years ago?

Will the Minister examine the pricing of diesel fuel in view of the statement that it is 15 per cent, more efficient than petrol?

Oil From Coal


asked the Secretary of State for Energy what financial contribution the Government are making towards the funding of pilot projects to process oil from coal.

The terms of the Government's agreement with the NCB are to provide up to £800,000 to assist in design and feasibility studies on two 25 ton per day pilot plants.

Since the House generally welcomes the Government's attitude in implementing part of the report of the working party that I chaired, and since the Government must have some say about the site shown, why is the hon. Gentleman so shy about revealing the sums of money that can be allocated? The previous Government undertook to allocate £20 million for these two projects.

The present Government, within less than a week of taking office, confirmed and awarded the design for the particular project in question. It would be premature, having set up such a design study, whose views we hope to see in the early part of 1980, to make judgments at this stage about money. We should await the study.

The decision to put these pilot plants at Point of Ayr colliery in my constituency has been generally welcomed. It is taken as a tribute to the excellent record in output and labour relations at that pit.

I thank my hon. Friend for that comment. However, I would not wish to deny that other coal mining areas have displayed equal ability to that shown by Point of Ayr.

Our road transport system which carries the vast bulk of our essential supplies will never be fired by nuclear energy. Is not the suggestion of my hon. Friend the Member for Midlothian (Mr. Eadie) a good one, bearing in mind the abundance of coal in this country? Does not the Minister agree that this is where the money should be invested?

I am sure that all those interested in energy matters would not deny, through their support of advanced and developing work in coal, the value of resources that exist elsewhere, including nuclear energy.

Have the Government considered the advantages of Boness, Kinneil and Grangemouth site which has both the Kinneil colliery and the Grangemouth refinery?

All these matters were taken into consideration by the NCB. I must stress that this time the Government are talking only about the recommendation for the location and siting of the pilot plants as opposed to the commercial and demonstration plants.

Fuel Supplies


asked the Secretary of State for Energy if he is satisfied with the adequacy of fuel supplies to meet all demands in the forthcoming winter.

Given normal seasonal weather and no interruptions in production or supply, I do not foresee any general difficulty in meeting our fuel requirements this winter. However, the need for exercising the maximum restraint in our energy consumption remains as important as ever.

What estimate has been made of the effect on the United Kingdom of the threatened limits in production of oil in Saudi Arabia? What will be the effect on demand of the swingeing increases in price likely to take place in all three fuels—coal, gas and electricity?

The first question refers to supplies to this country. Oil stocks at CEGB power stations are regarded as adequate given normal conditions. On the second part of the question, a more rational use of price in the valuation of energy as a rare resource in our society will be a feature in good long-term conservation.

Does not my hon. Friend agree that far more attention should be paid to the price mechanism in respect of fuel? If that was done, particularly in respect of gas, it would give to the producers of gas a higher price which would justify them in putting in the pipes and other capital equipment so that it would no longer be economic to continue the wasteful flaring of gas in the North Sea.

It is clear that consistency in energy pricing is rational. Clearly, however, movements towards such consistency must be careful and gradual.

The Minister's statement today is as ambiguous as ever. Many industrialists are genuinely disturbed by the stories they keep reading in the press and by speculation about a massive increase in the price of gas this winter, or that the British Gas Corporation will not be able to supply its full amount to existing installations. Will the Minister make a concrete statement about whether the price is going up, so that people know where they stand?

This question was directed to supplies and availability. Anything that encourages people to assume that there will be difficulties might add to the problem. We refer to the other question later.

Nuclear Safety


asked the Secretary of State for Energy when he expects to make a statement on the implications of the Kemeny report on the nuclear accident at Harrisburg.


asked the Secretary of State for Energy what assessment he has made of the Kemeny commission's report on the Three Mile Island disaster with reference to Great Britain's nuclear programme; and if he will make a statement.

The Three Mile Island accident undoubtedly has important lessons for us. My Department is seeking a careful evaluation of the Kemeny commission findings. The Health and Safety Executive and the CEGB have been doing their own studies and I have asked for these studies, together with their views of the implications of the Kemeny findings for the United Kingdom, to be published as soon as practicable.

I thank my right hon. Friend for that reply. Does he agree that a preliminary analysis of the Kemeny report appears to show recommendations for a movement in America towards our philosophy of regulation in matters of safety and away from legalistic arrangements that have been traditionally undertaken?

My hon. Friend is correct. At first reading, the Kemeny commission report is mainly concerned with regulatory procedures and attitudes and organisation within the United States. Its concern seems to point away from present arrangements in the United States towards those that might be broadly similar to arrangements enjoyed in this country.

Bearing in mind that the Kemeny commission said that the nuclear industry must dramatically change its attitude to safety in nuclear power stations, and the practical delay that will occur in issuing new licences for power stations in the United States, will the right hon. Gentleman disavow the Prime Minister's infatuation with the expansion of the nuclear power programme in this country as foolish and dangerous?

It is recognised in most countries, and certainly by this Government, that it would be an unjustifiable risk to plan our future without a further expansion of nuclear power in some form. But any developments in reactor systems or new designs would have to be preceded by detailed safety clearance, taking into account all possible lessons from the views that we publish and our evaluation of the Kemeny report. That must be common sense.

Will my right hon. Friend, when he considers the Kemeny report, look particularly at the recommendation that, for the present at least, nuclear power stations should be built as far from population centres as practicable?

I have asked for an evaluation on these matters from the Health and Safety Executive and from the CEGB. We will examine all their recommendations and evaluate them in the light of our own circumstances and our own plans inside our own nation.

Will not the right hon. Gentleman admit that anxieties about the pressure water reactor and its inherent safety features, or lack of safety features, first drawn to the attention of the public by Sir Alan Cottrell and now confirmed by Harrisburg and by apparent cracks experienced in French reactors, mean that the Government must make clear that they will not order a PWR in Britain until all the assessments in this country have been published, enabling everyone, including the House of Commons, to examine the factors that are involved?

I have already indicated the publications that will be made. At the same time, it must be right that full safety clearance is given by our well-tried and laid down safety procedures, through the Nuclear Installations Inspectorate, before any new reactor design is placed before an inquiry in this country. That is understood. I am sure that the right hon. Gentleman shares my view.

Will my right hon. Friend confirm that the reactor system used at Harrisburg was different from the system proposed here, being a Westinghouse system as opposed to Babcock and Wilcox?

My hon. Friend is correct. It was a United States Babcock and Wilcox design. There are a number of other designs of pressure water reactor in the Western world. If the plan was to activate a licence with Westinghouse, a different technology would be involved. I again emphasise that anything built here would be subject to our own safety clearances and our own standards laid down by our own Nuclear Installations Inspectorate.

Will the Secretary of State look at that part of the Kemeny report which deals with public information? It states that the public should have full access immediately to any possible information when a nuclear mishap takes place. Is he aware that there has been the feeling in the past in this country that when there has been a nuclear incident an attempt has been made to cover up rather than release the fullest possible news to the public?

Yes. I see no advantage in an approach which involves a cover-up of vital information. I will look at the particular element in the Kemeny report to which the hon. Member referred. It is certainly my view that there should be full information and discussion on incidents and developments involving any hazard to the public. That must be the basis upon which confidence is established when we go forward with a nuclear programme in this country, as we must.

Alternative Energy Sources (Research)


asked the Secretary of State for Energy how much was spent in 1978 on research into nuclear energy and how much on research into alternative forms of energy, including solar, wave and wind power.

In the financial year 1978–79 the United Kingdom Atomic Energy Authority spent £131·9 million net on nuclear energy research and development, of which £l0·8 million net was for research into nuclear fusion and plasma physics. My Department's expenditure on research and development programmes on alternative forms of energy in this period was £2·4 million and this will rise to £6·9 million in 1979–80.

Is there not a huge disparity between the amount we are spending on research into nuclear energy and the amount spent on looking into alternative forms? Is there not a danger of our putting all our eggs into one nuclear basket? Ought not the Government to spend a lot more on research into alternative forms of energy, particularly in view of the doubts about the safety of nuclear reactors?

The differece between the two figures reflects two factors. The first is that the nuclear industry and its research programme have been in existence for 30 years, whereas the other programmes have existed for about six years. Secondly, the figures reflect the state of the art and the advice we have about where the best chance of a breakthrough in getting cheap sources of energy lies. The hon. Gentleman will have seen from my answer that we are planning to increase the amount spent.

I accept the validity of what my hon. Friend said, but will he give a firm inlication that when the commercial development stage of some of these alternative sources of energy is reached the Government will be prepared to back them as appropriate?

My hon. Friend is, of course, right that when these projects get either to the demonstration stage or near to the commercial stage greater sums of money will be called for, and obviously the Government will be willing to examine them. Several projects involving alternative sources of energy have reached the stage of early development, such as the deep bore hole in Hampshire. We are prepared to support projects that have reached that stage.

In the light of the pathetic result from throwing money into the AGR programme, which has given us one and a half power stations in 15 years, is it not time for a redirection of effort with money being spent on alternative sources of energy?

The AGR programme has also given us cheap electricity at a cost that compares with electricity from other sources, particularly coal. It is the CEGB's view that nuclear electricity is fully competitive.

Ought not the Minister to inform the House that he accepts that it would be unwise to scrimp the budget on alternative sources of energy in order to provide a larger budget on nuclear power, bearing in mind that money spent on research into alternative sources will ensure future renewable sources of energy?

Yes, but I have already pointed out that we are planning to increase the budget to a higher figure than that which the hon. Member for Midlothian (Mr. Eadie) supported when he was in Government.

Mr Alan Blackshaw


asked the Secretary of State for Energy if he will make a statement on the action he has taken in relation to a former senior civil servant, Mr. Alan Blackshaw of Friarsbrae, Linlithgow, West Lothian.

As the answer is rather long, I will, with permission, circulate it in the Official Report. I am sending the hon. Member a copy.

May I express my appreciation of the personal attention which the Secretary of State has found time to devote to the problems of my constituent? Does the Minister agree that my constituent left the Department of Energy with an unblemished reputation and a record of excellent service?

I am glad to be able fully to confirm what the hon. Member has said, as the longer written answer that I have circulated makes clear. There was no question of any blame attaching to the senior civil servant. Mis-statements have been corrected by a press statement and recorded in the minutes of the published evidence of the Public Accounts Committee.

Following is the answer:

I am glad to place it on the record again that he resigned from the Department on 10 August 1979 for personal reasons wholly un- connected with the administration of the interest relief grant scheme—there was of course never any suggestion by the Department or anyone in it that any such connection existed. He has also both personally and in the course of the proceedings of the Public Accounts Committee on 31 October received an apology for distress caused to himself and his family as a result of a misstatement to that Committee that an undersecretary in Glasgow had been reprimanded. This misstatement was corrected both in a press statement by the Department on 18 September and in the minutes of evidence taken by the Committee which have since been published.

Energy Policy (Franco-British Co-Operation)


asked the Secretary of State for Energy whether he will hold discussions with the French Minister of Energy in order to examine the possibility of closer Franco-British co-operation on energy policy, particularly in the nuclear field.

I met M. Giraud, the French Minister of Industry whose responsibilities include energy, on 19 November, and we discussed the possibility of Franco-British co-operation in the energy field including nuclear power.

Does my right hon. Friend agree that with our vast reserves of energy we have much to contribute on this subject and are therefore in a position of strength in our negotiations with the French in particular and the European Community in general? Does he agree that we should be prepared to use that position in order to further positive co-operation?

Yes, I agree with my hon. Friend. We are in a position of strength. We should be careful, however, not to entangle the position in which we have a clear case that stands on its merits with the particular aspects of energy that my hon. Friend mentioned and which should be pursued on the basis of their merits where collaboration pays off.

Is the right hon. Gentleman aware that about three years ago it was intended to proceed with the commercial fast breeder reactor, subject to public inquiry? Is that policy now altered, and is it the intention to proceed with commercial fast breeder development in collaboration with the French?

I certainly believe that the fast breeder reactor has a place in the nuclear future. The United Kingdom Atomic Energy Authority and other parties have explored the possibilities of collaboration with the French on future developments in this area. I expect to receive a report from the Authority before Christmas. I shall then be considering that issue.

Does my right hon. Friend agree that on energy we have not only much to give but, where France is concerned, probably much to receive, particularly on nuclear matters? Will he bear that in mind in his future discussions with his French opposite number?

Yes, I will bear that in mind both in respect of thermal reactor co-operation, should we go along that particular path, and, as I have already said, on the fast breeder reactor as well.

Will the right hon. Gentleman confirm that he has an option of collaboration not just with France but with West Germany, on the fast breeder reactor, and with the United States? Will he give an assurance that there would be no question of entering into a partnership with France in which Britain was clearly seen to be a junior partner?

There is no need to see this issue in exclusively bilateral terms. One can imagine arrangements for tripartite co-operation. The French still have their links on the pressure water system with Westinghouse, of which I believe they will not be free until 1982. If we decide to go along that path there will be certain time constraints to be considered. However, co-operation need not be exclusively on a bilateral basis.

Solar Energy


asked the Secretary of State for Energy if he is satisfied with the level of research by his Department into the potential and actual use of solar energy.

I am satisfied that my Department's research and development programme, when taken together with those supported by other Government Departments and by the European Economic Commission, to which the United Kingdom subscribes, is commensurate with the likely potential of solar energy.

I thank my hon. Friend for that reply. Does he agree that the use of solar energy will be for secondary and support purposes? What consultation has my hon. Friend had with the car and building industries to see how this form of energy can be developed in the future?

There is continuing consultation involving not only the Department of Energy but the Department of Industry and the Department of the Environment with the industries that my hon. Friend mentioned. I accept that this is an area in which there is already investment by the Government in research, monitoring and development, to the tune of £1 million this year.

Is not research into solar energy in this country likely to be hampered by the Government's economic policies which mean that the country is likely to be living under a permanent cloud for the next two or three years?

The reverse is the case. The rational pricing policies of the Government have seen a major increase in interest in, and examination of, solar energy. There is in this area a modest expansion at small business level.

European Community (Energy Policy)


asked the Secretary of State for Energy whether he is satisfied with progress towards the development of an EEC energy policy.

The main thrust on energy developments comes from member States' national energy programmes, supplemented by action at community level on matters of shared concern. Acting together, we can also all make an important and effective contribution to the discussion of international energy issues.

In view of the seriousness of the world energy position and the consequent urgency that an EEC energy policy should be determined, does my hon. Friend agree that, so far, progress has been pathetically slow? What initiatives do the Government intend to take that might lead to the development of a common energy policy in the EEC?

One of the most important things that needs to be done is to get solidarity in the Community on the consumption of energy and energy imports into the Community. Progress has been made on that. Import targets have been agreed up to the year 1985. The United Kingdom Government play a constructive part in the Energy Council. One proposal that we put forward recently was that for coal. We are anxious that a European coal policy should be developed, which would be of great advantage to this country.

While welcoming the effort to secure a sensible coal policy may I ask the Minister to make it very clear to Europe that it cannot expect to benefit from British oil reserves throughout the 1980s?

We make it quite clear to our Community partners what we expect the profile of production of oil from the North Sea to be. However, these are matters within the jurisdiction of the United Kingdom Government.

Will the Minister confirm that his right hon. Friend the Prime Minister will reject the German claim that North Sea oil should be sold to the EEC at lower than market prices?

Yes. That would be to nobody's benefit. The North Sea oil price is determined by world market forces. If we made an effort to suppress it below those levels it would merely mean that other people would buy that oil and on-sell it at higher prices. That would not be to anybody's advantage.

Will my hon. Friend confirm that, subject to satisfactory feasibility studies, the Government will look favourably upon the construction of a cross-Channel gas pipeline link?



asked the Secretary of State for Energy when he now expects that the United Kingdom will be a net exporter of oil.

On present prospects, the future rate of the build-up of North Sea oil production is expected to result in net self-sufficiency some time during 1980.

Surely the Minister could be more precise as to exactly when next year we are likely to be self-sufficient? Can he at least assure the House that when we are self-sufficient we shall keep enough oil for our own use and needs before we start exporting it elsewhere?

On the first point, it is extremely difficult to forecast exactly when we shall be self-sufficient, but it is expected to be during the second half of 1980. It is difficult to give the over-the-year position. On the second point, I confirm to the hon. and learned Gentleman that we shall do as he suggests.

While welcoming the coming increase in oil supplies, may I ask my hon. Friend nevertheless to look at the serious loss of exchange from which we are suffering because too much oil is being refined in Rotterdam while our refinery industry is working below capacity, with oil then being reimported into this country at the spot market prices?

My hon. Friend will appreciate that we have frequent consultations with the oil companies on the subject. We do our utmost to ensure that the assurances given by our predecessor are adhered to in this way.

Mining Industry (New Entrants)


asked the Secretary of State for Energy what is his estimate of the number of new entrants into the mining industry over the next 10 years which will be needed under the requirements of EEC Document 7855/9.

This is a matter for the National Coal Board and I am asking the chairman to write to the hon. Gentleman. However, it is encouraging to note that recruitment so far this year has more than made up for wastage, despite the extra outflow arising from the last stage in the progressive introduction of the early retirement scheme.

May I thank the Minister for that reply? May I ask him for another answer, as we discussed the documents at some length but no miners' Member of Parliament was called? Therefore, as I think that it is the duty of the Minister to reply, will he answer this question? Is the Minister aware—as I respectfully suggest—that Britain is the most efficient coal-producing country in the EEC if not in all Europe? Is the Minister aware that West Germany will not now be able to fulfil its obligations under the 7855/9 EEC document, as it cannot recruit miners into the West German pits?

Will the Minister give a reply to the House with regard to his letter on 4 October to Commissioner Brunner on his request that 250 million European units of account per year should be spent on coal-producing industries within the EEC? Will he say how much Britain will receive?

The hon. Gentleman is aware of the serious nature of the coal industry and the way in which it is regarded by hon. Members on both sides of the House. I am sure that he will be happy to know that I am very much aware of the comments he made in the first part of his question. It is exciting for our country to know—looking specifically at the recruitment question that was raised—that in the first 31 weeks of our fiscal year, in terms of the coal industry, we have seen an increase in recruitment of 42 per cent. Within that we have seen an increase in new adult recruitment of 77½ per cent.

Of course at this stage I cannot answer the hon. Gentleman's final question about the initiative of my right hon. Friend with Commissioner Brunner. When he receives a response he will be happy to come to the House with it.

If at the end of the day there are not enough entrants forthcoming, will my hon. Friend say what the position will be over the importation of coal into this country?

I thought that I drew the attention of the House to the excellent pattern of recruitment. To some extent that pattern has been going on for some years. It has been masked somewhat by the heavy wastage caused by the early retirement scheme. To that extent we now have a series of years when excellent recruitment happily continues.

Does the hon. Gentleman accept that to run down the coking coal industry would have grave implications and be against the policy of the EEC? Will he confirm that there are considerable subsidies for coking coal within the EEC? Will he give an assurance that he is not opposed in principle to such a subsidy? Will he confirm that if the present 2 million tonnes of coking-coal contracts were to be let either to North America or Australia, that would put at risk thousands of jobs in the industry and be a grave step, for it would undermine confidence in the coalmining industry?

I do not think that this is an appropriate time to go into considerable details on this point other than by accepting the points that the right hon. Gentleman makes on the importance, for our long-term energy and coal future, of the coking industry of this country. To the extent that there are current debates going on between two of our nationalised industries—the NCB and British Steel—it would be inappropriate at this time to make any further comment.

Is it not a fact that increased productivity recently in the mines has coincided with the reduction in the level of direct taxation? Will my hon. Friend welcome this evidence that the coal miners know what is good for them? Will he seek confirmation that my right hon, and learned Friend the Chancellor of the Exchequer intends to continue this process?

I am delighted that my hon. Friend drew attention to the increase in productivity in our coal areas. There has been a substantial increase of over 3 per cent, in the past few months. Obviously those of us who understand that initiative is rewarded, especially through reductions in taxation, are delighted to see such increased productivity.

The Minister did not answer on the question of principle. Will he give an assurance that the Government are not opposed in principle to granting a subsidy for coking coal, either through BSC, with a revision of its financial targets, or to the NCB?

The Government obviously have their minds open at all times to such matters. It would be completely improper, at a time when negotiations are going on between the National Coal Board and British Steel, for the Government to say any more on the matter.

Depletion Policy


asked the Secretary of State for Energy if he will make a statement on oil depletion policy.


asked the Secretary of State for Energy when he expects to make a statement on the Government's depletion policy.

We can expect to achieve net self-sufficiency in oil during the course of next year. Depletion policy is kept under continuing review in the light of production prospects thereafter and all other relevant factors. I hope we shall be able to make a statement to the House in due course.

I accept that the Varley assurances, given so recklessly by the previous Government, have allowed the oil companies an unnecessary bonanza in relation to oil production, but will the Minister agree that the formula he has just put forward to the House is meaningless as it stands, and that there is an urgent need for a depletion policy to be evolved to take care of the gap between supply and demand which will emerge in the early 1990s?

I accept what the hon. Gentleman said about the need for a depletion policy, but I remind him that any depletion policy announced by this Government must take into consideration the ever-changing position within the oil industry, both at home and abroad. It is, therefore, better that we should take some little time in ensuring that we evolve the proper depletion policy, rather than rushing into it.

I welcome the Government's intention to restrict the flaring off of North Sea gas which cannot be brought ashore, and believe that the flaring off of excess North Sea gas is wrong, but will the Minister inform the House in what circumstances, if any, he might allow such flaring off to take place in the future?

Each case will be considered individually and on its merits. Exceptions might be granted in cases where the amount of gas was so small that it would be totally uneconomic to gather it. That might be an instance in which flaring would be allowed.

Will the Minister accept that a vital element in discussing the depletion policy is the Government making up their minds on a gas-gathering system? When do they propose to do that?

The hon. Gentleman will be aware that the present study being carried out by the British Gas Corporation and Mobil is likely to be completed early in the new year. It is hoped that it will be available for consideration by about the end of March. Before that is received it would obviously be unwise to make any positive decisions.

Will the Minister of State modify the Varley proposals for depletion and also bear in mind a European requirement, provided that the Europeans are prepared to pay world prices?

We have undertaken to honour the Varley assurances for the period to which they apply. Any other consideration will be considered from time to time.

Nuclear Industry


asked the Secretary of State for Energy when he expects to be able to make a statement on the organisation of the nuclear industry and further nuclear orders.

We are reviewing our policy on the nuclear programme and my rt. hon. Friend hopes to make a statement in the course of the next few weeks.

Is my hon. Friend satisfied that the process for storing nuclear waste, known as vitrification, is now sufficiently well proven to enable the nuclear programme to go ahead without undue danger to the public?

I am satisfied that the present proposals and the present plans for storing waste work safely.

Vitrification is nearing the stage of commercial development and we hope that it will be in commercial operation in the late 1980s. In other countries, such as France, it is further advanced. It will be a very considerable advance on ways of storing waste. It will reduce the volume. It will very much reduce the dangers of movement and of leakage. I believe that altogether it will be a very considerable advance.

Does the Minister realise that the very last thing the industry wants is another period of uncertainty brought about by proposals for further reorganition? Will he further realise that what is far more important is to have a steady, orderly, programme that will fill the greatly unused capacity which exists at the present time?

I agree with the hon. Gentleman. There can be many opinions on the ways in which the industry ought to be organised. I do not quite agree with the hon. Gentleman that this is unimportant, but I agree with him to the extent that orders are the most important thing for the industry.

When considering the industry, will the Minister pay special attention to and learn the lessons from Dungeness B? Will he realise that when a nuclear station is started before the plans are completed, this adds to the cost and brings about a deterioration in labour relations?

My hon. Friend is quite right. The history of Dungeness B is a very sorry one indeed and has added considerably to the costs. That is all the more reason why the industry needs reorganisinn.

Is the hon. Gentleman aware that in a written answer of last week it was stated that energy policy will be discussed in Dublin? Can the hon. Gentleman tell us whether the discussion will be about nuclear policy? If so, will it be on a matter which has been referred to the House by the Scrutiny Committee but not yet debated?

I have already answered one question. I gather that there has been a good deal of speculation on what might be discussed, but I have no reason to think that nuclear policy will be discussed in Dublin.

When the Minister is considering the future nuclear programme, will he bear in mind that it is not only Dungeness B that has been a disaster? Of the other four AGR stations, two have produced no electricity and the other two are now, if they are running at all, running at much lower than their original design ratings, and will never get back to those ratings.

Yes, but even if we take account of delays in the course of construction, and the fact that stations have operated at below capacity, it is still the opinion of the CEGB that investment in the AGRs has been worth while, and that investment in nuclear industry will provide a cheap and competitive form of electricity.

House Of Commons

Procedural Motions


asked the Chancellor of the Duchy of Lancaster if he will make a statement concerning the form and nature of procedural motions which he will in future be placing before the House.

The Chancellor of the Duchy of Lancaster and Leader of the House of Commons
(Mr. Norman St. John-Stevas)

I shall continue to do all I can to ensure that such motions are framed in the form most generally convenient to the House.

I am grateful to the Chancellor of the Duchy of Lancaster for his correspondence on this matter. Will he confirm that where possible he will put down motions in his representative capacity as Leader of the House, rather than in his Government capacity as Chancellor of the Duchy of Lancaster? Will he tell the House whether he is proposing to appoint a Sessional Committee on Procedure this Session?

I am extremely grateful to the hon. Gentleman for his correspondence and for the helpful suggestions that he has put forward, some of which I have been able already to assure him I accept for the better convenience of the House. I hope to make progress in due course concerning the Sessional Committee on Procedure.

Will my right hon. Friend set up the new Sessional Committee as soon as possible, so that it can consider and take into account what recently happened with regard to the relationship of the House to the use of a tape machine? There is the question whether it is the tape machine of the House or of the BBC, as it was the other day, as against the usual reporting of the proceedings of the House, and which alternative is to be used in future.

I was present in the House when that important point was raised and I noted the remarks of Mr. Speaker. This would be a very suitable subject for the Sessional Committee on Procedure to consider urgently.

European Community Legislation


asked the Chancellor of the Duchy of Lancaster what proposals he intends to put before the House for the more effective scrutiny of EEC legislation.

A number of recommendations for improving the scrutiny of EEC legislation were contained in the First Report from the Select Committee on procedure, Session 1977–78. As I informed the House on 31 October, we shall in due course be bringing forward proposals on these and on other outstanding recommendations of the Procedure Committee.

Will the right hon. Gentleman give an assurance that we shall not have a repetition of the disgraceful performance a little while ago, when seven major documents on energy policy were supposed to be debated within 90 minutes, and most of that time was taken tip by the Secretary of State for Energy?

Will the right hon. Gentleman tell his right hon. Friend the Prime Minister that what we want here is not merely a scrutiny of the edicts of Brussels but the right to disown or disallow them?

It is always open to this House to express its views and its will. It has been the practice of this Government to bring EEC documents regularly before the House for discussion, and for my right hon. Friend the Lord Privy Seal to make regular statements. We shall continue with this practice.

Is my right hon. Friend aware that many of us who are pro-European are sick and tired of the stream of so-called harmonisation legislation which is coming from the EEC, and which is adversely affecting commerce and industry in this country? In the circumstances, does he not think that it is a priority that we should begin to examine this matter much more seriously?

I certainly attach great importance to making progress with the recommendations of the Procedure Committee. I agree with my hon. Friend that one should economise on harmonisation, otherwise one creates discord.

Does not the right hon. Gentleman agree that it is most desirable that this House should express its view and its will before the Government have committed us to something in the Council of Ministers which then is irreversible? Will he take steps to ensure that we get that matter right in the future?

This is the subject of a recommendation of the Procedure Committee. As I recall, the Committee concluded that the balance of advantage lay with the course that the hon. Gentleman suggests. However, this is something that we must examine extremely carefully and urgently.

Bottomley Report (Implementation)


asked the right hon. Member for Middlesbrough, as representing the House of Commons Commission, if he will make a further statement about progress towards the implementation of the recommendations contained in the Bottomley report on the administration of the House.

A new Whitley committee constitution has been agreed between staff and management. The grading review of all staff in the five Departments of the House is now in progress and should be completed before the House rises next summer. Progress is also being made on negotiating recognition agreements with the unions represented among the staff of the House, but the Commission is not yet ready to make a statement on that matter.

Is my right hon. Friend aware that the House will be grateful for that information about the implementation of his report? How long does he expect it to be before the review of the grading structures for staff in the House is actually implemented? Will he give an assurance that the present terms and conditions of members of staff will be safeguarded and that they will not be worse off as a result of this review?

The grading review is proceeding very satisfactorily and I hope that it will not be too long delayed. I have no reason to expect that any member of staff will suffer as a result of the grading review.

Is my right hon. Friend aware that there is some concern in the House about the time that is being taken to reach agreement on the new trade union recognition agreements? Will he look into the matter?

Yes. The unions have not all responded as yet. When they do, I hope to be in a position to make a further comment about the matter.



asked the right hon. Member for Middlesbrough, as representing the House of Commons Commission, what plans he has for the House of Commons catering.

The Commission has been considering whether it should make use of the powers conferred upon it by the House of Commons (Administration) Act 1978 in order to implement some of the recommendations contained in the Second Report of the Services Committee of Session 1978–79. A statement can be expected shortly.

Will my right hon. Friend ensure that, when any press reports are produced showing the catering subsidy in this House, the catering facilities for the press side are also included? Will he make sure that the press employers, who do not pay the full cost of catering facilities in this House for the Press lobby, are charged the full cost, including the cost of presently free stationery, free telephone usage and free use of premises, lighting, heating and so on? Will he also, as a step towards open government, make sure that private Dining Room bookings are published in future?

I take note of what my hon. Friend has to say, and I shall bring the matter to the attention of the Commission.

As my right hon. Friend the Chancellor of the Duchy seems to be incapable of providing good English apples, will the right hon. Gentleman do so?

Will the Commission's review of catering take two matters into consideration—namely, that Members and staff of these premises should pay no more than civil servants in First Division messes, or Army officers for that matter, and that the catering staff should receive no less than is received by those employed by the Crown? In order to achieve that, will my right hon. Friend bring the Catering Department under the Commission totally?

What my hon. Friend has said has been noted. A report will be made in due course.

May we have an assurance that the catering will be brought on to a profitable basis forthwith; and if not, why not?

I would prefer to answer that question some time later when I have more information.

Is my right hon. Friend aware that at a time when at the posh end of the Dining Rooms the meals are subsidised, so I am told, to the tune of as much as £5 per meal, the present Government are actually making propositions to all local education authorities for the withdrawal of subsidised meals for millions of school children? Will my right hon. Friend say that a Government acting in that manner are nothing short of hypocritical?

Central Office Of Information


asked the Paymaster General when last he met the head of the Central Office of Information.

When my right hon. Friend met the head of the COI, did he raise with him the COI's campaign to explain the link of Northern Ireland with the rest of the United Kingdom in the United States of America? Is my right hon. Friend satisfied that the mere churning out of press releases about the Province is the best way of explaining that historically?

Yes, Sir. I have discussed this matter. This is, in some measure, the responsibility of the information department of the Northern Ireland Office. But I am satisfied that the COI is alive to all the possibilities.

British Broadcasting Corporation


asked the Paymaster General what meetings he has had with representatives of the British Broadcasting Corporation.

At the invitation of the BBC I have on three occasions met a small number of BBC officials.

Does the Minister accept that on the recent exercise of BBC filming at Carrickmore there was a severe rush to judgment by this House? Will he assure the House that he is not in any way attempting to influence the BBC by exercising some sort of censorship, that the BBC remains free to film and report as it thinks fit, within the law and within the terms of reference that it is able to apply to programmes, and that the Government are not, either by raising issues in this place or through behind-the-scenes influence, attempting to censor an important medium?

This is a matter primarily for the governors of the BBC. At no time in any of my discussions did I raise, or was there raised with me, the question of the IRA "Panorama" programme. As far as I am concerned, no attempt has been made to censor the BBC.

Will my right hon. Friend, at the first available opportunity, cancel the BBC charter, put the wavelengths out to public tender and, at the same time, safeguard outside broadcasting and overseas broadcasting?

My hon. Friend has raised a fascinating and wide selection of issues, but they are matters for my right hon. Friend the Home Secretary.

In view, however, of the almost intimidating statement made by his right hon. Friend the Prime Minister the other week, does the right hon. Gentleman consider that last night's impressive showing of a play about Suez was a timely reminder of the importance of the independence of the BBC?

When the right hon. Gentleman meets the BBC, will he explain that the BBC is independent and that it should not be intimidated either by the comment by the Prime Minister about putting its house in order or by the more serious statement made last week by the Secretary of State for the Environment when he tried to suggest that the BBC should not display protests that were being made about the Government's public expenditure cuts?

In all my relations with the BBC I have never gained the impression that it is in any doubt as to the fact that within the law it is independent.

Is the Minister aware that when the Home Secretary gave the written statement on the increased television licence fee last week and refused to be questioned at the Dispatch Box, as he should have been, the result was that thousands of people rushed to Post Offices in order to buy the necessary stamp and to get their licences? In my constituency—I bet that it has been repeated in many others—many disappointed customers attempted to pay their television licence on that evening before the deadline but the Post Office ran out of stamps. Will the hon. Gentleman see to it that those disappointed people are able to purchase their licences at the old rate?

That is a question that must be addressed to my right hon. Friend the Home Secretary. It cannot possibly fall within the purview of the Government information service.

Political Honours

With permission, Mr. Speaker, I should like to make a statement about honours for political service.

Work in the service of political parties is at present the one major area of this country's life which is not recognised by the award of honours. I do not believe that this is right. I have accordingly recommended that the forthcoming New Year Honours List and subsequent lists should include a number of awards to members of the parties for their political and public services. Her Majesty the Queen has approved my recommendation.

I do not consider that such awards should be made only to members of the party in power. I have therefore invited the right hon. Gentlemen the Leader of the Opposition and the Leader of the Liberal Party to submit recommendations for political honours. I am also ready to receive in the same way recommendations from the leaders of the other minority parties.

All recommendations for honours for political and public services will be examined by the Political Honours Scrutiny Committee before they are submitted to the Queen for her approval.

I should also like to announce one other change in the role of the Political Honours Scrutiny Committee. I have asked the committee to examine any names that I add to the recommendations at CBE level and above which are submitted to me through the official honours machinery in respect of services in all fields other than that of political services. The committee has readily agreed to do so. This further extension of the committee's function will, I believe, help to maintain the integrity of the honours system.

I congratulate the Prime Minister on this innocent diversion from some of the more pressing matters of the day. It is, of course, a matter for the Prime Minister of the day, and it is her decision to take, as I properly recognise. As to her proposals, I think that there is general recognition of the value of the service that is given to the political parties by voluntary workers in all the parties, whoever they may be. The Prime Minister will remember that this system was discontinued in 1966 to some extent because of—I do not wish to use too strong a word—abuse of the system in the conferment of knighthoods and baronetcies by previous Tory Chief Whips. [HON. MEMBERS: "Oh."]. Having heard the enthusiasm with which this has been greeted by the aspirants on the Conservative Benches today, it is quite clear that there will be no lack of candidates in the future.

I think that the Prime Minister is moving in the wrong direction. As she is aware, I considered some partial changes, especially in the conferment of awards to civil servants, who are now remunerated on a very different basis from when these awards were first conferred, and also the relationship between the Civil Service, the Diplomatic Service and the Defence Service. Because there were more pressing problems, and for another reason, I decided then not to take any action on that limited aspect of the matter. I regret that the right hon. Lady is introducing this partial change—I shall, therefore, not be making any nominations—but I put it to her that now that she is making this change, which she is entitled to do, it should be coupled with a general review of the honours system as it now stands, in relation to both the distribution of awards between various groups and the method of selection.

I am glad that the right hon. Lady will submit certain names to the Political Honours Scrutiny Committee. In fact, that was done when the right hon. Member for Sidcup (Mr. Heath) reintroduced the system in 1970. I think that he did exactly the same thing, except for the CBEs. I seriously suggest—this was in my mind when I decided not to make partial changes—that we in this country are too status-conscious anyway. I think that there is a good case for making the conferment of awards more valuable, by making them more restrictive rather than easier to come by by generalising and extending them. That is the proposal that I make to the right hon. Lady.

I regret that the right hon. Gentleman will not make any recommendations. It is a pity to leave all these matters to Resignation Honours Lists. I think that it will help a number of people in the political parties who give absolutely vital service to democracy. It will help them feel that they, too, could be recommended for the regular honours lists. However, that is a matter for the right hon. Gentleman and his party.

I am aware that the right hon. Gentleman instituted some kind of inquiry into the numbers for Crown servants but, as he pointed out, he decided not to do anything further about it. I do not think that there is any need to have a general review of the honours system. I believe that by announcing that political honours will be reinstated and by making certain that they go to the Political Honours Scrutiny Committee we will protect the integrity of the system.

Is the right hon. Lady aware that in our view it does not make any sense at all to give honours for outstanding public services to every group in this country except servants to our democracy? For that reason, the change that she has announced is obviously sensible. Will she not close her mind to the possibility of a review, because surely these awards are meant to be for outstanding service and not routine place service of the kind that has been used in the past. Does she accept that Governments since 1966 have abused the system ostensibly by not having political honours but none the less finding other ways of distributing them? Surely that brings the system even more into disrepute. Will she give an undertaking that this will not be used to dangle knighthoods in front of her revolting Back Benchers?

I am grateful to the right hon. Gentleman for indicating that he will take part in the political honours system. I confirm that the name of anyone whom I recommend outside the political honours system for other services would have to go to the Scrutiny Committee, which I believe is absolutely right. However, I do not see any need to have a general review of the honours system. Of course, that does not preclude minor changes from time to time.

Does my right hon. Friend include the conferment of membership of the Privy Council among those honours of CBE status or greater? If so, and when they are not for ministerial office, could they be examined by the Political Honours Scrutiny Committee as well?

No. Membership of the Privy Council is not included. That is regarded as a wholly separate honour, which does not go before the Political Honours Scrutiny Committee. In view of its status, I think that that is right.

As a continuation of this counter-revolution process, and in response to pressure from her own Back Benchers, will the right hon. Lady consider reintroducing hereditary peerages?

I do not wholly exclude the possibility, but I think that it would have to be for something of very great distinction.

As a non-revolting Back Bencher, is my right hon. Friend aware that her half-considered promise about the creation of new hereditary peers will cause widespread satisfaction throughout the whole country, remembering that the English love a lord?

I thank the right hon. Lady for her offer to receive recommendations from other minority parties, but I inform her that I have no intention of taking up that offer, now or at any time in the future. In view of the strained loyalties among hon. Members on the Government Benches over the removal of transport for schoolchildren, industrial redundancies, the mortgage rate, and so on, would the Prime Minister tell the House whether this scheme has been cooked up as a bribe to keep those hon. Members in line?

Does not our democracy depend entirely upon those people who, regardless of party, work for the local parties in the constituencies? Does it not require voluntary effort, and is it not entirely constructive of my right hon. Friend to say that those who do such work should not be ineligible for benefits and honours?

I entirely accept my hon. Friend's view. Democracy could not work without the work that those people do, and I think, therefore, that they should be eligible for honours.

Is the Prime Minister aware that there is a widespread view that patronage is one of the great cancers of our society and that the granting of honours corrupts, or can corrupt, those who are given them as well as those who are tempted by the hope of receiving them or are actually receiving them? Is the right hon. Lady aware that there is also a widespread view that some dignified way of recognising public service would be better than a system that entrenches social divisions and makes this country the laughing stock of the rest of the world?

The right hon. Gentleman will not be surprised if I disagree with him. I believe that this is a dignified way of recognising a great deal of public service, and I hope that the safeguards that I have built in will preserve its integrity.

One recognises at least the consistency of the view of the right hon. Member for Bristol, South-East (Mr. Benn). Will my right hon. Friend give some attention to the real situation, which is that their Lordships, particularly hereditary peers, are far less likely to have political debts than are hon. Members of this House who may have to face reselection? On that basis, will my right hon. Friend give serious consideration—as she has just indicated she may—to reintroducing the hereditary principle?

I stand by the reply that I gave, but I do not rule out the possibility of hereditary peerages. However, I think that it would require some very great distinction and service to this country. Life peerages, of course, are also submitted to the Political Honours Scrutiny Committee.

Is the right hon. Lady aware that some of us think that political honours—in fact, all honours—are a load of rubbish, and that the only honour that some of us want is when the working-class people whom we represent say "He did the best job he could on our behalf"?

The fact remains that people of all parties have been very ready to receive honours, even though not given at the time of regular honours lists. I do not believe that the time has come to abolish them or to review the system. I propose to continue with the system with the modification I have announced today.

Would my right hon. Friend consider discussing with the Leader of the Opposition his reaction to her statement? I am certain that I am not unique, in that in Conservative constituencies many Conservative Members of Parliament are approached by members of Labour Party organisations asking for recognition for people who have given great service to the Labour Party in the constituency. They are just as worthy of recognition as is anybody else.

In so far as those requests are for political honours, of course, we can do nothing about them, but in so far as they are requests for recognition for very distinguished public, charitable, or other service, they will be considered in the usual way. I confirm that such requests do come from all sides of the House.

Council House Sales (Written Questions)

I wish to raise a point of order, Mr. Speaker, of which I have given you notice and which relates to a report in The Guardian newspaper this morning about the leakage of a Government document on the costs of the sale of council houses.

At the end of July I asked the Secretary of State for the Environment a series of written parliamentary questions about the costs arising from the Government's policy on the sale of council houses. There are two questions in particular to which I would draw attention. I asked the Secretary of State:
"if he will publish a table in the Official Report giving the estimated number of local authority tenants who have been tenants of any authority for a period of one year, two years, three years and for each year up to 20 years and for those who have been tenants for more than 20 years."
and also
"what information on the sale of council houses he collects from local authorities or other sources; and if he will make this available in the Library."
To both questions I received the following reply from the Minister for Housing and Construction:
"The information is not available in this form."—[Official Report, 26 July 1979; Vol. 971, c. 466.]
In The Guardian this morning it was reported that an official paper prepared by senior civil servants at the Department of the Environment showed that for every property sold by the end of the century losses could range from £8,535 and £2,735. The article stated that the report
"provides a profile of the council-house buyer."
The average council house buyer is shown not to be a young couple but a family man of 40 seeking a 25-year mortgage.

Perhaps the hon. Gentleman will now put a point of order that I can answer.

I was coming to the point, Mr. Speaker. The report also states that the paper showed that the Government could have provided immediate information on the financial aspects of council house sales.

My point of order is that the report to which The Guardian story refers was, I understand, written before the parliamentary questions that I put down were answered. The answers that I was given were at best inaccurate and, in my judgment, misleading. I ask, Mr. Speaker, whether it is in order for a Minister to answer in an inaccurate and misleading manner questions that are tabled.

Further to that point of order, Mr. Speaker. I am grateful to the hon. Member for Blackburn (Mr. Straw) for telephoning my office and telling me that he would raise this point of order, which enabled me to make some inquiries. It now appears that in respect of two of the questions the answers that I approved in writing were not those that subsequently appeared in Hansard. I apologise to the hon. Gentleman and to the House for the slip that occurred. With your permission, Mr. Speaker, I will reproduce the answers that I originally approved in writing and publish them in the Official Report.

Further to that point of order, Mr. Speaker. I do not think that we have ever heard a stranger reply than that. Admittedly the reply was honest, but for the Minister not to add anything beyond the fact that his own answer was altered is remarkable. Will he please explain what happened after he approved the answer?

What happened was exactly what I have told the House. The answers that I approved in writing were not those that subsequently appeared in Hansard, as a result of an administrative slip-up.

With respect, it is unheard of, when a Minister has approved an answer in writing, for it to appear in a different form. Was it the Editor of Hansard who altered it? If not, who did?

Order. Right hon. and hon. Members know that I was on my feet. I was simply asking for order. I call the Leader of the Opposition.

I am much obliged, Mr. Speaker. I do not wish to trespass on your generosity on a point of order. I think that you would agree that what we have heard from the Minister is without parallel in this House. As he intervened on a point of order, the Minister owes it to us to explain who altered his answer—without his authority—which then appeared in Hansard.

Further to that point of order, Mr. Speaker. I cannot add to what I have already said. The answers that I approved were approved in writing and, obviously as a result of an administrative error, the wrong answers were sent to the hon. Member. Obviously we shall make inquiries within our Department to see how that happened. I have apologised to the House and the hon. Member, and I cannot add to that.

Order. We have had points of order that I cannot answer, and points of order are always addressed to me. Because it was the Leader of the Opposition I allowed him to extend his point of order after the Minister's statement. I am trying to think what possible further points of order could come to me as a result of that.

Further to that point of order, Mr. Speaker. The issue, as I understand it, is that at the beginning of every Session the House passes a sessional order providing that if anyone tampers with witnesses to the House he is guilty of high crime and misdemeanour. That is a matter for the House. What the Minister said—it was quite unprecedented within the experience of most hon. Members here—is that a civil servant changed the answer that he had approved for delivery to the House, thus tampering with information that the House was entitled to receive. It is not for the Opposition to try to find out what goes on in the Department, but it is for the House, in the person of yourself, Mr. Speaker, to find out how it was that a civil servant interfered with a ministerial answer and denied the House the information that it should have had.

I undertake to make inquiries into this matter to see whether there is anything that I can do to help the House. I shall make a statement in the near future.

May I give notice that, subject to your statement, Mr. Speaker, I may wish to raise this matter as a breach of privilege?

Order. That is not necessary, and, indeed, it is irregular now. Under the rules of the House, of which the hon. Member for Nottingham, West (Mr. English) is a master, he knows that he should put that in writing.

See also column 1107

Business Of The House


That, at this day's sitting, the motions relating to Agriculture, Defence, Education, Science and Arts, Employment, Energy, Environment, Foreign Affairs, Home Affairs, Industry and Trade, Social Services, Transport, Treasury and Civil Service, Scottish Affairs and Welsh Affairs may be proceeded with though opposed, until half-past Eleven o'clock or for one and a half hours after they have been entered upon, whichever is the later, and that if proceedings on the motions have not been disposed of by that hour any amendments to the first motion which may have been selected by Mr. Speaker, may be moved, the questions thereon shall be put forthwith, and Mr. Speaker shall then proceed forthwith to put the Question upon the said motion and any Questions necessary to dispose of the other motions and of any amendments moved thereto which have been selected by him.—[Mr. Cope.]

Statutory Instruments, &C


That the Rate Rebate (Amendment) Order (Northern Ireland) 1979 (S.R. & O. (NI) 1979, No. 358) be referred to a Standing Committee on Statutory Instruments &c.—[Mr. Cope]

Orders Of The Day


[6TH ALLOTTED DAY]— considered

Mortgage Interest Rates

3.56 pm

I beg to move,

That this House recalls the statement in the Conservative election manifesto that "the prospect of very high mortgage rates deters some people from buying their homes and the reality can cause acute difficulties to those who have done so", notes that the manifesto attributed high mortgage rates to Government financial mismanagment, and condemns the present Government for applying policies which result in the mortgage rate being increased by the largest amount ever to the highest rate in history.
The facts of the situation are only too plain. On 1 January 1980—

Order. I see that a number of right hon. and hon. Members are standing while the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) is addressing the House. We can have only one hon. Member addressing the House at a time.

On 1 January 1980 mortgage rates will rise by 3·25 per cent., the highest increase ever, to 15 per cent., the highest rate ever. As a result, mortgage holders face the largest increase in repayments in real terms that owner-occupiers have ever been forced to endure.

For the £5,000 mortgage there will be a net increase after tax of £2.05 a week, for the £10,000 mortgage the increase will be £4.10 a week, and for the £15,000 mortgage it will be £6.15 a week. These figures are the levels paid after average tax relief. There will be some families—admittedly only a few—who are on low incomes and pay little tax and who are struggling to buy their houses who will find that the gross sums they are required to pay are very near to the net sums after tax.

In those circumstances it is no wonder that The Daily Telegraph, of all papers, says that the Secretary of State is beginning to show "considerable despair". There is no wonder either that the Financial Times, of all papers, says that the Chancellor of the Exchequer shows signs of being "considerably chastened". I am sure that the House needs no description of the anxieties and hardships that increases of this sort will cause.

I suspect that very few hon. Members on Conservative Benches, as well as on this side of the House, will share the view of the hon. Member for Lichfield and Tamworth (Mr. Heddle) who suggests that those who have complained about high mortgage rates causing hardship and anxieties are making a great deal of fuss about nothing. In fact, there will be hardship and there undoubtedly is anxiety, particularly among young couples buying or hoping to buy their first homes, and among those families with modest incomes who have managed their present repayments only after making sacrifices. Even now, these people are on the margins of being able to afford to buy their houses and not being able to afford it, and they will find that the new increases are literally beyond them.

The most significant indication of how bad things will become was found in The Times on Saturday. The Times is a paper which normally prides itself not only on its rigid financial probity but on its rigid respect for the law. Yet on 24 November one of its correspondents, talking about the prospects facing mortgage holders after 1 January, gave advice to those who would be in extremis. To them he said that they should first consider passing their mortgages on to their children instead of regarding that as unthinkable, as it was 10 or 15 years ago. Secondly, he suggested that endowment holders should ignore their legal obligations to complete repayments within a fixed term and hope that the law and the building societies would turn a blind eye because the situation had become so desperate. If The Times is simultaneously recommending such extraordinary financial expedient and such a remarkable flouting of the law, things have become extreme.

No one will doubt why this has occurred. There is no doubt either—and this has been reported in all but the most sycophantic of newspapers—that the increase on 1 January will have a con- siderable effect on the living standards of the people of this country. For families who are buying their houses from average and below average incomes, whatever benefit they might have expected from a reduction in income tax has been wiped out, to coin a phrase, at a stroke. In addition, they will have to pay higher prices because of increased VAT, higher national insurance contributions, higher prescription charges, higher prices for school meals and higher rates. It is now easy for owner-occupiers to count the real cost of Conservatism. I suspect that before long council tenants will be making the same gloomy calculations and coming to the same conclusion.

I doubt whether either group will need reminding where the responsibility and the blame lie. If they need a reminder, they can turn to the wit and wisdom of the Chancellor of the Exchequer, who said in May 1978 in one of those statements he issues from time to time:
"Signs for borrowers are ominous. The current lending rate of 8½ per cent. is under threat. There is talk of it going up by 1½ per cent."
Some of us will look back on those days as halcyon days. He went on to say, regarding it as an enormous and intolerable increase:
"Let us make sure that the blame is placed fairly and squarely where it should be placed."
He came to the simple conclusion that, however they wriggle and whatever the arguments, the blame should lie on the Government of the day. I am sure we all say "Amen" to that—[Interruption.] Does the Financial Secretary want to say something? [HON. MEMBERS: "He dare not."] There is no doubt that whatever owner-occupiers will suffer on 1 January is the direct result of the economic and financial policies that the Government have chosen to follow.

It is not simply monetarism that they choose to follow—to which all the blame has been attached by the right hon. and learned Member for Hexham (Mr. Rippon) who, in a most impressive letter to The Times, said that monetarism was at the root of our problems—but excessive monetarism. Not only is it excessive monetarism; it is incompetent monetarism. As every correspondent or commentator of any consequence has said over the last three weeks, the increase in the minimum lending rate to 17 per cent. and the consequent increases in other interest rates are the direct result of the Government's incompetent attempts to deflate the economy and to reduce direct taxation at the same time.

Those two aims are mutually incompatible. They have turned the Government's economic policy into a farce and even penalised those whom it was most anxious to assist. I offer two quotations to support my view. First, the Financial Times, on the general level of interest rates, said:
"The pains we have so far suffered have not been in the cause of deflation. They have only brought us to the point where deflation can begin. It is a forbidding thought."
I have no doubt that the whole country agrees.

The Daily Telegraph drew a different moral. Typically it was less interested in the high economic argument and took the low political point:
"Mrs. Thatcher aptly described the Conservatives as the home-owners party. Sustained high mortgage interest rates could seriously erode this natural affinity."
It could indeed.

While we are on the subject of blame, as were the Financial Times and The Daily Telegraph—blame for the uniquely high interest rates and blame for the suffering that house owners will face after 1 January—a word or two should be devoted to where the Secretary of State for the Environment believes that the blame should rest. Certainly he did not accept any responsibility on behalf of the Government. Nor did he blame the Government's predecessors, the Labour Government. He blamed the British people. He spoke of:
"The self-imposed tragedy of a nation which has abandoned any sense of reality about the awfulness of its position."
I am sorry that the British people are proving unworthy of the Conservative Government.

However, I congratulate the Secretary of State on not falling into another pitfall into which some of his less subtle colleagues might well have fallen—the temptation to blame the previous Labour Government, or the "Gillingham syndrome", that is, the idea that everything that has gone wrong since 3 May—

When the right hon. Gentleman last referred to me, I asked him a simple question—what cuts his party would have made had it been in government? The Financial Secretary made clear that heavy cuts would have had to be made.

What I wanted to ask the hon. Member for Gillingham (Mr. Burden), hoping that he would feel it necessary to comment on my reference, was that, while he no doubt believes that the increase in mortgage rates is the direct result of what the Labour Government did before 3 May, why was he negligent in not explaining that fact to the Prime Minister? In June and July the Prime Minister assiduously gave the impression, as I shall demonstrate shortly, that everything was all right, that mortgage rates would soon fall and that the building societies could postpone their natural and anticipated increase.

In a moment or two, I shall pursue the question of what happened in those difficult and painful days. There were strange examples of meetings that did not take place and advice that was or was not given by officials to the building societies. There was also the strange case of what it was the Secretary of State congratulated the building societies upon when he met them on the Monday after they decided not to increase their rates.

Before I turn to those matters, I shall turn to a more important question which deals with the future rather than the past—how long the punitive rates of mortgage repayments and interest are likely to last.

I do not propose to ask the Financial Secretary to give the House an indication of when he believes that the minimum lending rate is likely to fall. I agree that that would be a foolish question, so much so that I cannot understand why the Secretary of State for the Environment asked it on 21 June 1978. Another point that he made in that debate was that under the last Labour Government mortgage rates were on average 2 per cent, higher than they were under their Conservative predecessors. That is a crude calculation. However, I give the Secretary of State credit for making only slight exaggeration. I accept his figure at face value, that is, that the five years of Conservative rule, which preceded the five years under the Labour Government, produced mortgage rates of about 2 per cent. higher than under the Labour Government.

Does the Secretary of State believe that that pattern will persist? Does he believe that the average mortgage rate under the Conservative Government, a Government elected in May of this year and which might run till 1984, will maintain that pattern? Does he believe that the average rate will be lower or higher than under the Government's predecessors? If he believes that it will be higher, I hope that he will avoid the temptation to do what he did on Friday when, on behalf of the Government, he blamed the people. I suspect that the people will do the opposite. They will, quite rightly, blame the Government.

All the signs are that the high rate will persist. I regret that as a politician and mortgage holder, and I hope to be proved wrong. Nevertheless, all the evidence suggests that recent gloomy predictions that high mortgage rates will last are true. If the Secretary of State can assure us that those gloomy predictions are based on either false evidence or false conclusions, nobody in the House will be more pleased to accept that assurance than I.

I fear that there are three reasons why that assurance must and will be difficult to give. First, the minimum lending rate will persist at its historically high level as the Prime Minister persists with her monetary remedy to all our problems. As her monetary remedies continue to fail, there is no evidence that the Prime Minister is prepared to make judgments about our economic position according to fact rather than to her personal dogma. Indeed, the Prime Minister suffers from what is rightly described as the "certainty of the second rate". She will pursue her programme until it has been clear to everyone for some time that it is bound to fail. As she pursues it, MLR and mortgage interest rates will remain high.

Is the right hon. Gentleman opposed to high interest rates? If so, why did he remain in the Cabinet when MLR went up to 15 per cent?