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Commons Chamber

Volume 979: debated on Tuesday 26 February 1980

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House Of Commons

Tuesday 26 February 1980

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Private Business

Stevenage Development Authority Bill (By Order)

Greater London Council (General Powers) (No 2) Bill (By Order)

London Transport (No 2) Bill (By Order)

British Railways Bill (By Order)

Orders for Second Reading read.

To be read a Second time upon Thursday 6 March.

Oral Answers To Questions

Social Services

Family Income


asked the Secretary of State for Social Services if he is satisfied that the indexation of benefits assists in the minimisation of the poverty trap.


asked the Secretary of State for Social Services if, in order not to aggravate the so-called "why work?" problem, he will take steps to ensure that no more child support is given to non-working families than to those who work.

I recognise that the levels of benefit are an important factor in any consideration of work incentives. But if, for example, we were to increase child benefit by £1.70. so as to produce the same level of child support for a person who is at work as one receiving unemploy- ment benefit, the cost would be £950 million a year. Such resources are not available.

Does not that mean that, while there is a powerful case for increasing some of the long-term benefits by an amount equivalent to the rise in the cost of living, there is, equally, a case for increasing such benefits as short term unemployment benefit to a rather lesser extent, so as to act as an incentive to those receiving that benefit to take some of the jobs that continue to be available?

We recognise the importance of the interaction between benefits, tax and low wages. We are keeping these matters under review. I cannot be drawn any further on this subject at present.

Is my right hon. Friend aware that those not in work receive at least £5.70, and in some cases as much as £9.35, for teenage children, while those in work receive only £4? Does he agree that that is one of the principal causes of the "why work?" problem which the Government are pledged to solve? Will he give an assurance that he will institute a uniform child benefit at the earliest possible opportunity?

I cannot anticipate what may happen about child benefit. Clearly, in principle, we all wish to see it raised a good deal. The general problem has to be attacked in several ways. One is the raising of tax thresholds, on which a useful start was made in the Budget last year.

Is not the Minister aware that his Government's refusal to increase child benefit is deplored by the majority in Britain, especially those who are most poor and needy? Will he give an assurance that child benefit will be increased to its true level in real terms?

The hon. Gentleman cannot expect me to anticipate anything that may be announced in a few weeks' time.

Does not my right hon. Friend agree that if, at the next Budget, the Government decide not to index the tax system through implementing the Rooker-Wise amendment, there will be a substantially reduced case for indexing child benefit? If Rooker-Wise is not implemented, and the indexation of child benefit occurs, will not the poverty trap be made worse?

That is an interesting supplementary question. I cannot anticipate the Budget Statement for two reasons. First, I do not know what is in the Budget and, secondly, even if I did know I would not be allowed to say so.

Instead of listening to his hon. Friends behind him calling for a decrease in benefits to alleviate the poverty trap, will the Minister pay attention to the early-day motion sponsored by his hon. Friend the Member for Hornchurch (Mr. Squire) outlining methods to solve the poverty trap?

Does the right hon. Gentleman realise that that motion has been signed by 29 Conservative Members of Parliament and calls for child benefit to be raised?

Every hon. Member is in favour of raising child benefit as fast and as far as resources will allow.

Child Benefit


asked the Secretary of State for Social Services what recent representations he has received requesting an increase in child benefit.


asked the Secretary of State for Social Services when he expects to make an announcement on the increase of child benefit.


asked the Secretary of State for Social Services if he will make a statement on child benefit levels.


asked the Secretary of State for Social Services what representations he has had from organisations regarding the level of child benefit; and how many of these organisations requested that the indexation of this benefit be restored.


asked the Secretary of State for Social Services what representations he has received requesting an increase in child benefits.

I have had a number of representations. Any change in the levels of child benefit will be announced at the appropriate time.

Can the Secretary of State confirm that he has received many representations not only from Labour Members and Labour Party organisations, but from his own side? Will he take particular note of the Conservative Women's National Advisory Committee, which has also asked him to press for an increase in child benefit? Will he therefore give some assurance to the House that these representations will be taken note of?

I am grateful to the hon. Gentleman for his solicitude for Conservative women. I can assure him that I pay the greatest possible attention to what they say to me.

Order. I propose to call first those hon. Members whose questions are being answered.

is the Secretary of State aware that there will be considerable anger among my constituents who are suffering hardship from the inflation that has been caused by the Government's policies and who are failing to get the increase in child benefit that they require to keep up their standard of living? It is not good enough for the right hon. Gentleman to say that the announcement will come later. The announcement is required now.

The only way in which people in this country can maintain and improve their standard of living is by increasing the output which the country as a whole produces. There is no way in which any Government can guarantee for our people the maintenance, let alone the increase, of their standard of living.

Does my right hon. Friend agree that over the last few years the cost of living for families has gone up at least as rapidly as the cost of living index as a whole? Does he further agree that families are among the least well off groups within the community? Would he personally like to see child benefit go up so that it is at least in line with the rate of inflation?

I understand and applaud my hon. Friend's concern for the position of families. I can assure him that the Government have a lively concern for the relative position of families with and without children. However, he cannot expect me to announce, ahead of the due date, what we may be able to do about the increase in child benefit.

Does not the Secretary of State accept that it is his responsibility, not the responsibility of the Chancellor of the Exchequer, to state exactly by how much child benefit should be increased in order to restore its real value?

The hon. Gentleman may not be fully familiar with the procedure in relation to the announcement of the November upratings of social security benefits. He will know that for instance, for many years it has been the custom for the Chancellor in his Budget Statement to announce the increase in pensions. There will be an announcement at the due time about child benefit.

The right hon. Gentleman must surely appreciate that parents, who have already been burdened with VAT increases, are looking for an announcement as early as possible with regard to child benefit because they want to be able to budget for the rest of the year. Is there no assurance that can be given on this point at this time?

I have already made it clear in my letter to the right hon. Member for Salford, West (Mr. Orme) that the Government do not feel it right to make an increase in child benefit this April. Now that child tax allowances have been wholly phased out, and there is a direct interaction between the amount of child benefit and the amount of the child dependency additions for short-term benefits and for supplementary benefit, it makes every sense to increase the child benefit in November, at the same time as other social security benefits, and to make the consequential adjustments in the child dependency additions at the same time. I can assure the hon. Gentleman that an announcement will be made about the uprating of child benefit at the due time.

I welcome my right hon. Friend's announcement that the appropriate time for the increase in child benefit is in November. Will he bear in mind the pleas that have been made from both sides of the House that a substan- tial increase in child benefit can do much to help parents climb out of the poverty trap and also to encourage work and wealth production?

I can give my hon. Friend the assurance that the Government have both those considerations very firmly in mind.

Does my right hon. Friend agree that, with the amalgamation of child tax allowances and child benefit, child benefit is now part of the tax system just as much as it is part of social security? Will he ask the Chancellor, in considering his Budget Statement, to review the social priorities that apply in the selection of tax concessions, because there are certain classes of recipient of benefit in the income tax system which I believe society as a whole would not put ahead of mothers, given the present state of inflation?

My hon. Friend has pursued these matters with great tenacity over many years and has aroused the admiration of all his colleagues. I think that he would recognise that child benefit, whatever may have been its origins, is a cash transfer from the public to the private sector, whereas a tax allowance is a way of allowing a man to keep more of his own income. As to the decision which a Government face in making proposals to the House, the key question is that either would have an effect on the public sector borrowing requirement. Every 10p increase in child benefit costs £56 million in a full year and the Chancellor considering his tax allowances or the Government as a whole considering the level of child benefit must have regard to the requirement to keep the PSBR under control.

Is the right hon. Gentleman aware that the language that he has just used is not the same language that he used when in opposition, and neither is it the language of the Conservative Party manifesto before the general election? I should like to put a specific point to him. Does he agree that any increase in child benefit, presumably announced at Budget time, should at least allow for raging inflation? Does he agree that to do that there would have to be an increase next November of more than 25 per cent. on present trends? Is he aware that there has already been a net loss of about 20 per cent. in the real value of child benefit since it was last increased, and there will be a great deal more between now and next November?

I honestly do not believe that the right hon. Gentleman expects me to answer questions as to quantum of the child benefit now. That is an announcement which will have to be made at the appropriate time.

Will my right hon. Friend draw, and bring to the attention of his Cabinet colleagues, a graph showing the increase in earnings and pensions and the decrease in the level of child support—either combined child tax allowances and family allowances or child benefit—since 1955?

I shall certainly take careful note of what my hon. Friend says. However, it is fair to put on record that child benefit remains of greater value to most basic rate taxpayers than child support in recent years by way of child tax allowances and family allowances or child benefit.

Does the Secretary of State recall that the Royal Commission on income distribution said that there are more poor children than there are poor pensioners—4½ million as against 3¾ million—and that nearly 45 per cent. of families with three children or more are living in poverty? Is not that a reason for now paying a larger child benefit to large families rather than the case which he has put?

It all depends on what one means by poverty. The case that has been advanced by Professor Townsend and others is that poverty must always be looked at solely as relative poverty—

The hon. Gentleman says "Of course." But the implication of that is that if the standard of living in the country as a whole doubled over a period of years, with no relative change in the position of different groups, exactly the same number of people would be in poverty at the end of that period as there was at the beginning. I happen to regard that proposition as absurd.


asked the Secretary of State for Social Services what reply he has sent to the Conservative Women's National Advisory Committee regarding its request for an increase in child benefit.


asked the Secretary of State for Social Services what reply he has sent to the Conservative Women's National Advisory Committee on its request for an increase in child benefit.

My right hon. Friend has conveyed to the Conservative Women's National Advisory Committee his appreciation of its contribution to the discussion on the role of child benefit.

That is what I would call a dusty answer. I am sure that every Labour Member and obviously a lot of Conservative Members, judging from the previous question, must welcome the support of the Conservative Women's National Advisory Committee with regard to child benefit. Will the Secretary of State take time off, and take his right hon. Friend the Prime Minister by the hand, to meet the Conservative Women's National Advisory Committee so that, as women to women, it may try to persuade her of the necessity to raise this important benefit for the family?

I am sure that my right hon. Friend has noted the remarks of the hon. Member for Barking (Miss Richardson). He will no doubt act on them in his own special way.

Since the Government have always claimed to direct resources to those who need them most, how can the hon. Lady, or any member of the Government, defend the giving of enormous juicy carrots to those earning £22,000 a year while at the same time clobbering families with children whose situation has been made worse by the increase in school meal and school transport charges? How can the hon. Lady defend that inequity?

I assure the hon. Gentleman and other hon. Members that we have taken careful note of the needs of families. We are well aware of the needs of children. The House must await the statement of my right hon. and learned Friend the Chancellor of the Exchequer.

Does my hon. Friend accept that part of the Conservative Women's National Advisory Committee analysis which says that recent Governments, of whatever party, have so organised the benefits system that they have engineered a shift of resources away from families and towards single people?

We have taken careful note of that fact over a period of time. It has not only happened over the last year, but over a number of years. It will be brought to the attention of my right hon. and learned Friend the Chancellor of the Exchequer.

Will the right hon. Lady write to the Conservative Women's National Advisory Committee giving it her previous statements on child benefit detailing her support for an increase in child benefit, and will she state whether she has now changed her mind?

I assure the right hon. Gentleman that the Conservative Women's National Advisory Committee is well apprised of all statements made on this issue in the past. It is also aware of our views on the question of raising child benefit.

Pensions (Life Expectancy)


asked the Secretary of State for Social Services what is the average length of life after receiving the State retirement pension of (a) women and (b) men.

On the basis of the current mortality rates in Great Britain, the expectation of life of a woman at her pension age of 60 is 20 years, and that of a man at his pension age of 65, 12 years.

Does the Minister realise that these vulnerable people in the community, who work all their lives, 'ire now suffering dreadfully due to the policies of his Government? Services are being cut in many ways. The meals on wheels service, home helps and so on, are now difficult to obtain. Has the Minister any plans on the subject of increases in prices, fuel bills, and so on? Has he any plans to review the matter, and to ensure that those people are helped in a proper manner?

No. Sir, I do not accept that statement. The rates of pensions and other main benefits were increased more than the cost of living last November. I accept that pensioners are suffering from inflation. We should all do our best to pursue counter-inflation policies, particularly, in relation to the current level of wage demands.

Is it not sheer hypocrisy for the hon. Member for Sheffield, Hillsborough (Mr. Flannery) to talk about destroying the value of the pension, when in five years, the Labour Government cut by half the value of pensioners' savings? Will my right hon. Friend now pay special attention to giving additional help to very elderly pensioners?

With regard to any adjustment of rates, we must await the Budget Statement. I agree with my hon. Friend in the earlier part of his question. That is why I underlined the importance of counter-inflationary policies in my answer to the first supplementary question.

Is the Minister aware that, because of a miscalculation, pensioners received an increase rather less than the increase in average earnings? They have been done out of a week's pension by the Government. What will the Minister do about that? There is a legal responsibility on the Government to do something. Is it not time that the Secretary of State started obeying the law?

There is no legal liability to make a good a shortfall of that sort. However, if Labour Members are to argue that it should have been done, they had better count the cost, and decide where they would make the cuts in Government spending elsewhere.

Is my right hon. Friend satisfied that the added-on element for a pensioner who remains in work is still fair and equitable?

That matter is tied up with the whole question of the earnings rule, and it is the objective of the Government to phase out that rule as soon as practicable.

Will the right hon. Gentleman agree that the quality of life is as important as the length of life for the elderly? Will he consider giving greater priority to the care of the growing number of frail, elderly people in our community?

The community should give the greatest possible priority to frail, elderly people. That is why I am glad that in the last 10 years or so the provision of personal social services by local authorities to the very elderly and disabled people has more than doubled.

Shawbury Community School


asked the Secretary of State for Social Services if he will make a statement on the proposed closure of the Shawbury community school in Coleshill.

I understand that the children's regional planning committee and the Birmingham city council are considering the closure of Shawbury school. Before it can be closed, they will need to seek my right hon. Friend's approval to the appropriate amendment to the regional plan.

Is my hon. Friend aware of the extreme concern, expressed locally, about the change in national policies and the withdrawal of community school services, and the particular nature of the problems caused to the staff due to the linking of their employment with tied homes?

We are alive to those problems, but until we hear from the regional planning committee, my right hon. Friend cannot say whether the West Midlands needs the places. On the broader question, alernative methods have been found for looking after those children, which in many ways are better than community homes with education. I support that trend.

Hospitals (Derbyshire)


asked the Secretary of State for Social Services how many representations he has received about the closure of hospitals in Derbyshire by the area health authority.

In the last six months I have received 63 letters or telegrams and a deputation, led by the hon. Member, about the Derbyshire area health authority's hospital closure proposals.

Is the Minister aware of the outrage in Derbyshire about the area health authority's decision to close five of those hospitals? Will he accept that that is largely due to over-spending because of the rate of inflation and the doubling of VAT? Will he give an undertaking to the House that, when his Department next discusses resource allocation for Derbyshire with the regional health authority, he will make it clear to the region and to Derbyshire that the provision of a comprehensive Health Service, by the re-opening of those hospitals, should be a first priority?

I do not accept the first statement. Following my meeting with the deputation on 28 January, I wrote immediately to the chairman of the area health authority, asking him to look again at some of the closures, particularly the closure of Etwall. He replied that he still regards it as necessary. I have now written again, asking what other economies might be made in order to reopen Etwall as soon as possible. I shall keep the hon. Member informed.

Is the Minister aware that local people are grateful for his intervention in favour of Etwall but that they are still in favour of the staff sit-in at the hospital and the fact that the hospital is still being picketed? Does he realise that they are hoping for more intervention from the Minister, even at this late stage?

I understand the hon. Lady's concern, and I share it. She may be pleased to hear that there have been no staff redundancies as a result of cash limits.

Order, before I call the next speaker, I remind the House that the question refers only to hospitals in Derbyshire.

Will the Minister place in the Library copies of the correspondence relating to hospitals in Derbyshire with the regional health authority and copies of the 62 letters that he has received, as guidance to hon. Members who may have similar problems?

Those are personal letters between myself and the chairman of the hospital authority. It would he improper to place them in the Library without first consulting him. I shall look into the matter.

If the procedure in regard to these hospitals does not turn out to be as the hon. Gentleman believes, does he agree that a community health council could oppose a closure as a means of getting it on to the desk of the Secretary of State? If community health councils are abolished, as the Government believe might happen as a result of their consultative procedures on "Patients First ", what method does the hon. Gentleman suggest for raising these matters with the Secretary of State?

Once again, the right hon. Gentleman is trying to pre-empt the discussions that are taking place on "Patients First". He has done that consistently in the Committee on the Health Services Bill. It is not the right way to proceed.

Mr A J Gardham

asked the Secretary of State for Social Services why Mr. A. J. Gardham, a constituent of the hon. Member for St. Helens. has been refused benefit by the local staff of his Department in spite of repeated and regular medical certificates indicating that his constituent is unfit for any kind of employment.

Claims to sickness benefit and invalidity benefit are decided by independent adjudicating authorities, which are not bound to accept the opinion of any doctor as conclusive. Neither the insurance officer nor the local tribunal was satisfied that Mr. Gardham was incapable of work, and invalidity benefit was therefore not payable.

The Supplementary Benefits Commission has decided that Mr. Gardham must register for work in order to obtain supplementary benefit.

Is the right hon. Gentleman aware that Mr. Gardham suffers from a serious cardiac illness? Will he accept that to say that he is fit to sign on for light work is to offer him an opportunity that is not available? There are no light jobs to be had. Is the right hon. Gentleman aware that we have hundreds of disabled people registered for work that they cannot obtain?

Will the right hon. Gentleman accept that I could not recommend my constituent to appear before the local appeals tribunal because I have no faith in the chairman, who is receiving professional fees, to make a decision on behalf of the Department?

The decision that the adjudicating authority had to make was whether Mr. Gardham was capable of work. He may be ill but still be considered capable of work. I am surprised that the hon. Gentleman followed his supplementary question with an attack on the chairman of the local appeals tribunal. He is doing a difficult job and deserves our support.

On a point of order, Mr. Speaker. In view of that most unsatisfactory reply, I shall seek to raise the matter on the Adjournment.

Retirement Pension

asked the Secretary of State for Social Services what representations he has received about the frequency of payments to those in receipt of the State retirement pension.

Does my right hon. Friend agree that a great deal of worry and uncertainty has been created for pensioners through recent publicity? Will he put that right as soon as possible? Further, will he confirm to the House that, if there is any question of fortnightly payments to pensioners, one week will be in advance?

I gave a very clear assurance, in the debate last Tuesday, to pensioners and all those in receipt of social security benefits that it would remain open to anyone who wished to do so to draw those benefits over the post office counter. It is a sad fact that many people have been told, quite erroneously, that benefits were to be paid into bank accounts. That never was true. There never was any such proposal, and I am happy to make that clear.

I also made it clear in the debate on Tuesday that the proposal in the study by officials was that benefits should, in general, be paid fortnightly. I also made it clear that, if that were to be done, one week would be paid in advance and one in arrears.

In the light of the debate, and considering what was said on both sides of the House, the Government are considering how and whether to carry the matter forward.

Will the right hon. Gentleman tell the House what impression he received from representatives of sub-postmasters after the lobby last Wednesday? Secondly, will he confirm that the general desire is for weekly payments? Finally, when will the right hon. Gentleman make a statement to the House?

I had a full and valuable exchange of views with representatives of the National Federation of Sub-Postmasters. I believe that they recognise the value of the assurances that I gave in the House. I recognise the strength of feeling that they represented about what they had seen as a threat to their livelihood. I gave a clear undertaking in the House that the Government would do nothing to threaten the network of sub-post offices across the country. I am happy to repeat that.

The Government are considering how to carry forward the study that has been undertaken with the advice of Sir Derek Rayner. We are taking the fullest account of views expressed from all parts of the House. I cannot say when we shall be able to make a statement, but I recognise the great desire that we should make our intentions clear as soon as possible.

Is my right hon. Friend aware that representatives of the National Federation of Sub-Postmasters were heartened by their meeting with him last Wednesday and welcomed his assurances?

Since the right hon. Gentleman is looking for ways to reduce the cost of paying out benefits, will he note that in the largest sub-post office in the East End, every morning the sub-postmistress receives from Newcastle on average 60 pension books, each in a separate envelope, separately addressed to her, sealed and posted? Does the right hon. Gentleman agree that Sir Derek Rayner might look at that?

It certainly sounds like something that should be looked at. I am sure that the hon. Gentleman is aware of the enormous complexity of the operation at Newcastle. Pensions are paid by reference to the national insurance number rather than to the recipient's address. It is therefore necessary for the pension to be sent to the post office nearest the address given, in a separate envelope.

Of the total of £130 million that my Department pays as an agency fee to the Post Office, only about £30 million goes to sub-post offices, although they transact some 70 per cent. of the benefit business done by the Post Office on behalf of my Department. That is a matter that we shall have to look at carefully.

Voluntary Work


asked the Secretary of State for Social Services if he will give an assurance that he will make good any local authority cuts in support for voluntary work.

Has the Minister considered advising local authorities of the advantages of putting out to tender some of the social services that they carry out themselves, such as home helps and meals on wheels? Does my hon. Friend agree that it would be better to contract out to private enterprise some of those services, on the basis that it will be better and cheaper in the long run?

The second part of that question is for my right hon. Friend the Secretary of State for the Environment. I am convinced that local authorities will consider the vital role of the voluntary sector in helping to keep people out of residential care, through the provision of domiciliary services, the development of informal care and in providing whatever support that they can.

Does the Minister realise that, whatever the importance of voluntary service—and it is very great —it is no substitute for professional service?

We believe that there is tremendous scope for a partnership between professional support and the voluntary sector. Going round the country, I am delighted to see the ways in which many local authorities are making use of the untapped resources of the voluntary sector to meet areas of real need in the community.

Is my hon. Friend worried that the local authority social services people will cut services and output from their departments but will not cut their own numbers, thus producing an inflationary rise in the money cost of these services?

That question may be more appropriately put to the Department of the Environment tomorrow. We have urged local authorities to try to protect, as far as possible, certain areas of activity that affect the elderly, children and the handicapped, and to use the resources of the voluntary sector to meet those needs, where possible.

Is the Minister aware of the representations that his Department received from the Association of Directors of Social Services, which refer to the cutbacks that are being forced on its members, not only in their own services but in the financial support that they have willfingly given to voluntary welfare organisations up and down the country?

When the Minister says that it would not be practicable to adopt the idea put forward by his hon. Friend the Member for Liverpool, Wavertree (Mr. Steen), is he aware that such powers are vested in government by way of the urban programme?

The Department has maintained the value of its grants to the voluntary sector this year. We hope to increase those grants next year, as evidence of the importance that we attach to the voluntary sector. I have read the report of the Association of Directors of Social Services. I was disappointed about the lack of reference to the use of voluntary organisations as a means of helping to meet the difficult circumstances that it faces.

Hospital Waiting Lists (Staffordshire)


asked the Secretary of State for Social Services how many people were awaiting admission to hospitals in Staffordshire at the most recent count.

I refer my hon. Friend to my reply to him of 29 January in which I said that, at 30 September 1979, the latest date for which information is centrally available, there were 15,259 such people.

Does my hon. Friend agree that that figure is much too high? What steps is he taking to reduce it?

Yes. We are concerned about the level of waiting lists. Unlike the previous Labour Government, we intend to reduce those lists. We are restructuring the Health Service. We are maintaining small local hospitals that serve the local community. We are encouraging voluntary services to help. We are also encouraging the private sector. We have set up a special study on how to reduce the orthopaedic waiting list.

Is the Minister aware that an increasing number of my constituents tell me that, although they are in pain and although they are suffering, they have been told that they can gain immediate admission to a hospital only if they pay sums that are far beyond their pockets? They must wait months, or even years, if they cannot pay.

I do not accept that. By attacking that side of the Health Service, the hon. Gentleman ignores the fact that, when the previous Labour Government were in office, waiting lists increased by 234,998 patients. The appalling strikes of last winter increased the waiting lists by 125,000 patients.

Flowers Report


asked the Secretary of State for Social Services what consideration he has given to the Flowers report on London medical schools in his examination of the pattern of health care in the London area.

The Flowers report was published this morning. I thank its members for the work that they have put into perparing this very valuable report. Its recommendations will be considered first by the university, since it set up the working party.

At the same time, the London Health Planning Consortium published its report today on the future pattern of acute hospital services in London. Copies of both reports are available in the Library of the House. The two reports together represent a fundamental examination of the organisation of hospital services and medical teaching in London. They make far-reaching proposals that will require careful consideration.

I thank the Minister for that reply. As he has said, considerable changes will be made in medical education and in the distribution of health services in London. Will the Minister give an undertaking that the House will have a full opportunity to debate all the proposals before he makes any decision to implement them?

I agree with the hon. Lady. The Royal Commission recommended that a further inquiry should be made into London. We do not agree. Sufficient inquiries have already been made about what is needed for London. We now need decisions and action. My right hon. Friend will shortly announce the setting-up of an advisory committee to look at the two reports and to recommend action.

As I have been put at risk by the report of the Flowers committee which was published this morning, will my hon. Friend understand if I do not share his enthusiasm for it.' Will he give an undertaking that he, or his right hon. Friend, will consult those members of the academic staff of medical schools who are involved in the delivery of health care, and who will be affected by the report, before any decisions are made?

I am sure that the whole House will sympathise with my hon. Friend. We shall certainly hold wide consultations. There will be full representation on the advisory group that we intend to set up. There will be not only representatives from the university, but from other relevant bodies in London.

Does the Minister agree that irrespective of the quality and content of the Flowers report and of the report of the London Health Planning Consortium, they cover narrow areas? Does he further agree that evidence was not collected with full publicity? Community services, general practitioners and inner city areas are involved. The reports do not pre-empt a public inquiry into the London health services. Will he, therefore, reconsider his decision?

The right hon. Gentleman should wait until he has read the two reports before making any further comments.

Prime Minister (Engagements)


asked the Prime Minister whether she will list her official engagements for 26 February.

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

Does the Prime Minister share my surprise that Mr. Bill Sirs has called the proposal of the British Steel Corporation to hold a secret ballot in order to see whether the steel workers want to vote on their pay offer "a dirty trick"?

I share my hon. Friend's suprise. Workers who have been without a pay packet for about eight weeks and who have gone without strike pay have a right to expect to be consulted about their wishes for the future.

Will the Prime Minister study today the speech of her right hon., noble and very distinguished Friend, Lord Butler? He spoke yesterday on the Education Bill. Is the right hon. Lady aware that he suggested that the Government could save public expenditure as regards sending a few pupils to private schools, and that they could use the money to maintain free school transport for children?

I noted the observations of my very distinguished right hon. and noble Friend. He went to the type of school that we wish other children to have an opportunity to attend.

During the course of her busy day, will the Prime Minister consider the insidious effect of the activities of members of the Unification Church—known as "moonies"—and the threat that is thereby posed to family unity? Will she consider taking measures to alert and protect citizens from such activities?

I am quite prepared to consider any proposition that my hon. Friend puts to me on the subject.

Will the Prime Minister reconsider her reply to the right hon. Member for Roxburgh, Selkirk and Peebles (Mr Steel)? Does she not agree that spending public money on private schools such as Marlborough will further divide British society? Will she consider the announcement made by the Minister, who, during the Committee stage of the Education Bill, made it clear that certain expensive schools would not be part of the system?

I obviously disagree with the lion. Gentleman. It is important to give all children the very best educational opportunities. If that includes assisted places at some schools, so be it.

Will my right hon. Friend find time today to consult her Treasury colleagues and to request clearing banks voluntarily to consider some form of reduced interest rate charge on smaller businesses, in view of the banks' substantially increased profits?

My hon. Friend knows that one of the problems of bank profits is that banks inevitably make high profits when there are high interest rates. That occurs when other businesses are in considerable difficulty. Banks do less well when businesses are doing well. That is certainly a difficult problem to explain. However, I do not think that we can have two-tier interest rates. Nor can we do anything to increase the amount of borrowing. That is the cause of high interest rates.

Would the Prime Minister care to try to explain something else in the light of her television discussion last night? As wage earners are apparently able to claim more when an industry is prosperous than when it is not, is she now saying that bank clerks should have a substantial increase while steel workers should get nothing?

The right hon. Gentleman knows that it is not my policy to intervene in pay claims.


asked the Prime Minister if she will list her official engagements for Tuesday 26 February.

Will my right hon. Friend take time today to reflect on the decision of the executive of the Iron and Steel Trades Confereration to expel the Sheerness steel workers from union membership for exercising their desire to work?

I saw the report to which my hon. Friend refers. If it is true it brings the trade unions into conflict with public opinion. These workers wish only to carry on working—

These workers wish only to carry on working in a company which is not in dispute with its own workers. They wish to carry on working to support their families and honour business contracts, and both of those objectives should be encouraged.

Before the elections begin in Rhodesia tomorrow, will the Prime Minister give a categorical assurance that Lord Soames will call on the leader of the majority party in the election to form the Government of Zimbabwe as soon as the results are known?

I have every confidence in my right hon. and noble Friend Lord Soames to do whatever is just and proper—

I have every confidence in my right hon. and noble Friend Lord Soames as the man on the spot, to do whatever is just and proper as soon as the results are known of the free and fair elections which I am confident he will hold.

Is my right hon. Friend aware of the overwhelming support of the British people for her television statement last night that she will take the strongest action to get justice for this country in respect of our contribution to the EEC? Will she take time to remind our German friends that the sooner we get justice the less likelihood there is of our withdrawing troops from Germany, since those troops are highly expensive?

It so happens that our German partners are considerable contributors to the EEC budget, and we hope that others will increase their contributions. With all due respect to my hon. Friend, I do not think we can get this issue muddled up with any question of reopening the offset agreement.

Medical Education


asked the Prime Minister if she will transfer responsibility for medical education from the Department of Education and Science to the Department of Health and Social Security.

Is the Prime Minister aware that in the Flowers report, which was published today, there are proposals to close down several medical schools of merit and also several teaching hospitals? Is she also aware that the proposals include the closure of several institutions, including the Institute of Obstetricians and Gynaecologists and the Institute of Paediatrics and Dental Surgery? Does she not think that the very far-reaching proposals in this report need adequate funding, and adequate discussion by this House and by all interested bodies outside? Will she give serious consideration to this?

I looked quickly through the Flowers report, sufficiently to know that before any opinion is ventured on it, it requires considerable study and consultation. I heard what the hon. Lady said to my hon. Friend the Minister for Health during Question Time and I assure her that this matter will be given full consideration.

Has the Prime Minister had time to reflect on the com- ments of Lord Justice Lawson to the effect that social security scroungers should be sent to gaol? Will she comment on my suggestion that we should ask neighbours to help the authorities in their inquiries?

My right hon. Friend is making strenuous efforts to bring to the courts any who are alleged to be fraudulent in claiming social security benefits to which they are not entitled. When they get to the courts it is a matter for the judge to decide what sentence should be passed.

Will the Prime Minister take time today to study the comments made by the retiring chairman of the Inland Revenue, who estimates that there is a loss of £2,000 million to £3,00e million in tax evasion—

Order. This is not an open question. I shall call the hon. Member when we reach the next question, which is an open question.

Prime Minister (Engagements)


asked the Prime Minister what her official engagements are for 26 February.

Will the Prime Minister have the courage to admit that her Secretary of State for Industry has introduced ruthless, reckless and reactionary policies which are dividing our nation and totally rending apart the social fabric of Britain? When will she assert her premiership, move against the monetarists in the Cabinet and sack the Industry Secretary?

My right hon. Friend, to whom the hon. Member has referred, has probably done as much for the social services of this country as any right hon. Member who was ever responsible for the social services. The hon. Member forgets that it was my right hon. Friend who introduced pensions for those over 80, family income supplement, pensions for widows between 40 and 50 years of age, invalidity pensions and constant attendance allowances. He should pay credit where credit is due.

Will my right hon. Friend take time to reread a report in Saturday's Daily Mail which discloses that the Tameside council intends to allow representatives of the Irish National Liberation Army to lecture in Greater Manchester? Will she not only condemn that proposal, but ban appearances by representatives of a terrorist organisation which was responsible for the murder of Airey Neave?

I certainly deplore the fact that this is being done. Subject to further inquiry, I believe that this is a proscribed organisation and, if so, the matter should be taken up formally with the Home Secretary.

Will the Prime Minister study the comments of the retiring chairman of the Inland Revenue, who estimates that this country loses annually between £2,000 million and £3,000 million through tax evasion?

Would it not be more correct to direct the efforts of a substantial number of the 1,000 people who are supposed to be investigating social security scroungers into chasing tax evaders?

It is fraud whether it occurs when people try to claim social security benefits to which they are not entitled, or when people try to get out of paying tax. Both offences should be treated in exactly the same way.

Will the Prime Minister, particularly in the light of her earlier answer, find time to send a message of congratulations and good wishes to the Governor of Rhodesia and to the people of Rhodesia on the eve of the historic act of casting their votes for a democratically elected Government?

I am grateful to my hon. Friend. I will certainly do so. The Governor has had an extremely difficult task. This is a week of decision for Rhodesia. I shall send him that message from my right hon. and hon. Friends.

Lambeth, Southwark And Lewisham Area Health Authority

With permission, Mr. Speaker, I wish to make a statement on yesterday's judgment on the appointment of commissioners in Lambeth, Southwark and Lewisham.

In August 1979 I gave directions under section 86 of the National Health Service Act 1977 in effect appointing commissioners to manage the affairs of the Lambeth, Southwark and Lewisham area health authority (teaching). My action was intended to ensure that the AHA(T) should keep its spending for the year 1979–80 within the cash limits laid down by my predecessors.

Although the court expressly held that I acted reasonably and in good faith in giving those directions and moreover accepted that the situation that faced me required immediate action, the learned judge found that in giving directions without specifying the duration I acted outside the power conferred by section 86. He also suggested that there was an alternative course that I might have taken. I shall study the judgment in detail when I receive a copy and any question of an appeal must wait until then.

However, my first concern is that proper respect for the courts and the rule of law means that I must give urgent consideration to the early restoration of their powers to the members of the authority. I shall therefore this afternoon be considering with the chairman of the regional health authority and the chairman of the commissioners the steps that might now be taken. All this must be done in a way that ensures that the progress made by the commissioners in establishing financial control will be maintained.

The learned judge said that it was in the public interest that the commissioners should continue to act in the interim and I know that the House will applaud what they have done to bring the financial affairs of the area under control.

The Secretary of State should have come to the House this afternoon, having accepted the judgment, and announced the replacement of the commissioners with the AHA. Was his action today based on the advice of the Law Officers, or did he take this decision by himself?

We would like to know the time scale for the restoration of the AHA and when the Secretary of State will make a further statement to the House. Will the right hon. Gentleman say what action he proposes to take about the closure of the two hospitals by the commissioners and whether or not the reinstated area health authority will be able to open those hospitals and allow them to operate in a free and fair manner?

I must say that it is good to see the Labour Front Bench accepting judicial decisions for a change.

I am sorry if that remark was too wounding for the hon. Member for Keighley (Mr. Cryer). I have come to the House on the first possible occasion—all that I had seen at this time yesterday were two conflicting press reports—and announced that I intend to meet the chairman of the regional health authority and the chairman of the commissioners in less than half an hour with a view to the return of their powers to the members of the area health authority. That being so I am bound to say that I think that the right hon. Member for Salford, West (Mr. Orme) has done me less than justice.

The right hon. Gentleman asked about closure decisions and mentioned St. Olave's and St. John's hospitals. I must tell the House that the commissioners decided temporarily to close some hospital facilities in order to contain current spending within the resources available. Those were short-term measures, and I have always made it clear that if permanent closures were contemplated any proposals would be subject to full consultation.

It is always open to health authorities to consider alternative ways of keeping expenditure under control that may lead to the ending of temporary closure. I have no doubt that when the members of the area health authority find themselves once again in power they may wish to do that. However, I must make it clear that there can be no question of the area health authority's expenditure exceeding the funds available to it.

It is not for me to tender legal advice to my right hon. Friend, but will he, in view of the clear limitations in section 86 to the period specified by the direction—which limitation was the ratio decidendi of the judgment—rather than appeal consider the issue of a section 17 direction, which places a specific duty, without limitation of time, on the method of the exercise of an authority's statutory function, which direction if not obeyed can be followed by the replacement of the defaulting members under section 85?

My right hon and learned Friend, who was Minister of Health some years ago, is probably more familiar than are most hon. Members with the intricacies of this legislation. He is entirely right in saying that the learned judge suggested that the course indicated by my right hon. Friend would have been open to me.

However, I have to make this point. Faced as I was at the end of July with a clear decision by the area health authority that it did not intend to remain within its cash limits, and faced with the fact that it was by then getting on for halfway through the year and that the authority had been overspending in previous years and had carried that overspending into the following year, I took the view that I should act immediately.

Had I proceeded by way of sections 17 and 85 a further time would have had to elapse between the giving of the direction and the recognition that the circumstances for the operation of section 85 had arisen. In the meantime the overspending would have continued, and I therefore took the view, on the balance of the legal advice available to me, that it was right and proper to take action at once. The only section under which that action appeared to be open to me was section 86.

Cutting out all the legal jargon, do I understand that, in simple terms, the commissioners are to be sacked and the area health authority is to be reinstated? If my interpretation is correct, may I put it to the Secretary of State that the area health authority said that it was unwise to close St. Olave's hospital, in my constituency—the right hon. Gentleman knows the case—which caters for psychiatric and geriatric cases? St. Olave's has nothing to do with the teaching hospitals. It was a disaster to close that hospital, and though we had the sympathy of the right hon Gentleman we did not get his support.

I ask the Secretary of Stale a straight question: may I go back to my constituents tonight and say that it is now all right, and that having got rid of the other shower we will be getting our own people back and that St. Olave's will be reopened?

I have every sympathy with the right hon. Gentleman in his desire to cut out the legal jargon. However, as he will know, as a former member of Government, Ministers have to have regard to the law. [Interruption.] All lawyers can make mistakes from time to time.

The right hon. Gentleman knows that I expressed more than sympathy when he came to see me about St. Olave's Hospital. I gave him a statement about how I saw the long-term future of that hospital, in which I said that it seemed inconceivable to me that that part of London could do without the services for geriatric and psychiatric patients that St. Olave's was capable of providing. I felt that that was a perfectly proper use for the hospital and I drew that matter to the attention of the commissioners. No doubt the matter will be drawn to the attention of the AHA in due course.

The right hon. Gentleman asked me whether the commissioners would be sacked. I remind him that the judge expressed the view yesterday that in the interim it. was in the public interest that the commissioners should continue to act. He held that they were not validly appointed. Therefore, it follows that unless the ruling is reversed on appeal their decisions have not been validly taken. In considering the steps that should be taken to validate both the past steps of the commissioners and any that they may need to take before the return of the members of the authority, the learned judge, at the end of his judgment, drew attention to the possibility of giving further directions to that end.

The whole House will regard my right hon. Friend highly for having come to the House this afternoon and accepted a judge's ruling. Is he also aware that, as a member of the regional health authority concerned, I believe that he took the right action in replacing the authority at the time that he did because it was in open revolt against the Government and the previous Government to an extent exceeding £5 million. Some action had to be taken. I also remind my right hon. Friend that whatever steps he may take now to abide by the legal niceties he should ensure that whoever runs the health administration in the Lambeth, Southwark and Lewisham area health authority will do so in accordance with Government policy.

I am grateful to my hon. Friend for his kind remarks. As I said in my statement, my first concern is to abide by the ruling of the court and to uphold the rule of law. I believe that to be the right priority.

With regard to the future, let me make clear that the judgment in no way changes the position that all health authorities need to control their expenditure within cash limits. Indeed, it makes clear that powers are available to ensure compliance with this requirement. The House may be aware that there is a clause amending the National Health Service Act 1977 included in the Health Service Bill that is now before Parliament. The effect of the amendment will make compliance with cash limits a statutory duty on health authorities. If the area health authority is restored—as I hope it will be soon— it will be under no less a duty than the commissioners to live within the cash limits.

Does the Minister recognise that my constituents, like those of the right hon. Member for Bermondsey (Mr. Mellish), have been subjected to massive cuts in their health services— cuts that have been proved to have been carried out illegally? Does he feel that he has a moral duty not only to reinstitute that area health authority but to provide it with the powers and money to put back those illegal cuts?

I do not recognise any such duty. My duty is to recognise the order of the court, and that is what I am doing. As my hon. Friend the Member for Canterbury (Mr. Crouch) pointed out, the area health authority has a long history of overspending. It is significant that in the several years during which my predecessor, the right hon. Member for Norwich, North (Mr. Ennals) wrestled with the problem of the overspending by that authority, at no stage did he believe it right to increase its cash allocations on the ground that it was underfunded.

It is bound to concern the House when Ministers act as if their powers are much greater than they are. Has the Secretary of State told his right hon. Friend the Prime Minister that he is very sorry to have landed the Government in this trouble? Has it not caused him to reflect upon what his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), who was so lavishly praised a moment ago, left in the health service—authorities that he cannot sack and that the electorate cannot sack when they act in ways that exceed their spending rights?

The House has every right to hold me to account. That is why I am here this afternoon. That is the chain of accountability whereby health authorities are made accountable to the House of Commons. I am happy to say that my right hon. Friend the Prime Minister fully shares my view as to the primacy of the rule of law.

Does my right hon. Friend accept that his statement this afternoon shows clearly that we have a Government who are prepared to accept the judgments of the courts with good faith and to act on them speedily? In view of what has happened in the past, will he seek an undertaking from the chairman of the area health authority involved that he recognises that the vast bulk of the money spent by that authority comes from the taxpayer, to which this House has primary responsibility?

To be fair to the chairman of the area health authority, Mr. Stan Hardy, he has always done his best to try to persuade the members of that authority to abide by the cash limits that were laid down by my predecessor and later by myself. I have no doubt that when reappointed Mr. Hardy will do his best to make sure that the authority lives within the limits. I want to help him in that matter and to make absolutely certain that the Department can give him all the backing that he needs, whether by direction, law or otherwise, to see that the authority has regard to the cash limits laid down for it. There would be no permanent basis for the preservation of health services in that part of London if it were done in any other way.

Order. I propose to call two more hon. Members from either side and from the Front Benches to conclude this matter.

I am sure that the right hon. Gentleman would not wish to mislead the House. He said that the judge had said that he acted reasonably. Is he aware that what the judge actually said was that it had not been established that he had acted unreasonably? That is a different matter.

I should like to put two questions to the right hon. Gentleman. First, are St. John's and St. Olave's hospitals legally closed now, or are they legally open? Will he give us his opinion, based on the legal advice that he receives—inasmuch as that is worth anything? Secondly, in view of his praise of Mr. Hardy, and because Mr. Hardy is available, will he exclude him from his meeting with the chairman of the commissioners and the chairman of the regional hospital board? Will he restore Mr. Hardy's salary, which he chopped off illegally in October?

The hon. Gentleman will understand that at this stage I shall not dig too deeply into the legal consequences of the judgment. I have already made clear that Mr. Justice Woolf held that the commissioners were not validly appointed. It follows that unless the ruling is reversed on appeal their decisions have not been validly taken. I remind the hon. Gentleman that the judge said at the end of his judgment that in his view it would be in the public interest that the commissioners should continue to act. I understand that he indicated that he would be open to hear applications for directions as to how that might be achieved and how the decisions of the commissioners could be validated. Obviously, these are matters of considerable legal complexity, which my advisers have under study. I am making arrangements to see Mr. Hardy at the earliest possible opportunity.

Will my right hon. Friend continue to give full emphasis to the fact that the persistent and gross overspending by this area health authority has been at the expense of all other areas and districts within the South-East Thames region—in particular, many deprived districts such as Medway? There has been considerable support for the savings that have been made by the commissioners. There is also widespread support for the political action taken by my right hon. Friend even though, naturally, it is regretted that those actions were founded on unsound legal advice. Will my right hon. Friend emphasise the need to maintain almost continuous restraint on this area health authority, which is necessary if there is to be any fairness for the very deprived districts in the same region?

My hon. Friend is absolutely right. Indeed, the court made it perfectly clear that the overspending by the Lambeth, Southwark and Lewisham area health authority was at the expense of other areas in the region and that the region had had to divert funds to them. One of the factors that I had in mind in seeking to oblige that authority to remain within its limits was to be fair to the other areas in the region that were relatively underfunded.

I have already made clear that the restoration of power to the members of the area health authority will have to take place on terms that ensure that they, too, fully abide by the obligation to remain within the cash limits. It simply is not possible to run an organisation such as the National Health Service in any other way.

Will the Secretary of State accept that he really cannot take any credit for saying that he has decided to accept the ruling of the court? He has no alternative but to accept the ruling of the court. Does he not accept, therefore, that he has acted with some arrogance, brusquely and illegally, and has created great confusion in one of the largest areas in London as a result of the action that has now been repudiated by the High Court? He has not said whether he is very sorry.

If the right hon. Gentleman had had a little more guts earlier the situation might never had arisen.

Will my right hon. Friend take heart from the fact that the judge said that he had acted in good faith? If the members of the area health authority had acted in good faith this situation would not have arisen in the first place.

My hon. Friend is absolutely right. There is little doubt that some members of the area health authority were really making a political point rather than concerning themselves with running the health authority in accordance with the provisions of the Act and all the directions given to them.

In his new found enthusiasm for accepting the words of judges, would the right hon. Gentleman care to tell us whether he accepts the finding of fact made by Mr. Justice Woolf to the effect that what put the area health authority into an impossible position was his right hon. and learned Friend's Budget on 9 June last year? Will the Secretary of State get up and say that he accepts that finding of fact?

Secondly, will the right hon. Member answer the question put by my right hon. Friend the Member for Norwich, North (Mr. Ennals)? Did he cause this chaos in South-East London off his own bat or did he take the advice of the Attorney-General first? Whom are we to blame for this?

Thirdly, does the right hon. Gentleman realise—I speak as someone who was administered to by these commissioners— that the commissioners had little credibility before today but as a result of his waffly statement today they will have even less credibility? Is not the only thing to do to get rid of them forthwith and return the old area health authority straight away?

I am sure that the right hon. Gentleman did not intend that intervention to be helpful. I am bound to say that it was not. The whole House knows the financial position that the Government inherited in terms of the National Health Service. I am not sure that there was evidence before the court that would have enabled the learned judge to draw a clear distinction between the addition of value added tax in the Budget and the national figure of £23 million that the right hon. Member for Norwich, North had already indicated was to be removed from the cash limits of health authorities as an offset against the pay increases that had to be given.

I entirely accept that health authorities —not only this health authority but others —have faced a significant squeeze on their spending this year, of which VAT is less than a quarter, because the cash limits which had been laid down by the right hon. Member for Norwich, North proved to be entirely inadequate. Every other health authority in the country has resolved to live within its cash limits but this authority did not. That is why I took the decision to act.

As to what advice I had, I am accountable to the House for the NHS and of course I accept responsibility for what has happened.

On a point of order, Mr. Speaker. On a previous occasion when the right hon. Herbert Morrison made a similar mistake in relation to the fire service, an Act of indemnity was introduced, on the same day I understand, to cover any liability in damages or crime for acts committed during the intervening period of illegality. Today we have been left in some suspense and I wonder whether you, Mr. Speaker, would consider tomorrow, after the Secretary of State has made a further statement, an application under Standing Order No. 9 so that we can discuss indemnifying those who may have broken the law?

On a point of order, Mr. Speaker. I am sorry to interrupt the proceedings, but this is, I believe, a very important point of order. At the beginning of these exchanges, after the spokesman for the Opposition had finished his points, I distinctly heard the hon. Member for Nottingham, West (Mr. English) say loudly and clearly words to the effect "Not on oil sanctions. You always supported the criminals", referring to my right hon. Friend the Secretary of State for Social Services. Perhaps you, Mr. Speaker, could guide the House appropriately and ask the hon. Member for Nottingham, West to confirm whether he did say that and, if so, to withdraw the remark.

Further to that point of order, Mr. Speaker. I took it that the decision not to proceed against the breakers of the oil sanctions was a Cabinet decision in which the right hon. Gentleman had a part. If it was left to junior Ministers, of course, I would automatically withdraw any implication against him.

Order. It so happens that I did not hear the remark of the hon. Gentleman, but nobody's argument is advanced by personal references.

Westminster Hospital (Beds)

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 proposal published this morning in a planning document that 410 beds at the Westminster hospital should be closed, thus reducing this hospital of international repute to a small 100-bed support hospital."
I submit that this issue is certainly specific in that such a proposal, if carried through, would mean the decimation of this great hospital, which not only has served the needs of the people of Westminster but has earned a national and international reputation as a great teaching hospital and as a centre for much vital specialisation and research.

The matter is certainly important because this is our hospital. Several right hon. and hon. Members and members of another place owe their lives to the skill of the doctors, nurses and other staff at the Westminster hospital. I certainly owe my life to the staff of that hospital, but I am only one of many.

The matter is urgent because proposals are too quickly accepted in this time of public expenditure cuts. I believe that the issue is of such importance that the House will wish to consider it and debate it.

The right hon. Member for Norwich, North (Mr. Ennals) gave me notice before 12 o'clock today that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,

"the proposal published this morning in a planning document that 410 beds at the Westminster hospital should be closed, thus reducing this hospital of international repute to a small 100-bed support hospital."
I listened carefully to the exchanges that took place this afternoon on this subject. The House was able to hear the remarks that were made.

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 reason for my decision.

I listened with great care to the representation of the right hon. Gentleman. However, I must rule that his submissions do not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Northern Ireland (Housing)


That the matter of the review of policy in the private rented housing sector in Northern Ireland, being a matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Committee for their consideration.— [Mr. Boscawen.]

Social Security (Payment Of Benefit)

4.2 pm

I beg to move:

That leave be given to bring in a Bill to require the Secretary of State to continue to use the Post Office for payment of long-term social security benefits, except where a payee requests otherwise.
Hon. Members on both sides of the House will have become aware over recent weeks of the great concern throughout the country caused by the review undertaken at the request of Ministers in the Department of Health and Social Security of methods of payment of social security benefits, which at present are mainly through local post offices.

The volume of correspondence sent to hon. Members on this subject has been extremely large. From my constituency I have received representations from 18 sub-postmasters, from villages as far apart as Fairburn, Adlingfleet, Monk Fryston and Hatfield Woodhouse, from 26 other individual constituents and from six local councils and other organisations. Some of these representations have enclosed petitions containing hundreds of signatures. In addition, as all hon. Members will know, last Wednesday a mass lobby of the House was conducted by several hundred sub-postmasters from most parts of the country.

There is no need for me to repeat all the arguments used in opposition to any proposals to change the basic method of paying social security benefits. Indeed, all the arguments were deployed in debate in the House last Tuesday. I have carefully read the report of that debate, and I regret to say that I do not think anything was settled. Ministers merely muddied the waters with vague undertakings, and they still continue to discuss the outcome of their review of these matters. I am still awaiting a reply from the hon. Lady the Under-Secretary of State to a letter on this subject that I sent her on 29 January. At Question Time today the Government tried to make encouraging noises, but there is still no definite future for the maintenance of the present system of payments of social security benefits.

In the absence of any definite commitment by Ministers to preserve the present system, Parliament should now exert its authority to enact a legal requirement that Ministers should pay benefit as at present.

The present state of the law is very weak. Section 81 of the Social Security Act 1975 gives the Secretary of State wide discretion as to the time and manner of payment of benefit. Any regulations made by him on these matters are subject only to negative parliamentary control. So far as I can determine, if the Secretary of State wishes, there is nothing in the present regulations to prevent him from using any method of payment. He could even go round on the back of a lorry handing out benefits in cash. That would be legal under the present arrangements.

In view of the far-reaching social implications of these matters, especially concerning the key place of sub-post offices in most local communities, the law needs to be much more precise on the time and method of payment of benefit. At present the Secretary of State has far too much discretion—discretion that has led to all the uncertainty of recent months that continues unabated. New primary legislation is needed to tighten up the law. That would be provided by the Bill that I am seeking leave to introduce.

The simple principle of the Bill is to propose a legal requirement that the Post Office be used for the
"payment of long-term social security benefits, except where a payee requests otherwise."
If the House in its wisdom grants leave for such a Bill to be introduced, it will be assenting to that general principle. It will be giving a clear indication to the Secretary of State of what is desired by the House and by the vast number of our constituents who have left us in no doubt about their views.

Question put and agreed to.

Bill ordered to be brought in by Dr. Edmund Marshall, Dr David Clarke, Mr. Arthur Davidson, Mr. Terry Davis, Mr. Eric Deakins, Mr. Peter Hardy, Mr. Barry Jones, Mr. Austin Mitchell, Mr. Martin J. O'Neill, Mr. David Stoddart, Mr. Roger Stott and Mr. K. J. Woolmer.

Social Security (Payment Of Benefit)

Dr. Edmund Marshall accordingly presented a Bill to require the Secretary of State to continue to use the Post Office for payment of long-term social security benefits, except where a payee requests otherwise: And the same was read the First time; and ordered to be read a Second time upon Friday 14 March and to be printed [Bill 152.]

Orders Of The Day

Companies Bill Lords

As amended ( in the Standing Committee), considered.

New Clause 24

Continued Application Of Provisions Of Protection Of Depositors Act 1963

'(1) The repeal by the Banking Act 1979 (the "1979 Act") of the Protection of Depositors Act 1963 (the "1963 Act") shall not affect, and shall be deemed never to have affected, the application of the following provisions of the 1963 Act to unexempted companies on and after the commencement of Parts I and III of the 1979 Act, that is to say—

  • (a) sections 6 to 17; and
  • (b) so far as relevant to the operation of those sections, sections 5 and 22 to 27.
  • (2) In this section "unexempted company" means any company within the meaning of the 1963 Act which is not excepted by section 2(1) of the 1979 Act from the prohibition on the acceptance of deposits imposed by section 1 of the latter Act.'.—[ Mr. Eyre.]

    Brought up, and read the First time.

    4.8 pm

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

    The purpose of this new clause is to remedy an omission from the Banking Act 1979, which was enacted by the Labour Government, which among other things provides for the repeal of the Protection of Depositors Act 1963. The Protection of Depositors Act 1963 restricts and regulates advertisements for deposits and requires companies subject to the Act to deliver to the Department annual and half-yearly accounts. These accounts are examined by the Department to ensure compliance with regulations made under the Act and to check the companies' general financial position.

    The Banking Act 1979 was enacted to improve the control of banks and deposit takers. It provides for the recognition of certain banks and for the licensing of other deposit-taking institutions by the Bank of England.

    It was originally envisaged that, fairly soon after the bringing into force of the major provisions on 1 April 1980, it would be possible to repeal the 1963 Act. The position would then be that deposit takers could take money from the public only if they had a licence under the 1979 Act. Unfortunately, account was not taken of the continuing need to keep an eye on deposit takers which failed to obtain a licence under the 1979 Act and which, while therefore unable to continue to seek deposits from the public, continued in existence making use of money deposited with them earlier. Repeal of the 1963 Act will remove all control from such deposit takers with possible risk to their depositors; on the other hand, failure to repeal the Act will mean that deposit takers licensed under the 1979 Act will have to make returns both under that Act and under the 1963 Act.

    Accordingly, it is proposed to keep the relevant provisions of the 1963 Act alive to control the 60 or so unlicensed companies which continue to hold deposits. This will protect people who have money deposited with those companies; and it will not hamper the express repeal of the 1963 Act in respect of licensed deposit takers.

    Although the 1963 Act has not yet been expressly repealed, I am advised that it is possible for repeal to have come about by implication on bringing into force the major provisions of the Banking Act, on the reasoning that the provisions of the later Act are so inconsistant with, or repugnant to, the provisions of the 1963 Act that the two cannot stand together: hence, as a safeguard, the retrospective nature of this amendment.

    At the end of the previous Parliament, the Banking Act was passed so quickly that Homer did not merely nod; he was knocked over in the rush. It is important that the 1963 Act provisions as to unexempted companies should be preserved.

    Although the Minister is restoring many of the sections of the 1963 Act, he expressly retained in the repeals section 17, which gives the Department of Trade the power to see documents to discover whether there has been any breach of the 1963 Act, and section 18, which provides for search and entry. I should like to know whether Homer nodded again or whether it is a deliberate act of Government policy to leave out the provisions for the production of documents, search and other powers to obtain information. Those powers are important. If there is to be the protection of depositors, the powers of entry and obtaining information must be preserved. Why have those been omitted in the restoration of the repeal of certain provisions of the 1963 Act?

    The second question is one that perhaps the Minister would like to think over and consider whether something should be done in another place by way of an amendment to the the new clause. I refer to the way in which the law is stated. It is difficult if someone reads the Banking Act and comes to the same conclusion that the Minister came to—that the 1963 Act is repealed—and then finds tucked away in the Companies Bill of this year a provision saying that the repeal did not take place but was restored. It is an unsatisfactory position. I am not sure whether the law will now he stated with the clarity that it should be stated. I doubt whether people can easily see that that which was intended to he repealed, or which was repealed by implication, is not now repealed. Perhaps the Under-Secretary would like to think about that point.

    In basic principle, we retain such powers as we believe are necessary for the continuing supervision of the limited number of companies which will continue to retain deposits for a period in the manner that I explained.

    The Department is willing to discuss with these unlicensed companies their new position and its implications for the future. The hon. Gentleman need have no fear in respect of the continuing supervision of the function of these companies. It may well be that this will be only a transient stage as moneys are withdrawn from those companies, or they make other arrangements. Perhaps the unlicensed company will merge with another licensed company. For that reason, this is probably a transitional arrangement which we believe will adequately deal with the present situation.

    Question put and agreed to.

    Clause read a Second time, and added to the Bill.

    New Clause 22

    Application Of Sections 54 To 58 And 60 To 64 To Unregistered Companies

    Section 435 of and Schedule 14 to the 1948 Act (which provide for the application of certain provisions of that Act to unregistered companies) shall have effect as if sections 54 to 58 and 60 to 64 above were provisions of that Act and were included among the provisions of that Act specified in that Schedule which relate to accounts and audit; and the reference in the last entry in column 3 of that Schedule to provisions applied by virtue of the foregoing entries in that Schedule shall be construed accordingly.'.—[Mr. Eyre.]

    Brought up, and read the First time.

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

    The effect of this new clause is to enable the Secretary of State, by statutory instrument, to extend the disclosure provisions of part IV of the Bill to unregistered companies. These are defined in section 435 of the Companies Act 1948 as
    "all bodies corporate incorporated in and having a principal place of business in Great Britain"
    other than a body incorporated by or registered under any Public General Act of Parliament or a body not formed for the purpose of carrying on a business for gain or any body from time to time exempted from the provisions of section 435 by direction of the Secretary of State.

    The bodies corporate falling within this definition are, broadly speaking, those that are incorporated otherwise than by registration under a general system of incorporation. They include bodies incorporated by Royal charter or by Private Act of Parliament, and the provisions of the Companies Acts 1948 to 1976 do not automatically apply to them. There is, however, power in section 435 of the 1948 Act to apply to such companies those provisions of the 1948 Act that are listed in Schedule 14 to the Act, with such adaptations and modifications as may be specified by the Secretary of State in the regulations applying therein. In both the 1967 and 1976 Companies Acts and the European Communities Act 1972, provision was made to include in Schedule 14 those parts of those Acts that it was felt desirable to be applicable to unregistered companies.

    The provisions of the Companies Acts that have been extended to unregistered companies are currently set out in the Companies (Unregistered Companies) Regulations 1975. Under these regulations the vast majority of the Companies Acts' provisions relating to accounting and disclosure have been applied without modification to unregistered companies, including section 197 of the 1948 Act and section 16 of the 1967 Act. The present position is, therefore, that companies formed under the Companies Acts, as well as unregistered companies, are subject to the same regime as to the disclosure of loans to directors and contracts between directors and their companies.

    As presently drafted, clause 64 of the Bill, when it comes into effect, will repeal section 197 of the 1948 Act and section 16(1)(c) of the 1967 Act, and they will be replaced for companies formed under the Companies Acts by the broader disclosure provisions of part IV. As I have explained, those broader provisions will not themselves automatically apply to unregistered companies, so that a more rigorous regime of disclosure will be applied to Companies Act companies and no disclosure provisions, other than those contained in the constitutions of the individual companies, will be applied to unregistered companies. Right hon. and hon. Members will agree that such a result would be quite unjustified, and the aim of this clause is to enable the disclosure provisions of part IV, which replace sections 197 and 16(1)(c), to be applied to the unregistered companies as were these sections.

    Therefore, the Government's intention is that the same requirements for disclosure of directors' transactions shall apply equally to Companies Act companies and to unregistered companies. I hope that this will meet with the approval of the House.

    I make no complaint about this new clause. It embraces a sensible concept. However, regrettably, I want to start on a note of complaint. New clauses 20 to 24 were all tabled last Wednesday night. The Government have had a long time between the Committee and Report stages. On a technical Bill of this character the Government—aided, as they are, by a group of hard-working officials, who undertake the task with great dedication —should have been able to table this and the other new clauses long before last Wednesday night. If they were not in that position, they should not have proceeded with the Report stage at this juncture.

    Faced with a large number of Government amendments. Opposition amendments and Back Bench amendments, it is extremely difficult for the Opposition to consult about these matters as we feel entitled to do. It is possible that the Government have got this one right. There is an awful lot that they have got wrong in drafting. I understand that. We are dealing with a highly technical Bill. One can never be absolutely right in company law. We shall return to that argument on another new clause.

    On highly technical matters such as new clauses 20 and 23, this is not the right way to deal with the House. The Minister was kind enough to write to me and, I presume, to other hon. Members who served on the Committee about new clause 24, but the Government did not find time to write to us about the other matters. We are entitled to some explanation. One understands that Ministers are heavily burdened. All hon. Members have been heavily burdened with getting the necessary information and reading up the necessary law for this difficult Report stage.

    I believe that the Minister owes those who served on the Committee an apology. I hope that in the absence of any real opportunity for scrutinising matters that require consultation with outside bodies the Government will recognise that it may be necessary for them to be scrutinised with great care in another place. I hope that the Government, if necessary, will not feel backward about producing amendments if such scrutiny requires this.

    Having made that complaint, which also applies to other amendments, the Opposition feel that this new clause has a great deal to commend it.

    I think that the hon. Gentleman is confusing me with the reasonable man on the Clapham omnibus.

    I apologise to the hon. Member for Hackney. Central for having thought that I had seen him on the Clapham omnibus. The hon. Gentleman would certainly be qualified for the role of the reasonable person riding on than omnibus. It was entirely fair of him to say that this is a highly technical Bill. Having struggled with it in Committee, all hon. Members know that this is inevitably so. I am, therefore, sorry if Opposition Members have been inconvenienced by the fact that because of the sheer complexity of the matter and the pressure of events the Government have not been able to give much longer time to consideration of various clauses.

    I am grateful to the hon. Gentleman. It is not a question of inconvenience; it is a question of not being able to do one's duty properly in scrutinising these difficult proposals.

    I appreciate that. The hon. Gentleman, with his experience in Government, especially his experience in respect of these complicated matters, will know that the Government have to follow a complicated process of consultation with interested parties. The hon. Gentleman, if he thinks back some months, will know that this process of consultation takes up a long time.

    The hon. Gentleman acknowledged that I had written to him about new clause 24. He will know that Ministers have tried to be considerate and to write to and consult Opposition Members. I do not wish to disguise the difficulty of the job that we have to discharge in this respect. I can only assure the hon. Gentleman —I thank him for the welcome that he has given the new clause—that we will continue to assist him as much as possible in discharging his job and dealing with these highly technical matters.

    Question put and agreed to.

    Clause read a second time, and added to the Bill.

    New Clause 20

    Extension Of Section 26 Of 1967 Act

    `(1) In subsection (1) of section 26 of the 1967 Act (disclosure of director's service contract with company) the following paragraph shall be inserted after paragraph ( b)—

    "(c) in the case of each director who is employed under a contract of service with a subsidiary of the company, a copy of that contract or, if it is not in writing, a written memorandum setting out the terms of that contract;".

    (2) The following subsection shall be inserted after subsection (3) of that section—

    "(3A) Subsection (1) above shall not apply in relation to a director's contract of service with the company or with a subsidiary of the company if that contract required him to work wholly or mainly outside the United Kingdom, but the company shall keep a memorandum—
  • (a) in the case of a contract of service with the company, setting out the name of the director and the provisions of the contract relating to its duration;
  • (b) in the case of a contract of service with a subsidiary of the company, setting out the name of the director, the name and place of incorporation of the subsidiary and the provisions of the contract relating to its duration,
  • at the same place as copies and the memorandums are kept by the company in pursuance of subsection (1) above.".

    (3) Each reference in subsections (4), (5) and (7) of that section to subsection (1) shall be construed as including a reference to subsection (3A) of that section; the reference in subsection (7) of that section to a contract of service with a company shall be construed as including a contract of service with a subsidiary of a company; and in subsection (8) of that section, paragraph ( a) shall cease to have effect.'.—[ Mr. Eyre.]

    Brought up, and read the First time.

    With this it will be convenient to take Government amendments Nos. 302 and 247.

    Section 26 of the 1967 Act provides for the disclosure of directors' contracts of service with the company. Clause 47 of the Bill, which will prevent directors from entering into long-term service agreements with their company without the approval of the general meeting, covers a wider category of employment agreements. This includes contracts of service which are the usual basis on which people are employed and contracts for service, for instance, where a director makes his services available through his own private company or as a consultant.

    The disclosure provisions of these two sorts of service contracts are to be effected in different ways. Contracts for service which are not at present required to be disclosed as such will in future fall for disclosure under clause 54. A director will be required to declare his interest in such contracts by virtue of section 199 as amended by clause 59 of this Bill. Under clause 54, the principal terms of the contract and the nature of the director's interest in it must be disclosed in the company accounts.

    Contracts of service are already largely provided for in section 26 of the 1967 Act, which requires details of directors' service contracts to be open to inspection by members of the company at an appropriate place. This section needs amendment, however, to bring it into line with the Bill in two respects.

    First, we need to ensure that a director's service contract with a subsidiary company is disclosed in the same way as his service contract with the holding company, of which he is a director, is already required to be disclosed. The effect of this is achieved by subsection (1) of new clause 20.

    Secondly, we need to restrict the exemption embodied in subsection (8) of section 26 for the disclosure of service contracts which require directors to work wholly or mainly overseas. Companies will now be required, by virtue of subsection (2) of this new clause, to disclose the existence of such a contract and those terms of the contract relating to duration in the same manner as those for non-overseas contracts.

    Subsection (3) is merely consequential on subsections (1) and (2). It applies the provisions in section 26 relating to the inspection of service contracts, fines for default, and variation of service contracts to contracts of service with subsidiaries. It disapplies the present total exemption from disclosure of foreign service contracts.

    Amendments Nos. 247 and 302 are also consequential. The latter extends the exemption from the disclosure requirements in clause 54 to contracts of service between a company and a director of its holding company, as this is now provided for in the amendment to section 26.

    I concede that I have not looked up the reports of the Committee stage of the 1967 Bill. I should like to know what is the rationale for the exclusion of the contract of service that is to be wholly or mainly performed abroad. The Minister must have been impressed by that qualification in the 1967 Act, as he has incorporated it in the Bill.

    4.30 pm

    I understand that the effect of the clause is to provide for disclosure of such contracts, but there are no sanctions similar to those which are provided subsequently in the Bill in relation to breaches of the contract of service provisions. I content myself with asking the Minister to reply to those specific points.

    To build on what my hon. Friend the Member for Hackney, Central (Mr. Davis) said, there must be very cogent reasons for exempting overseas service contracts, because the benefit in respect of a director who has an overseas service contract is no less than that applying to any other contract. If it appears that there is no need to disclose in respect of overseas contracts, greater use might be made of overseas service contracts for the purpose of evading the disclosure provisions applying to domestic contracts.

    Having listened to the hon. Members for Hackney, Central (Mr. Davis) and Swansea, East (Mr. Anderson), I can only think that they misunderstood what I said. I emphasised that we needed to restrict the exemption embodied in clause 26(8) for the disclosure of service contracts which require directors to work wholly or mainly overseas. Companies will now be required by virtue of subsection (2) to disclose the existence of such a contract—

    I did not misunderstand it. I think the Minister must have misunderstood what I said. I conceded that there was disclosure, but I said that there were no sanctions.

    It was the hon. Member for Swansea, East who misunderstood me, then. I am sorry if I misunderstood the hon. Member for Hackney, Central.

    Companies will now be required, by virtue of subsection (2) of the new clause, to disclose the existence of such a contract and the terms of the contract relating to duration in the same manner as those for non-overseas contracts. The exclusion of foreign service contracts in the 1967 Act was to prevent the disclosure of details which might be embarrassing to the holder of the contract.

    The hon. Member for Hackney, Central went on to raise the question of sanctions—

    There are, of course, sanctions for breach of the provisions which appear in the relevant clauses, but they do not apply in this instance, as I read the clause.

    I remind the hon. Gentleman that under section 26 of the 1967 Act companies and any officers of companies in default are liable to a fine. There are, therefore, adequate means within the Bill for the enforcement of the requirement.

    Question put and agreed to.

    Clause read a Second time, and added to the Bill.

    New Clause 21

    Duty Of Auditors Of Company In Breach Of Sections 54 Or 56

    'If in the case of any group or other accounts of a company the requirements of section 54 or 56 above are not complied with, it shall be the duty of the auditors of the company by whom the accounts are examined to include in their report on the balance sheet of the company, so far as they are reasonably able to do so, a statement giving the required particulars:.—[Mr. Eyre.]

    Brought up, and read the First time.

    With this it will be convenient to take Government amendment No. 293 and amendment No. 91, in page 67, line 14, at end add— '(8) If in the case of any such accounts as aforesaid the requirements of this section are not complied with, it shall be the duty of the auditors of the company by whom the accounts are examined to include in their report on the balance sheet of the company, so far as they are reasonably able to do so, a statement giving the required particulars'.

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

    We have tabled the clause in response to a helpful suggestion made by the Consultative Committee of Accountancy Bodies. Its effect is to place a duty on auditors to include in their report a statement giving the particulars of any loans and other transactions of the kinds described in part IV of the Bill, such as quasi-loans and credit transactions, which have not been disclosed in the accounts.

    The disclosure provisions in clauses 54 and 56 are intended to replace section 197 of the Companies Act 1948, but they do not at present include a provision replacing subsection (3) of that section. That subsection goes further than the general requirement on auditors to qualify their report it any information required by statute to be included in the accounts is not so included, as it places a duty on them actually to supply, as far as possible, the missing information required to be included by section 197 in a separate statement in their report. The subsection can therefore serve to discourage directors and officers from attempting to withhold the information in the first place. As we regard the new disclosure provisions as an important policing mechanism for the general prohibitions in part IV, we consider that, by maintaining this duty on auditors, the disclosure provisions will be that much more effective.

    The clause therefore repeats the wording of section 197(3), though extending the new provision to group accounts and to all the disclosure requirements of sections 54 and 56.

    We recognise that the intention of amendment No. 91 is very similar to that of our new clause 21. The scope of amendment No. 91 does not, however, extend either to group accounts or to the additional disclosure provisions in clause 56—that is, disclosure of loans to officers, and aggregate disclosure of loans to directors of recognised banks. We believe that this wider coverage is desirable and that the new clause is, therefore, preferable to amendment No. 91. I hope that Opposition Members will recognise that we have accepted the principle of amendment No. 91 in our new clause and will feel able to withdraw the amendment.

    I will put the Minister out of his misery at once by telling him that there will be no Division on the clause.

    I am delighted to see here the hon. Member for Folkestone and Hythe (Mr. Costain). He takes such an interest as Chairman of Committees and in many other matters. I am anxious to know what he is interested in today.

    I readily agree that the clause is an improvement on our drafting in amendment No. 91. It is amazing how valuable are the parliamentary draftsmen from time to time. We are all agreed about the principle, and I agree, therefore, that the new clause is to be preferred. I welcome the addition that is being made to the Bill.

    May I thank the hon. Gentleman for his tribute to the parliamentary draftsmen?

    Question put and agreed to.

    Clause read a Second time, and added to the Bill.

    New Clause 23

    International Bonds

    '.—(1) Section 65 above shall not by virtue of section 67 above prohibit an individual from doing anything in relation to any debenture if—

  • (a) that thing is clone by him in good faith in connection with an international bond issue—
  • (i) not later than three months after the issue date, or,
  • (ii) in a case where the international bond issue is not proceeded with, before the date on which it is decided not to proceed with the issue,
  • and he is an issue manager for that issue or is an officer, employee or agent of an issue manager for that issue; or

    ( b) he is or was an issue manager for an international bond issue who is making a market in that debenture, or is an officer, employee or agent of such an issue manager, and that thing is done by him in good faith as a person making a market in that debenture or as an officer, employee or agent of such a person;

    and in either case the unpublished price sensitive information by virtue of which section 65 would but for this section apply in relation to that thing is information which he holds by virtue of his being (or having been) such an issue manager or an officer, employee or agent of such an issue manager, and is information which it would be reasonable to expect him to have obtained as an issue manager, or as such an officer, employee or agent.

    (2) In subsection (1) above—

    "international bond issue" means an issue of debentures of a company (the issuing company")—
  • (a) all of which are offered or to be offered by an off-market dealer to persons (whether principals or agents) whose ordinary business includes the buying or selling of debentures, and
  • (b) where the debentures are denominated in sterling, not less than 50 per cent. in nominal value of the debentures are so offered to persons who are neither citizens of the United Kingdom and Colonies nor companies incorporated or otherwise formed under the law of any part of the United Kingdom;
  • "issue date" means the date on which the first of these debentures is issued by the issuing company; and
    "issue manager" means—
  • (a) an off-market dealer acting as an agent of the issuing company for the purposes of an international bond issue; or
  • (b) where the issuing company issues or proposes to issue the debentures to an off-market dealer under an arrangement in pursuance of which he is to sell the debentures to other persons, that off-market dealer.'.—[Mr. Parkinson.]
  • Brought up, and read tile First time.

    With this it will be convenient to take Government amendment No. 317.

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

    Like several clauses we have discussed this afternoon, this is a highly technical clause. Its objective is relatively simple. It is to seek to exclude from the operation of clause 67, the insider dealing clause certain activities carried on by those who manage the Eurobond market. The reason why we seek that exclusion is that by the very nature of the market those who deal and act as brokers also make the market. By the nature of their activity, insiders will be caught by clause 67 unless we seek to exclude them. It is an international market which is dealt in by professionals. The way in which the market operates ensures that the person making the market is the one broking the bonds. The clause has been drawn up to try to defi