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Commons Chamber

Volume 975: debated on Monday 3 December 1979

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House Of Commons

Monday 3 December 1979

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Oral Answers To Questions

Oral Answers To Questions

I appeal to hon. Members who are called for a supplementary question to limit themselves to one question. That will enable us to reach more questions on the Order Paper.


Trunk Roads


asked the Secretary of State for Wales whether he is satisfied with the rate of progress in constructing trunk roads in Wales.

I am satisfied that work in hand on trunk road schemes is being carried out as quickly as possible.

Although my right hon. Friend has rightly attached the highest spending priority to trunk roads as the basis for a stronger Welsh economy, will he promote plans for further extensions of that network to ensure that plans are ready for future implementation?

Details of the future trunk road programme will be announced following the publication of the Government's public expenditure plans for the next five-year period. There is no shortage of proposals for roads, but they are often delayed because of statutory procedures and the process of preparation. I shall do all that I can to ensure that there are sufficient proposals to match the speed of those procedures and the resources available.

I agree that there is no shortage of proposals, but is there likely to be a shortage of public money to carryout such proposals, since there is to be a cut in public expenditure on roads and transport of about £11 million?

We will stick to our programme for road development in Wales, though with great difficulty, and it is our policy to give that development the highest priority. I expect reductions to fall mainly on smaller schemes, selected according to progress on statutory procedures and contractual arrangements.

Welsh Language Education


asked the Secretary of State for Wales if he will arrange to discuss with each of the eight local education authorities in Wales the impact that Government policies are having on Welsh language education.

No. My right hon. Friend and I have already discussed the educational implications of our policy, including the question of specific grant for bilingual education, with representatives of the Welsh Joint Education Committee.

Will the Under-Secretary accept that the Government's policy on bussing children to school could have a serious adverse effect on those areas with centralised bilingual, or Welsh language, primary and secondary schools, which attract children from large catchment areas? In his negotiations, will the Under-Secretary ensure that no local authority cuts back on transport to those schools, because that could kill them off?

We are aware of the special transport problems for both denominational and bilingual schools. However, the transport subsidy on school buses will remain very substantial. I note, with a modicum of satisfaction, that Gwynedd county council has informed the Welsh Office that it considers the latest rate support grant settlement to be fair.

Factory Units


asked the Secretary of State for Wales how many new factory units have been built by the Welsh Development Agency since its inception.

Two hundred and twenty-seven, with a total floor area of 1·6 million sq ft.

Will my right hon. Friend confirm that the great majority of those factory units have been occupied or allocated? Will he also confirm that those that have not yet been allocated will shortly be so? Does he agree that this makes a real contribution to industrial expansion in Wales?

I agree with my hon. Friend. A high proportion of those units have been taken up by small companies and newly established companies. The Welsh Development Agency will continue to give that sort of priority.

Does the Secretary of State agree that the need for the Welsh Development Agency will become greater in the future? Has anyone told him about the proposal to make over 6,000 people redundant at the Llanwern steelworks? Does he appreciate that that will put Newport and the surrounding areas back to the 1930s in terms of unemployment? Has he any contingency plans in his locker to turn that area into a special development area?

I do not doubt that the WDA will have a great deal of work to do, but it is absurd to talk about specific proposals for a particular area before the British Steel Corporation has made any final plans for that area.

Is my right hon. Friend aware that the shortage of advance factory space could prove a bottleneck in dealing with the problems arising out of unemployment in the Deeside area? Will he give urgent attention to that matter?

I am visiting Deeside on Wednesday to discuss with the local authorities and those involved the plans for advance factory building and other measures around the Shotton area. I assure my hon. Friend that I am well aware of the need for a major programme, and I am already discussing with the WDA the details of that programme.

Is it not sheer industrial and economic madness, given the thousands of job losses that are at least pending, possibly in steel and coal, as well as the general level of unemployment, which will rise in 1980, for the Secretary of State to cut investment grants to the WDA and to remove grants from special development areas in South Wales? Will he consider suspending those cuts in light of the terrible dangers facing the Welsh economy and the serious prospects for unemployment in Wales?

I notice that the hon. Gentleman is once again advocating higher public expenditure without telling the House how he proposes to finance it. No doubt he will also criticise the Government for high interest rates. He must recognise that the two go together.

I have already told the House that I attach great importance to the work of the WDA, and I believe that there is great potential for using its substantial existing assets far more widely than hitherto.

Interest Rates


the Secretary of State for Wales what assistance can be given to farmers and others in Wales in times of the present high interest rates.

Sources of assistance to farmers include capital grants under the farm and horticulture development scheme and the farm and horticulture capital grants schemes, together with loan facilities available through the Agricultural Mortgage Corporation and the Agricultural Credit Corporation.

While welcoming my right hon. Friend's explanation and accepting that the present high interest rates are an integral part of the Government's strategy for economic recovery, may I ask whether my right hon. Friend is aware that French farmers are heavily subsidised by their Government and that they are put in a position of unfair competition with our farmers?

I agree that French farmers are heavily subsidised, but Governments and the farming industry in this country have long preferred our method of assistance, namely, the substantial contributions towards the cost of capital investment which we provide under the schemes that I have described. My hon. Friend should be aware of the scale of support that we give our farmers in that way.

Will the Secretary of State explain to his hon. Friend the Member for Anglesey (Mr. Best) that the Tory Party fought the last election on cuts in public expenditure and that the hon. Gentleman cannot now call for more public money to protect certain groups from the disastrous consequences of the Government's economic policy?

My hon. Friend the Member for Anglesey (Mr. Best) was pointing to the problems of high interest rates which arise from the excessive public expenditure unleashed by the right hon. Member for Llanelli (Mr. Davies) when he had responsibility in the Treasury. I hope that the right hon. Gentleman takes responsibility for the consequences that we are suffering.

Is it not a fact that by delaying regional grant payments in one Budget the Government forced business men to borrow money, and by action in a subsequent Budget made it cripplingly expensive for them to do so? Where in the Conservative manifesto could any business man or householder who voted Tory last time have anticipated that the Government would force interest rates above the rates that Conservatives described as "usury" when they were in opposition? Finally, what comfort can this Shylock Government offer to business men whose businesses are bleeding to death as cuts reduce orders, real profits fall to the lowest level ever and interest rates soar to the highest level ever?

No doubt that, Mr. Speaker, is the one question that you suggested should be asked. The language used by the right hon. Member for Swansea, West (Mr. Williams) could be covered by the phrase of the right hon. Member for Leeds, East (Mr. Healey) when he was Chancellor of the Exchequer. When faced with similar criticisms of high interest rates, the right hon. Gentleman said that the criticisms grossly exaggerated the effect of changes in interest rates on the real economy. That is absolutely right. The criticisms come ill from a former Minister who was involved in the overnight abolition of the regional employment premium, without any compensation for the economy. I remind the right hon. Gentleman that the CBI is pressing us to go on with the policies that we are following.

Contraception (Depo Provera)


asked the Secretary of State for Wales what representations he has received about the use of the Depo Provera contraceptive injection amongst Welsh women; and whether this form of contraception is being used in Wales.

I have not received any representations about the use of Depo Provera. This drug is in use in Wales as a contraceptive.

Is the hon. Gentleman aware of the anxiety among women's organisations in Wales over the side effects, including acute depression, that are reported to be experienced by those for whom the drug has been prescribed? Will he issue instructions that the drug should not be used on women in Wales unless the fullest explanation has been given, and that it should certainly not be used on unmarried women?

I am not aware of the deep concern to which the hon. Gentleman has referred. Depo Provera is currently licensed for use only as a short-term contraceptive in special circumstances; for example, where a husband has undergone a vasectomy or where a woman has been injected against rubella and the virus is still active. I am advised that the drug is well tolerated and that no significant untoward effects have been reported.

Would it not be better for the time being, as we do not know the long-term effects of the injection, if Depo Provera were used only under the strict supervision of obstetric and gynaecological departments of our district hospitals?

We have always taken the view, as the hon. Gentleman will know, that in the National Health Service doctors should be free to exercise their clinical judgment. The drug may therefore be prescribed where individual circumstances so indicate. I should not like to limit clinical judgment in any way.

Interest Rates


asked the Secretary of State for Wales what special attention he will give to the problems of the small companies and firms in Wales during the continuance of high interest rates; and if he will make a statement.

My Department and the agencies for which I am responsible recognise the important role of small firms in the economy and will do all we can to help them. High interest rates for a period are unavoidable if we are to succeed in controlling inflation, which is essential to a successful future for our small businesses.

Is my right hon. Friend aware that among the companies that have approached me recently there are many that recognise the paramount importance of containing inflation? However, will he bear in mind that many small firms have had a decade or more of difficult conditions and have not been able to acquire great reserves and are therefore peculiarly dependent upon overdrafts and other forms of borrowing?

I am sure that my hon. Friend is right, but it is a prime requirement that we defeat inflation. No one will suffer more disastrously from continuing inflation than the small business sector. We have taken, and are taking, a number of measures to help that sector. The Budget was an important first step in that programme, which will include many important measures to revitalise the small firms sector and to remove the unnecessary obstacles to their success.

Does the right hon. Gentleman agree that the increase in MLR from 12 per cent. to 17 per cent. was partially due to the Budget, which gave tremendous concessions to the wealthy? Will he consider restoring the regional development grants to Wales, because their absence is hitting small businesses? Will the right hon. Gentleman also consider the provision of small factories in the advance factory programme that we expect him to announce shortly?

I notice that the hon. Gentleman is again advocating higher public expenditure. The high level of that expenditure is the reason for present high interest rates. I have already told the hon. Gentleman that more than 90 per cent. of the advance factories being built by the WDA are being constructed for the small business sector.

Does the right hon. Gentleman accept that high interest rates have an adverse effect on the liquidity of small companies? Will he consider not lengthening the waiting period for payment of industrial development grants to companies that have already been given approval of grants and have gone ahead with investment programmes on the assumption of lower interest rates, but are now being caught in a trap because of the liquidity problem?

If any individual company is faced with a particular problem we shall look at the circumstances to see whether we can help, and the Welsh Development Agency will do likewise.

Since the Conservatives, in their election manifesto, posed as the friends of small business men, and since they rely on the notion of mandate, can the Secretary of State say where in the Conservative manifesto there is a mandate for the current high interest rates?

The policy for which we sought a mandate was to restore the economy and to defeat inflation. We always said that the defeat of inflation was our first and most immediate priority. The previous Government inreased expenditure in an effort to win the general election, and they left us with a rapidly rising rate of inflation. We are now suffering the consequences, and we shall take determined action to defeat inflation.



asked the Secretary of State for Wales what is the present target date for the completion of a dual track road from the English border to Bangor along the line of the A55.

Subject to the satisfactory completion of statutory procedures, I hope that the dualling of the A55 will be completed by about 1987–88.

Can my hon. Friend assure us that, despite economic difficulties, this programme will not be allowed to slip? Will he agree that proposals to simplify the statutory procedures might make it easier to keep the programme up to date?

The planned level of expenditure for 1980–81 will enable work to go ahead on those schemes of the A55 which are expected to be ready in that year—the Hawarden bypass and phase I of the Colcon scheme. Expenditure levels for subsequent years will be announced in due course, but we have made it clear that priority will be given to the dualling of the A55.



asked the Secretary of State for Wales what representation he has received from local authorities in Wales regarding cuts in governmental grants for development areas, cuts in local authority expenditure during the current financial year and proposed further cut for the next financial year.

Four local authorities, Cardiff city council, Clwyd county council, Cynon Valley borough council and Dwyfor district council, have made general representations about reduction in local authority expenditure, and others have written about the possible effect on specific services in individual areas. Five counties and 13 districts have commented on the changes in regional policy.

Is the Secretary of State aware that there is deep concern in local government circles about the Govment's policy? What effect does he think these cuts will have on local authority rates? Will he tell the people of Wales that they should not blame their borough councillors and their county councillors, but that they must look to the Government who are primarily responsible for the cuts that will come about in social services?

I hope that the hon. Member will not exaggerate the effect on local government of a cut of 2½ per cent. over two years, or argue that that is a justifiable reason for substantial rate increases. I do not believe that that is so.

Does not the Secretary of State realise that the representations that he listed to the House show the real concern of these local authorities, not only for their services, but for the prospects of industrial development in Wales? Will he now come clean and give his estimate of the number of people likely to be unemployed as a consequence of the cuts? When I gave a figure of 110,000 in the Welsh Grand Committee was I too high, too low, or just about right?

I amsure that the right hon. Member will agree that the difficulties we now face make it absolutely right for us to concentrate industrial help on those areas with the greatest problems. I have no intention of giving unemployment forecasts because I do not believe in forecasts of that kind. I well recall that when the previous Government put up their interest rates to a then record level, unemployment fell. These things are difficult to foresee. I told the House of Commons in my first speech from this Dispatch Box that we had inherited a rising trend of unemployment. I do not disguise the fact that I expect unemployment in Wales to rise.

Does not my right hon. Friend find it rather strange that there is so much furore over modest reductions which leave overall public expenditure, in real terms, more or less what it was last year? Is it not a fact that the cuts that were introduced by the previous Government were effectively far more stringent, yet we heard no criticism then?

My hon. Friend is quite right. The previous Government cut local government expenditure by 2½ per cent. in a single year. Now they are complaining because we propose a similar level of reduction over a two-year period.

If the Chief Secretary to the Treasury can indicate in the Government's White Paper that he expects unemployment to rise by 300,000 next year, why cannot the Secretary of State for Wales tell us how many people will be unemployed in Wales?

The Chief Secretary has done nothing of the kind. He has done what his predecessors have done—he has made an assumption for the purposes of calculating social security benefits. The right hon. Gentleman presumably has the mathematical skills to make some kind of calculation based on that, but it would not be a forecast.

Teddington Bellows Limited, Pontardulais


asked the Secretary of State for Wales, what progress is being made with the application of Teddington Bellows Ltd., Pontardulais, for a large extension in the form of an advanced factory to its existing factory; and if he will make a statement.

The factory extension is a matter for the Welsh Development Agency, but I understand that good progress is being made. I welcome the expansion plans and am pleased that my industry department's offer of financial support under section 7 of the Industry Act has been accepted by the company.

I thank the Minister for that reply. Is he aware that, in the light of the situation at Port Talbot, the Lliw Valley and the Swansea Valley are in urgent need of industrial development? Having regard to the wider repercussions of the British Steel Corporation's position at Port Talbot on the whole of West Glamorgan, will the Secretary of State immediately support redesignation of West Glamorgan as a special development district?

The BSC indicated the present extent of its crisis to the Government only last Wednesday and it is much too early for us to come to any conclusion on what we have now been told. I have said repeatedly in this House that one of the advantages of the structure of regional assistance is that we have a consistent pattern on which development areas are based and if the situation changes we have the flexibility to respond to the new facts that arise.

Is it not absurd that, at a time when we are all desperate to obtain new jobs and new industry in Wales, the Welsh Development Agency has deliberately delayed the expansion programme of a different company on the Fforest Fach estate in Swansea and has also refused a third extra unit to that company in its Llandovery operation where it would have created 13 much-needed jobs?

If the right hon. Gentleman will table a question on that point about the Welsh Development Agency, I shall see that he gets an answer.



asked the Secretary of State for Wales what representations he has received from the Alyn-Deeside district council concerning measures to aid employment subsequent to the closure of the steelmaking plant at Shotton.

I have received written representations on four occasions from the council. I met representatives on 1 August 1979 and will be meeting them again when I visit Deeside later this week.

Is it not a fact that it has been estimated that £1½ million in rate income will be lost next year when steelmaking closes at Shotton? Is it not also a fact that the Alyn-Deeside council will lose £250,000and this is generating widespread resentment because there is no guarantee of a compensatory grant? Can the Secretary of State tell us whether he will, as requested, set up a task force led by a Government Minister to supervise the steel rescue measures? Will he agree that a £15 million river road in the area of the Deeside constituency would help to bring new jobs to the area and stave off further unemployment?

I told the hon. Member when he last raised this point that I felt that the first priority of Government expenditure was to provide infrastructure and new factories. I am aware of the representations that have been made about the rate loss, which is recovered after a year or so. I shall listen most carefully to the points put to me by the local authorities on Wednesday about whatever form of monitoring and supervision seems most suitable for the area. I do not believe that a formal task force is the best answer but I have an open mind to those representations and I shall listen carefully. I note what the hon. Member says about the road. I hope that he will accept that the road schemes already announced for the area, including the scheme announced by the Ministry of Transport only last week, represent a substantial improvement in communications to Deeside.

Interest Rates


asked the Secretary of State for Wales what calculations he has made of the effect of the recent increase in the minimum lending rate on employment prospects in Wales.

I do not believe that meaningful estimates of this kind can be made.

The right hon. Gentleman is understandably coy about giving unemployment forecasts for Wales. Is he not aware that the Government's policy of high inflation and high interest rates will put thousands of people in Wales on the dole and that it makes a mockery of the Conservative Party's claim to be the party of small business? Will he now assure the House that he will not be party to any further increase in interest rates?

It is remarkable that a former Treasury Minister who repeatedly refused to give forecasts of that kind should ask me to do so. It is equally remarkable that charges about high inflation should come from the Treasury Ministers who created the present situation We shall continue the fight against the high inflation that we inherited from the previous Government, even if in the short term it means high interest rates.

Will my right hon. Friend bear in mind that whenever the previous Labour Government made elaborate forecasts about an improvement in the economy they were invariably followed by a marked deterioration?

I have always had a good deal of scepticism about forecasts of that kind. We always remember the unending succession of forecasts from my predecessor, who week after week and month after month told us that the economy in Wales was being transformed, yet week after week and month after month under the previous Administration unemployment in Wales went up.

With regard to unemployment and the apparent further uncertainties in the steel industry, can the right hon. Gentleman give a guarantee that the remaining jobs at BSC Shotton—about 4,500–will be saved? Will he guard these remaining steel jobs like a tigress guards her cubs?

Eventually, and in the long term, jobs in any industry depend upon the ability to market goods. I know of no proposals that affect the jobs to which the hon. Gentleman referred.

Is my right hon. Friend aware of any suggestion from the Opposition on how to combat inflation, or of any advice from any Labour Member to the unions not to press inflationary wage claims?

School Transport


asked the Secretary of State for Wales how many representations he has received concerning the decision to cut back on free school transport; what reply he has sent; and if he will make a statement.

Threepetitions and 31 letters. In reply I have explained our view that savings in expenditure should, as far as possible, be secured in areas not directly related to teaching in the classroom.

Are not the basic points to be appreciated that the catchment area for Roman Catholic schools is far larger than that for the normal local education authority school and that it is the less well off parents who will feel the pinch of these increased costs? Will the hon. Gentleman prevail upon his right hon. and learned Friend the Secretary of State for Education and Science to delete this provision from the Education (No. 2) Bill, because such action would win the warmhearted approval of hon. Members on both sides of the House?

We are not singling out denominational schools. There is, of course, no statutory requirement in the Education Act 1944 for authorities to provide free transport for children attending denominational or bilingual schools, unless there is no nearer suitable school. What the local authorities now do for these schools they do at their discretion, and that discretion will remain. As I pointed out earlier, the amount of subsidy for school transport will remain substantial. As to less well off parents, under the proposed legislation authorities will still be obliged to provide free transport for children from families in receipt of supplementary benefit and family income supplement.

Does not the hon. Gentleman recall that one of the slogans under which the Conservative Party fought the election was that of increasing freedom of choice? This reduction in free school transport severely restricts the freedom of choice for many parents whose children attend Welsh language, Catholic and Church in Wales schools. It is all very well for the hon. Gentleman to say that the discretion will remain, but he knows that it is a meaningless discretion in that local authorities will not have the money to exercise that discretion.

It is not a meaningless discretion. I hope that the right hon. Gentleman will make representations to local authorities if he feels that they are not exercising their discretion in a reasonable way. Of course we still stand by choice for parents and their children, but this must be with due regard to the public purse.

While accepting a good deal of what my hon. Friend has said, will he note the valid point made on this occasion by the hon. Member for Newport (Mr. Hughes), namely, that the catchment areas, particularly of the Roman Catholic community, are extraordinarily large? To that extent, would it be helpful if local authorities were asked, either in the form of a circular or something of that nature, to bear in mind the size of the necessary catchment area in any particular case?

I always notice any valid point made by the hon. Member from Newport (Mr. Hughes). I accept that the catchment areas for Roman Catholic schools are indeed extensive. The local authorities have recognised that by the discretion that they have shown in the past. I am certain that during further discussion on the Education (No. 2) Bill this matter will be given further consideration.

School Building (Dyfed)


asked the Secretary of State for Wales what effect his proposed reduction in the schools' capital building programme in Dyfed will have on the replacement of Victorian primary schools.

That will depend on what schemes the authority undertakes within its allocation.

I speak as a member of an education committee that covers one-quarter of the surface area of Wales. Does the Minister realise the chaos into which he puts the plans of any education committee, particularly an education committee in South-West Wales that has a huge burden facing it with regard to a particular school in the South-West of the county?

There are 123 pre-1903 primary schools in Dyfed. The previous Administration recognised that this was not a matter that they could tackle immediately but only over a very long period. The hon. Gentleman will be familiar with the fact that the Dyfed county council education authority, on which he serves, has in the past, and with the approval of the previous Administration, allocated most of its money to comprehensive schools rather than to the improvement of primary schools.



asked the Secretary of State for Wales how many teachers were employed in Wales in 1978–79 and how many are assumed to be employed in 1980–81, based on the assumptions underlying Cmnd. 7746, "The Government's Expenditure Plans 1980–81"?

I refer the right hon. Member to the answer given on 9 November by my right hon. Friend.

I do not have the advantage of having that answer with me. Since the White Paper clearly indicates that there will be 21,000 fewer teachers in post next year as opposed to last, can the hon. Gentleman say how many of those 21,000 will be found from among teachers in Wales?

The White Paper does not refer only to England and Wales. The figure for England and Wales is 18,000.In determining the rate support grant we have assumed that the teacher force in England and Wales will fall by 3·7 per cent. between 1978–79 and 1980–81. Over the same period pupil numbers will fall by 4·7 per cent. I cannot give the hon. Gentleman separate figures for Wales. I can only give the figures for England and Wales. However, I can add that the pupil-teacher ratio next year should remain at its present best ever level of 18·7 to 1. Therefore, when we talk about the number of teachers employed we must take into consideration the falling rolls in our schools.

Steel Industry


asked the Secretary of State for Wales how many steel jobs will have been lost in the public and private sectors in West Glamorgan between November 1978 and March 1980 on the basis of current plans.

About 2,000. Approximately 900 have already taken effect and the remainder would take place before March 1980 on the basis of firm current plans.

Since there have been previous failures of communication between the Secretary of State and the British Steel Corporation—I accept through no fault of his own—may I ask the right hon. Gentleman whether he is aware that there is a BSC document in existence, a copy of which I have seen, which envisages a further reduction in capacity at Port Talbot which will have the consequential effect of 3,000 further redundancies in West Glamorgan, on top of those that the right hon. Gentleman has already announced? Do not the redundancies that he has announced and those in prospect together make the West Glamorgan problem one on the scale of Shotton and Corby? How does he reconcile that with the downgrading of West Glamorgan for RDG purposes?

I am aware that the British Steel Corporation is considering possible substantial additional redundancies in the area. I agree that that would have a serious effect on the area. However, the BSC board has taken no final decision on the matter. I have already indicated to the House in an earlier answer our flexible approach to regional development and special development areas, and we shall always examine new circumstances when they develop.



asked the Secretary of State for Wales what estimate he has made of unemployment levels in Wales in 1980 based on the Treasury forecasts of minus 2 per cent. rate of growth in 1980.

It is not possible to forecast the effect on unemployment generally or in individual regions, but the underlying trend would be for increasing unemployment in Wales, as elsewhere.

Is the Minister aware that, in addition to the underlying trend, there are BSC proposals suggesting 3,500 redundancies at Port Talbot and 6,500 at Llanwern, and a subsequent loss of 6,000 jobs in the pits associated with the steel industry? Will the Minister say whether he has seen those suggestions, and does he plan to stand idly by and wash his hands of the affair, as he has previously said, or will he intervene this time on behalf of the Welsh people?

As I indicated in answer to an earlier question, the Government were informed only last Wednesday of the latest scale of the marketing problem confronting BSC. The board has made no firm plans but is considering the situation that it faces. In those circumstances, it would be wrong for me to make specific commitments about remedial measures or other action.

The Secretary of State knows of the 2,000 redundancies planned at the pump storage scheme at Dinorwic, Gwynedd. Will he ensure that there is a public investment programme to provide jobs to avoid the Government having to support these people when they are out of work?

As I have indicated, we are prepared to look at the situation as it develops. The hon. Gentleman should not always make the assumption that the people working at Dinorwic will fail to find jobs. In my constituency in West Wales over the years we faced similar problems with far bigger construction projects. The hon. Gentleman should not exaggerate the scale of the problem in his constituency.

Does my right hon. Friend agree that it should not lie in the mouths of Labour Members to ask questions about unemployment, when seemingly amnesia enables them to forget that under every Labour Government since the war unemployment has risen?

My hon. Friend is right. The Labour Government came into power when unemployment in Wales stood at 38,000, and they took it up to well over 100,000.

Wales is due to lose 15,000 jobs as a result of its share of unemployment generated by the Treasury, it stands to lose the same number again through closures at Shotton, Llanwern and Margam, and half as many again in the coal industry, so how does the Minister justify cutting back regional aid and assistance to Wales?

I have never accepted the right hon. Gentleman's forecasts, and I do not accept the figures that he has given to the House now. Previous experience suggests that his forecasts are unreliable. I remember what he said about the regional employment premium before the Labour Government abolished it. If we are faced with new and grave difficulties, as indeed we are, we shall concentrate assistance where it is most needed, and that is precisely what the Government are doing.

If the right hon. Gentleman is dissatisfied with the forecasts from this side of the House, will he give his forecast of how he sees unemployment developing in Wales? If the figures given by my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) are true and the Government believe that unemployment might reach that figure, the right hon. Gentleman has a duty to make a statement to the House on the steel industry in Wales.

As I told the House in my first speech from this Dispatch Box after the election, we face an underlying rise in unemployment trends. Quite clearly if we face a world recession, unemployment is also likely to rise, for that reason. But I do not share the right hon. Gentleman's confidence, faith or belief in firm forecasts of this kind. They tend to be extremely unreliable.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek an early opportunity to raise the matter on the Adjournment.



asked the Chancellor of the Duchy of Lancaster how support for the arts in the United Kingdom compares with that given in other member countries of the EEC.

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

Following the hon. Lady's question of 25 July—[Vol. 971, c. 255–56]—I have made extensive inquiries into this matter. I regret to say that it has not been possible to obtain the statistics on which to make a reliable comparison. I can, however, say that central and local government support for the arts, museums and galleries and libraries in the United Kingdom is broadly of the order of £7 a head.

I thank the Chancellor of the Duchy for his reply, which I suppose I would not have received if I had not put down the question again, having waited since 25 July. However, is he aware that every country in the EEC provides much more support for the arts as a whole and that many cities put our contribution to shame? If the right hon. Gentleman does not have the correct information, I should be glad to let him have it.

I am grateful to the hon. Lady for raising this important question. I have a number of figures in front of me which indicate that we are not bottom of the EEC league. I shall gladly send her those figures, because I know that she is in a position to make them widely known.

Will my right hon. Friend say whether there is any hope of the arts in this country and in other member countries of the EEC obtaining a grant from the EEC budget?

That is an interesting suggestion. There is a certain amount of trouble going on at the moment and perhaps this might not be the best moment to raise the matter. However, when that little local difficulty is out of the way I shall pursue my hon. Friend's suggestion.

Does not the right hon. Gentleman recall that I revealed to him during the VAT debate on the Second Reading of the Finance Bill comparative figures of EEC expenditure on the arts? If he does not remember that, perhaps he will get one of his civil servants to look up those figures and inform him of them.

I remember all the hon. Gentleman's revelations. If his hon. Friend the Member for Wolver Hampton, North-East (Mrs. Short) agrees, I shall send him a copy of the letter that I am sending to her. He will then find that the position is not quite as bad as he thinks.

With the greatest respect to the right hon. Gentleman, most EEC countries support their provincial theatres far better than Britain does. There is a clear indication that, far from receiving support, provincial theatres, like the one in my constituency, will have their allocations cut.

I am afraid that the standards of living and work in most EEC countries are higher than they are here. That is inevitably reflected in the level of support that can be given to the arts.

National Collections (Curators)


asked the Chancellor of the Duchy of Lancaster for what appointments of curators of national collections he is responsible.

Does the right hon. Gentleman agree that, in view of recent events, it is desirable that the Minister responsible for the arts should have some responsibility for the appointment of a curator of the Royal pictures in Buckingham Palace?

It is a private collection which has nothing to do with the Government. With regard to this matter, I offer to the hon. Gentleman the advice of Lord Melbourne—"Why cannot you leave it alone?".

Arts Council


asked the Chancellor of the Duchy of Lancaster when he next expects to meet the chairman of the Arts Council.

Is my righthon. Friend aware of the serious threat that is posed to small orchestral budgets by the decision of the DHSS to exact national insurance contributions from employers of casual musicians? Will he persuade his right hon. Friend the Secretary of State for Social Services to withdraw his predecessor's ruling and take the case out of the courts forthwith?

I am grateful to my hon. Friend for raising the matter. I shall certainly raise it with my right hon. Friend the Secretary of State for Social Services.

Does the right hon. Gentleman appreciate that the most successful opera companies still require outside subsidy? Will he assure the chairman of the Arts Council when he meets him that the Government will guarantee the survival of full-time opera companies in this country, including the remarkably successful English National Opera North, which has been the most successful artistic innovation in the North for a decade?

I shall do my best to secure anoverall grant for the Arts Council that will enable it to discharge its responsibilities. However, under our constitution, how that grant is spent is a matter for the council. Like the hon. and learned Gentleman, I appreciate the excellent work done by the English National Opera as well as by the Royal Opera House, Covent Garden. I wish that the Royal Opera House directors would wait to see the outcome of the Arts Council decisions before claiming that it is about to be closed down.

Since it is a good Conservative principle to invest in success, will my right hon. Friend advise his Cabinet colleagues that the one thing that we are good at in this country is the arts and that money is much better spent on that than on propping up industries that are about to collapse?

We are extremely good at the arts. However, I would not go as far as my hon. Friend and say that that was the only thing we are good at. We are good at that, among a whole range of things.

I should like to be fair to the right hon. Gentleman because, as the House knows, there is considerable personal affection between us. [Interruption.] Why not? Does the right hon. Gentleman recall that in a public speech a few days ago he compared the State subvention of the arts—he gave a figure of £120 million or £140 million—to private and industrial patronage, which is running at about £5 million? Will he make a personal declaration of faith in the public subvention of the arts?

I am delighted to make a declaration—more than a declaration of faith, a declaration of fact, of the Government's support for the public sector. Of course that is and will be the major component in the support of the arts. I have made clear that we hope that the general level in the coming year will be the same as last year. However, I am looking for extra money from the private sector.

I am grateful to the hon. Gentleman for his declaration of affection. I remember that he raised the question of my wedding before. I shall certainly ask him to be a bridesmaid at it, when it occurs.



asked the Chancellor of the Duchy of Lancaster if he is satisfied that enough is being done to decentralise the availability of the publicly funded arts.

A great deal has already been done, but the Arts Council and Welsh Arts Council are alive to the need to keep the position constantly under review, given the resources and facilities available.

Does the Minister accept that many of the arts are still over centralised in London, particularly live theatre and some of the visual arts? Will he give an assurance that if there is any restriction on finance for the arts it will not in any way stop a move towards greater decentralisation?

Certain things have to be centralised in London. However, the Arts Council, with my full support, is concentrating more and more of its finances on the regions. The proportion of the Arts Council budget for England and Wales that is invested in the regions has grown from one-third 20 years ago to two-thirds at the present time. That is a development which I welcome.

Does the right hon. Gentleman agree that, apart from the arts decentralising, the touring of nationally based opera, as well as orchestral work and theatre, faces the threat of cuts? Does he further agree that private patronage can hardly replace that, since the only notable recent example was his snaffling of the portrait of Cardinal Newman into his private office?

The private sector has made a notable contribution towards helping the Welsh National Opera to come to London. That has shown people here the high standards of that opera company, and it has been an important contribution. Certainly I support touring by the various opera companies but, in the ultimate event, it is a decision for the Arts Council and not for me.

Has my right hon. Friend made any estimate of the number of paintings and other works of art in the capital that are kept permanently out of public sight? Could some of these he lent to the provinces?

It is the policy of the various national museums to lend their pictures to the provinces, and that again is something that I welcome.

Reviewing Committee On The Export Of Works Of Art


asked the Chancellor of the Duchy of Lancaster when next he expects to meet the Reviewing Committee on the Export of Works of Art.

I have no plans to meet the reviewing committee in the near future.

Why did the Minister and the committee allow a millionaire chancer like Axel Springer to bend the rules by exporting a valuable work of art under the pretext of gifting it to a British museum on condition that he be allowed to borrow it back for the remainder of his life? Is it not absolutely irresponsible to deprive the British public of that valuable work when enough money was raised by public subscription to keep it in the country and there is no guarantee that it will ever be returned?

I believe that the position is the opposite of that outlined by the hon. Gentleman. The purpose of export control regulations is to ensure that, in the long run, the work of art concerned remains permanently in this country. Contrary to the hon. Gentleman's impression, the arrangement has secured that after a period of years the work will return to this country. It will be obtained for nothing and enrich our art collection in the future.

Royal Academy


asked the Chancellor of the Duchy of Lancaster whether he has any plans to make an annual grant to the Royal Academy.

No. But I understand that the Royal Academy has been in touch with the Arts Council.

Will my right hon. Friend have another think about the matter? I am sure that he will agree that the Royal Academy has contributed greatly to our cultural and artistic life, and it would be a tragedy if it went to the wall. Will he at least encourage the Arts Council to consider most sympathetically any request, and will he consider increasing the Arts Council grant to meet it?

I am afraid that I cannot give the undertaking that my hon. Friend requires, because there has been no tradition of Government support for the Royal Academy. However, I recently read in the Sunday Telegraph—so it is likely to be true—that the postimpressionist exhibition at the Royal Academy is so successful that it is not likely to be facing an immediate financial crisis. Perhaps it is along those lines that the Royal Academy's financial problems can be solved.

Just to make this a bipartisan occasion, will the right hon. Gentleman listen to the request of his colleague, who knows a great deal about these matters, and reconsider? Within the next few years public subvention for the Royal Academy will be necessary if it is to survive at all.

If it were true that the Royal Academy could not survive without public subvention, no doubt a case could be made, but it should be made to the Arts Council and not to me. I am at present searching for money for existing institutions that are supported, and I do not believe that this is a good moment to add to the list.

Does my right hon. Friend agree that the Royal Academy has been a tenacious repository of recidivist artistic taste for the past century?

I do not have the connections of my hon. Friend, and I defer to his expert opinion in these matters, but I should not like to commit myself one way or the other.

When the right hon. Gentleman is seriously considering which institutions will receive aid will he bear in mind that the majority of previous Ministers with responsibilities for the arts lost their seats at the following general election?

Works Of Art (Export)


asked the Chancellor of the Duchy of Lancaster if he is reviewing his policy on the potential export or loan of major works of art, in the light of both the case of the 1740 Dresden cabinet, loaned by Mr. Axel Springer, and the Michaelangelo Ton do, which he did not allow to be loaned to the Union of Soviet Socialist Republics.

The reviewing committee on the Export of Works of Art is currently considering whether a procedure specifically designed for tem- porary exports could be incorporated into the export control regulations. However, neither of the two cases referred to by the hon. Member bears directly on the reviewing committee's consideration. In the case of the Dresden cabinet, the owner is the Victoria and Albert museum which, as a Crown body, is not bound by the export control regulations. In the case of the Ton do, the reason for refusing an export licence lay in its unique quality.

In this admittedly complex field, is there not a danger that if one country introduces export control regulations and assumes that they will be adhered to other countries will, tit for tat, play the same game? Although I do not suggest that the Federal Republic will put an embargo on the Dresden cabinet, as a matter of principle are there not great dangers for the future?

I do not believe that the hon. Gentleman's fears are well founded. The Federal Government have given us a specific guarantee that they will facilitate the return of the cabinet. As to the Tondo, the advice that it should not be given a licence came to me from the reviewing committee within a few weeks of my assumption of office. Unless there had been clear indications to the contrary, it would have been imprudent for me to overrule that advice.

European Council (Dublin Meeting)

With permission, Mr. Speaker, I will make a statement about the meeting of the European Council in Dublin, which my noble Friend the Foreign and Commonwealth Secretary and I attended at the end of last week.

There was a general debate on economic prospects, including energy. It was dominated by the feeling of uncertainty about the future of oil supplies, especially in view of the situation in Iran. It was agreed that inflation is still the main economic problem.

Otherwise, most of the time in formal session was devoted to Britain's budget problem. We were not able to reach agreement on an acceptable reduction in Britain's excessive net contribution to the Community budget. Our partners recognise that we have a problem. But they, of course, have their own problems, too. We and they did not see eye to eye on the magnitude and seriousness of the difficulty for the United Kingdom or on the measures that would be required to deal with it properly.

In spite of North Sea oil, we are still among the least prosperous of the member States but are nevertheless expected to be one of the main contributors to the Community budget. On present Community policies, the prospects are that the burden would increase even further. We stressed, therefore, that any solution must be a lasting one. Otherwise, the problem would come up yet again with damaging consequences for us and for the Community as a whole.

Agreement in Dublin would no doubt have been possible had we been ready to accept that changes to the financial mechanism negotiated in 1975 would have settled the matter in full. That would have reduced our net contribution next year by about £350 million, one-third of what we are expected to pay. The House clearly expressed its views on such a settlement in the debate last week. We were therefore confident that we would have the full support of right hon. and hon. Members in saying that this was totally inadequate.

Removing the constraints which limit the effectiveness of the 1975 mechanism can very well form the basis for such a solution, but, by itself, it is nothing like enough. It does not deal at all with the problem that our receipts per head from Community expenditure are less than half the average for the whole Community. This must be the second element in any solution.

There was, however, considerable resistance to any action to remedy that part of our problem. Eventually, it was agreed that the Commission should bring forward proposals for developing supplementary Community measures which would lead to more Community expenditure in this country.

The third and longer-term element in tackling the problem is the pattern of Community expenditure. The Commission suggested that more should be spent on structural measures and less on agriculture. This approach was generally supported.

Several countries which had been helpful in searching for a possible solution felt that more time was needed. We therefore agreed to another early meeting of the European Council to try to find a satisfactory settlement. It is left to the next President, the Italian Prime Minister, to judge when that meeting should be called.

I cannot give the House any reassurance about the success of that further meeting, but, if others will show willing, I am ready to do the same in the search for a genuine compromise. I left our partners in no doubt that my room for manoeuvre was limited, but I did not feel it right to refuse to make this further effort.

The European Council also wanted progress on other current Community issues—fisheries, energy and sheepmeat. These are seperate questions, each of which will be considered on its merits. Indeed, we are already considering them in that way.

So far as the budget is concerned, I naturally regret that this meeting did not find a satisfactory solution. The Community has much to do together in the larger world. We must now see whether the possible elements which we identified in Dublin can be built up quickly in order to produce an adequate and lasting settlement.

Before I come to the important question of the Community budget, may I ask about an issue on which the right hon. Lady has not reported in her statement but which is referred to in the conclusions of the Presidency, namely, the serious unemployment situation? It is stated that unemployment can be dealt with "primarily through increased investment". As our own investment is calculated to fall during the next 12 months, will the right hon. Lady say what contributions she made to that part of the debate?

Will the right hon. Lady inform us of her attitude to the reorganisation of working time, which is also mentioned in the conclusions?

With regard to energy, it is stated that
"the European Council considers that efforts must be made both by producing and consuming countries to create greater stability."
The right hon. Lady has not given us any information about that. What steps were proposed to follow this up? Is there to be a dialogue between the Western IEA countries and the oil-producing countries, or in what way is the Community attempting to "create greater stability"?

With respect, Mr Speaker, I should like to return later to the important issue of the budget, but I think that the issues which I have raised are also important and should be dealt with.

The answer to the right hon. Gentleman's first question, on serious unemployment, is also to be found in the communiqué, which states:

"The fight against inflation and unemployment should not be made more difficult through attempting to compensate by increases in money incomes for the real transfer of purchasing power which has taken place to the oil producing countries. Moreover, monetary policy should continue for the time being to support efforts to counter inflation."
It was generally realised that unless we tackle inflation we shall continue to have a problem with unemployment, and the whole of the debate on the economy was conducted on that basis.

With regard to the reorganisation of working time, very little time was spent upon that matter. As the right hon. Gentleman knows, many of us believe that the important thing is to keep this country competitive. If there were to be a very strong agreement on work sharing, we should cease to be competitive. That view, I think, was held by most member countries there. It was therefore agreed that the proposals put forward to the Council should be further considered with the "social partners". As the right hon. Gentleman knows, they are both the employers and the representatives of the trade unions.

The energy debate was part of the general economic debate. We did not have a prolonged debate on energy on its own. There were no specific proposals for a formal dialogue between the consumer and producer countries.

The right hon. Lady's answers are not very satisfactory on either of those matters, especially concerning the reorganisation of working time, on which the Council of Ministers is not considering proposals which have been put forward but has in fact adopted a resolution. However, we shall return to that in due course.

On 16 July last, the Government accepted an amendment tabled by the Opposition stating that what was necessary was a fundamental readjustment of the budget and a reform so that expenditure was a least balanced by, or
"not greater than the receipts".
That amendment was accepted by the Government. We reaffirm it today.

The right hon. Lady said that the result of the Council that had just been concluded was
"totally unsatisfactory."
Those words were used by the right hon. Lady, and I can certainly support them. What I want to ask her is, why did she give the impression before she went to Dublin that there was a deadline if she did not intend to stick to it? When she got there, apparently they had a fierce row and she said 'I want my money"—

—and returned at the end of the day having said that she was willing to compromise.

What does this mean? Is the right hon. Lady standing by her intention of achieving a broad balance, or by "compromise" does she mean that she intends to go for something less than that? Or is the compromise to be found not in financial terms: is it to be found by making bargains with the Community on some other matters? The right hon. Lady has got herself into the position in which, unless she puts some proposals forward, there will not be another meeting. Thus, we did not press her on her tactics—deliberately so—before she went to Dublin because we assumed that she had some cards up her sleeve, but when she got there we found that she had nothing up her sleeve.

Therefore, the right hon. Lady must now come forward with some proposals. The House will want to press her on what those are and what is to be the nature of the compromise that she is considering.

On reflection, does the right hon. Lady not think that it is a pity that she deserted the price freeze on the common agricultural policy that she inherited from us last spring? Would she not then have gone to Dublin with some levers in her hand instead of going there and returning entirely empty-handed?

With respect to the right hon. Gentleman, he is the last person who is in a position to criticise the budget contributions that we have to make to the Community. When he started the renegotiation of the Community contributions, this country was making a net contribution of £16 million a year to the Community budget. It went up during his tenure of office to £281 million, then to £632 million and this year to £919 million, and next year it will be £1,000 million. That was his contribution to renegotiation—to leave us with a considerable and increasing budget. The spectrehanging over Dublin was very much as they said—that we had negotiated on this basis, that we had renegotiated at Dublin previously on this basis, yet we were then coming along to renegotiate yet again. We had to try to perform against that background.

Secondly, the right hon. Gentleman refers to "fundamental reform" of the budget, which certainly was in the resolution passed by the House.

Fundamental reform may be desirable—I happen to think that it would be—but fundamental reform would change all the existing mechanisms, all the existing bases, of the budget. I still think that it is what we need, but anyone who thinks that we could get that immediately does not understand how the budget works.

Therefore, one goes not to fundamental reform but to what we did—to using the existing Community mechanisms. Those were two—to diminish the contributions, and to increase the receipts. Those existing mechanisms were the ones that we were operating on. We were offered £350 million on reducing the contribution, and when it came to increasing the receipts there was considerable reluctance to do that because the other leaders recognised that receipts would have to be reduced in their own countries. But we should not get relief for next year unless we used the existing mechanisms. In the long run, I think there needs to be a change, a fundamental reform, in the budget, but that will take time.

Thirdly, the right hon. Gentleman asked me about the deadline. The instruction from Strasbourg to the Commission and to the Council of Finance Ministers was first to find the facts and then to make proposals in time for decisions at Dublin. That was what we were charged with. All right—it takes longer to get decisions on precise figures. We were offered £350 million. I personally thought that that was not enough, that we should get more and that it was worth while going on negotiating to get more, particularly as a number of countries in that Council of Ministers were trying very hard to help us a achieve a better result.

As for the price freeze, I think that, when the right hon. Gentleman left office, all his economic policies, including a price freeze—he had held up many price increases for the election—and incomes policies were collapsing, and we had to go to a totally different system.

The right hon. Gentleman's final point related to two matters—broad balance, and bargains on other matters. Fisheries, energy and sheep meat are not linked to a solution of the budget problem. They must be tackled on their merits, and they are being tackled on their merits. The broad balance, of course, is the starting point, but the position that was put to me very strongly indeed was that the third element in the solution—that of structural changes in the budget, which consist of getting less spent on agriculture and more on other investment—will take time. Colleagues said to me "Yes, we are prepared to do more to help, but it will take time. Therefore, we must have a period of intense activity between Heads of Government and officials."

I think that the House will be relieved to know—[HON. MEMBERS: "Not again."] When the hopes of the whole House have been disappointed as they have been, we are right to hold the Government to account for that failure.

I think that the House will be relieved to know that in talking about a compromise the right hon. Lady is not talking about such issues as fish, energy or the other matters that have been raised. We therefore assume that what she is discussing is whether the sum shall be less than £1 billion, or whatever the figure will be next year. If that is so, does she really believe that at some Council which is to be held in February she will get structural alterations in the CAP, which we have been promised for the last five years? She is right: they were promised in Dublin in 1975. Does she really believe that the other members of the Community intend to work out structural changes which will enable her to take anything like £1 billion out of the necessary changes to the CAP by February? Is that not just as unrealistic as her previous deadline?

A moment ago the right hon. Gentleman was asking for total reform of the budget. Now he is doubting whether one can even get structural changes, or determination to undertake structural changes, by February.

May I once again point out that there are three elements under existing mechanisms for solving our budget problem? One is on the contribution side, where we have an offer of £350 million. The second is on the receipts side, to increase our receipts. If our receipts from the Community are raised, obviously the net contribution goes down. On that side, we encountered considerable resistance, but that is the side upon which we shall concentrate in the coming three months—as the right hon. Gentleman will have seen from the communiqué, which charged the Commission to find supplementary measures in this country which would raise our receipts from Community expenditure. Certainly the third element, structural changes in the budget, will take longer, but unless they are brought about within the next 18 months we shall be through the 1 per cent. ceiling—[HON. MEMBERS: "Eighteen months?"] We are talking of the financial year 1980–81 —next April to April 1981. Unless some movement is made on structural changes, we shall go through the 1 per cent. VAT ceiling.

Is the right hon. Lady aware that it is well understood in the country that she inherited a rapidly worsening situation and that there is no need for her to labour that point, because it is accepted?

Does the right hon. Lady accept that the question of the budgetary imbalance and the unacceptable distorting effects of the CAP are problems for the Community as a whole, as she has just said, and that it was perhaps a mistake to pretend, pre-Dublin, that she was going to do battle on the British problem? Since the Prime Minister now accepts that it is a question of balancing expenditure on agriculture with other structural measures, why did not her Treasury Ministers support the proposals of our Members of Parliament at Strasbourg for transferring expenditure from agriculture to the regional and social funds?

Part of the problem with the CAP arises from the proportion of the budget taken by the agriculture budget. That is what we mean by a structural switch. When it comes to reforming the CAP, some of the proposals before the Council of Ministers—which we did not discuss in detail—were not favourable to Britain. Although we accepted the objective of reforming the CAP in order to reduce its proportion of the budget, we could not accept the particular proposals before the Council of Ministers at this time. They would have damaging effects for Britain on milk and sugar.

One hopes that there will be a determination to reduce the proportion spent on the budget by a specific percentage. It will be remitted to the Agriculture Ministers, who will decide how that shall be brought about. The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) also asked me why we did not support the European Parliament in its resolution on milk. There is a more important principle at stake as to whether, having agreed in the Council of Ministers on a budget, one should then individually support the European Parliament on issues which happen to suit us. That particular matter would have suited us and therefore we had to take up a position on the larger principle.

Does my right hon. Friend appreciate that public opinion is wholly behind her in her stalwart efforts to achieve a sensible and satisfactory solution to these problems? Does she also appreciate that the best argument for her formidable advocacy is the restructuring of the CAP with a view to reducing its proportion of the budget to a much lower and realistic level, from which Britain will certainly benefit? Does she further appreciate that no amendment of the Treaty of Rome is required to bring this about? It need not be a long-drawn-out matter unless there is opposition by vested interests, which I am sure she would overcome.

I entirely accept the conclusion of my right hon. and learned Friend that we shall have to restructure the whole expenditure to reduce the proportion spent on agriculture. That indeed is our objective. Italy also feels strongly that we must go ahead and do that because she does not profit from the existing CAP. We shall, of course, continue our efforts in that direction, but I must stress that we cannot wait for the reform of the CAP before getting relief on the budget.

Therefore, the proposals that we made—taken from an excellent Commission paper—were designed to achieve that end. In the short term, we could achieve our aims through relief on contributions and more by way of receipts. We cannot wait for a total reform of the CAP in order to get considerable relief from the heavy contributions that we shall make this year and next year, and the even heavier ones that we shall be making in the years after that.

Is it not clear from everything said by the right hon. Lady today that there will be no hope of real economic recovery for this country as long as we remain members of the Common Market?

No, that is not clear at all. There will be great hopes for the economic recovery of this country both through existing policies and by a reduction in our net contribution to the Common Market.

Is my right hon. Friend aware that there is widespread support for the Government's efforts to change the size and shape of the budget? Will she consider suggesting that there should be a joint meeting of Finance and Agriculture Ministers to make adequate preparation for the next summit? Does she agree that a series of summits which raise expectations that are not realised is damaging to the cause of a united Europe? Is she aware of the considerable misunderstanding in Italy and in Holland of the Government's failure to support the European Parliament proposal for reducing the farm budget?

I thank my right hon. and learned Friend, though I did not know that there was a misunderstanding. If there is, we shall endeavour to put it right. We remitted the agriculture paper not only to Agricultural Ministers but to Finance Ministers. We thought that it was time that the CAP decision-makers had their Finance Ministers sitting by them before they came to expensive conclusions. That is being followed up already.

As one who has little faith in summit talking of any kind, may I assure the right hon. Lady that there will be widespread support for really tough action to reassert Britain's interests and rights?

I am grateful to the hon. Gentleman. I was not quite certain whether I was being criticised for being too tough or for not being tough enough. I have no doubt that I shall know in due course.

Since the Labour Government, while in office, did nothing about the developing budget problem, hon can the Opposition now have the nerve to be tempted into unleashing a general anti-EEC posture? Will my right hon. Friend reassert the fundamental importance to Britain of our membership of the Community for many reasons, and will she express a feeling of optimism that, at the February summit, solutions will be found?

The Community is quite capable, if it wants to, of finding a solution with Britain as a member. At the moment, the Community is reluctant either to contribute more or to take less in receipts. The Community did not like the intensity of our message and the fact that it would have to face up to it but the Community can sort it out. There is no question of our coming out of the Community. Britain is better in the Community, and the Community is much better with Britain as a member.

Is the right hon. Lady aware, recalling her strident bugle calls before she went to Dublin, that she has today reported an unmitigated defeat? In view of the response of our so-called partners, does she agree that she is now faced with the stark choice of either economic suicide for the United Kingdom or our withdrawal from the Common Market?

The right hon. Gentleman will not be surprised if I say "Absolute nonsense". In the first place, we have to get relief for the year 1980–81 and also a formula that will give relief in subsequent years. We shall do far better and enjoy a far more important position in the world as a member of the Community than we should on our own.

Does the right hon. Lady accept that her "all or nothing" stance at the Dublin meeting failed to deliver the necessary £1,000 million? Will she now turn, more constructively, to the third element of the package—structural reform? What is the Government's attitude to the Commission's view that there can be no long-term resolution of this difficulty without increased expenditure on new programmes? Does she agree that if we opt simply for cutting down the CAP budget we shall not see any return?

We do indeed support structural reform, but there was a danger at one period during the summit meeting that my European colleagues would want to leave everything until structural reform had occurred. That would have taken far too long. I had to turn down in no uncertain way such an element in the communiqué. I agree that we need structural reform, but it will take longer to achieve that than to secure re- lief on contributions and an increase in receipts. I have made it perfectly clear that I believe that the limit on the budget of 1 per cent. contributions on value added tax should not be exceeded.

Does my right hon. Friend agree that the follies and extravagances of the common agricultural policy have been responsible primarily for what has become to us an unacceptable situation which needs an urgent and equitable solution? Does she accept that her solution, which she pressed with such formidable advocacy and determination in Dublin, has the overwhelming approval of the British people?

I wholly agree with my hon. and learned Friend that the main component of the expenditure is the common agricultural policy. The rapid annual increases in the CAP budget have given us tremendous problems. Many of our partners profit far more than we do from that policy. That is why we have to reform it in order to reduce expenditure. However, we must beware that the methods used to reduce expenditure do not act badly on our farmers in any way.

In any civilised community, be it local, national or international, should not the rich, strong and powerful help those who are less fortunate? Why is the Prime Minister so diffident? Why is she prepared to settle for a mere book-keeper's balance? Why is she not asking the other European countries for a generous contribution to help us all—say £1,000 million?

In the opening of my statement I included a section which showed that if we based the calculation on the average gross national product per head we could apply to be net beneficiaries. I did not ask the Community for that. We ask to be in broad balance. Britain is not asking for anything from the Community. Some of our partners in the Community do not see Britain as one of the less prosperous countries, although that is what the figures show. The other countries say to me "You are in the best position of all because you have oil, gas and coal and do not face the uncertainties which the other countries face".

Others see our position differently, but the figures do not support that view. Our Starting position for the next summit is a broad balance. I must in candour say to the right hon. Gentleman that I doubt whether we shall achieve that next year because the structural changes will take longer.

I congratulate and support my right hon. Friend on the stand that she has taken. Will she bearin mind that reform of the CAP is not only in our financial interests and in the interests of the consumer but in the interests of the agricultural producer? Will she continue her fight? If she has to take drastic action, as she may have to do, will she bear in mind that those involved in British agriculture will fully support her in achieving a reform of the CAP?

I am grateful to my hon. Friend. Obviously we must keep in mind the interests of the producer. Some of the principles of reform which the Commission enunciated unfortunately would have the effect of cutting back on our milk and sugar production. Most of us take the view that we should be producing more food from our own resources. Therefore, we had to enter a reservation against those methods.

Does the Prime Minister agree that she went public before she went to Dublin, in the sense that she informed the British people of what she intended to ask from the EEC budget? Does she agree that for her own credibility and in the interests of the British people she should go public today and explain what she intends to do if she fails?

One has only to examine the figures to know what we ask for. Either we ask to be in receipt and in benefit from the budget—and I did not ask for that—or we ask, like France, which is much richer than Britain, to be in something like broad balance. The hon. Gentleman asked exactly what would happen if we did not get our way. It was painfully obvious that a number of our colleagues at the European Council realised that there would be an immediate crisis if we did not move any further than we did at the last Council.

There are only two possibilities. One is to ensure that no further progress is made on any Community decision—which would be disruptive. The other, which we have not so far seriously considered, is to withhold contributions. That of course would also have considerable consequences. There are two schools of thought. Some people believe that to withhold contributions would be better and more direct, and others believe that it would be better to disrupt. Let us hope that we shall move a great deal further before applying either of those suggestions.

I congratulate my right hon. Friend on the firm stand which she took in Dublin, in sharp contrast to the stand taken by the Leader of the Opposition during the so-called renegotiation. Is she aware that most people fully accept that at long last the EEC Commission recognises the unfairness of the budget? Does she agree that the offer of one-third of the amount for which we asked is far better than anything that has been offered in the past?

I am grateful to my hon. Friend. I thought that the offer was not bad as a start, particularly since one or two countries indicated that given a little time they were prepared to try to find more. There will be a period of intense diplomatic activity both on a bilateral and multilateral basis to agree on figures before we go back to any other meeting. Unless figures can be agreed behind the scenes, the Council is not the forum where sudden increases will be offered.

Is the Prime Minister aware that her speeches have raised public expectations? Is she aware that people now want to know what she is going to do? Is she prepared to follow de Gaulle in boycotting institutions? Is she prepared to amend section 2 of the European Communities Act in order to restore power to this House? In the last resort, is she prepared to contemplate withdrawal? Does she agree that if there is no back-up action all her speeches will be sound and fury signifying nothing and that she will be known, not as the iron lady, but as the paper tigress?

With respect to the right hon. Gentleman, an offer of £350 million for a start is not bad. He asked whether we are prepared to boycott. Frankly, I do not think that boycotting and leaving an empty chair is an effective way of conducting ourselves. My Ministers and I will do better to fill the chairs than to leave them empty. In some cases, when one boycotts a meeting, a decision is taken by a majority. What is the point of boycotting? It is far better to be there.

The right hon. Gentleman asked whether we intend to amend section 2of the Act. No, Sir. He asked whether we shall consider withdrawal. No, Sir. I believe that unless it is shown that the free nations of Europe can live together equitably—and it is on that basis that I am seeking a solution—the only people who will cheer are those who are based on Moscow.

I propose to call three more hon. Members from either side and then the Opposition Front Bench spokesman to conclude.

If in future the European Parliament votes to secure a reduction in the real burden of the common agricultural policy, will my right hon. Friend instruct our representatives at the Council of Ministers to support the decision of the European Assembly in support of the Italians and the Dutch rather than to oppose it?

May I consider what my hon. Friend has said? There is an enormous principle at stake here: does the Council of Ministers keep control of the budget, or, having agreed a budget, does it then, by minority vote, support a different view taken by the Parliament? To do that would be a considerable step. I personally agreed with part of what the Parliament put up. It was trying to reduce the amount spent on milk, but we did not agree with an increase in the co-responsibility levy on milk. So there was part that we were for and part that we were against.

I must have a look at matters in the light of the larger principle, because, if we did that for things that suited us it could go against us very adversely on other occasions when other Members of the Parliament put up things that would cost us money.

Does not the Prime Minister agree that many people foresaw the effects of budgetary imbalance under the own resources formula, and that those who confidently stated that the EEC would be flexible have been proved wrong? Therefore, does not she agree that, rather than fight a fruitless battle over the next 18 months, it would be much better both for Britain and the Community to have an orderly disengagement, to the benefit of everybody concerned?

The answer to the last part of the hon. Gentleman's question is "No". There is not much point in putting everything on the own resources formula. It is not only a question of the gross contributions through levies and value added tax; it is what the Community does with the money when it has those contributions in.

Indeed, it does, and it is on that side that we have been trying to persuade it to increase receipts in this country. I think that we shall get further. The question is whether we shall get far enough at the next meeting. But I believe that the Community knows how seriously we take our case. I am grateful for support from all parts of the House to indicate that the whole House supports us.

Would not my right hon. Friend have been wiser had she accepted the £350 million offered and then, at the invitation of the EEC, returned, like Oliver, to ask for more?

I obviously had to consider that. But, had we accepted the £350 million only, we should soon have been in considerable difficulty again. It was not only a question of accepting that; it would have been in full and final satisfaction of our problem, and, plainly, it just was not enough. We not only want more—I agree with my hon. Friend that we have, like Oliver Twist, to ask for more—but must secure a formula that will sort out our problems so long as we are below average income and receiving comparatively few receipts. So it is future years that I am concerned about as well as next year.

Is the Prime Minister aware that no one in this country is in the least impressed by her Dublin performance, and that the only thing that she has succeeded in doing is to make a laughing stock of herself throughout Europe? Is she further aware that the British people, who are told on every side that public expenditure must be slashed, cannot understand why she does not simply refuse to hand over the £1 billion that we are contributing to the economies of our eight European partners?

I put the point that the hon. Gentleman has made, I thought even more cogently than he did. I even pointed out that our £1,000 million contribution to Europe, which is fairly wealthy, is more than the whole of our aid budget, and that does not make sense either.

The fact was that our partners did not like the message that we delivered, for the simple reason that it means their either making more contributions or taking less in receipts. But they will have to do that. After all, hon. Members who suggest that we might leave know that if we did so the Community would have to find the money. Therefore, the Community can find it with us in. That is what the majority of other member countries will wish to do.

Does my right hon. Friend accept that the majority of the people of this country are not disposed to compromise on this issue and that whatever measures—I emphasise "whatever measures"—she sees fit to take to enforce concessions from the Community will have their wholehearted and enthusiastic support?

I am grateful to my hon. Friend. As he knows, I have always gone about this business on the basis that one cannot have a partnership unless there is equity among partners. Equity, of course, is historically a British concept, but I think that it is one that we bring to the Community. As I think that we have been very generous to the Community in many ways, we are entitled to expect in return understanding of our problem and measures properly to meet it.

Is the right hon. Lady satisfied that the advice she receives from the Civil Service on this topic is always disinterested? Is not Common Market policy advice co-ordinated in the Cabinet Office? Has not the former head of that office left the service of the Crown for the service of the French State, which, the right hon. Lady will be aware, owns the bank that now employs him? Is not that a contrast with the way in which the former head of the Civil Service felt that he should be employed by the Bank of England, not by an outside private or public body?

I receive the greatest support and help from all those in the Cabinet Office. I cannot speak too highly of their loyalty and devotion to, and work for, the cause that we are fighting for.

The right hon. Lady has said very little to the House today about her intentions, and of course it is her intentions that the House and the country now want to hear about. So may I at least invite her to reaffirm here in the House what she said at the Press conference after the Dublin summit—that what is at issue is our own money? Will she assure the House that she understood the implications of what she was saying? Will she tell the House that she is willing, if she is unable to make progress in the next few weeks, to invite the House to retake those powers of control over its own money that it abandoned seven years ago?

Finally, will the right hon. Lady make it absolutely plain, in all the talk about compromise, that she does indeed mean what she says and that she will stick to her guns?

I believe that the right hon. Gentleman is anxious to take us out of the Community, and I must view his questions against that background. I do not believe that that would be in the interests of Britain in the wider world. Therefore, I am not prepared to take Britain out of the Community.

I most certainly said that I believed that in a way this was our own money; we are asking only to have more of our own money. I am determined to try to keep as much of it as we possibly can. The first way is by increasing the receipts. The second, and medium-term, way is by making structural changes. The right hon. Gentleman will have been in negotiations for a very long time. He knows that one cannot go into a negotiation and give absolute pledges.

This is too important a point for the right hon. Lady to evade. What is at issue is this: it is either our own money or it is the Community's own resources, to which we have no right. This is a fundamental point—fundamental to the treaties, to the European Communities Act and to any possibility of seriously rectifying the situation. Will the right hon. Lady make clear whether her view is that what we are about is the control of our own money or getting back what is the Community's own resources?

The problem is about reducing the net contribution. I do not need to explain that to the right hon. Gentleman. In addition to the £350 million, that could be dealt with wholly by increasing the receipts from the Community. Indeed, we do not even have to bring those receipts up to the Community average per head. We would recover all of the net contribution in Britain if we brought receipts up to only three-quarters of the average receipts per head in the Community. Then the problem of the net contribution would be dealt with.

I have received notice from three hon. Members that they wish to make applications for an emergency debate under Standing Order No. 9. I shall call the hon. Members in the order in which they submitted their letters to me this morning.

British Steel Corporation

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

"the proposals of the British Steel Corporation to reduce its steel making capacity to 15 million tons per annum which would cut manpower in the industry by approximately 40,000 in addition to those redundancies that have already been announced."
If implemented, these proposals would mean the closing down of a substantial part of the steel industry as we know it today. They are coupled with a proposal to take 2 million tons out of the export market on the ground that it is non-profitable because of the strength of sterling. It is also proposed to establish a new grouping called British Steel Holdings that could herald the start of a process of hiving off to the private sector on similar lines to Government's proposals for the National Freight Corporation.

These proposals are specific, the reduction in capacity that is proposed is certain, and the only question remaining is how that reduced capacity will be distributed throughout the country. We can calculate the job implications for each area and, indeed, each plant. For example, in South Wales the proposals would mean that approximately 10,000 jobs in the steel-making industry would be lost—3,000 to 4,000 at Port Talbot and 6,500 at Llanwern. A further 6,000 to 9,000 jobs would be lost as a consequence in the South Wales coalfield, as that coalfield supplies 88,000 tons of coking coal to the Llanwern steelworks per month. If steel making were abolished at that plant, that coking coal would not be needed.

This matter is important—this really answers itself—because in my political lifetime there has been nothing of comparable importance affecting South Wales plants or, indeed, other plants such as that at Scunthorpe. South Wales would be returned to the period of the 1930s.

This matter has both national and regional implications. These proposals would render the whole of South Wales, from Chepstow in the East to Pembroke in the West, an employment disaster area. In national terms, these proposals are related to the Government's policy on shipbuilding, the imports of motor vehicles, their monetary policy, and the strength of sterling as an impediment to our exporting capacity.

The matter is also urgent. I concede that there has been a recent debate on the steel industry, but these are new and unexpected proposals that were disclosed to the major steel union on Friday of last week, and there are questions that need urgent answers from the Government. Are the Government to stand on the sidelines, or will they intervene in this crisis? Will the Government allow de-industrialisation to continue; or will they bale out the corporation?

Under the Standing Order you, Mr. Speaker, are invited to consider the extent to which this matter concerns the administrative responsibility of Ministers. These proposals are due entirely to the cash limits that the Government have imposed on BSC— £450 million in 1980–81–which cannot be used to finance losses. The matter is not premature, because the BSC has admitted the scale of the redundancies. The matter falls four-square within the criteria of the Standing Order. If the House is not given the opportunity to debate this alarming and vital development, it will not be fulfilling its proper function in our democracy and will not be acting as a forum for such a debate.

The hon. Member for Swansea, East (Mr. Anderson) gave me notice this morning that he would seek to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration.

As the House knows, under Standing Order No. 9 I am directed to take account of the several factors set out in the order but to give no reasons for my decision. I listened with care to the exchanges on this very subject at Question Time this afternoon, in which the hon. Member took part.

I have given careful consideration to the hon. Gentleman's representations, but I have to rule that his submissions do not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House, which was for a debate on the British Steel Corporation's proposal to the Iron and Steel Trades Confederation on Friday 30 November to axe a further 32,000 jobs, with a consequent threat to devastate many steel communities and regional economies.

Scottish Development Agency (Chairman)

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

"the dismissal of Sir William Gray as chairman of the Scottish Development Agency."
The House may be aware that this has been a burning question in Scotland during the 48 hours since the information first leaked.

First, the decision was made in a distasteful way, namely, by leaks to the press apparently from the Government, culminating in a formal announcement this morning. Secondly, the dismissal took the form of the non-renewal of Sir William's contract, which everyone expected would be renewed in a fortnight's time.

Normally, one would not question the non-renewal of a contract, but the circumstances are hardly normal and must be seen against the background of the recent forced resignation of members of the National Enterprise Board, which is the main body responsible for Government intervention and aid to industry—the SDA being the Scottish extension of the NEB, and now apparently under threat.

The matter is specific because it refers to one man, and he a man who is widely respected and trusted by both sides of industry in Scotland. It is urgent because the decision has caused dismay in Scotland. The front pages of the Scottish newspapers have headlines and comments such as:
"Dismissed SDA Chief in Row over leaks"
"Thatcher had me dismissed claims angry Sir William."
Sir William is not normally an angry man. The dismissal has especially caused dismay throughout industry as the comments in the press show.

Finally, the matter is important, as is shown by the nature of the comments that have been made about its being a political decision and, indeed, a decision instigated by the Prime Minister. It is a further example of the Government's intention drastically to reduce public support for, and aid to industry, especially when one considers the difficulties that face Scotland with daily news of redundancies and closures. Against that background, we cannot accept this as a normal decision. It is a political decision. The matter not only merits but requires an immediate debate in the House.

The hon. Member gave me notice this morning that he would seek leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,

"the dismissal of Sir William Gray as chairman of the Scottish Development Agency".
As the House knows, I do not decide whether these matters shall be discussed—that applied also to the one previously raised—there being other avenues open to the House for debate. I merely decide whether a matter is of such a scale that the opinion of the House should be registered upon it either tonight or tomorrow. That is the limit of my powers, and the House has directed me to give no reasons for my decision.

I listened with care to the hon. Gentleman, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Airfix Industries Limited

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

"the decision of the management of Air fix Industries to close the Mecca no factory, Binns Road, Liverpool, at one hour's notice on Friday 30 November".
I submit, Mr. Speaker, that even though this matter concerns only 900 workers—many fewer than those mentioned by my hon. Friend the Member for Swansea, East (Mr. Anderson) in connection with the British Steel Corporation—the loss of 900 jobs at one hour's notice is certainly a matter of importance which should be considered by the House.

You will know, Mr. Speaker, that I tried to raise a private notice question—I make no comment about that—

Order. I was hoping that the hon. Gentleman would know by now that reference is never made to an application for a private notice question.

If it can be struck from the record, Mr. Speaker, I shall be happy with that. I was trying to explain why I raised the matter in manuscript form when I had understood from members of your staff that another hon. Member from Liverpool had formally given you notice this morning of his intention—

Order. I am surprised at the hon. Gentleman. If members of my staff said anything to him, I am quite sure that they did not expect him to stand up on the Floor of the House and repeat the conversation. As a matter of fact, if they gave him that advice they themselves were misinformed.

I apologise to them and to the House, Mr. Speaker, and I shall not explain why I have taken this matter on when it might have been raised by another Member, and I expected it to be raised by another Member.

I submit that it is a specific matter—900 jobs to be lost, at one hour's notice—and that it is urgent. There is not just a sit-in at the factory; there is a work-in. Production continues, distribution continues, exhibitions continue. The workers want the product to go through.

Moreover, I submit that it is a matter of national importance. Although in the past hon. Members have been all too used to the giving of 30 days' notice, 90 days' notice, and so on, one hour's notice of closure, even if all the provisions of the law are being followed, is a matter of national importance.

I submit also that it comes within the responsibility of Ministers—the Secretaries of State for Employment, for Trade and for Industry.

For those reasons, Mr. Speaker, I ask that this matter come before the House. If I have done it in less than what I believe to be my usual courteous or knowledgeable way, I ask to be excused by yourself and by the members of your staff—because, obviously, I shall need your good will if I do not get what I want this afternoon.

May I say to the hon. Gentleman that there is not a more courteous Member of the House than he—and that is saying a lot—and I know that he observes the rules, but one of our unwritten rules, which is a matter of honour among us all, is that we do not, except by accident, repeat conversations with servants of the House, or even conversations with one another if they are private.

The hon. Gentleman gave me notice this morning that he would seek leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that he believe should have urgent consideration, namely,
"the decision of the management of Airfix Industries to close the Meccano factory, Binns Road, Liverpool, at one hour's notice on Friday 30 November."
As the House knows, it has directed me not to express my reasons when I give a decision in response to an application under Standing Order No. 9,I listened with great care to the hon. Gentleman, and I realise the depth of his feeling on this question, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Steel Industry (South Wales)

On a point of order, Mr. Speaker. During Welsh questions and subsequently, as a result of the application under Standing Order No. 9 by my hon. Friend the Member for Swansea, East (Mr. Anderson), we have had several references in the Chamber to the enormous number of job losses which will occur in the steel industry in South Wales, where the number will be greater than in any other part of the United Kingdom.

My point of order, Mr. Speaker, is this. In view of the anxiety which is being created among people in South Wales, may the House he told whether there has been any request from the Secretary of State for Industry to make a statement on the situation in the House today?

First, the hon. Gentleman's point of order is absolutely in order. The answer is that I have not received such a request for any statement to be made.

Statutory Instruments, &C

With the leave of the House, I shall put together the two Questions on the motions relating to statutory instruments.


That the Sea Fish Industry Act 1970 (Relaxation of Time Limits) Order 1979 be referred to a Standing Committee on Statutory Instruments, &c.

That the Fishing Vessels (Acquisition and Improvement) (Grants) (Variation) Scheme 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[ Mr. St. John Stevas.]

Orders Of The Day

National Heritage Bill

Order for Second Reading read.

4.37 pm

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