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Commons Chamber

Volume 974: debated on Tuesday 27 November 1979

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House Of Commons

Tuesday 27 November 1979

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Private Business

University College London Bill Lords

Considered; to be read the Third time.

Oral Answers To Questions


Nuclear Installations


asked the Secretary of State for Defence what information he has as to how near the Russian border Western countries have sited their nuclear installations; and in which countries these are situated.

The hon. Gentleman cannot expect me to reveal operational details of this kind.

Does the right hon. Gentleman agree that the consternation being expressed about the 2,000 combat troops that the Soviet Union has in Cuba is being manufactured to jeopardise the SALT II agreement? Does he also agree that Lord Carrington's urging NATO to take a decision on medium-range missile replacement on 12 December will jeopardise the possibility of a SALT III agreement?

I do not agree with the hon. Gentleman. The presence of troops in Cuba is not a matter for Her Majesty's Government. The agreement that we hope to achieve on 12 December is in response to the increasing deployment of weapons by the Warsaw Pact countries. It is true that the ratification of SALT II is a preliminary to the beginning of SALT III. I do not think that the delay that is now occurring, however much we may regret it, will have the effect of stopping, preventing or delaying arms control negotiations, which we regard as an important part of the programme.

Will my right hon. Friend put in simple terms to the hon. Member for Bootle (Mr. Roberts) exactly what the balance of conventional forces is in Europe?

The House is aware that it is massively in favour of the Warsaw Pact countries.

Flight Safety


asked the Secretary of State for Defence what has been the total number of mid-air collisions in 1979; how this figure compares with the previous years; and if he will make a statement.

The Under-Secretary of State for Defence for the Royal Air Force
(Mr. Geoffrey Pattie)

There has been one mid-air collision involving RAF aircraft in 1979, which occurred near Wisbech. This was the first since 1976, when there were two; one involving two Harriers and the other two Gnat trainers. I shall make a full statement on the circumstances of the Wisbech accident at the earliest opportunity.

Does the Minister feel that he should reconsider his policy of supplying information? Does he accept that those on the ground at Wisbech have a right to know how the accident happened and how similar accidents might be averted? Above all, will the hon. Gentleman bear in mind that, to the people of Wisbech, 10 weeks to find the results and to report on the findings of a commission of inquiry seems a very long time?

The hon. Gentleman will be aware that the procedure in accidents of this sort is to establish a board of inquiry. The board was convened, and it has recently been reconvened to check certain detailed matters. It would be wrong for the people of Wisbech, or any other part of the United Kingdom, to expect such proceedings to be unnecessarily expedited. I think that the hon. Gentleman will be aware, if he is concerned about matters of flight safety, that I wrote to him on 24 October offering to arrange a special briefing for him. That offer is still open.

Harrier Av8b Aircraft


asked the Secretary of State for Defence what plans he has to buy American-built Harrier AV8B aircraft for the Royal Air Force.


asked the Secretary of State for Defence to what degree the United Kingdom is participating in the United States AV8B programme.

Under arrangements agreed between United States and United Kingdom industry, British Aerospace stands to gain 30 per cent. of the airframe work and Rolls-Royce 75 per cent. of the engine work if the United States AV8B programme goes ahead. Sixteen other United Kingdom companies are currently associated with it.

With the aim of retaining for the Royal Air Force until at least the end of the century the unique operational advantages conferred by the Harrier, an Air Staff requirement has been identified for an improved version of this aircraft offering increased manoeuvrability, range and payload. The British Aerospace Mk. 5 Harrier had been specifically designed to meet this requirement, and the AV8B is currently being evaluated as another potential means of doing so.

Is my hon. Friend aware that that answer will bring great consolation and gratification to all those who believe most firmly in this British aircraft, which is now being developed to the great advantage of the NATO Alliance?

Does my hon. Friend agree that a long-term development programme undertaken with the United States for this type of aircraft would provide a better long-term investment for this country and for the Alliance, provided that British Aerospace is given an adequate share of the work?

That is one of the factors that is currently being evaluated. It is important for my hon. Friend to appreciate that we should need to be satisfied that the operational advantages of the AV8B were in line with what the RAF requires.

Can my hon. Friend say when he expects the RAF flight test evaluation team to fly the AV8B in the United States?

My hon. Friend will be aware that the second and more advanced of the two AV8B prototypes crashed about 10 or 12 days ago, and that will necessarily postpone the evaluation. The evaluation is proceeding on the basis of existing data, and it is a matter of judgment whether this information will be adequate on which to base a decision.

Does the Minister agree that long-term weapons development programmes undertaken with the United States always end badly for British industry? We always find that our technology is exploited and that they get the money from the production. Would it not be very much better to concentrate and confine these activities to the United Kingdom wherever possible?

I think that the longer-term interests of the Harrier programme, to which my hon. Friend has alluded, must lie with the possible development of a supersonic Harrier capability. It must be an open question whether we would wish to develop that capability, whatever the outcome of the much shorter-term decision in regard to the Mark 5 versus the AV8B.

Raf Stanbridge, Bedfordshire


asked the Secretary of State for Defence if he will make a further statement on the future of RAF Stan-bridge, Bedfordshire.

A proposal was announced on 28 September that the various functions performed by RAF Stanbridge should be transferred to other communications centres by 1983. Consultation on the proposal has now been completed and I hope to announce a final decision very shortly.

Can my hon. Friend give a precise timetable of when individual civilian jobs at this station will disappear? When the RAF finally leaves Stanbridge, will the land and buildings be sold, leased or retained?

It is proposed to run down the installations progressively over the next three years. However, at this stage I am afraid that I cannot say when individual posts will go. A proportion is likely to remain until 1982. The technical site will be needed for its present use until 1982 or 1983. It is much too early to speculate on its usage after that, but I shall keep my hon. Friend informed.

Defence Codification Establishment


asked the Secretary of State for Defence if he will make a statement on the future of the Defence Codification Establishment, Mottingham, London SE9.

An announcement on the future of the DCA, Mottingham will be made as soon as a final decision has been taken about the MOD work to be dispersed to Glasgow.

Can my hon. Friend assure me that the cost savings of keeping the DCA where it is will be fully taken into account?

I can give that assurance to my hon. Friend. I hope that an announcement on these matters will be made before the end of the year.

Arms Control


asked the Secretary of State for Defence if he will seek to place on the agenda at the next meeting of NATO Defence Ministers the matter of the possible deployment of Pershing II missiles.

A meeting of NATO's Defence and Foreign Ministers to decide on the introduction of new long-range theatre nuclear forces and a parallel arms control approach to the Soviet Union is already planned for 12 December.

Will the right hon. Gentleman bear in mind that the speeches by President Brezhnev and Mr. Gromyko recently were no doubt seriously and sincerely meant? Rather than make a decision of this kind and run the disarmament talks in parallel, would it not be better to postpone this decision in order to give the Vienna talks the best possible hope of success, in accordance with the speeches that were made on our behalf at the United Nations' Special Session in New York?

As the hon. Gentleman knows, the talks in Vienna have been going on for a very long time. Naturally, we should like to see progress made there. So far it has been, and it is today, the view of the NATO Alliance that the modernisation programme has become necessary in view of what has occurred on the other side of the Iron Curtain. But that approach, which we shall consider next month, is, as the hon. Gentleman knows, coupled with an arms control approach. We shall consider both together because they are two sides of the same coin.

As nuclear confrontation and tension can lead to war, certainly since the Americans have their finger on the button, will the Government try to end the proliferation of nuclear weapons by postponing, for 12 months at least, the decision on the new generation of Pershing and cruise missiles?

It is not the intention of the NATO Alliance to increase the extent to which reliance for deterrence lies upon the nuclear deterrent itself. It is a proportion of our capability, and the modernisation programme is not intended to increase it as a proportion.

Would it not help arms control negotiations, and the possible consideration of the modernisation of theatre nuclear weapons, if the Soviet Union were to make a meaningful offer to halt production of the SS20 and Backfire bomber and to withdraw those already deployed against this country and Western Europe?

I am grateful for what the hon. Gentleman has said, and the Government agree with him.

Is not the present position that with the SS20 the Soviet Union could hit any place in Europe, and that we have no means of hitting back by tactical nuclear weapons? Therefore, is not the modernisation of our weapons essential, and would not that give us a leverage towards SALT III, which most people want?

It is true that the Soviet Union has that capability. We also have a capability to strike them with theatre nuclear forces, but the contrast is that on the Warsaw Pact side they are modern and new and increasing in scale, whereas in our case they are ageing and in need of replacement.

Does the right hon. Gentleman recognise that even many committed supporters of NATO feel that the Government's response to Mr. Brezhnev's statement has been brusque, negative and lacking in any positive initiative? Will he indicate, if not to the House today, very soon and before 12 December in a full debate in Government time, what the Government's attitude is to containing the nuclear arms race and to positive measures of arms control and disarmament?

I am grateful for what the right hon. Gentleman has said. As he knows, I have raised this matter before, and I have also talked the matter over with my right hon. Friend the Leader of the House who will, I am sure, note the right hon. Gentleman's request.

Low-Flying Training


asked the Secretary of State for Defence whether he is satisfied that the RAF's low-flying training programme treats the various rural districts of England and Wales with equal fairness.

The United Kingdom low-flying system was enlarged in January 1979 with the express purpose of dispersing the training more evenly throughout Great Britain. I am satisfied that the distribution of low-flying between the rural districts is as fair as possible.

Is my hon. Friend aware that, though this low-flying programme is essential as part of our defence capability, there is a feeling among many people, including some of my constituents, that the RAF tends to concentrate on certain rural areas? Despite what he has just said, will he look at this matter again to make sure that the burden is shared fairly?

I assure my hon. Friend that the burden is shared as equitably as possible. If he would like it, I shall write to him giving figures of such flights over different parts of the country.

Will the Minister ensure that in these low-flying rural exercises particular villages are not repeatedly treated as over-flying targets, to the concern and anxiety of the people living in them?

Villages are never treated as targets, no matter what people may claim. It is part of the low-flying procedure to avoid, wherever possible, residential and built-up areas, although, sadly, it is not possibe to avoid all dwellings. However, it is not the intention of the RAF to make villages into target areas.

Will my hon. Friend ensure that in regard to the recently adopted practice of exercises involving a much greater amount of low-flying—this affects particularly the West Country and my constituency of Honiton—notice of them is given some time beforehand, because that is greatly appreciated by the local residents, who then understand what is going on?

I am grateful to my hon. Friend for that suggestion. As he knows, the normal form of advance communication is to write to the local Members of Parliament for the constituencies concerned as well as to notify the local councils and, where appropriate, the local media.

Does the Minister accept that I have written to him about low-flying over urban areas, such as Oakworth and Haworth in my constituency? Does he further accept that such low-flying has caused a great deal of concern and surprised objection by residents, who find low-flying a frightening experience? Will the Minister confine low-flying to rural areas and exclude low-flying from urban areas?

I have, indeed, received a letter from the hon. Member for Keighley (Mr. Cryer) on this subject. The difficulty lies in defining the difference between a rural area and an urban one. There is obviously a line to be drawn between the two, and the areas referred to by the hon. Gentleman are right on the margin. Occasionally, aircraft do fly over his constituency.

Staff (Dispersal)


asked the Secretary of State for Defence when he expects his Department to occupy office accommodation in Glasgow in connection with the planned dispersal of Ministry of Defence jobs to that area.

Is the hon. Gentleman aware that office accommodation in the London area costs £13 per sq. ft., whereas it costs between £4 and £5 per sq. ft. in Scotland, and £3·50 per sq. ft. in Cumbernauld new town? Does he accept that job dispersal to Scotland makes economic sense, and that the sooner it happens the better?

The cost involved is one of the factors that were taken into account in the Government's decision, announced on 26 July this year, that about 2,000 jobs would be dispersed from London to Scotland. Of those, the Ministry of Defence contribution is 1,400 jobs.

Will my hon. Friend accept that, in the light of the experience of the previous Administration, which failed to disperse even one job to West Central Scotland, there is a natural concern that the forces of official prevarication and delay which afflicted the Government's predecessors will continue? Will my hon. Friend bring forward a detailed programme for the dispersal of jobs as soon as possible?

As I indicated in an earlier answer, we hope to come to a decision in the Ministry of Defence by the end of this year about the people who will be transferred. I accept what my hon. Friend says. The previous Government tended to be strong on plans but abysmally weak on action.

Does the Minister accept that his answer will be bitterly disappointing to all political parties in Scotland and that it is just not good enough to suggest that as a result of the dispersal programme no people will actually appear in Scotland for seven years? That is a deplorable state of affairs. Will the Minister please look at this again?

It is planned to move staff to St. Enoch's, but I understand that the buildings will not be available until the middle of 1986. There may well be an advance party, which would go two or three years earlier to make the necessary preparations.

Nato Ministers (Meetings)


asked the Secretary of State for Defence if he will make a statement on his meeting with NATO Ministers at the nuclear planning group in mid-November.


asked the Secretary of State for Defence if he will make a statement on discussions of medium-range nuclear missiles at the NATO talks, and on the British proposals made there.

At the meeting of the nuclear planning group on 13 and 14 November I reaffirmed the Government's strong support for a programme to modernise NATO's long-range theatre nuclear weapons and a parallel arms control approach to the Soviet Union. A copy of the communique issued following that meeting is in the Library.

What convincing reply can the Secretary of State give to the Dutch Government, who have argued a formidable and detailed case to the effect that the proposed missile deployment under discussion would be more, and not less, dangerous for Europe?

There has, of course, been considerable debate within the Alliance about this proposal. All sorts of problems in connection with it have been raised and discussed. It so happens that the Netherlands Government have perhaps as great a domestic difficulty with it as any country, but there have been problems for all countries. At the recent nuclear planning group meeting all these issues were fully debated and discussed. That was the purpose of the meeting. Its purpose was not to reach decisions but to go over the ground in preparation for that decision. The points made not only by the Netherlands Government but by other Governments were fully considered, and we will, of course, be returning to them next month.

Have not the Russians recently offered negotiations on missile reductions.? Will not the plan to have an increased number of missiles on British soil worsen the prospects for negotiation?

It is our opinion that the opposite is the case. The reason why this programme has been designed, discussed and, hopefully, decided upon, is that the increase in both the quantity and quality of nuclear missiles in the Soviet Union is of such a character that, in our opinion, it would be dangerous for us not to have adequate strength. We think that we must negotiate from a position of strength. If, as was said a few minutes ago, the Soviet Union were to decide to dismantle missiles and not produce any more, no doubt different attitudes would be taken by the Alliance.

Will my right hon. Friend confirm that during the last two years the Soviet Union has established, in Euro strategic nuclear weapons, a superiority of more than three to one? Does my right hon. Friend agree that even after the proposed theatre nuclear modernisation plans of NATO have been effected the Soviet Union will still enjoy a substantial superiority?

Yes, it certainly does seem to be the case that even after the modernisation programme that we are considering the Soviet Union will have a substantial preponderance of nuclear weapons. That is, of course, unless any other changes are made. As I said in reply to an earlier supplementary question, it is not our intention to increase the proportion of nuclear capability. What we are sure is right is that we should see that our nuclear capability is a genuine, effective and credible deterrent.

Did the Secretary of State see yesterday's leading article in The Times? Does he accept that that leader, expressed in very clear terms, represents a sensible policy for the future?

I cannot recall that leading article in detail, but I have set out the position of the Government.

Territorial Army Soldiers (Widow's Compensation)


asked the Secretary of State for Defence what compensation is payable to the next-of-kin of a territorial soldier killed on duty.

The Ministry of Defence would award an attributable pension, at current rates, of £803·81 to a widow. This would rise according to the number of children. An unmarried Reservist's estate would receive a gratuity of £535·90. From the Department of Health and Social Security a widow would receive a pension dependent upon her age and the number of her children. The present rates are £6·99 per week for a widow under 40 years of age and £10 per week for each child.

I am grateful for my hon. Friends' remarks, but does he agree that that there are considerable grounds for improvement for Territorial Army soldiers, on whom the country depends so much for the defence of the realm?

I know that my hon. Friend, as a lieutenant-colonel in the TA, is deeply involved in these matters. There has been concern amongst reservists for some time about this issue. I have had discussions with the council of the territorial auxiliary and voluntary reserve associations, and we are now conducting a complete fresh review of the reservist scheme. This will consider, among other things, whether reservists' pensions should be more closely comparable with those payable to injured regular Service men and their dependants. I heartily underline and reinforce what my hon. Friend has said about the importance of the Terriers.

Will the Minister tell me how many recommendations of the Shapland committee have been accepted by the Government and when they will be implemented? Does he accept that it is wrong that Territorial Army soldiers should, in any circumstances, suffer worse conditions than those applied to regular soldiers?

The position is the one that we inherited from our predecessors. The hon. Gentleman will know that there have been discussions on these matters for a considerable time. So far as the Shapland report is concerned, the main recommendations were accepted by the Government. My right hon. Friend made that clear early in August. The most important of those recommendations is an increase in training bounties. I am delighted to learn from members of the Territorial Army that these are already having a significant effect.



asked the Secretary of State for Defence if he will make a further statement on his proposals for the replacement of Polaris.

As I have stated on a number of occasions in the House, the Government are firmly committed to maintaining the effectiveness of our strategic nuclear deterrent.

Does the Secretary of State dispute the estimate of £3 billion to £4 billion—rather more than the cost of Concorde—that was supplied to the Expenditure Committee in its recent important study of the replacement cost of Polaris? If the right hon. Gentleman does not dispute that figure, does he believe that it makes economic sense for Britain, in its present condition, to invest on that scale in the production of a weapon for which there is no conceivable export market?

The Government are still considering the options for and possibilities of a successor system. It follows that no decision has been reached and that I can give no figure. Naturally, the costs and estimates of the various possibilities must be taken fully into account in coming to a conclusion. It is fair to say that, historically, the contribution that the nuclear deterrent has made to peace has represented a comparatively small proportion of our defence budget.

Does my right hon. Friend accept that many of us see a decision on the replacement of Polaris as an urgent responsibility for the Government? However, in view of the significant progress by the Soviet Union and Warsaw Pact countries in anti-submarine warfare and detection, will my right hon. Friend consider carefully the airborne and land-based systems as an alternative to the inordinately expensive Trident series? Will my right hon. Friend please ensure that the House has an opportunity to consider fully any decision before the Government announce it?

Our view is that the theatre nuclear forces in NATO represent the more immediate problem, which we are tackling. We thought that if we could we would take a decision on a successor system in the next few months. When we came into office we thought that a year or 18 months would be about right. We hope that we shall be able to reach a conclusion within the next few months. The question of a debate is not a matter for me, but I have no doubt that the Leader of the House will note the request, which I have made myself.

Has the Secretary of State's attention been drawn to the large majority decision taken by the British Council of Churches last week against this proposition? In view of the enormous expense involved, at a time when the Conservative Government are cutting back on social services, does such a decision make any sense at all?

I am aware of the view of the British Council of Churches. There are a number of views on this difficult and important matter. They all require to be fully considered, and we are considering them all. The Government's opinion is that the nuclear deterrent has contributed significantly to the peace that we have known for the last 30 years. Our determination is to try to do everything that we can to ensure that that continues. The right hon. Gentleman will know that this is an extremely serious matter. Of course we have given full weight to the various views that have been expressed.

Is my right hon. Friend aware of the opinion poll taken three weeks ago, which showed that 91 per cent. of the population of Britain was in favour of more money being spent on defence and on a change for Polaris? Is he also aware that 87 per cent. of Labour Party supporters in that poll supported that view?

I am aware of that opinion poll. I say to my hon. Friend and to the right hon. Member for Norwich, North (Mr. Ennals) that defence is not cheap. Indeed, it is expensive for all countries. The object of our defence policy is to secure our freedom and to protect the realm at the minimum cost. However, all those involved must play their due parts. Defence is expensive, but the nuclear element in it represents a surprisingly small proportion of total defence expenditure.

Does the Secretary of State recognise that, whatever views are held in the House, these are grave issues indeed? I welcome what he said about the need to debate these issues in due course.

I draw the right hon. Gentleman's attention to a report in The Times today, which refers to his minute of 21 June. Has he placed a copy of the minute in the Library of the House? What information has he so far released as a result of it? Will he undertake to think hard about this matter and release more information than in the past, taking into account the interests of security when they are involved, so that we can have a proper debate on this grave issue?

I do not wish to speculate on any press article. That would not be wise. I wish to pursue a policy of releasing as much information as possible, bearing in mind the interests of national security. We have been forthright in trying to lead a public debate and in making the facts and figures available wherever possible. However, we must bear in mind that it would be wrong to release information that might involve national security.

Rapier Missiles


asked the Secretary of State for Defence whether he will report on the results of his talks with the United States Government as to the use of British-made Rapier missiles to defend the United States Air Force airfields in Great Britain.

During my recent visit to the United States of America I discussed with the United States authorities many topics of mutual interest, including the possible purchase of the Rapier surface-to-air missile system by the United States Air Force for use at its bases in this country. I made clear my disapointment that it had not yet taken a decision to purchase Rapier. In an effort to make further progress I offered that if the USAF would procure Rapier and fund it operationally, we would examine constructively the possibility of the RAF manning the system, on repayment, at seven USAF bases in the United Kingdom. A detailed proposal, giving indicative costs, is being sent to the United States this week. I hope that this initiative will lead to a procurement decision.

Did my hon. Friend point out to the United States Air Force that the Soviet Air Force capability now enables it to attack airfields in this country on a scale which has not previously been possible? Did he point out the advantages to the United States Air Force of using RAF manpower rather than its own? Did he also express the opinion that the two-way street should be implemented and not just talked of by the Americans?

I am grateful to my hon. Friend for his comments. I drew the attention of the United States Air Force to the potential vulnerability of its bases in the United Kingdom. I hope that if this purchase proceeds more reality will be brought into the present imbalance in the two-way street.

Is an inter-Service quarrel in the United States preventing the use of British weapons on British soil?

Yes. The hon. Gentleman is obviously aware that the main problem is what is known in American circles as a "roles and missions" argument. I made the proposal in an attempt to assist in breaking the deadlock.

Garvie Island


asked the Secretary of State for Defence if he will review the arrangements to secure safety at the Gar-vie Island range in North-West Sutherland.

Various measures, some introduced only late last year, are in force which are designed to ensure the safe operation of the Garvie Island range. Operations cease if it is believed that the range is not clear.

Is the Minister aware that in the last two months there have been episodes which have alarmed fishermen from my constituency because shells have landed within 300 yards of their vessels? Is he aware that arrangements entered into last year appear not to be working as they might? Will he examine this urgently?

I am grateful to the hon. Gentleman for the letter that he sent me. I shall certainly investigate the matter. The last official complaint that we had about Garvie was in July 1977, and about the Cape Wrath gunnery range on 13 November last year. We shall, of course, look into all complaints.

Air Cadets


asked the Secretary of State for Defence how many air cadets have been trained to first solo proficiency standard in air cadet gliders during the last ten years.

I thank my hon Friend for that reply. I should like him to note that many of these boys were assessed as having an above-average aptitude for flying and are, therefore, a prime source of future RAF pilots. Much concern is felt among members of the RAF Voluntary Reserve, who trained these boys, because the principal airfield used by them—

Is my hon. Friend aware that the airfield which is being used by air cadets in the central gliding unit is better used for that purpose than for the training of dogs?

I note what my hon. Friend says, and I reassure him that the tremendous contribution made by the air cadets is well appreciated by the Royal Air Force. I shall examine the matter and see that the contribution is not further reduced.

While on the subject of flying training for air cadets, may I ask my hon. Friend to look into the operation of the flying scholarship scheme? The present allotment of 30 hours is five hours short of the time required for a private pilot's licence at the Civil Aviation Authority approved flying training schools.

Nuclear Capability


asked the Secretary of State for Defence what plans Her Majesty's Government have for enhancing the capability of Great Britain's independent nuclear deterrent prior to the scrapping of the V-bomber force.

As I explained earlier this afternoon, we are continuing the programme to maintain the effectiveness of the current Polaris force so that it remains a powerful deterrent to aggression into the 1990s.

Is my right hon. Friend aware that it would be a grave matter if the Government were to go ahead with the Labour Government's plans to scrap half of Britain's strategic nuclear capability in 1982 with the standing down of the V-bomber force? The Soviet Union has more than trebled her capability in the past three years. Will my right hon. Friend consider continuing the life of V-bombers as cruise missile carriers? The United States are doing that with the B-52s, which are of similar vintage.

We have the whole of the strategic system in mind at present, and that includes the continuation of the present system into the 1990s as well as consideration of the successor system. We have in mind all the considerations that my hon. Friend has raised.

Does the Secretary of State agree that the Conservative Government have embarked upon an arms race, and that the proposals that are being put toward this afternoon are to satisfy the whipping boys on the Conservative Back Benches? Does he further agree that it is all being done at the expense of schools, hospitals, and so on?

The hon. Gentlemean presents a grotesque picture of the facts. The arms race that caused us to think about new policies was started on the other side of the Iron Curtain with a massive re-organisation programme that has gone on for 10 years. It has forced us to take decisions that we would much rather not have to take.

Will my right hon. Friend confirm that it would be inadvisable to consider phasing out the V-bomber force at a time when Trident is being imported from America at great cost to replace Polaris? Will he assure the House that the V-bomber force has an interim role in carrying the cruise missile?

Those are all aspects of the matters that are in our minds at present. The V-bombers are undoubtedly old and there is doubt about how long they will last. We are considering the possibility of other air-launched cruise missiles. That is the assurance that I give my hon. Friend.

How independent is the independent nuclear deterrent about which the hon. Member for Stretford (Mr. Churchill) asked?

The hon. Gentleman knows that it is assigned to NATO, but at the end of the day, in certain horrific circumstances, if we are threatened, and subject to the arrangements that have existed for a great many years, it is entirely within the capability of the Prime Minister and this country to take a decision. That has been so for a number of years.

Anti-Surface Ship Missile


asked the Secretary of State for Defence what progress has been made on the anti-surface ship missile project; and if he will make a statement.

Following initial studies, the United Kingdom, together with a number of NATO Allies, is studying proposals put forward by industry for the development of a family of anti-ship missiles for the 1990's.

Is not there a little more to it than that? Is it not the case that those studies were extremely promising and were initially conducted on a trinational basis amongst ourselves, the French and the Germans, with the United States having a 2½ per cent. interest? Are not the United States approaching France and Germany to try to get a co-operative development on those lines, and not including the United Kingdom? Does my hon. Friend agree that that is a classic example—[Interruption.] Hon. Gentlemen should listen. This is important.

Is it not a classic example of the United States filching our technological inventiveness to feed its own military industrial complex and making us pay for it?

Although the United States were a full participant in the feasibility studies, they volunteered to accept a lesser status on the commencement of the more detailed stage of the project. That proposal is actively under consideration at present with our NATO colleagues.

Why do we need anti-surface ship missiles and theatre weapons if the Minister believes that our independent nuclear deterrent has deterred invasion since the war and will continue to do so? Why do we need these other weapons that are designed to be thrown around the theatre of Europe if there is an invasion?

Anti-surface ship missiles do not in any way replace the strategic deterrent. They are tactical missiles to deal with the growing surface fleet of the Soviet Union and Warsaw Pact. At present that fleet outnumbers the NATO fleet in the East Atlantic by a ratio of 1½: 1.

Prime Minister (Engagements)


asked the Prime Minister, if she will list her engagements for Tuesday 27 November.

This morning I had meetings with representatives of the Board of Deputies of British Jews and later with the president of the National Farmers Union. In addition to my duties in this House, I shall be having further meetings with ministerial colleagues and others, including one with the Moderator of the General Assembly of the Church of Scotland. This evening I hope to have an audience of Her Majesty The Queen.

Before the Prime Minister departs to meet the Moderator will she take the opportunity, which will be the last before she departs for Dublin, to place on the record of this House the minimum shift in Britain's budget contribution that she will accept? Is she aware that every cow in the Common Market enjoys a subsidy of £100 per annum, much of it provided by the British taxpayer? Is she also aware that tomorrow, on the eve of her departure, there will be a demonstration against her expenditure cuts? It will be insupportable if she fails to obtain a cut in our subsidy to farmers in France and Germany while enthusiastically cutting social services in Britain.

I am grateful to have support from both sides of the House for the task that faces us in Dublin. As the hon. Gentleman knows, if there had been greater public expenditure cuts we should have had to borrow less and the interest rate would have been lower. If the public expenditure plans of the Labour Government were put into effect, the interest rates would be infinitely worse and the prospects dim.

When she is in Dublin, will my right hon. Friend bear in mind the anger of those who are suffering losses on their lamb production as a result of the French ban, and are facing losses on their apples? The French are flooding our markets with about 300,000 tonnes of apples this season. If necessary, will she gently remind our partners that membership of the Community is subject to the continuing assent of Parliament?

There are two big problems, one of which, the budget, we shall tackle at Dublin. I know the resentment felt by most people over the fact that despite being one of the poorer members of the Community we have to pay a large amount to the Common Market. There is also the long-term problem of the common agricultural policy. That, too, I am afraid, will take a long time to solve.

When the right hon. Lady meets the National Farmers Union, will she ask if it agrees with the estimate of the National Farmers Union of Scotland that her savage cuts in rural transport will cost a rural worker with two children at school £270 per annum?

I have received congratulatory letters on what we have managed to do for hill farming in the latest subsidies, and I have not received many complaints.

Will the right hon. Lady take time off today to speak to the Secretary of State for Northern Ireland about the serious attacks in the Province yesterday, when 30 bombs exploded and there was a wave of violence throughout 12 towns and villages? Will she see to it that rigorous steps are taken to seal the border so that explosives cannot be brought in from the South of Ireland? Will she also take time today to get in touch with the Palace and convey to Her Majesty The Queen the thanks and gratitude of the people of Northern Ireland and the troops there for the visit of the Prince of Wales last week?

I am grateful to the hon. Gentleman for his last remark and I will, of course, convey it to the appropriate place. I need hardly say how disturbed we all are at the latest spate of mindless bombings in Northern Ireland. We will do everything possible to track down those who are responsible. The hon. Gentleman asks us to seal the border. If that were possible we would have a go. However, I do not think that it is possible to do that. That opinion has been held by nearly every Secretary of State for Northern Ireland and for Defence.

Liverpool, Scotland Exchange


asked the Prime Minister if she will pay an official visit to Liverpool, Scotland Exchange.

The right hon. Lady will be aware of the effect of the Government's policies on unemployment in Liverpool and the cuts in public expenditure which affect school children, the disabled, the sick and the aged. Will she be in a position to accept a petition signed by nearly 100,000 people protesting against the proposed closure of the Royal Liverpool children's hospital? I assure the Prime Minister that if she visits Liverpool she will receive a hot reception.

Many of us are aware that Liverpool has serious and grievous problems on a bigger scale than some of the other large cities. The hon Gentleman referred to particular public expenditure cuts. None of us wishes to make cuts in public expenditure, but we are up against the reality that no Government can urge a nation to live beyond its means and expect to command respect either at home or abroad.

Prime Minister (Engagements)


asked the Prime Minister if she will state her official duties for 27 November.

Will the Prime Minister consider whether it is in the interest of the British people for us to press on 12 December for cruise missiles to be sited on British soil? In particular, will control over launching lie with the Pentagon, with the inevitable retaliation against this country?

I am certain that it is in the interests of our people to be armed so that we can deter any potential threat from any aggressor. As my right hon. Friend the Secretary of State for Defence said earlier, the need now is for us to modernise to equal the extensive modernisation and supply that has been made by the Soviet Union.

Will my right hon. Friend take time today to consider the serious position of Charing Cross hospital? The lives of patients are at stake because of unofficial industrial action. Will she consult her right hon. Friends the Secretaries of State for Employment and for Social Services to see whether, in consultation with the unions, a non-strike agreement or clause can be contained in conditions of employment for hospital employees in order to avert this sort of action?

We were all appalled and repelled by the scenes outside Charing Cross hospital yesterday. We are repelled by the difficulty that the hospital is experiencing in receiving proper oil supplies. The scenes that we saw seem to show a callous disregard for common humanity. They reflected unjustly on trade unionism, because most trade unionists were just as horrified as others by the scenes. This morning my right hon. Friend the Secretary of State for Social Services made clear that if the siege of oil is not lifted we shall be prepared to authorise whatever action is necessary to ensure that the supplies of oil get through.

Will the Prime Minister take time to meet the Federation of Old Age Pensioners to explain to it, so that it can explain to its members, that while she and the Government—unlike the Labour Government—cannot take time to phase out television licences she can give £60 million to private education?

The hon. Gentleman is very much aware of the problems of having special rates for television licences for one group of the community. It is especially difficult when many families have a parent living with them. My right hon. Friend the Home Secretary had to announce an increase in the television licence. The increase was inevitable if we are to receive the sort of service that people expect from the BBC.

Will my right hon. Friend take time today to look at the many interesting photographs in the press of the Opposition Front Bench spokesman the hon. Member for Nuneaton (Mr. Huckfield)? Will she seek to discover whether the activities of the hon. Gentleman represent the official policy of the Opposition?

Fortunately, I am not responsible for the official policy of the Opposition—thank goodness.—[Hors. MEMBERS: "Who is?"] As far as British Leyland is concerned, the previous Government appointed an extremely good manager in Sir Michael Edwardes. We have backed him, and we must continue to leave the resolution of the problem to him.

Will the Prime Minister take time today to discuss with the Secretary of State for Industry the fact that he misled the House yesterday about the number of times that he had met the chairman of Rolls-Royce in the absence of the chairman of the NEB? He also misled the House in another respect, because the whole board of Rolls-Royce had not threatened to resign—it was only the chairman.

I never knew my right hon. Friend the Secretary of State for Industry to mislead anybody—[Interruption.] If the hon. Gentleman has a particular point, perhaps he will take it up with my right hon. Friend.


asked the Prime Minister if she will list her official engagements for Tuesday 27 November.

Will the right hon. Lady take time to explain why it is that when the West has 11,000 targetable nuclear warheads against the Warsaw Pacts's 5,000—[Interruption.]

I hope that Conservative Members are not showing their ignorance of the facts. Why, when the West has an overwhelming superiority in the strategic sphere, does the Prime Minister believe that we should seek overwhelming superiority in theatre weapons? Will she make clear—as she did not in her reply to my hon. Friend the Member for Salford, East (Mr. Allaun)—whether she will have control over those weapons and be able to determine whether or not they are used? Or will that control be in the hands of the President of the United States?

The hon. Gentleman knows that to be successful with a policy of deterrence it is necessary to deter at each and every level. I can hardly accept that the West has overwhelming superiority against the Soviet Union—I do not believe that it has. We have to have sufficient power through our Allies to deter at the strategic level and sufficient power among ourselves to deter at the theatre nuclear force level. That still leaves the vexed question of conventional forces, in which the Warsaw Pact countries have a great superiority.

Does not the right hon. Lady agree that there will be a long period between the taking of the decision on 12 December and the moment when the cruise missiles can be added to the armament of the West? Therefore, while we should not allow the Soviet Union to determine our decision on 12 December, which must be what we regard to be in our interest, we should use the intervening period to negotiate seriously with the Soviet Union. We should negotiate both on Mr. Brezhnev's at present inadequate offer and on the possibility of the withdrawal of the SS20s, which would remove a large threat from Europe.

As the right hon. Gentleman knows, we are always prepared seriously to try to negotiate genuine disarmament. As he in particular will be aware, the latest weapons, such as the SS20s, are already being provided to the Warsaw Pact forces. We have no modern reply. Yes, we must have the modernisation of the theatre nuclear forces. Yes, we are always prepared genuinely to negotiate on disarmament. But I had understood that the Soviet Union was somewhat reluctant to negotiate on disarmament at the theatre nuclear force level if we put in sufficient to deter. But we are ready to try.

Council House Sales (Written Questions)

With permission, Mr. Speaker, I should like to make a statement arising from the point of order raised yesterday by the hon. Member for Blackburn (Mr. Straw) and the information given to the House by my hon. Friend the Minister for Housing and Construction.

My hon. Friend told the House that two answers provided to the hon. Gentleman on 26 July, which appeared in the Official Report, were not those he had originally approved. At the time he was speaking, my hon. Friend had not had a chance to establish how this had occurred.

The facts are as follows. In the last two days before the recess the parliamentary section of my Department, which also serves the Department of Transport, processed 140 answers to parliamentary questions. Amongst these were 11 from the hon. Member for Blackburn. For two of these the answer was the same and in the normal way they were grouped. I should explain to the House that in order to ensure that grouped questions are kept together in all stages of departmental processing the folders are physically tied together. After my hon. Friend had approved the answers to the hon. Member for Blackburn, instead of the two folders for the two questions rightly grouped together being so linked, two other questions, for which he had approved different and individual answers, were also accidentally tied to these folders and were therefore wrongly grouped with them.

As a result of this error the four questions incorrectly received the same single answer as shown in the Official Report for 26 July.

This was undoubtedly a clerical error by my Department and I apologise for it. It was not until yesterday, when the hon. Member for Blackburn informed my hon. Friend that he proposed to raise a point of order, that the error was detected. My hon. Friend thought it right immediately to apologise to the House even though in the time available he had not been able to establish how the mistake occurred.

There is, of course, no question of any blame attaching to the Officers of this House.

I have asked why the orginal error was not revealed by the normal process of checking against Hansard the answer approved by Ministers. I am told that Hansard was delayed at the time. Hansard was not available in my Department until early in August and I believe that the reason why the error was not discovered then was that the House had then risen, we were in the leave period and, in all probability, the group of four questions were tied together and checked only to ensure that the top copy conformed with the Hansard record.

The process of checking is exactly that carried out under the previous Government and there have been no changes in the resources devoted to this important process. However, to ensure that the mistake does not occur again I have given instructions that where a group of questions is checked, each question will be checked individually. I have further asked that all groups of questions answered since May are rechecked.

With your permission, Mr. Speaker, copies of the answers that my hon. Friend had intended to give will be circulated in the Official Report later today.

Order. It was the hon. Member for Blackburn (Mr. Straw) who raised the matter yesterday.

While accepting that reply, may I ask the Secretary of State four groups of questions? First, why was the mistake not discovered before? On 21 August I wrote a long letter to the Secretary of State, together with a memorandum, at paragraph 27 of which I specifically drew attention to the inadequacy of the replies given by his hon. Friend. Did the right hon. Gentleman fail to read the letter? Did his officials fail to take account of the points that I made in that memorandum?

Secondly, is the Secretary of State aware that his statement today clears up the mystery surrounding only one—not two—of the questions to which I referred in the House yesterday on a point of order. I asked 11 questions. Yesterday I referred to two of them. However, I understand that the inaccurate answers to which his hon. Friend referred answered one of the questions that I raised yesterday, and another one. There is still outstanding the answer to the question related to
"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. "
My point yesterday, which still stands, was that the document leaked in The Guardian, which was available in the Department before July, must have contained information that the Minister denied existed. [Interruption.]

Order. The House must give the hon. Member a chance. The hon. Member's questions must obviously relate to the statement that was made today about the mistake in answering.

Is the Minister aware that he answered only one of my points and not the other, and that in respect of the other questions to which I referred, information was available in the Department that I was not given?

Thirdly, is the Minister aware that there was another inaccurate answer that I was given that day? I asked
"what calculations his Department has made as to the financial consequences of the sale of council houses; and if he will make these available in the Library."
The Minister for Housing and Construction replied:
"I must ask the hon. Member to await information in the next public expenditure White Paper."—[Official Report, 26 July 1979; Vol. 971, cc. 465–66.]
That White Paper was published earlier this month, and contains not one word, not one line, relating to the financial consequences of the sale of council houses.

Fourthly, to clear up the mystery altogether, will the right hon. Gentleman now agree to place in the Library of the House the full document that was leaked and published yesterday in The Guardian? Does he agree that only when that happens will hon. Members be able to judge for themselves whether, in respect of each of the 11 answers that I was given in July by his hon. Friend, he was forthcoming and accurate when he denied that information was available in his Department?

I have made inquiries about the document that apparently was leaked to The Guardian and upon which so many of the hon. Gentlemen's questions are based. My difficulty is this: it was a document that was made available, I understand, among the papers of the previous Government and was therefore not available to Ministers in my Department.

However, in answer to the substantive part of the hon. Gentlemen's continued interest in the question of the financing of council house sales, I have given an undertaking that I will produce a range of assessments upon which the House can make its own judgment in expectation of the parliamentary processes associated with the housing Bill which will be introduced later, before Christmas.

I am sure that the House is grateful to the Secretary of State for having come to us so quickly with the second statement. Of course I am sure that the House accepts his version of events. However, he will equally understand that, at least in the metaphorical sense, some of the things that he says are incredible. I press him particularly on the question asked by my hon. Friend the Member for Blackburn (Mr. Straw) that he did not answer. As the erroneous answer was given in July, and as a letter complaining about that answer was received in his Department in late August, why did the receipt of that letter—which referred specifically to the answer that we now know to be wrong—not trigger off the checking that should have been done before?

Secondly, I refer to the question of my hon. Friend the Member for Blackburn about the substance of the matter—that is, the figures. If the Secretary of State wishes to publish the paper to which he referred, I have the authority of the previous Prime Minister for saying that we will not provide any let or hindrance, why that should not be done. Therefore, I hope that the Secretary of State will respond to that gesture of good will at once by telling us here and now that he is prepared to publish that paper and put it in the Library of the House.

During the debate on mortgage interest rates yesterday the right hon. Gentleman told me that all these figures are available and were available to the previous Administration and to him. If the right hon. Gentleman is genuinely in the mood of penitence, I suggest that he makes amends and shows good faith by producing the figures at once and putting them in the Library tomorrow.

I have tried to explain to the House—let me go through the argument again—the answer to the first point put by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), whose kind and courteous words I appreciate. The letter from the hon. Member for Blackburn, which pursued his own interests in the subject at length and in detail, was answered in terms of the generality of the interest that he has shown. It has always been my intention to make available the full detail of this complex subject in time for the House to consider the issues involved. However, we did not check and recheck the specific questions of the four grouped answers. I have apologised to the House for that. I am sorry that it did not happen, and I apologise again to the hon. Member for Blackburn.

Returning to the interesting offer of the right hon. Member for Sparkbrook that we should be free to publish the document that was apparently available to the previous Administration, do I take it that he is making it possible for us to publish the round of advice on the subject of rents that was available to the Opposition at that time? If Opposition Members want to refresh their memories about the document they are free to come to my Department to do so. Indeed, I believe that I am right in saying that one of the former Ministers in the previous Administration has already asked to visit my Department and, of course, in the normal way, we have agreed he should have access to the documents on which he was working. To that extent the Opposition are free to see the documents that are there.

The last question that the right hon. Gentleman put to me was broadly along the lines that if all these figures are available to the Department why are they not produced individually as specific questions are tabled? The answer is that I believe that it is right for the House, when looking at this matter, to have a total assessment of the figures and a range of options that the House will be able to consider. I must tell the House that the figures that we produce in this context will be a great deal more forthcoming and revealing than any figures produced by the Opposition when they considered the whole question of public sector rents.

Is my right hon. Friend aware that what he has told the House today sounds more like an innocent mistake than a national scandal? Could he give some indication of what extra cost is involved in the new checking process that he told us about?

I very much hope that the description of my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) will be felt to be reasonable in the circumstances. However, it is a mistake, and for that I am obviously responsible to the House. I believe that the additional checking that we shall introduce will be carried out within the existing establishment.

I am very interested to hear that this document was prepared during the time of my own Administration. As it apparently shows that the case that we made when in opposition is accurate—namely, that huge losses are incurred when council houses are sold—I am not at all sure whether it is proper to give the right hon. Gentleman permission to publish it. But certainly I think that we should examine this document, extract the basic facts and let us see who is correct.

The right hon. Gentleman will understand that on this matter the conclusion that one draws depends entirely upon the facts that are fed into the calculation. Opposition Members should see the calculations before they reach early judgments on the conclusions.

Order. I remind the House that we are asking questions on a statement that explains an error that was made clear due to the point of order yesterday. We are not going into the whole housing question now. Questions must be related to the statement.

Does the right hon. Gentleman really think it fair in the first instance to blame the string and then, in the second instance, not to blame the facts but the computer for what he puts into it?

Order. I owe the hon. Member for Bootle (Mr. Roberts) an apology. They are not all points of order—at least, not yet.

I would like your guidance, Mr. Speaker, on whether the question that I want to ask is in order or whether I need to raise it on a point of order. I have received an answer from the Department of the Environment—from Mr. Geoffrey Finsberg, the Under-Secretary of State—

Order. I remind the House that we never refer to each other by name. We are all, officially, honourable men.

The Under-Secretary of State for the Environment gave me an answer to a question which I know to be totally inaccurate. In fact, it is misleading me and the House. I want—

Order. I can help the hon. Gentleman. He is by no means the first to feel that an answer that he has received has misled him, but that is not a point of order for me. The contents of Ministers' statements are their own responsibility. All I have to do is to ensure that there is fair play. A misunderstanding was revealed yesterday, and it has been explained today.

Is the Secretary of State aware that I received a letter from his Department yesterday evening, which reads as follows:

"Dear Mr. Kaufman, An error has occurred in the written reply to your Question about the Home Ownership Group (Report) given by Mr. Heseltine on Thursday 15 November 1979. The answer should read ' non-civil servants' and not 'none-civil servants'. I apologise for this error and have informed the Official Reporter. Yours sincerely, Miss M. A. Chambers, Parliamentary Branch."
Anyone comparing that correction with the answer given by the right hon. Gentleman will see that the answer is seriously misleading because it implies, in the context in which it is given, that an inquiry that the right hon. Gentleman has set up costs no money at all, whereas the answer, as corrected, shows that that is not so. Therefore the answer is inaccurate and seriously misleading. If what—

Order. It may well be misleading, but that is not a point of order for me. Disagreements between both sides are settled on the Floor of the House. All I want is for the right hon. Gentleman to give me a point of order upon which I can give a ruling.

With respect, Mr. Speaker, I am not raising a point of order; I am asking the Secretary of State a question in connection with this letter, which has come from his office, about a misleading answer.

Order. That letter is not related to the statement that has been made today. I am sorry, but I am not prepared to allow the right hon. Gentleman to continue on that matter. He must table a question if he wants an answer to it. He must not pursue wider issues than those to which the statement referred.

On a point of order. Mr. Speaker. I certainly would not wish to question your ruling, but the fact is that the Secretary of State's statement dealt with the checking processes of his Department. I was about to ask him about the processes of checking in his Department consequent upon his statement and revealed by the letter that he has sent me. I submit that that would be a perfectly pertinent question.

The last part is definitely in order, because it relates to what the Minister said about the checking in his Department. I remind the House that I have a long list of right hon, and hon. Members who hope to catch my eye during the debate on transport.

May I put a question to the Secretary of State? Why did he not realise this error in the process of checking? Secondly, in consequence of the checking process, why did it take 10 days from the date of the answer to discover the error and put it right? Thirdly, why did the Secretary of State, having discovered the error in the course of the checking process, not himself write to correct it, rather than leave it to a junior official in his Department?

Under the previous Government, between November 1978 and March 1979 four such errors occurred in the administration of the Department of the Environment. It did not seem appropriate to me to raise what by any standards would be trivial changes, arising from what were clearly spelling mistakes. I am most grateful to the right hon. Gentleman for revealing that the checking system in my Department works.

Is the Secretary of State aware that following yesterday's exchanges many Back Benchers have become very concerned about the seriousness of the situation and the fact that there may well have been a policy decision on his part or that of his Ministers to alter these questions? That has serious and sinister undertones for the workings of the House. Will he accept that his statement today, part of which appears to be no more than a wriggle out of a situation, does nothing to assuage those fears? In fact it only points to sheer incompetence on the part of his Department. Is he aware that if that is so, I certainly would not want to buy a secondhand house from him?

The hon. Member will understand that it was my hon. Friend's intention to give a much fuller answer to the two questions that were grouped together. That was the intention behind the approval that he gave. The moment that my hon. Friend discovered, albeit late, that there had been a failure to communicate his intended answers, he came to the House at the earliest possible moment to apologise and to explain what had happened.

Will the Secretary of State bring the factual information on the sale of council houses to the House at the earliest possible opportunity, so that we may have adequate time to consider it before the debate on the housing Bill? Also, will he check the other parliamentary answers that have been given by his Department on the questions about available information, and particularly the reply that the Minister gave me on 14 November as to the lack of information on particular points? That information seems very unlikely to be unavailable, in the light of The Guardian article.

I have explained where The Guardian article originated. Of course I accept the hon. Member's suggestion, which coincides with my assurances to the House. I intend to provide a range of information upon which the House can reach judgment about the economics of council house sales.

On a point of order, Mr. Speaker. The Secretary of State said that an apology had been given. Yesterday his junior Minister quite gratuitously brought the officers of Hansard into this rather silly and rather sordid story. In fact, they had produced Hansard but the Government had not managed to print it. May we now have an apology for bringing them into this matter?

Order. That was made clear in the statement, and that was why I did not myself give a ruling that anyone in this House was concerned with the mistake in any way.

Purchase And Sale Of Dwellings (Adoption Of Model Rules)

3.57 pm

I beg to move,

That leave be given to bring in a Bill to provide model rules of procedure for the purchase and sale of dwellings.
The purchase or sale of a house is a very important transaction for a private person and in some cases it can result in uncertainty, and even misery and financial loss because the parties to the transaction are not sure how to conduct themselves in particular unforeseen circumstances.

In Kensington, which I have the honour to represent, there are many properties where the prices are now so high that the question of procedure on disposal of such properties can be very important. When things go wrong, the problems are sometimes extremely vexatious.

I would like to make clear that I am concerned here not with conveyancing but with the procedure in the stages of the transaction leading up to the point where the sale is made a binding agreement by the exchange of signed contracts. According to normal practice, at present a householder may choose to sell his house by auction, by tender, by private treaty or by some kind of conditional contract, including various kinds of option arrangements. I am not seeking to interfere with the freedom of the vendor to choose the most suitable way of disposing of his house.

The procedure most commonly adopted is selling through advertisements, either with or without the aid of estate agents, and many problems can arise because the parties are in genuine doubt about how to proceed or even what honour demands in certain circumstances.

Hon. Members have often drawn attention to the practice of gazumping, which from time to time can be a particular nuisance. But it is not only the seller who sometimes is tempted to behave in a way that is frowned upon by public opinion. A buyer of a house, too, may be inclined to act in a way which causes distress or concern. Often the parties do not know the best thing to do because the purchase and the sale of a house is not something that a private citizen undertakes so often that he becomes familiar with the conventional routine.

Therefore, my object is to devise a form of model rules after consultation with professional bodies and others concerned. Once the vendor had decided to adopt these rules, both parties would be guided as to the way to act in cases of difficulty and the rules would be binding on the parties until the contract was signed.

I hope to do this in a workmanlike way: I hope that the model rules will establish themselves as a normal routine in the purchase and sale of a house. As I have already emphasised, I am not seeking to reduce the vendor's freedom to decide on his method of sale; but if the adoption of the "model rules" procedure became a popular and normal practice, vendors might be well advised to choose to sell their properties according to those rules because in that way they would have a more satisfactory transaction and probably would also obtain a better price.

I am well aware of the pitfalls in seeking to legislate in this area, particularly as set out in the Law Commission's working paper No. 51 on "Subject to Contract" agreements. However, I hope that I can produce a useful Bill which will provide hon. Members who are concerned about the present state of affairs with a series of realistic talking points and which may, in due course, lead to legislation which the House could approve. It is not through over-confidence but rather through diffidence that I am not asking other hon. Members at this stage to commit themselves in support of my Bill. I hope, however, that I may depend upon their co-operation and I value the assurances that I have already received in that respect. I hope that at this point the House will give me leave to introduce my Bill.

Question put and agreed to.

Bill ordered to be brought in by Sir Brandon Rhys Williams.

Purchase And Sale Of Dwellings (Adoption Of Model Rules)

Sir Brandon Rhys Williams accordingly presented a Bill to provide model rules of procedure for the purchase and sale of dwellings: And the same was read the First time; and ordered to be read a Second time upon Friday 7 March and to be printed. [Bill 85.]

Orders Of The Day

Transport Bill

Order for Second Reading read.

4.2 pm

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

Order. I am sorry to interrupt the Minister, but it is the wish of the House that I should announce at the beginning of a Second Reading debate whether I intend to apply to speeches the 10 minutes rule between 7 o'clock and 10 minutes to nine. Although it may not at the moment appear, from the number of hon. Members present, that any difficulty will arise this evening, there will be difficulty, and I therefore intend to apply that rule between the times I have stated unless I feel, when the time comes, that I can allow speeches to run a little longer.

This Bill comes at an important point in the development of transport in this country. The fact is that policies of regulation, State intervention and ever larger injections of financial support have proved to be no more a solution in transport than in any other area. Regulation and protection for the bus industry have not prevented its steady decline or given the public the choice they seek. Intervention and State control of the National Freight Corporation have been irrelevant to the general health of the freight industry but have involved the public sector in a totally inappropriate mixture of activities.

This Bill sets a new direction. It aims to increase the freedom of choice for the public; it aims to provide a better range of transport services from which the public can choose; and it aims to take the State out of activities which it should not be in. It is a practical measure of reform. It dismantles many of the most excessive restrictions in the road passenger industry and it paves the way for bringing private capital into the NFC.

I will deal with both those policies in turn and lastly deal with the position of the historic liabilities of the British Rail pension fund.

First, let me be clear about the approach of the Bill. The starting point of transport policy is the interest of the passenger and the interest of the consumer. Others have a right to put their view, but in the final analysis the Government, in framing legislation, must decide what is in the interests of the user of transport and not be content simply to preserve the position of existing providers.

So in putting the user first in passenger transport this Government have checked and examined the restrictions and barriers which stand in the way of new services developing and new operators coming forward. The result is that this Bill contains the biggest series of reforms in road passenger transport for half a century. It makes fundamental changes in the road service licensing system which has survived since the Road Traffic Act 1930.

Let us remember what conditions that 1930 legislation was tackling. The Act was based on the recommendations of the 1929 Royal Commission on transport. Those proposals form the basis of the law which has lasted to this day. The position, then, is that the legislation which governs the provision of passenger transport in this country today was formulated in the decade after the First World War. It was a time when road signs, car headlights and third party insurance were novel ideas. It was also a time when bus services were expanding at an unprecedented rate. The Royal Commission described the five previous years as
"years of the most remarkable development in the industry of road transport".
In evidence, bodies such as the North Yorkshire committee on traffic control spoke of
"the rapidly increasing omnibus services within the district—the congestion of traffic".
They were the conditions that the 1930 legislation was designed to meet—an unprecedented growth in services and a legitimate concern about safety standards.

So a system came into being which provided for safety standards but which also protected the operator against competition. In protecting the existing operator, obstacles were deliberately placed in the way of the new operator for the very good reason that encouraging new services was the very last thing that the authors of the 1930 legislation wanted.

It is those obstacles and those restrictions in the way of new services developing which this Bill tackles. The Bill does not reduce in any way the safety requirements. They are basic. It tackles the protectionist legislation devised for a different age and for entirely different conditions. The first and most obvious difference is this. The 1929 Royal Commission reported at a time when bus services were expanding and expanding. That is not remotely the position today. The story of the last 30 years has been one of reducing bus services. In 1949 there were 17,000 million passenger journeys by bus. In 1959 the figure was 14,000 million and in 1969 it was 10,000 million. In 1979 the figure is expected to be 7,000 million.

Bus use has halved since 1959 while in the same period the total mileage of all forms of passenger transport has doubled. In other words, buses have been carrying a smaller and smaller share of a growing market. This does not challenge the proposition that bus services have and should have an important role to play. But it challenges the relevance of legal apparatus designed to check growth. The aim of the Royal Commission and of the 1930 Act was the creation not of competition but of a "controlled monopoly". The aim was not to encourage new operators but to prevent them.

So today there are fewer passengers and fewer services but increasing cost to the public not only through fares but through rates and taxes. In 1978 central and local government support totalled £291 million—compared with £23 million in 1969.

Faced with this position, some tentative moves have been made over the last few years towards reform. There have been attempts to encourage other kinds of services—such as post buses and community buses. But the heart of the problem has not been touched. The licensing system itself still discourages newcomers from entering the industry. It neither provides competition nor does it encourage innovation and adaptation to new circumstances. Some parts of the country—notably some of the rural areas—have clearly inadequate passenger services. Some services are controlled where there is no need for control. The Bill makes important changes to meet these different positions.

In a number of important areas restrictions on new operators entering or existing operators expanding are being scrapped altogether. Safety restrictions will remain, but provided the operator can meet these safety requirements there will be no restriction on his operating long-distance express services and excursions and tours.

We do not believe that the public interest is served by restricting the number of express bus services—defined as journeys of over 30 miles in length. This means that we will be removing the obstacles put in the way of operators who want to run inter-city bus services. It opens the way for developments like the Greyhound services in the United States. It opens the way for new services. It means that there will be free competition between operators who want to run intercity coach services between our major cities—London to Manchester or Birmingham or Exeter. The former president of the Confederation of British Road Passenger Transport referred patronisingly to that as encouraging Freddie Lakers into the industry. Let me say that if I did that, I would reckon this part of the Bill an outstanding success.

Is my right hon. Friend aware that if one wishes to travel from King's Cross to Grimsby one can get a train at 4 o'clock or one at 6 o'clock? According to the timetable, there is no hope of catching a train to Grimsby between 4 o'clock and 6 o'clock. A closer inspection reveals that the 17.05 leaves King's Cross and it is possible to change at Doncaster for Grimsby. British Rail says that one can go to Grimsby via Newark and catch a 16.10 or an 18.10 train—

Order. I hope that the hon. Gentleman gets his train to Grimsby. However, the Minister is making a Second Reading speech and the hon. Gentleman's intervention does not seem to be relevant.

With respect, Mr. Speaker, if I wish to catch a train to Grimsby, surely I am entitled to talk about the inefficiency of British Rail. We are discussing the Transport Bill. I await your ruling.

I accept my hon. Friend's point that there should be more competition in this area.

I hope that my hon. Friend will forgive me if I pursue my speech.

If I am successful in attracting into the inter-city services people of Sir Freddie Laker's quality, that will be an outstanding success and an asset to Britain, because what Sir Freddie Laker is about is what all transport operators should be about—providing services that the public want, at a price they can afford.

The case on excursions and tours is self-evident. Even the most diehard protectionist must be somewhat daunted by the prospect of having to defend a system which requires that an operator who wants to run an extended tour to the castles of Britain should have to appear before the traffic commissioners, not once but on three or four occasions. Nor can I see any reason why an old people's tour to view the fields of Kent or the Blackpool lights should require the special blessing of the traffic commissioners. The restrictions on such excursions and tours will also be abolished.

A third area where restrictions are being scrapped is car sharing. The case in principle is clear. If we can persuade only a small proportion of motorists coming to work each day to share cars there will be enormous savings both in terms of energy and congestion.

It is for that reason that the United States is continuing to develop car-sharing programmes and why—as I learnt last weekend at the Paris meeting of European Transport Ministers—countries such as West Germany are now also urgently investigating the same idea. And, of course, let us be clear, in spite of the rumbles of Labour Members, that car sharing was not only backed but extended by the previous Government. We are simply finishing the job that they started.

The major change that we are making is to lift restrictions on advertising. At present it is lawful to advertise a car share on a works notice board, on a club notice board or on a church notice board. One cannot, however, advertise at one's local newsagent. It is an absurd position and one which the Bill will change. But the real thing that we will do, namely, encourage car sharing, is not in the legislation at all.

The position speaks for itself. At present, during the morning peak period in London about 130,000 cars come into the centre. Those 130,000 cars carry 176,000 people. If we succeed with only 10 per cent, of those car commuters, the gain will be enormous. Therefore, on express services, excursions and tours, and car sharing, restrictions will be lifted altogether.

The Minister has said that, having abolished express coach licensing, he would like to create a system similar to the Greyhound system in the United States. Does he realise what he is saying? Greyhound operates under the same sort of restrictive proposals as the Minister wants to abolish. In most of the United States, Greyhound operates under the same system as we have now.

We want to encourage a service, similar to that of Greyhound, that is both fast and efficient. However, provided the terms of competition are fair, people should not be prevented from travelling by coach rather than by rail or air if lower fares are more important than speed to those people. I am sure that the hon. Gentleman will agree with that, because those are the sentiments expressed in the Labour Government's White Paper on transport. The hon. Gentleman may shake his head, but Labour's White Paper set out that sort of approach to inter-city travel.

My wife always travels by coach because she says that it saves the Government a lot of money. Has the Minister been to Victoria coach station recently? Does he know that one can travel to Perth or to the West Country by coach and that there is a bus every day from Aberystwyth to London? Those buses already run on cheap fares.

Is it the policy of the Liberal Party that because excellent services are already provided we should not encourage more? If, as the hon. Gentleman has said, there is a market for intercity services, we should allow those services to develop. I believe that there is a developing market for such services. We should not impose the apparatus and controls of the traffic commissioners.

I do not want to restrict such competition, but from the Minister's verbiage one would think there had been a vast new development and that a great new freedom had suddenly been given. The Minister will be very disappointed when the Bill becomes law.

The hon. Gentleman cannot have it both ways. If he does not think that the Bill will have any effect, he has no need to worry. However, if he believes in freedom, he will back the Bill.

I am grateful, and I shall withhold the comments that I was about to make.

If we want increased freedom for operators, we must dismantle the traffic commissioner regulations. The hon. Gentleman may like to study the reactions of some operators. I stand by our policy that express services, excursions and tours, and car-sharing restrictions must be lifted altogether. That is in the interests of the public.

In other areas the restrictions will be substantially modified. For local services—services of less than 30 miles—the traffic commissioners will be retained, but their terms of reference will be changed. At the moment, existing operators enjoy a privileged position. Traffic commissioners, although making their decision on an application on the basis of public interest, are obliged to pay special attention to the objections of existing operators. It is, after all, essentially a system to protect the existing operator.

In future the traffic commissioners—I quote from clause 5—
"shall grant…a licence on the application unless they are satisfied that to do so would be against the interests of the public".
In considering those interests, the commissioners will take account of any representations that they think relevant and not just those from existing operators. The public interest in many areas will be best served by encouraging new services rather than seeking to prevent them. In particular, in rural areas small private operators with lower overheads may provide for the public interest in much better ways than can a big corporation. In other words, the presumption in the Bill is changed in favour of the applicant. The barriers to new operators are again brought down.

In London the system is changed, so that for the first time a new operator has a chance of appeal. At present the London Transport Executive operates, in effect, as its own traffic commissioners. No one else can run a service without permission from the LTE. In future, a prospective operator will be able to appeal to the traffic commissioners.

The last major change that I shall mention in the road passenger part of the Bill is the provision concerning trial areas. Under the legislation I intend to establish a limited number of trial areas—perhaps two or three—in different parts of the country. In those areas there will be a minimum of restrictions and no road service licences will be required.

Let me emphasise that the trial areas will come into existence not on the insistence of the Government but on the application of the locally elected county councils. The House will be pleased to know that a number of county councils have shown considerable interest in this scheme. It also means, of course, that local authorities that continue to give support to particular services will be presented with a better choice of options on whom they support and at what price. It will enable local authorities to get the best possible value for money.

The right hon. Gentleman mentioned a number of intimations from local authorities. Can he be precise and tell us how many?

I shall ask my hon. Friend the Parliamentary Secretary to check the exact figure, but from memory the number is about 10. I shall investigate to see whether we can give further details in the winding-up speech.

No, I really cannot give way again.

All the provisions that I have outlined are positive moves to encourage the provision of new or better services for the public, but all those services must continue to meet rigorous safety controls. I have, however, considered the way in which those controls have been exercised and have concluded that a logical and useful step would be to replace the present system of licensing each public service vehicle with a much simpler system of licensing each operator.

A system of operator licensing is not new to transport. It is well tried and seen to work effectively in the freight industry. Passenger transport operators agree with me that it will work well in their industry. They welcome the saving in cost and time to them. The National Bus Company, for example, has to obtain each year a separate licence for every one of its 17,500 vehicles.

In the first part of the Bill, clause 2 takes cars and small vehicles out of licensing, thus paving the way for increased car sharing. Clause 3 redefines express stage and contract carriages. Clauses 4 to 12 provide for the granting of road service licences to stage carriage—or local services—only. Express services are thus delicensed. Trial areas are provided for in clauses 12 to 14. Next come three clauses securing that the stringent safety controls of public service vehicles are maintained.

Clauses 18 to 26 set out the operator licensing system. The last nine clauses of the first part of the Bill deal with a variety of other matters, including, in clause 28, provisions for the appeal procedure in London. Hon. Members may also wish to note that clause 29 abolishes licensing of bus conductors and clause 52 allows articulated buses to be used as public service vehicles.

The second part of the Bill deals with the National Freight Corporation. The NFC was set up in 1968 and under its umbrella there are about 50 subsidiary companies. They range from road haulage to removals, from cold storage to package holidays, from waste disposal to parcels delivery. The question that has to be answered is, what justification is there for a State-run removals company or a State-run cold store? No one can claim that the NFC is the sole provider or an essential public utility. It merely represents one small part—about 10 per cent.—of an industry dominated by the private sector. In every type of business the NFC is in competition with the private sector.

There are, however, two essential differences between the NFC and a private company. First, the NFC has not had the commercial freedom and opportunities open to private firms. Its management is subject to the review and intervention of the Government. It is absurd to believe that the Government should—or, indeed, are able to—get involved in a business as deeply competitive as road haulage. Secondly, the NFC has been shielded in the past from the full rigours of normal commercial disciplines.

Just as the NFC should be free to develop commercial opportunities, it should also be subject to the normal discipline of profit and loss accounts. Freight subsidies cannot be justified—that became the position even with the previous Government—and it must follow that the NFC should be put in a position in which it can take charge of its own future, in the knowledge that success or failure lies in its own hands and not in the hands of the Government.

The aim of the Bill is clear. It is to transfer control of the NFC firmly into the hands of the private sector. I set that out in my August policy document, but let me repeat that the Government do not want a majority or a controlling interest in the corporation.

The Bill simply provides for the NFC's legal form to be changed into that of a normal Companies Act company with an appropriate capital structure, including shares that can be sold to private investors. The change to an equity-financed company is strongly supported by the NFC board.

The Minister will recall that he met the trade unions on this aspect of the Bill a few weeks ago and, in answer to questions, stated categorically that he would take complete control of the whole of the NFC and would sell all the shares. Has he changed his mind again?

The hon. Gentleman is wrong. I have written to one of his colleagues on that matter.

I quote from my principal private secretary's note of our discussion of 19 July. It says:
"The question of the Government's shareholding would be made clear by the time of Second Reading. No final decisions had yet been taken, but the Minister thought it only fair to tell the Group that he saw no compelling reason at the moment to keep the Government shareholding at 51 per cent."
The hon. Gentleman and I have debated transport questions for a long time. He will understand that I have been frank about my intentions both in the policy document, published in August, and in speeches during the election and on the last occasion. I cannot accept what the hon. Gentleman says.

The decision on when the Government will sell shares in the company will depend on a range of factors, such as general stock market conditions and the track record of the company itself. But our overall objective is to sell, as quickly as market conditions allow, a controlling interest in the company to private investors. If we retain an interest, it will certainly be no more than a small one.

At the same time, we shall ensure that there is full opportunity for employees of the company to acquire shares, and I hope that as many as possible will want to do this. I have also made clear that we are not going to be selling off individual NFC subsidiaries to the highest bidder. The whole purpose of this Bill is to enable us to sell shares in the enterprise as a whole. We want it to go into private ownership as a single entity, without any major change in size or range of interests. As to the question of timing of the change, it is important to retain the maximum scope for flexibility, and I would not at present envisage a sale of shares taking place before 1981.

I firmly believe that our proposals will give the corporation a much better deal than it has ever had in public ownership. It will move away from its unsatisfactory position as a nationalised industry with no clearly defined role or objective.

Does the right hon. Gentleman recognise that the comparison he is making between the public and private sectors is totally wrong in the sense that the public sector provides better conditions of service, rates of pay and pension funds? If the sell-out takes place, will he guarantee that the employees in the public sector will not suffer as a consequence?

I cannot guarantee that. But the whole aim of what we are doing is to try to get a better future for the National Freight Corporation, which means for those people working for it. That is the whole aim of the legislation.

The National Freight Corporation will, as a result of the Bill, be freed from the intervention of the Government and civil servants who know little about the day-to-day requirements of running a major transport undertaking. [HON. MEMBERS: "What about Rolls-Royce?"] We can certainly argue about the history of the Labour Government on the issue of the National Freight Corporation. I would be happy to do so.

The corporation will be able to adopt flexible and realistic trading strategies and to make the most of whatever commercial opportunities the market place may offer. I am convinced that the NFC can look forward to a good future in the private sector. That is my aim.

Clause 54 provides for the abolition of the Freight Integration Council. This Government are committed to getting rid of so-called quangos where these do not serve any genuinely useful purpose. The council is a prime example of just such a body. Its purpose was dubious from the very outset. It has been dormant for several years. I cannot imagine that even the Opposition Front Bench will lament its demise.

Finally, let me say something about part III of the Bill. As time is pressing, the Parliamentary Secretary will say more about this in his winding-up speech. This covers the changes that I propose to make in the arrangements for providing support for the historic pensions obligations of the British Railways Board and of the rail-based part of the National Freight Corporation.

Pensions are at the best of times one of the more technical subjects with which this House has to deal. Railway pensions arrangements are complicated and technical even by the standards of pensions schemes generally. But I hope that I can summarise what it is all about in a relatively few words.

The various railway pension schemes are funded schemes—that is, there are trustees who hold the assets of the schemes and who manage the schemes' investments, collect and invest contributions from employees and employers and pay out the pensions. The problem arises because there are large deficiencies in some of the schemes. The origins of these deficiencies go back very many years. They arose from a combination of factors. Both before and after nationalisation, many of the assets of the pension funds had been invested in the railway undertaking itself at low fixed rates of interest. The financial problems of the railways in the 1950s and 1960s did not allow the sums so invested to be repaid, nor the rate of interest to be increased. This problem was compounded by inflation. Indexation of pensions became an established practice, even though past contributions had not been adequate to fund the cost of it.

In 1974, the Government of the day decided that something must be done about these deficiencies. But they were concerned then, as we are now, only with the historic deficiencies. As far as current employment is concerned—and let me emphasise this—the same problems do not arise, because contributions are being paid at rates certified by the actuaries to be sufficient to cover the benefits laid down in the rules of the schemes.

Part III, like the provisions of the Railways Act 1974 and the Transport Act 1978 which it will replace, is concerned with the so-called "historic deficiencies" in the railway and NFC schemes. These deficiencies relate to the historic obligations which are defined in clause 44. Broadly, these are the historic deficiencies which the board and the corporation were, at the beginning of 1975, under an obligation to make good.

The essence of the 1974 and 1978 Acts was that the Government were to fund the deficiencies. The deficiencies were to be assessed on a once-for-all basis and the Government would then pay over the very substantial capital sums necessary to eliminate the deficiencies. Even though the funding process was to have been spread over a number of years, the costs would have been astronomical. By the end of the current fiinancial year, £578 million will have been paid by the taxpayer under the 1974 Act. Under the funding orders so far made, a further £1¼ billion stood to be paid over the next seven years. I might say that the board has also argued that the funding payments provided under the existing funding orders are not enough to fund the deficiencies fully.

Concern about these arrangements has been expressed by a number of individuals and bodies, notably the Public Accounts Committee, which in the eighth report of the 1976–77 Session said that it was
"concerned at the very substantial sum needed to fund the Board's pension schemes under these arrangements."
While the Government are not in any way questioning the general principle of funded schemes for nationalised industries, it seems to us that there is much force in the criticism expressed of the method adopted for dealing with the historic deficiencies in the railways' funds.

Part III of the Bill terminates funding under the Acts of 1974 and 1978. It places the Minister under an obligation to meet the emerging costs attributable to the historic deficiencies. An actuarial assessment will be made of the assets and liabilities of each scheme in which there are historic deficiencies. This will show what proportion of the pensions liabilities can be met out of the assets of the scheme. This proportion will continue to be the responsibility of the board. Responsibility for the remaining proportion—the unfunded proportion—will be transferred to the Government. As and when pensions corresponding to the historical obligations fall due for payment, the Government will meet that proportion.

What I am proposing is essentially a change in the method of financing the deficiencies that stood to be funded under the 1974 and 1978 Acts. I am not proposing any changes in the obligations which the Government are supporting. I can give the assurance that the pension entitlements of pensioners and serving members of the funds will not be affected by the changes. Nor will they entail increases in contributions.

So far as the British Railways Board itself is concerned, my proposals will tend to reduce the risk to which it is exposed, because the Government will be accepting total responsibility for a fixed proportion of the liabilities, rather than seeking to make a once-for-all actuarial assessment of the kind which the 1974 Act envisaged. At the same time, the changes will make very useful reductions in public expenditure in the years immediately ahead.

I have described the three parts of the Bill. I would add only that the Bill puts into effect two of our major pledges on transport during the last election. It scraps unnecessary restrictions in passenger transport. It enables there to be private investment in the National Freight Corporation. But what it does above all is to look to present-day conditions rather than conditions of the past. We shall now have legislation governing passenger transport designed for the conditions of the 1980s, not based on the position in the 1920s, and we shall enable the National Freight Corporation to have commercial freedom and to take charge of its own destiny.

If Labour Members want to fight the battles of the past, that is up to them. What we on this side of the House are concerned about is providing better transport today and setting free our transport industries. It is on that basis that I ask for the support of the House.

4.40 pm

The Bill, if operated in the way that the Minister envisages, would pose a serious threat of damage, possibly irreparable, to bus services in many parts of the country. I believe that an expansion of bus services based on competition between private operators exists only in a Tory dream world. The reality of experience in this country is that when unregulated competition is tried it results in a serious deterioration of public services, to the point at which many parts of the country are left without any bus services at all.

It is not sufficient for the Minister to suggest that conditions have changed since the licensing laws were introduced. Of course they have changed—and the House has changed the legislation as new technology has made new vehicles possible, just as we legislated for the introduction of the hovercraft. The right hon. Gentleman has delved way back into history to find his justification.

The real test must be whether in modern conditions, with today's economy, social conditions and technology, it is necessary to do what the House did when it introduced licensing. What hon. Members did then was not what the Minister suggested they did. He is clearly suggesting that they were trying to keep operators out of the field. I do not believe that those who manned the Government and Opposition Benches in the 1920s and 1930s were keen to keep bus operators out of the field.

What the House was keen to do, as comes through in the debates and the legislation, was to ensure that the buses that provided public transport were safe, properly manned and properly maintained, and were operated by efficient and competent operators. That is what the licensing system required. I hope shortly to show that that is relevant to present considerations and is within the competence of our present licensing system.

To justify the part of the Bill dealing with public service vehicle operators' licensing, the Minister will have to show that the experience that led to those licensing considerations, to ensure those standards of bus operation, is completely irrelevant. I do not think that he can. I think that all the considerations that apply in modern times argue against the conclusions that he has apparently drawn.

The reason why so many miles of British roads, so many potential routes, have no buses upon them has nothing to do with the licensing system but everything to do with modern conditions, which are such that it is not possible for private or public operators to make a profit on them. That is why so many people living in rural areas, and some urban areas, have difficulty in obtaining a proper public transport service.

Many of the routes now covered by buses are covered not because they are profitable but because it has been possible for those running the services to work out ways of directly subsidising them or making cross-subsidising arrangements to ensure that the services are maintained. Those arrangements have involved licensing authorities, the Minister's own Department—as he well knows—the county and metropolitan authorities and the bus companies in complex arrangements to ensure that services are maintained where they would otherwise be withdrawn.

Can the right hon. Gentleman make clear his position on the question of subsidies and cross-subsidisation? We might disagree on whether one should explicitly subsidise this or that service that could not otherwise be run properly, but what argument does the right hon. Gentleman put forward in favour of a system of regulation that ensures cross-subsidisation, which means that some passengers are subsidising others in a completely arbitrary way?

I shall gladly come to that. I would argue that the present cross-subsidisation, which results in passengers on some routes meeting part of the costs of maintaining other routes, is an essential part of the existing system. If the Bill results, as it may well do, in the withdrawal of that sort of subsidisation, we shall see a diminution of our bus services.

I am not against—indeed, I very much favour—consideration of other ways of subsidising, particularly if they are proposed by people who object to the cross-subsidising principle. But we cannot envisage, on the basis of the Bill, a change that will render it impossible to cross-subsidise without one of two things happening—either that another form of subsidy will be introduced or that we must tolerate a drop in the number of bus services. I am very much opposed to the latter.

If the Bill results, as the Minister clearly envisages, in new operators applying for road service licences and succeeding because he has reduced the licensing requirement, or succeeding in the stage area if only because he has changed the presumption on which the traffic commissioners worked, we can be certain of one thing. It is that the applicants will seek licences to operate upon the profitable routes. They will not seek licences for the routes where the operators are losing money or are continuing to operate only because there is a subsidy. If licences are granted by the traffic commissioners, working on the Minister's new presumption, there can be only a limited number of results. One is that the new operators will operate at the same fares as the operators already on the profitable routes. The income of the existing operators will then drop, because the fares will be shared between two operators.

If the major operator already on the route is using it to cross-subsidise another route, he must then decide whether to continue to compete on his profitable route by reducing his fares and abandoning the route that he is cross-subsidising. He is almost certain to take this course. He will fight not to stay in the area where he is losing but to stay in the profitable area. Then district councils and metropolitan and county authorities will clamour for arrangements to stop what is happening. They will have to decide whether ratepayers' and taxpayers' money should be spent to prop up subsidies that would otherwise come from the existing cross-subsidising arrangement.

Is the right hon. Gentleman aware that he is advancing the same argument as British Airways used against Sir Freddie Laker? In fact, new traffic has been generated by new operators coming in, and British Airways, far from losing, have benefited from the new area of traffic that has been generated. No one makes a journey that he does not wish to make, but many people cannot make journeys that they want to make. If the Bill is enacted, one of the possibilities is that new traffic routes will be generated and a new arena opened.

I have not failed to envisage the possibility of an expanding market that would provide more employment for those in the bus industry. I have tried to find an area in which that has happened. I can find only one area in which there has been an expansion of bus services and an increasing number of bus passengers, and that is South Yorkshire. The expansion in South Yorkshire has been achieved by a subsidising arrangement that enables more routes to be operated, but those in that area are faced with one of the problems that confront public bus operators in a declining market.

The market can be expanded only if a more attractive service is offered. That can be done only by reducing fares or by giving a better service, which means increasing vehicle frequency. That means that the operator has to find more money to operate the service. There is no operator of buses who at any time in the past 10 years has been able to reduce his fares, increase the number of passengers and recover the additional cost of offering a superior service. That is not an experience that exists or can be found anywhere in the United Kingdom.

Mr. Roger Moate