Skip to main content

Commons Chamber

Volume 980: debated on Monday 3 March 1980

The text on this page has been created from Hansard archive content, it may contain typographical errors.

House Of Commons

Monday 3 March 1980

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Oral Answers To Questions


European Economic Community (Council Of Ministers)


asked the Secretary of State for Trade when he expects to meet his European Economic Community colleagues.

The next meeting of the Foreign Affairs Council will be on 17–18 March and either my hon. Friend or I will attend.

When the Minister attends the meeting with his EEC colleagues, will he explain to them that the arguments in favour of protecting certain key British industries by means of selective import controls are growing apace? Will he emphasise that unless those arguments are recognised, grave consequences will follow that will affect the future of the EEC?

The arguments for selective import controls are not growing apace, although the demand may be increasing.

When my right hon. Friend sees his colleagues in the Community, will he mention the unfairness that arises from Britain's contribution to the European development fund? Will he bear in mind that Britain contributes 18 per cent. of the fund in return for 7 per cent. of the contracts, while the French contribute 18 per cent. but succeed in obtaining more than 30 per cent. of the contracts.

I think that perhaps that question should be answered by my hon. Friend the Minister of State, Foreign and Commonwealth Office. However, I shall endeavour to answer it. The distribution of the European development fund is very unsatisfactory. We receive about half of the amount that we put in. The French receive double, and the Germans come out about neutral. I am unhappy about the way in which the funds are deployed. However, in the last resort British industry must bid for those funds as part of its export effort. I agree with the sentiments behind my hon. Friend's remark.

Has the Secretary of State noticed that even The Guardian, with its liberal traditions, has come out more or less in favour of some form of import control for manufacturing industry? Is it not true that if there is to be any long-term future for our manufacturing base some form of selective import control is vital?

I would not necessarily define the sentiments expressed by The Guardian as "liberal". Some of its sentiments are illiberal. To a certain extent liberalism stems from the Manchester school I am not sure that all the attitudes expressed by The Guardian stem from that. Selective import controls do not have anything to offer this country. About one-third of our GNP is derived from exports. We should not follow the route of selective import controls.

When my right hon. Friend meets his European colleagues, will he bear in mind the incontestable fact that in 1970 we had a surplus of £150 million in trade on manufactured goods, but that last year we had a deficit of £2½ billion? Does he not agree that whoever may be benefiting from this trade, it certainly is not us?

I assume that my hon. Friend is referring to the European Community. We expanded our exports to the EEC last year at approximately double the rate at which we expanded exports to the rest of the world. That is a useful achievement. Trade is multilateral. Of course, we shall have deficits with some parts of the world and surpluses with others. We must improve our performance with our trading partners in the EEC.

Advertising And Price (Relationship)


asked the Secretary of State for Trade what conclusions emerged from the study initiated by the last Administration and the Advertising Association into the relationship between advertising and price.

The Advertising Association commissioned and published a study on advertising and price in May 1979, which has now been largely overtaken by the proposals in the Competition Bill for strengthening competition and reducing Government intervention.

Does my hon. Friend agree that investment in advertising is no different in principle from investment in production and distribution? Does he further agree that goods and services can benefit their producers only when they are sold, and that advertising is therefore an important and often essential part of that process?

My hon. Friend is right in many cases. Advertising may well play an important part in increasing competitiveness. That is not to say that all advertising is either effective or good, but it should not necessarily be seen as bad.

Advertising Control


asked the Secretary of State for Trade what action he intends to take in the light of the working party's report on advertising control.

My right hon. Friend is considering carefully the domestic, international and legal implications of the report's recommendations in consultation with interested ministerial colleagues.

Does my hon. Friend agree that the principle of self-regulatory control in advertising is probably good? Is he certain that there is a need to alter the present practice, apart from the requirement to comply with a particularly meddlesome EEC directive? Why do we not merely veto it?

I am not certain that we need to alter the self-regulatory control arrangements in the United Kingdom. The report's principal recommendations claim to strengthen and maintain the ASA arrangements rather than undermine them. We shall consider the report carefully, but we have no intention of moving suddenly to the projected European system of heavy-handed statutory control.

Does the hon. Gentleman accept that in essence, all the recommendations are for a statutory back-up of the self-regulatory system? Will he accept that we could easily accommodate the domestic demand for a back-up system and an amended directive in the same piece of legislation? Will that be forthcoming in the next Session?

As I explained to my hon. Friend the Member for Watford (Mr. Garel-Jones), we are considering the implications of the report. The hon. Gentleman is correct. It would be possible to consider the Commission's proposals' which can be reconciled with the present United Kingdom legal and institutional arrangements in advertising in the light of a statutory back-up to the ASA approach, and we are doing that.

Does my hon. Friend agree that the report essentially gives a clean bill of health to the self-regulatory system of the advertising industry and that the proposals for change are quite slight? Will he inform the House of the cost of the working party and the report?

I cannot tell my hon. Friend how much it cost. He is correct that, in general, the report is not excessively critical of the present position, although, as ever, there may be room for improvement. I shall try to discover a clear figure for the cost and let my hon. Friend know.

Market Entry Guarantee Scheme

asked the Secretary of State for Trade what is the total sum the British Overseas Trade Board has agreed to contribute towards eligible costs under the market entry guarantee scheme; how much of this has been recovered; and what proportion of the difference he estimates will be recovered in future years.

As at 29 February the British Overseas Trade Board has agreed to advance up to £3·5 million under the market entry guarantee scheme to help finance eligible overhead costs associated with ventures to develop export markets. So far £915,000 has been paid out and £188,000 recovered in levy and guarantee payments. I am hopeful that the balance will be recovered in due course.

I thank my hon. Friend for that answer, but can he indicate to the House when he expects to be in a position to make an announcement about the long-term future of the scheme? Does he accept that it is a valuable weapon in our fight to win export orders, and that the relatively slight cost is even smaller when compared with the export support given to competing industries in other developed countries?

I believe that my hon. Friend is right. It is a valuable scheme. As he knows, the Government's entire export promotion services are under investigation. We hope to make an announcement about the future of the scheme in the very near future.

Import Controls


asked the Secretary of State for Trade if he will consult the Trades Union Congress about the necessity to regulate imports into the United Kingdom.

I am always willing to have discussions with the TUC, but there is no question of introducing any general regulation of imports into the United Kingdom.

Is the Secretary of State aware that the majority of trade unions in manufacturing industry conclude that it is necessary to introduce a planned regulation of world trade in order to increase its volume? Is he further aware that if the Government refuse to intervene the trade unions will be compelled to take action, because of the rate of destruction of jobs in the country, and introduce selective industrial embargoes on certain goods coming into the country? Will the right hon. Gentleman reconsider his answer and introduce planned regulations in order not to force trade unions to take action?

I am not sure how the hon. Gentleman or the TUC will set about planning world trade, as he puts it, from London. The selective controls which the hon. Gentleman mentions would put up prices and thereby raise costs. They would divert goods from the export market to the home market, which would damage our balance of payments. If they succeeded, which I do not believe they would, they would further strengthen the pound and erode profit margins. They would also provoke retaliation from other countries. I do not believe that the hon. Gentleman's proposed policy stands up to serious argument.

Will my right hon. Friend accept that I agree with all the arguments that he put forward and believe that the suggestions of the hon. Member for Tottenham (Mr. Atkinson) are lunatic and self-defeating? Is my right hon. Friend aware that the American response to tentative efforts by the EEC over synthetic fibres indicates the dangers of retaliation, even among allied nations?

As I understand it, Labour Members are advancing the argument that we should identify core industries and impose controls to protect them. The single greatest core industry in this country is food, but I understand that the Labour Party and the TUC want a completely open market there. Apart from anything else, the proposed policy is not consistent.

With regard to synthetic fibres, we have throughout said that we believe in the open trading system. However, where there is a sudden surge of imports which come within article 19 of the GATT we are prepared to act, which is what we did for two textile products.

Is the Secretary of State aware that a most effective way of limiting manufactured imports is to have a realistic exchange rate so that the price is increased and not reduced, as appears to be the Government's policy? Is the right hon. Gentleman further aware that the main argument that the Government use for not intervening in the exchange rate market is that it would affect monetary aggregates? Will he accept that a high price is being paid by British industry to maintain our monetary position?

The hon. Member for Tottenham (Mr. Atkinson) wishes to plan world trade and the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) wishes to plan international exchange rates. In my view, there is no way in which the Government, at present, could successfully hold down the price of sterling, which I understand is what the right hon. Gentleman is suggesting, for anything more than a short time. Such a policy would be utterly self-defeating.

Is my right hon. Friend aware that most business men would agree that putting a great barrier around this country would in no way make industry more efficient? However, will my right hon. Friend make certain that imports are not dumped? Will he look into the question of black and white television sets from Thailand, which are virtually being dumped?

I entirely agree that we we must act vigorously through the EEC Commission wherever dumping arises. This is now under the direct authority of the Community, but we must give every assistance that we can to as speedy action as possible under the regulations set out in the GATT.

I followed my hon. Friend's question about monochrome sets from Thailand. I am aware of the suggestion that about 200,000 such sets are about to arrive. However, this is a prediction of what one firm in Thailand might do, and so far it has not done so. The sets have not appeared yet, but we shall investigate the danger of their coming here.

Is the Secretary of State aware that he spent months attempting to get a Community solution to the problem of unfair trading in textiles by the United States and ended up by getting pathetic quotas? For example, for nylon carpet yarn the quotas were 30 per cent. higher in 1980 than the total imports of 1979 which he considered disruptive. Is that the way to protect British trading interests?

In my view, the quota for nylon carpet yarn was appropriate to the circumstances. In settling the quota I was particularly concerned not to damage the downstream carpet industry. Had we set those quotas too low it might have helped those who were producing nylon yarn, but it would have damaged an even greater number of firms which were producing the downstream products—the carpets themselves. Therefore, in employment terms there was an argument for a relatively high, rather than a very low quota.

Price Commission


asked the Secretary of State for Trade when he expects next to meet the chairman of the Price Commission.

In view of the various economic reports published today predicting further increases in the rate of inflation to well over 20 per cent., and in view of the growing number of people within the Tory Party itself, and even within the Cabinet who are beginning to realise that extreme doctrinaire monetarism is not the cure for inflation, will the Government, even at this late date, abandon their plans to abolish the Price Commission, because people are calling for more price control, not less?

The hon. Member is obsessed with the Price Commission, which has only a few weeks of life left. I would gladly make him the chairman of the Price Commission if it were in my power to do so.

On the serious point, I am not sure what some of the forecasters are proposing. I read today that some were recommending measured reflation. I am not sure what that means in present circumstances. There are only two questions to be asked at present: first, can we finance the deficit without intolerably high interest rates; secondly, is private sector credit growing too fast in relation to output? Those are simple questions, and the answers to both will be given by the Chancellor of the Exchequer in his Budget Statement.

Does the Secretary of State consider that Government changes in competition policy have had or will have an effect on the level of prices?

I hope that the Competition Bill will have some marginal influence on prices, but I have never made any claim that it will transform our economic environment, unlike Labour Members, who claimed that the Price Commission would substantially change the course of inflation. The hon. Member is confusing the symptoms of inflation with its causes.

My right hon. Friend has posed two questions, may I put a third? How does he think that a 17 per cent. minimum lending rate has helped to contain inflation?

My right hon. and learned Friend must understand that when the Government inherited a prospective borrowing requirement of £11·5 billion—which we succeeded in bringing down to a prospective requirement of £8·5 billion—we inherited a substantial deficit which we had to finance in a non-inflationary way. Interest rates will have to be at whatever level is necessary to finance that deficit.

Will the Secretary of State answer a fourth question, and tell us what very high rates of VAT do to inflation?

High rates of VAT have nothing whatever to do with inflation. The rate of VAT, which was increased by the Chancellor in his first Budget, was offset by an equal reduction in income tax. Therefore, the rate of VAT has nothing whatever to do with inflation.

Companies (Winding-Up Procedure)


asked the Secretary of State for Trade whether he will investigate means of simplifying the winding-up procedure and the conversion of companies into unincorporated bodies in order to assist smaller companies.

The Insolvency Review Committee has been asked to consider possible less formal procedures as alternatives to company winding-up proceedings in appropriate circumstances. I await its report with interest.

Will my hon. Friend consult the Chancellor to see whether there is a means of reducing the tax disadvantages of taking such action?

Yes, of course. Consultations of that kind go on constantly. I note that my hon. Friend is concerned about the position of small businesses, and in that connection I draw his attention to the Green Paper on company accounting and disclosures, published last year. There are a number of helpful proposals in that, and we are now studying the comments on those proposals with the aim of preparing legislation for next Session.

As the Minister has said previously that he hopes to receive the Cork report by the end of this year, can he predict when he hopes to introduce legislation to reform the insolvency law? Is it likely to be in this Parliament?

Our intention is that it will be within the lifetime of this Parliament. The hon. Member is right in saying that the Cork report is expected towards the end of this year, and we are anxious to bring forward legislation as soon as possible thereafter.

Is my hon. Friend aware that the winding-up procedure of companies and bankruptcy petitions are multiplied these days because of the failure of the normal debt-collecting process? Will he take that into account in any consideration to reform winding-up and bankruptcy proceedings?

Certainly I shall take account of the points that my hon. and learned Friend makes. I know that he is aware that responsibility for the debt-collecting procedures which are followed through the courts is that of the Lord Chancellor.



asked the Secretary of State for Trade if he is satisfied with the progress currently being made towards metrication.

Yes. The voluntary approach will enable industries to complete the change to metric working as and when it is most appropriate for them to do so.

Does the Minister agree that the lack of decisiveness on the part of the Government means that we are having the worst of both worlds? Does he not realise that we shall be half metric and half non-metric for years to come, and that, except for the schools that have changed to metric working, we shall have a mixed system? Do the Government really want to go down in history as the first Government who tried to work out how many centimetres there were in a rod, pole or perch?

The Government's policy is clear. There is no impediment to any firm changing to metric working when it chooses. That decision is a matter for its commercial judgment, taking estimated costs and benefits into account. Costs are often critically dependent on the timetable adopted, because machines, equipment and working practices have to be altered or scrapped.

Will my hon. Friend give an assurance that we shall keep the pint, the yard and the mile?

My hon. Friend will be pleased to hear that Parliament need not make further decisions on these important matters until 1989.

Does not industry take the view that a voluntary change to metrication is best accompanied by an order made by the Government, with the agreement of industry and consumers setting a date so that the whole of trade or industry can work together towards an orderly and planned change?

The hon. Gentleman will appreciate that it is necessary for industry itself to agree that date. As I understand it, there is no legal impediment to prevent industry from coming forward with voluntary proposals, choosing whatever date it wishes to adopt.

Does that mean that if industry agrees a date the Government will make the appropriate order?

If there is agreement, and if industry works within that agreement, that will solve the problem.

Steel Imports


asked the Secretary of State for Trade what tonnage of (a) bulk steel and (b) special steel was imported in the first six weeks of this year; and from which countries.

Statistics of overseas trade are compiled on a monthly basis. In January 24,000 tonnes of alloy steel and 233,000 tonnes of other steel were imported. Details by country are not yet available.

Does not the Minister realise that the importation of these steels at a time when massive closures in the steel industry are under way—53,000 men are to lose their jobs—is causing an attitude of embittered determination by the steelworkers to continue with the strike? Will he, together with his right hon. Friend the Prime Minister, intervene and put more money on the table? If he had seen the massive demonstrations in Rotherham and Sheffield yesterday he would realise how intense is the strike and the determination of the steelworkers to achieve 20 per cent., with no strings attached.

The United Kingdom is, traditionally, a net exporter of steel. In 1979 the export of surplus steel amounted to 637,000 tonnes. The result of the present dispute, which I deplore as much as the hon. Gentleman does, is that imports are now bound to increase, and exports will suffer. The dispute has done no good for anybody working in the industry.

Will my right hon. Friend make it clear to the leaders of the unions in the steel industry that there is enough money on the table to justify a settlement of the strike? Will he make it clear also that if they do not settle the strike imports will increase and those selling the imports to Britain will achieve a firm market here, which will have disastrous consequences for the industry and the workers?

I am tempted to be drawn into a debate on the matter, but there are enough people trying to solve the steel dispute without my intervening in the responsibilities of the BSC and the unions involved. Much as I should like to debate the matter with my hon. Friend, it would not help the present position if I were to do so.

Is the Minister aware that many steel stockholders, especially importing stockholders, are demanding particularly aggressive terms from buying manufacturing industry? Is he aware that in some cases they are demanding a price which has risen by as much as 20 per cent. to 25 per cent., and are demanding also that contracts are signed for a year's supply? Does the right hon. Gentleman understand that the result will be heavy imports? Does he not feel that he should intervene and ask those stockholders to operate in the national interest, as everyone else is trying to do?

I am afraid that the shortage of supply of a product normally tends to raise its price. That is not an unusual thing to happen. There is no evidence that there has been, to use the hon. Gentleman's expression, any profiteering by the steel stockholders at the present time. If there is a shortage of a product, one would naturally expect its price to rise.

Leaving aside the industrial relations aspects, will not the only economic result of a continuance of the strike be to make British industry less competitive increase imports, and decrease the numbers working in the industry?

I fear that the result of the dispute will lead to lower exports in the immediate future, which will inevitably lead to higher imports. That cannot be avoided.

Merger Policy


asked the Secretary of State for Trade when he expects to publish his new proposals on merger policy.

The Government are committed to a strong and effective competition policy. It is too soon to say whether this requires any changes in the legislation on mergers.

May we take it that the referral of Blue Circle's bid for Armitage Shanks to the Monopolies and Mergers Commission is a signal from my right hon. Friend that he recognises that the British economy tends to be over-concentrated, that the urge to merge in recent years has not always shown unquestionable benefits, and that the policy which tended to encourage small but more competitive companies might, in many cases, be preferable?

Some of those features may have led to the recommendation to me by the Director General of Fair Trading for a reference to the Monopolies Commission. I must make it clear that my powers enable me to overturn a recommendation by the Director General, but I seek not to do that unless there are overriding political reasons for so doing. In this case the Director General recommended that the case should be referred to the Monopolies Commission, and I saw no overriding political reason why I should interfere with that recommendation.

In view of the Secretary of State's earlier admission that the Government's policy on competition will have only a marginal effect on the level of prices, will he stop indicating to the British people that competition is an effective means of holding down prices? Will he seek to strengthen competition policy from the steps that he has announced already, to make it more effective?

The principal new element in the Competition Bill, a firmer policy on anti-competitive practices, is one which, interestingly enough, stems from the now Opposition's Green Paper, which no doubt the hon. Gentleman helped to draft. I expect him to welcome the new Bill. I am making no brave prophecies for the Bill. We wish to build up and strengthen competition policy. We shall proceed step by step. I shall not make any brave, great prophecies for it. I believe that the measures contained in the Bill will prove helpful.

Dyestuffs (Imports)


asked the Secretary of State for Trade if he will make a statement on the European Community agreement with the Republic of China, which will allow dyestuffs to be imported without duty.

China was admitted to the European Communities generalised scheme of preferences on 1 January this year. The duty-free treatment which as a result is enjoyed by industrial goods imported from China is subject in the case of some products to limitations. United Kingdom industry was consulted when these limitations were under discussion, but dyestuffs were not then mentioned as a sensitive area. It would be open to us to seek to have a ceiling applied to duty-free imports of the dyestuffs concerned, and we are in touch with the United Kingdom industry to see whether there is a case for action.

Is the Minister aware that that statement will be welcomed if it is an earnest of good intention? Is he aware also that many manufacturers in my constituency wish me to ask him to ensure that early action is taken to prevent yet another sector of the textile industry from being hit? Many people in West Yorkshire believe that the Department of Trade is helping the problem not one whit in any areas of the textile industry.

The hon. Gentleman's rather general assertion is not borne out by my experience when I vistited Yorkshire a week ago and spoke to those in the industry. However, there is a possibility of action now that the problem has been brought to our attention. When the chemical industry was consulted before the agreement was reached, no mention was made of dyestuffs.



asked the Secretary of State for Trade what recent representations he has received about trade with the Union of Soviet Socialist Republics.

I have received representations both supporting and opposing the development of trade with the Soviet Union. The Government will continue to encourage mutually beneficial trade between our two countries.

Will my hon. Friend confirm that the imbalance of trade between our two countries is running at a proportion of 2:1, with a deficit for us of £400 million annually? Does he not think that the Government ought to promote more energetic policies to balance our trade and that the matter assumes a political significance if we are ever to make an effective response to the Russian invasion of Afghanistan?

We should like to see the imbalance in our trade reduced, and we are taking steps to encourage our exporters to seek mutually beneficial commercial opportunities for themselves. However, many of the things that we buy from Russia, such as diamonds, are subsequently resold and exported, and therefore the bare figures are slightly misleading.

If it is the Government's policy to encourage exports to the Soviet Union, what is the logic of saying to our athletes "But you cannot go"?

I am sure that the hon. Gentleman has listened carefully to the arguments. We believe that the Olympic Games are a gigantic political publicity act, and we do not believe that British athletes should take part in propagating the few attractive features of a country which invades others without cause.

Is my hon. Friend aware of the considerable tonnage of chromium and chromium oxide that we import from the Soviet Union and of the considerable reserves of that mineral in Zimbabwe-Rhodesia? Will he assure us that he will encourage trade in that mineral with Zimbabwe-Rhodesia rather than with the Soviet Union?

I assure my hon. Friend that we shall seek to promote trade with Zimbabwe-Rhodesia in every way open to us.

Is it not sheer hypocrisy for the Government to talk about encouraging trade with the Soviet Union and, at the same time, to try to discourage athletes from going to Moscow? Would it not be better for the Government to abandon the pressure which they are bringing to bear on athletes and, if we are to encourage trade at the same time, to say that they ought to go? If the Minister's argument is that we should not go to the Moscow Olympics because Russia has invaded Afganistan, will he confirm that most countries which go to the Olympics have supported invasions of one sort or another?

I hope that the hon. Gentleman listened to my reply about mutually beneficial trade. Perhaps he will be able to tell me later what is mutually beneficial about going to the Olympic Games and taking part in a gigantic propaganda exercise.

Will the Minister recall how he and his colleagues pontificated, when in opposition, about the disgraceful share of bilateral trade carried in British ships between the Soviet Union and this country? What have his Government done about that? Perhaps he would like to take instructions.

As the hon. Gentleman knows, any action on that front would have to be EEC-wide in order to be effective, and we are pressing for such EEC action.

Will my hon. Friend reconsider the situation regarding imports and exports between this country and the Soviet Union? Bearing in mind that what I have said before about Russian Christmas cards applies now to the greetings card industry as a whole, is my hon. Friend aware that hon. Members on both sides recognise the difficulties posed by the continual dumping of Russian greetings cards throughout the year?

I only hope that my hon. Friend received at Christmas the number of greetings cards to which his efforts on behalf of the industry would entitle him. He has brought a problem to our attention, and he knows that we are looking into the possibility of anti-dumping action.

European Economic Community


asked the Secretary of State for Trade if he is satisfied with the present balance of trade between the United Kingdom and the European Economic Community.


asked the Secretary of State for Trade if he is satisfied with the development of United Kingdom manufactured exports to the other European Economic Community countries in the last six months.

No, Sir. I look for improvement in our trade performance with the European Community in both manufactured goods and overall.

Since the balance of our trade with the EEC can hardly be called "mutually beneficial"—to use the Minister's own words—because it is overwhelmingly in favour of the EEC, will he undertake to draw the attention of his right hon. Friends in the Treasury, the Foreign Office and the Ministry of Agriculture, Fisheries and Food who are engaged in negotiations with the EEC to this important bargaining counter for use by us in those negotiations?

From time to time the hon. Gentleman should put aside his anti-EEC prejudices and look at the facts. Our exports to the EEC last year amounted to £18,000 million. Our exports of manufactures grew by 21 per cent. last year—far faster with the EEC than with any other part of the world. Is the hon. Gentleman suggesting that we would help ourselves by cutting ourselves off from those markets?

Would my hon. Friend think it prudent to ask his officials to start a formal investigation into trading alternatives to the EEC for the United Kingdom, because if the rest of the countries prove to be as intransigent as the French are at present, we may need those alternatives?

That would be a fairly fruitless exercise. We do 42 per cent. of all our trade with the EEC, and searching around for trading partners to replace that 42 per cent. would seem to me to be a waste of time. We should concentrate on improving our own performance.

Does not the Minister recognise that while this massive imbalance in the import and export of manufactured goods between this country and the EEC continues we are, in effect, financing the modernisation of French German and Italian industries from North Sea oil?

The hon. Gentleman's thought processes always intrigue me, and his assertion is a particularly interesting production of those unusual thought processes.

Holiday Caravan Industry


asked the Secretary of State for Trade if he will make a statement about the code of practice being negotiated with the holiday caravan industry.

My right hon. Friend is awaiting the reactions of the site operators to the changes which she has suggested to the draft code of practice. Meanwhile, as my hon. Friend may be aware, Government amendments to the Competition Bill which have been accepted in the other place will extend the provisions of the Competition Bill and of the Fair Trading Act to holiday caravan sites.

What steps does my hon. Friend propose to take about some of the malpractices on caravan sites and similar places of which the general public complain?

As I explained, a draft code of practice has been put by the trade to my right hon. Friend the Minister for Consumer Affairs. She, in turn, has suggested changes that might be made to deal with the complaints. The ball is in the court of the trade, and I hope that we shall shortly receive its proposals. In the meantime, the Competition Bill will extend the rights of customers on caravan sites.

Will the hon. Gentleman ask the Director General of Fair Trading to investigate some of the worst practices when the Competition Bill becomes law?

We have not yet arrived at that point, but certainly my right hon. Friend will bear in mind the hon. Gentleman's suggestion. However, I think that it would be best to wait until the Bill becomes law.

Exports And Imports


asked the Secretary of State for Trade what was the value of exports from and imports into the United Kingdom in the most recent month for which figures are available.

In January 1980 exports from the United Kingdom were valued at £3,879 million and imports into the United Kingdom at £4,225 million.

Does my hon. Friend agree that exports would have been much higher and imports much lower if the exchange rate of sterling had been more realistic? Has he drawn the attention of the Chancellor of the Exchequer to the damage that is being done to British trade by the current high level of the exchange rate?

My right hon. Friend the Secretary of State dealt with that point earlier when he pointed out that one must get out of the habit of thinking that the Government can fine-tune exchange rates. The rate of exchange, and the level at which it stands, is not within the gift of the Government.

Is the hon. Gentleman aware that in the past week 630 workers in North-East Lancashire have lost their jobs because of the crazy exchange rate policies being pursued by the Government and their abject failure to impose proper protection against low-cost imports and imports from the United States against our textile industry? Is the Secretary of State willing to take further action to give proper protection to our vital industry?

The textile industry receives far more protection than any other. A total of 95 per cent. of all imports from low-cost countries arrive under quota and are closely controlled. On the exchange rate, I think that the hon. Gentleman is grossly oversimplifying, as he usually does, the causes of the decline of the business to which he refers.

Will my hon. Friend indicate to the House what effect he thinks a 17 per cent. minimum lending rate has on the exchange rate?

Very little, indeed. What the 17 per cent. interest rate reflects is the fact that we have a high inflation rate and that if money is not to be lent by depositors to banks at an unfair rate of return and borrowed at a low rate of interest which does not reflect its real value, changing that circumstance would not help at all.

This is a very revealing day for Ministers in the Department of Trade to display their ignorance about the economic consequences of their policies. Will the Minister explain how British exports can possibly succeed when the exchange rate is so high, buoyed up by North Sea oil and not by underlying productivity? Is it not open to the Government to influence exchange rate policy so that our exporters get a reasonable chance in world markets?

The right hon. Gentleman learnt little during his time at the Department. He obviously never studied the performance of Switzerland, Germany and Japan, which, against a background of a firm, high exchange rate, contrived to improve their productivity their competitiveness and their industrial performance.

On a point of order, Mr. Speaker. I wish to raise a point of order relating to trade questions.

If the hon. Gentleman's point of order relates to his question being transferred, will he wait until the end of Question Time? I shall allow one minute extra for questions to the Lord Privy Seal.

Overseas Development

Overseas Aid Policy


asked the Lord Privy Seal what action he is taking to ensure that aid provided by the United Kingdom is used efficiently to raise living standards of poor people whilst promoting trade and employment in the United Kingdom.

Within our overall programme, which will reflect increased commercial and industrial emphasis, the developmental value of specific projects will be fully appraised.

Will my hon. Friend ensure that British aid is not used for uneconomic prestige projects which do comparatively little to raise living standards? Will he say what he is doing for the poorer countries of the Commonwealth?

On the second part of the Question, we shall, in the allocation of our bilateral aid, continue to attach great importance to the Commonwealth, which currently receives 70 per cent. of the bilateral share of the aid programme. On the first part of the question, all projects proposed for aid finance are fully appraised. In recent years the average rate of return on United Kingdom capital aided projects is calculated to be over 15 per cent.

Will the hon. Gentleman try to determine, when assessing aid projects for appraisal, whether the benefits are likely to go to a small minority in the country concerned or to benefit the mass of the people?

We shall always try to benefit the poorest sections in our projects, which are designed for that purpose.

Does my hon. Friend agree that one of the most effective ways of aiding poorer countries is through the Commonwealth Development Corporation? Will he confirm that he will make no reduction in its long-term investment programme in the review that he is undertaking?

Yes. I confirm that the aid passed through the Commonwealth Development Corporation is nearly always extremely effective. On the second part of the question, my hon. Friend must await the publication of the White Paper on expenditure.

Will the hon. Gentleman give an undertaking that no money from the aid programme will be spent on defence projects, such as the £50 million that went to Turkey, and that such money should come from the Contingency Fund or the defence fund, and not from the overseas aid development fund?

Aid Programme (Return On Disbursements)


asked the Lord Privy Seal what is his latest estimate of the total value of orders to British business financed out of the British aid programme in the 12 months to the latest convenient date.

My best estimate is that in 1978, the latest year for which figures are available, the total value of orders to British business arising from the aid programme was in the region of £415 million out of a total gross expenditure of official development assistance of £685 million. This figure combines estimates of the procurement return from both bilateral and multilateral aid.

I am grateful to my hon. Friend for that reply. In the light of his announcement last week that the higher proportion of the aid budget is to be made available for supporting trade overseas in the future, will he say what amount he is setting aside to support trade next year? Will he discuss with his right hon. Friend the Secretary of State for Trade the possibility of seeking a better return from those disbursements that are made through the European development fund?

On the second part, most certainly. I said that when answering questions on the aid statement. On the first part of the question, in accordance with our review of aid policies we shall seek to increase British procurement from multilateral aid institutions. In respect of bilateral aid, we shall have regard to whether projects relate to the needs of British industry and to opportunities for subsequent exports.

Because, in the world today, there is need to help developing countries.

Is the Minister aware that he has said very little that is new? In the light of the Brandt Commission report and all that is known about the relationship between aid and the benefit of trade to British industry, can the hon. Gentleman produce figures that will indicate the effect of the present recession in world trade on our orders? The World Bank estimated a 4 per cent. reduction over the last few years, but that figure is a little out of date. Will the hon. Gentleman promise to tell the House what the reduction actually is? This is the key relationship between the development aid programme and trading benefit to British companies.

I shall try to give that information, but not now. I shall write to the right hon. Lady. I am sorry that there is nothing new. That is because questions have not been put down which would reveal anything new.

Aid Programme (Aims And Objectives)


asked the Lord Privy Seal what steps the Overseas Development Administration takes to publicise the aims and objectives of the United Kingdom aid programme.

There is a conventional but modest programme of press activities, publications, and external engagements. These supplement anouncements made to this House.

Is it not essential for the support of the programme to have informed and concerned public opinion? Is the Minister satisfied that the present small amount being spent for this purpose will be sufficient in the long run?

Yes, I think that it is. The question to which I was directing my answer was connected with the publication by the Ministry of Overseas Development. As for the general educational programme, I think that a lot can be done voluntarily. It always has been. Voluntary organisations, including, if they wish, Members of Parliament, teachers and churches, could step this up. It does not always need Government money to get a message across.

Does not publicity of this type tend to impress other overseas countries, so that they also contribute?

Other countries must draw their own conclusions from what publicity we provide.

When the hon. Gentleman publicises his aid policy, will he explain how his policy on overseas students' fees is connected with the general principles of aid policy which he announced recently? Is he aware that if this policy continues many poor students who would, in the past, have come to Britain will end up receiving their higher education in Moscow and behind the Iron Curtain?

The answer to that question should come from my right hon. and learned Friend the Secretary of State for Education. I am, nevetheless, looking into this question myself.

Does my hon. Friend agree that publicity should be directed to British companies, which are now free from exchange control and able to invest overseas? If his Department and those companies combined their activities, this would help overseas development more than any other measure.

Yes. The publicity to which we have been referring goes to business and industry, and the British Overseas Trade Board is also taking a particular interest on behalf of British industry.

Will the Minister accept that one of the best ways of publicising his aid programme would be fully to restore the development education programme started by the last Government, which would have amounted to £3 million this year? Will he also accept that, just as his Government destroyed the Price Commission to conceal price increases, so he has almost destroyed the development education programme to conceal restrictions on the aid programme?

The hon. Gentleman has drawn the wrong conclusion from that. The rundown in Government-financed development education was because we could not afford to spend £3 million on educating ourselves on development when greater needs were to be found in the developing countries.

Is my hon. Friend aware that the only way to expand aid to the underdeveloped countries, which is necessary, is not for one country to do it alone but for urgent action on the Brandt report, so that there is an international effort?

There is a later question on the Order Paper about the Brandt report. There may be something in what my hon. Friend says, but the Government are looking into this carefully, and there is to be a debate in another place next week on this subject.

Is the Minister aware that the best publicity that this country can gain for its aid programme is the service which British Rail Engineering Ltd. has provided in various underdeveloped countries where British aid has been directed, in providing not only a network of railways, but other necessary basic engineering services? The Government should be commended for the service which they have provided for the poorer people of the world.

I agree that where the railwaymen have been abroad they have done good work of great benefit to the developing countries.

Is the hon. Gentleman aware that his sudden announcement that the other place is to debate the Brandt report next week is a shade disturbing? He will be aware that there are 130 signatures on one motion and others on another calling for a debate on the report in this House. He told us last week, I think, that it was far too early for him to have reached conclusions on the report. Can he tell us that a debate in another place—which I agree may be admirable and may provide useful guidance for him—will in no way preclude a debate in this House?

Although that must be a question for the Leader of the House, I do not think that it would preclude a debate in this House. I am sure that my right hon. Friend has taken note of what the right hon. Lady has said. The Government will answer that debate in the other place, and one will get a preview of their views there. One factor that we must bear in mind in considering a proper debate on the report in this House is that the report must be available to hon. Members before we debate it.

On a point of order, Mr. Speaker. How can the Government give a view on the Brandt report when it has not been published and when it is agreed that the Minister has to consider it before he can answer a question in this House?

The Government have received a copy and I have bought a copy in the shops. Unfortunately, the shops have now run out of stocks.

Questions To Ministers

On a point of order, Mr. Speaker. In January of this year. I put down to the Secretary of State for Trade question No. 55, to ask

"the Secretary of State for Trade what negotiations are taking place between his Department and the Law Society on the introduction of changes in the Solicitors' Practice Rules in line with the recommendation of the 1976 Monopolies and Mergers Commission report."
The right hon. Lady the Minister for Consumer Affairs, who is unfortunately unable to attend the House today, replied:
"None at present."—[Official Report 4 February 1980; Vol. 978, c. 51.]
I could not understand that answer, in the light of the right hon. Lady's statement at the seventh sitting of the Standing Committee on the Competition Bill, when, following a long statement that I made on the need for action on the basis of that MMC report, she said:
"my Department is currently negotiating with the professions concerned."—[Official Report, Standing Committee B; 20 November 1979, c. 339.]
I replied by tabling a further question to ask the Secretary of State
"if, following the reply of the Minister of State for Trade to the hon. Member for Workington",
in the light of this question, he could let me know when we could expect a statement following the consultations which are taking place. On 26 February, that question was transferred to the Attorney-General, without my being informed.

I raise this matter as a point of order, first because I believe that I should have been informed. I do not see why, because a question is embarrassing to a particular Minister, he or she should transfer it—or instruct the Department to ask the Table Office to transfer it—to another Minister, thereby denying me the chance to put that question on the Floor of the House, when it deals with a matter of substantial public concern—the charges of solicitors and the fact that there is no effective advertising among solicitors. I should be grateful if you could tell me what the position is, Mr. Speaker.

The House will have listened with concern to the hon. Member. Every hon. Member is entitled to be informed if his question is being transferred to another Minister: otherwise there is no protection of our Order Paper and no protection for Back Benchers. I can say little more than that to the hon. Member. I think that he was right to air his grievance.

On a point of order, Mr. Speaker. Is it not deplorable that so many hon. Members should put down questions yet not be here when they are called, as happened today?

It is true that when I called the first half a dozen questions today, the hon. Members concerned were not here. As a rule, if an hon. Member is not in his place when his question is called, I get a personal explanation from him by way of correspondence. I am not asking for that for today; I am just saying that that is one of the courtesies which hon. Members normally follow.

Lambeth, Southwark And Lewisham Area Health Authority

With permission, Mr. Speaker, I wish to make a further statement about the future of the Lambeth, Southwark and Lewisham area health authority (teaching).

I reported to the House last Tuesday. On Wednesday I had a meeting with Mr. Stanley Hardy, chairman of the AHA(T), who told me that the soundings he had taken among members of the authority led him to believe that the authority would in future accept its responsibility to comply with cash limits. On Thursday I received a letter from the solicitor for the London borough of Lewisham, writing on behalf of the three London boroughs which were the applicants in the case before the court informing me that his clients would not object to the commissioners remaining in a purely caretaking role until 31 March 1980. He envisaged that the authority, on resuming control from 1 April, would have freedom of action to review decisions taken by the commissioners, but accepted that the authority's expenditure should stay within cash limits. As the House knows, there is a clause in the Health Services Bill now in Committee which, if approved by Parliament, will impose a statutory duty on all health authorities to comply with the Government's requirements on cash limits.

The House will, I know, recognise the importance of these expressions of intent and the recognition they imply of the position which it was always my intention to sustain. In these circumstances, I thought it right to invite members of the AHA(T) to meet me last Friday to review the position, and I am grateful to the many members who at such short notice attended the meeting. The discussion took place in a helpful and constructive atmosphere. For their part, the members present, nearly two-thirds of the total membership, unanimously assured me that they will be prepared to accept an obligation to keep the authority's expenditure within cash limits. For my part, I assured the members that on that basis they would be free to review any of the decisions taken by the commissioners, and, moreover, that during the short care-taker period up to 31 March the commissioners would not initiate any changes of major significance. I saw the commissioners' task as preparing for an orderly handover to the members of the authority, taking only such routine decisions as were essential to maintain services in the meantime.

It seems to me that this would be a not unsatisfactory outcome and I have accordingly decided not to appeal against the judgment of Mr. Justice Wolff but instead to arrange for the members of the authority to resume their functions from 1 April next.

The solicitors for the three councils may seek a formal order from the court within the next day or so. Since the judgment effectively declares invalid the directions that I gave last August, legislation will be necessary to regularise the position over the past seven months and to give immediate backing to the status of the commissioners up to the end of this month. The Government are therefore laying a Bill before the House to give legal effect to the decisions and actions taken under the directions from 1 August 1979 up to and including 31 March 1980. Copies of the draft Bill are available in the Vote Office.

My right hon. Friend the Leader of the House will make a statement about the arrangements for the Bill in due course, following discussions through the usual channels. I offer my full and unqualified apology to the House in this matter and in particular for the trouble and inconvenience which the Bill will cause to right hon. and hon. Members.

The Secretary of State's statement reflects the serious misjudgment that he made as Secretary of State. He cannot hide from that. He has come to the House today with a full apology but it might have been better if he had made a full apology last Tuesday. His statement shows that his advice and his Department's advice was radically wrong. I am sure that the House will take note of that.

I give credit to my hon. Friend the Member for Nottingham, West (Mr. English) for raising the matter last week He put his finger on the central point. The Government must now introduce a retrospective Bill. My hon. Friend deserves credit for his parliamentary astuteness.

The Secretary of State referred to cash limits and the undertaking which he says he has received from the area health authority. What steps did he take last July to ascertain from the AHA whether it was prepared to live within the cash limits? Does he agree that he acted in a rather peremptory manner in dismissing that authority without consultation? We shall require to discuss several issues when we have sight of the Bill. My hon. Friends and I have not yet been able to obtain a copy of the Bill which contains retrospective elements which we shall want to examine.

What is the position of the two hospitals which have been closed by the commissioners? Will the AHA be able to reopen them? Is the Secretary of State talking about retrospective cash limits or those which affect the next financial year? What about the patients who have been removed from those hospitals? Have any patients suffered because of the commissioners' action? What about the staff who have lost their jobs or who have been promoted? Will salaries be reduced and will those who have lost their jobs get them back?

The Secretary of State spoke about taking action to protect the commissioners. I hope that he will allow employees and patients who have cause to take action to take that action. The proposed Bill is a constitutional measure which should be taken on the Floor of the House. There must be adequate time to deal with it.

The right hon. Member for Salford, West (Mr. Orme) has asked me many questions. He said that it was inappropriate that I did not offer the House an apology last Tuesday. On that day only 24 hours had elapsed since the court's decision and I had not seen a transcript of the judgment. I had not decided whether I should appeal. I am sure that the right hon. Gentleman will recognise that had I appealed successfully there would be nothing for which to apologise. I decided not to appeal but to take the necessary action to give effect to the judgment of the court. It is right that I should offer my full apologies to the House, which I now repeat.

The right hon. Gentleman asked whether the cash limits referred to the past or the future. The members of the area health authority have recognised that it is sensible for the commissioners to remain in power until the turn of the next financial year. Therefore, the undertakings refer to the cash limits for the next financial year. The right hon. Gentleman also asked whether I had acted in a peremptory manner in purporting to make a direction. Such a charge is valid only without reference to the long period which preceded the decision on 1 August during which the authority consistently overspent its limits.

The right hon. Gentleman said that the Bill would be retrospective. He asked whether it would be possible for the area health authority to reopen the two hospitals. In order to regularise the position for the past, the Bill must have retrospective effect. That point was made by the hon. Member for Nottingham, West (Mr. English) in his Standing Order No. 9 application last week. The future of the two hospitals is for the new authority to decide. It is free to change decisions reached by the commissioners but it must do that within the context of the cash limits which we have laid down.

The right hon. Gentleman asked about patients and staff. Precisely to avoid the legal doubts and wrangles that could arise without a Bill, I ask the House to approve the Bill. I understand that if the applicants go to court and obtain an order for a prerogative writ giving effect to the judgment of Mr. Justice Wolff everything that has taken place since I made the directive last August will be held to be invalid. Since that could give rise to considerable personal and corporate difficulties it is sensible for the House to pass the Bill. We shall discuss such matters when we debate the Bill.

I regret that my right hon. Friend was so badly advised legally. Is he now totally satisfied that the cash limits to which the Lambeth, Southwark and Lewisham area health authority has agreed will mean that the Medway health district will not be as deprived as it has been in the last several years, by up to £3 million, because of the continuing profligacy of the Lambeth, Southwark and Lewisham authority?

I assure my hon. Friend the Member for Rochester and Chatham (Mrs Fenner) that it is the other areas in the South-West Thames region that have had to bear the brunt of the overspending by this authority in the past. I am given to understand by the commissioners that last month they were on course to ensure that expenditure would be within the cash limits this financial year. Perhaps I can add this, to reassure my hon. Friend: it is imperative that all units in the area should continue to exercise financial constraint for the remainder of the financial year and beyond. Uncontrolled spending now will only make the area health authority's task next year even more difficult.

We must all be grateful to the right hon. Gentleman for following the precedent of the late right hon. Herbert Morrison, although a little belatedly. We should also be grateful to him for proposing to restore this health authority slightly more than a month after judgment was given in its favour.

Now that the right hon. Gentleman has read the judgment, does he realise the distinction between its first, second and third conclusions? The second conclusion says that the advice on which he acted was seriously misleading. The third relates to his own personal actions. Why is the right hon. Gentleman asking members of this health authority to obey cash limits when even now he has not issued a direction under section 17 asking them to do so? In other words, the statutory duty that he says will be introduced for every health authority he could have introduced for this authority or any other by a direction under section 17. Why did he sack the members of that authority first instead of asking them, or laying a duty on them, to do what he is still only asking them to do in a non-formal way?

The hon. Member for Nottingham, West (Mr. English) certainly made his points clear when he spoke last week. However, it is a little hard for me to be charged with announcing a Bill belatedly when if I had decided to appeal against this judgment clearly a Bill would not have been necessary and the matter would have remained outstanding until the appeal had been heard.

I do not think that the Herbert Morrison precedent is on all fours with this case. There are other cases of Bills going through to validate past actions of the House and I think that each one has to be judged on the facts of its case. The main burden of the hon. Gentleman's case was to ask why I did not issue a direction under section 17. This was exactly the point put last Tuesday by my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) who spelt out very clearly what the process would have been. It was stated in my affadavit to the court that I considered whether a directive under section 17 of the Act would have been appropriate, because if it had not been observed I would have been able to take powers, not under section 86 but under section 85, to dismiss the area health authority. The reason why I did not choose that course was one of timing. I was advised that it would have been necessary to delay so as to give the authority time to respond or fail to respond to the directive under section 17. I had in mind that five months of the year had already passed and that every month that overspending continued the task of bringing this authority back within its cash limits would have been that much more difficult. It was for that reason that I considered that urgent—indeed, emergency—action was necessary, although in the event it turned out that I did not take the action in accordance with the provisions of the section.

Given the unfortunate advice originally tendered to my right hon. Friend the Secretary of State, will he accept from me that to have achieved his financial objectives while obeying the letter of the law is, for some of us, a reason for congratulation rather than continuing condemnation?

I wish to make entirely clear, as I did on Tuesday, that I am answerable to this House for the activities of my Department. I accept that responsibility in full. That is why I am here today answering questions.

Does the Secretary of State realise that while he may be able to achieve retrospective amnesty for his commissioners and their staff he can in no way compensate those of my constituents who had to suffer prolonged illness and pain because of the illegal cuts in health services that he has imposed? Will he accept and recognise in the House that much of the tragic medical harm caused by this decision can never be put right?

I am not sure that that was a helpful contribution. If the health authority had done last August what the majority of its members agreed with me on Friday they would do in future, that health authority would have had to take some difficult and unpalatable decisions and I am far from clear that those decisions would have been necessarily different from the decisions taken by the commissioners after I appointed them. That will be a matter on which the health authority can comment when it reviews the decisions—as it no doubt will wish to do—once it has resumed control of the area. What is perfectly clear is that there are 90 area health authorities in England, and when 89 of them were prepared to take the decision to live within the cash limits and one was not, it was simply not tolerable that that authority should be allowed to continue to get away with it. The authority has now recognised that and I am grateful for its undertaking. I hope that the future will be happier than the past.

This is a very sad, sorry and abject story. I regard it as appropriate that 1 April is the day on which the area health authority will be reinstated—especially for the present Government Front Bench. If the area health authority decides—I understand it is more than likely that it will do so—that the closure of the hospital in which I have great interest should never have taken place and had nothing whatever to do with the arguments about the cash limits to which the right hon. Gentleman refers, and decides to reopen that hospital, may I have a personal and categoric assurance from the right hon. Gentleman that he will not interfere as Secretary of State but will allow the authority to reopen the hospital?

I can tell the right hon. Member for Bermondsey (Mr. Mellish) that the date of 1 April was a date that was suggested first in court by the applicants' counsel and, secondly, in a letter from the council's solicitors when they wrote to me last week. I was happy to accept that date. It seemed to me to be a sensible date which would allow for an orderly return of responsibility to the members of the authority.

As regards St. Olave's Hospital, I am well aware of and sympathetic to the right hon. Gentleman's profound concern for that hospital. I have made clear that it is open to the members of the authority to review the decisions that have been taken. I have no doubt they will want to do that, but they will have to work within the constraints of the money which will be made available to them in the next year. If the authority accepts that, there is no reason why I should not equally accept a decision that the authority may come to.

May I say to my right hon. Friend that it will not be a sad, sorry and abject story for others living in the South-East Thames region if this area health authority abides by the cash limits which in the past it has blatantly, flagrantly and persistently abused? The way in which my right hon. Friend has apologised to the House for what has happened reflects immense credit upon him

Will the right hon. Gentleman confirm that at the press conference on 1 August when he announced his policy—a press conference that I attended—he was warned that his action was illegal? Does he agree that he was warned on at least five subsequent occasions that he was breaking the law in approaching the matter in this way? Will he further confirm that his response to Mr. Stanley Hardy's letter in setting up the area health authority without constraints means that he has no intention of applying any section 17 directions within the 1980–81 financial year? Finally, when will King's College Hospital be able to resume fitting pacemakers?

If the hon. Member for Lewisham, West (Mr. Price) was able to say on 1 August, without having seen the terms of the direction, that the direction was illegal he must have second sight beyond the capability of most hon. Members. It is a fact that on every ground bar one on which the applicants' counsel sought to upset my direction the argument was held to be wrong. Perhaps the hon. Member should consult his hon. Friend the Member for Nottingham, West (Mr. English) on the question of a section 17 direction. The hon. Member for Nottingham, West was asking me to put on a section 17 direction, and I gather that the hon. Member for Lewisham, West is implying that I should not make such a direction.

My answer is that I am considering whether a section 17 direction should be applied, but I have to bear in mind that there is a provision in the Bill now before Parliament which, if Parliament accepts the clause, and when the Bill becomes law, will apply an automatic statutory duty to all authorities to comply with their cash limits.

The question of cardiac pacemakers at King's College Hospital is a matter for the local management to decide in conjunction with the consultants, but I emphasise that all units in this area must continue to constrain their expenditure or they will make the task of the area health authority when it resumes control after April even more difficult.

Is the Secretary of State aware that the rigid application of cash limits on this and all other authorities has a multiplicity of short-term and long-term results? Therefore, will the right hon. Gentleman publish a document to enable the health authorities and all those working in the Health Service, people who have to operate within the limits, to be aware of those consequences? Is he aware of the effect on nursing ratios in the four years following the year in which the cash limit is applied? Is he aware of the bonanza of equipment spending that took place in February this year in order to spend certain sums—within cash limits, it is true?

The hon. Gentleman's questions go a little wider than my state- ment. With the cash limit regime we are using the same machinery that our predecessors established and which, as I think is now widely recognised, is essential in order to constrain public spending within the limits established by the Cabinet.

Order. I propose to call two questions from the Opposition Front Bench and one Opposition Back Bencher. Clearly, the House will have a chance to debate the matter at greater length if legislation is on its way.

Does the Secretary of State accept the proposition which he says was put to him by the solicitor for Lewisham council, namely, that when the authority resumes control it will have freedom of action to review decisions taken by the commissioners? If that is so would it not follow that those who believe that they have acquired contractual rights may find them revoked? Is it proposed in the indemnity Bill to deprive these people of a remedy?

I would have thought that I had broadly accepted the point that was put to me by Mr. Joy, the borough solicitor, that the authority, on resuming control, should be entitled to review decisions. But it seems to me that the consequences of any Bill—and doubtless the right hon. and learned Gentleman will wish to examine carefully the terms of the Bill—would be to validate the decisions that have been taken by the commissioners in the meantime in order to create the certainty which it must always be part of the process of law to create. If the members of the authority then wished to change the decision which had been made by the commissioners, they would do so in the full knowledge of any legal consequences of making those changes. However, these are matters which we shall no doubt wish to examine in greater detail when we come to the Bill.

Given that the Lambeth, Southwark and Lewisham area health authority (teaching) will be reorganised, as will be every other area health authority under clause 1 of the Health Services Bill, will the Secretary of State give an assurance that the cash limits for the Lambeth, Southwark and Lewisham authority will imply that no variations to services to patients need take place in 1980–81 until the reorganisation envisaged in the Bill is effective?

I do not think that it would be for me to give such a direction to the area health authority. Every area health authority is always concerned to look at its priorities and to ensure that the totality of its spending is the best that it can organise for the purposes of serving the public who live and work in the area.

On restructuring, it has been widely felt for some time that this area would benefit from restructuring on the lines perhaps of the proposals outlined in "Patients First". The Government intend that the structure of all health authorities should be reviewed on those lines, and it would certainly be worth considering the Lambeth, Southwark and Lewisham area in the context of that review.

Will the right hon. Gentleman confirm—and this is what the chairman of the area health authority was on record last July as having said—that the first communication that he received from the Secretary of State was one which sacked him and his authority? How does he square that with the attempts said to have been made to persuade the area health authority to toe the Goverment's line?

It is not clear what happens to those who have sold goods to the area health authority. Will they be paid? What happens to people who have been promoted since last July? Will they be held to have drawn illegal increases in salary?

The procedures which were adopted before I purported to give a direction were clearly spelt out in my affidavit to the court, and are clearly on record in the judgment of the court. I think that I do not need to elaborate on that now.

It is precisely in order to avoid the kind of difficulties to which the right hon. Gentleman is referring that we have now considered it necessary to introduce a Bill. Notice has been given today and the Bill will be available and printed tomorrow. There is a draft Bill in the Vote Office now. If we did not have a Bill, having now decided not to appeal and to accept the judgment, there would be a risk that decisions that have been taken whether on promotion, the purchase of goods, the dismissal of staff, or a whole range of other matters, could be open to attack in the courts on the ground that the decisions were not properly taken. It must be in the interests of the entire House, of the area and of the NHS that that situation is remedied just as swiftly as possible.

On a point of order, Mr. Speaker. The subject we have just been discussing is a matter of a Minister accepting responsibility for a serious error of judgment. Yet again, a copy of the statement was not provided for right hon. and hon. Members which, if provided, would have given us greater information. However, as the Minister stood up to make his statement, copies of it were being handed round to the press. I see no reason why the press should not have them, but, equally, I think that Members of Parliament should have copies in advance so that they are better informed and can ask better informed questions, particularly where a Minister who admits that he has made a serious misjudgment is coming to answer to the House.

We cannot simply leave this matter to the discretion of the odd Minister who feel some sort of obligation to provide Members with a statement as well as providing them for persons outside. Can you use your influence, Mr. Speaker, to press on all Ministers to issue their statements in the Vote Office in advance as a matter of course?

The hon. Gentleman knows, as the House does, that he has raised that question with me on another occasion. It is a long-established custom, so I understand, that copies of statements are handed out for those who have to report them. I have heard and understood the point which the hon. Gentleman has raised, but it is not a matter within my discretion or control.

Further to that point of order, Mr. Speaker. The Secretary of State said that the Leader of the House would make a business statement on when we might consider the Bill, which, if passed, is to be cited as the National Health Service (Invalid Direction) Act 1980. May we have an assurance now from the Leader of the House that he will not rush that business through this week and that he will give us all due time to consider the matter?

Further to the point of order, Mr. Speaker. I wonder whether you could confirm that there are two sorts of Act of Indemnity—the non-controversial sort, when the Bill goes through all its stages instantaneously on the Floor of the House, and the more controversial sort, which it has been customary upon occasion to refer to a Select Committee? The latter would seem an appropriate procedure in this case. A Select Committee can call evidence and determine who misadvised the Minister, how far he himself was responsible for his own official action, and so on. Will you confirm, Mr. Speaker, that there are those two sorts of precedent?

It is not for me to decide the course which will be followed in connection with this Bill. What I am quite sure is that we have not heard the last of it.

Handicapped Children (Educational Treatment)

With permission, Mr. Speaker, I wish to make a statement on the Warnock report on the special educational needs of handicapped children.

The committee under the chairmanship of Mrs. Warnock presented its report in March 1978. Shortly afterwards, a consultation document was issued to seek the views of the many organisations concerned with the education, health and welfare of the handicapped. Their responses were almost wholly favourable. In addition, a thorough interdepartmental study of the report's recommendations has now been made and completed within the Government. In view of the anxieties expressed on both sides of the House during discussion of the provisions of clause 9 of the Education (No. 2) Bill, my right hon. Friend the Secretary of State for Wales and I have decided that it would be right to announce at once the Government's response to the report. My right hon. Friend the Secretary of State for Scotland will be dealing separately with the application to Scotland.

The central recommendation of the report was that, in the light of the experience gained since the passing of the Education Act 1944, the concept of special educational treatment appropriate to defined categories of bodily or mental handicap should be replaced by that of the special educational needs of individual children. Such a change, which would reflect enlightened current practice, was welcomed by the bodies which we consulted. The Government accept the arguments in the report for changes in the current statutory provisions relating to special educational treatment and intend to introduce early legislation to enact a new framework substantially on the lines recommended in the report. The new legislation will incorporate provisions designed to safeguard the interests of children with severe or complex special educational needs, including arrangements for more widely based assessment and for the recording of individual needs.

The legislation will also define and protect the rights of parents to adequate information and consultation about the education offered for their children, taking account of the relevant recommendations of the report and in the spirit of the provisions about information and parental preference embodied in the Education (No. 2) Bill.

Many of the other recommendations in the Warnock report were addressed not directly to the Government but to those concerned with the local provision of education, health and welfare services. Some recommendations—for example, those relating to nursery education, teacher training and further and higher education—have major implications for central and local government expenditure, and their implementation must be considered in the light of the economic situation and the need for restraint which it entails. The Government's current expenditure plans provide for the maintenance of expenditure on special education at its present level, despite the fall in the size of the relevant age groups.

We propose to lay before Parliament in due course a White Paper outlining the form that the new legislation might take and dealing with other recommendations made by the Warnock committee.

In conclusion, I wish to congratulate Mrs. Warnock and the members of her committee on their carefully presented consideration of the many issues surrounding the education of handicapped children and young persons. Their report will, I am sure, be a constant source of reference for many years to come for all with an interest in the development of special education.

I endorse the right hon. and learned Gentleman's thanks to the Warnock committee, and I add my own expression of admiration for the work which it undertook. May I commend also those organisations and individuals, some of them in this House, who have campaigned so hard for progressive developments in educational provision for those with special learning difficulties?

In view of the work which has been done, is not the Government's reaction a shallow and somewhat ineffectual response to so much earnest and authoritative work undertaken by the Warnock committee and others? Nevertheless, I welcome the right hon. and learned Gentleman's decision to accept the argument for changing the legislative categories from the rather narrow definitions of handicap and subnormality. Does his undertaking to enact a new framework mean that we shall have a broader, more sensitive and more sensible definition of special educational need which is related to the individual characteristics of individual children who suffer from behavioural and emotional disorders as well as from physical and mental handicap and retardation?

When shall we see the White Paper which the Secretary of State has announced? Second, and more important in a sense, why do we in this place and parents and others, outside who are concerned with these matters have to wait at least another eight months for a Bill, another year for enactment and another 18 months for its operation? Is this not an unwarranted delay, especially since there has already been exhaustive consultation over two years and there is ample scope in the Education (No. 2) Bill, now in the House of Lords, to make these changes of definition and changes in the scope of parental rights, which were recommended in the course of debates on the Bill both by us on these Benches and by the hon. Member for Exeter (Mr. Hannam) and other hon. Members on the Government Benches? Does the delay arise because the Secretary of State is perhaps trying to head off a threatened rebellion in the House of Lords, or because he cannot yet decide what the extent of choice and parental rights should be for those who have children with special educational needs—which, I recognise, is a complex matter?

Does the right hon. and learned Gentleman propose in the new legislation to remove section 10 of the 1976 Act, as has been rumoured in the press, and, if he does, will that be because he has abandoned any hope of getting the vital additional resources necessary to make integration of children with special educational needs into ordinary schools a practical and acceptable possibility? If he does not remove section 10, will he now specify a date on which under that Act the process of integration can become legally required and operated?

On the question of resources, since this was a matter of some concern dealt with in his statement, will the Secretary of State accept that the recommendations in much of the Warnock report emphatically urged the commitment of what Mrs. Warnock called substantial additional resources? Even in the current economic situation, cannot the right hon. and learned Gentleman make additional provision to meet the first priorities of the report, as Mrs. Warnock called them, that is to say, new provision for under fives and over-sixteens who have special educational needs and, very important, the extension and improvement of initial and in-service training of teachers of children with special educational needs?

What steps will the Secretary of State take to ensure that the Government's professed intention to maintain expenditure on special education at its present level will be fulfilled by local education authorities, especially those authorities which may be tempted to transfer resources from special education into ordinary education under the pressure of the cuts which are being felt in local education authorities and schools of all descriptions?

Finally—[HON. MEMBERS]: "Too long".] The report has been out for two years, there has been a year of consultation, there is widespread interest and concern, and there is a Bill now before the House of Lords. I am sorry that this is one of the few opportunities that we have for intensive questioning.

Does the right hon. and learned Gentleman accept that the change of definitions will have major financial implications in that 15 to 20 per cent. of British schoolchildren may now legally have an entitlement to special education during periods of their educational life? If he does not accept that view, does he admit that his statement has much more to do with words than it has with actions? If that is the case, what should not be a matter of contention and controversy between the two sides of the House may become so, to the detriment of all concerned.

The hon. Gentleman asked a fair number of questions and I shall do my best to answer them. First, I appreciate what he said about those who served on the Warnock committee, and I join with him in recognising the role played by various hon. Members on both sides as well as those outside who have expressed concern for handicapped children.

The hon. Gentleman's overall description of my response as a shallow one was somewhat surprising in view of the fact that there was only one real direct recommendation to Government, namely, the changing of the legislative framework. I stated that the Government accepted that major recommendation and that they proposed to legislate to carry it into being. In view of the recommendation to Government, it is difficult to know what more I could have done which would have avoided the accusation of being shallow in my response.

The hon. Gentleman is quite right about what the framework will be. As I made clear in my statement, the whole purpose of changing the legislative framework is to introduce a framework in accord with the general recommendations of the Warnock committee, which are to get away from the narrow categorisation of bodily and mental handicap and instead to provide a much broader framework for children in general special educational need.

I was somewhat surprised by the hon. Gentleman's criticism of unwarranted delay in my statement about the Bill. I remind him that the Warnock committee made 225 separate recommendations.

If one adds Scotland, there are 225. There are 224 for England and Wales.

I remind the hon. Gentleman that the Warnock committee was set up when my right hon. Friend the Prime Minister was Secretary of State for Education and Science. It took Mrs. Warnock and her committee nearly four years to report. They reported in March 1978. The then Government went out to consultation, inviting reactions by the end of February last year. I do not think that it is at all unreasonable, in view of the length and complexity of the report, to be in a position to announce within a year of taking office our reaction to that report. It has nothing to do with the Education (No. 2) Bill, which is now in another place, save to say that, as hon. Members on both sides raised the issue of the relationship of information and parental choice to those in special schools, I thought it right to announce at once our decision with regard to the Warnock report.

I accept what the hon. Gentleman said about resources. The Warnock report makes it clear that its recommendations as a whole will mean substantial additional resources. But it is also right to point out that the Warnock committee recognises that the first necessary stage is to change the legal framework and to accept that the recommendations will come in step as resources become available. That is why I thought it right to make clear in my statement the resource implications that would have to be considered in the light of the economic situation.

As to the hon. Gentleman's two final points, he tightly said that I could provide that money spent on special schools should be similar next year to what it is this year. I cannot force local authorities to spend their money in that way, any more than I can dictate any other form of educational expenditure. I can only say what the Government propose, and advise and hope that local authorities will react in this sensitive area. I do not accept that the change of definition itself has wide financial implications. I accept that the implementation of the whole of the report has wide financial implications. But Mrs. Warnock's central proposal was a change to a broader framework of understanding of the problems of the disabled, a much changed system of assessment, a much more parental involvement and a much greater ability to record different degrees of educational need without the financial implications which the hon. Gentleman suggested.

While the Secretary of State's acceptance of the main Warnock principle is welcome, would not it be fairer to all the parents to make it quite clear that, against a background of present cuts, the implementation of many of the proposals will take a long time indeed and that there may be little progress? Would it not be better to avoid the kind of situation that arose following the implementation of the Chronically Sick and Disabled Persons Act, when many false expectations were raised? Will the, right hon. Gentleman again consider the question of school meals and transport charges in relation to handicapped children when he is considering this matter?

I carefully pointed out in my statement that there were resource implications and that they must be considered in the light of the economic situation. I do not accept that that is a reason for delay in going ahead with the change in the framework, because I believe that that is a necessary first step. There are many parts in that, such as the question of assessment, the type of assessment, the type of discussion with parents and the sort of proposals recommended for the recording of information about children, which could well be implemented with advantage to the parents and the children without resource implications.

Will my right hon. and learned Friend accept our congratulations for the speedy implementation of the undertaking that he gave during th. Report stage of the Education (No.2) Bill? Can he give some idea of the time gap between the implementation of that Bill and the introduction of the proposals in the Warnock report?

Yes, I shall.

I apologise to the hon. Member for Bedwelty (Mr. Kinnock) because I failed to answer one of his questions. He asked when it was hoped that the White Paper would be presented. The best answer I can give is the early summer.

As to legislation, obviously I cannot anticipate the contents of the next Queen's Speech. However, I can stick to the phrase "early legislation", and I express the hope that the new legislation on Warnock will reach the statute book at a date prior to the implementation of clauses 6, 7 and 8 of the Education (No. 2) Bill.

The right hon. and learned Gentleman indicated how the proposed changes in law and administration will be implemented in two of the three parts of the United Kingdom for which other Secretaries of State are responsible. He will be aware that law and practice in Northern Ireland has not been identical with that in Great Britain, but presumably he will not deny that these considerations apply equally to all parts of the United Kingdom. Can he indicate when an announcement will be made in relation to Northern Ireland, and what form and character it will take? Would not it be generally more advisable, when statements of Government policy of this kind are made, if they included some reference to the fourth part of the United Kingdom?

I am grateful to the right hon. Gentleman for raising the question of Northern Ireland, because it is right that it should be raised. As he will know, the terms of reference of the Warnock committee did not extend to Northern Ireland, and its report is not, therefore, a direct commentary on special education in Northern Ireland. Having said that, I understand that the report is of considerable interest to those in Northern Ireland concerned with the education of handicapped children, and I understand that my right hon. Friend the Secretary of State for Northern Ireland will consider, with his ministerial colleagues, the need to take action in the light of the announcement that I have made this afternoon. I shall certainly draw to my right hon. Friend's notice the question raised by the right hon. Gentleman as to the form of any statement which he might care to make.

Is my right hon. and learned Friend aware that both sides of the House welcome his statement, particularly that part in which he said that he broadly accepts all of the recommendations of Mrs. Warnock? Is he also aware, as has been pointed out, that their full implementation will require resource priorities and that many Conservative Members would regard the fulfilment of Mrs. Warnock's recommendations as a high priority in the social sphere?

I note what my hon. Friend says. I am grateful to him for his general support.

Will the right hon. and learned Gentleman confirm that he will leave the duty to supply special education within the Education Act 1944 in the new legislation that he brings forward? In doing that, will he take into account Lord Alexander's suggestion in another place that that section of the Bill be amended to include gifted children to make unnecessary the assisted places scheme? Will the right hon. and learned Gentleman consider doing it in that way?

Secondly, are there any changes contemplated in bringing the salaries of teachers in special schools more into the broad structure of the Burnham committee?

The salaries of teachers is a matter for the Burnham committee and for negotiations with the committee.

The hon. Gentleman's first question enables me to answer another of the many questions asked by the hon. Member for Bedwellty (Mr. Kinnock). The hon. Gentleman will realise that a totally different concept is being proposed by Mrs. Warnock from the duty under the 1944 Act, or from section 10 of the Education Act 1976, which was an intention to alter the presumption in the 1944 Act. I think it right to ask the House to wait and see the terms of the White Paper and what the Government say on the general issue of integration that will appear in it.

Order. I propose—I wish that I had risen earlier to say so—to call those hon. Members who have been rising to question the Secretary of State for Education and Science. When that has been done, I think that it would be unfair to the House to remain any longer on this issue.

Does my right hon. and learned Friend agree that an important part of the education of both the physically and the mentally handicapped is education in sport and physical recreation? In the context of the Warnock report, will he lend his support to paraplegic children's education, with particular reference to the excellent work that is done at Stoke Mandeville? Secondly, will he give his support to the special Olympics, which this year brought together about 4,000 mentally handicapped children from 15 countries? As such an Olympics is intended to be held in Britain, will he give it his general support?

I recognise the importance of education in sport for those who are physically handicapped. I shall bear in mind my hon. Friend's remarks. I think that everybody welcomes the opportunity that paraplegic children now have to compete with their fellows from other parts of the world.

I am mindful of the right hon. and learned Gentleman's responsibility for England and Wales. However, will he give us some assurance about the timing of legislation for Scotland? Will he pass that on to his right hon. Friend the Secretary of State for Scotland, who is absent today? Will he give an indication that the consultations will be short? The Warnock committee began its work in 1973, a very long time ago for those who are the subject of the report.

If we are to talk merely of meeting the central recommendations, that will do severe damage to the morale of those engaged in this form of work. We talk about shortages of resources, but there are resources for which the Secretary of State has direct responsibility, namely, the training, for example, of occupational therapists and physiotherapists. Such people are vital—I speak with a specific interest as I have a young daughter who is a spastic—in ensuring that these young people, especially as they move into their teens and into adulthood, get a fair chance in our competitive society.

I understand that the Under-Secretary of State for Scotland was in the Chamber until a moment ago. My hon. Friend had been present since 3.30 pm. As the hon. Gentleman says, the position in Scotland is slightly different. I shall ensure that his comments are conveyed to my right hon. Friend the Secretary of State for Scotland. As the hon. Gentleman will appreciate, I have no ministerial responsibility for special schools in Scotland. I understand that my right hon. Friend has answered a written question that appears on today's Order Paper, which I hope the hon. Gentleman will have an opportunity to study. Following that, he will be able to ask any question of my right hon. Friend that arises from the written answer.

Is my right hon. and learned Friend aware that his statement on financial choice will be especially welcomed by the parents of these unfortunate children? Will he confirm that provision will be made regardless of county boundaries? Will he make a point of ensuring that special funds are available as early as possible to avoid disappointment?

I must ask my hon. Friend to await the forthcoming White Paper, in which we shall set out our general legislative proposals. On this occasion I must limit myself to what I said in my statement, namely, that our proposals will be in the spirit of the provisions that exist in the Education (No. 2) Bill, which is now passing through another place.

Is my right hon. and learned Friend aware that this is the second occasion within a week when a major oral statement has been made affecting England and Wales, following which hon. Members representing England and Wales may ask and have answered their questions—the other statement concerned housing—whereas Scotland has been dealt with by means of written answers? That means that Scottish Members have no opportunity to ask questions and to receive answers. Does the Secretary of State agree that this is most unfortunate? Does he further agree that it would not have arisen if we had had a Scottish Assembly?

The first part of the hon. Gentleman's question concerns a matter that he will have to take up with my right hon. Friend the Leader of the House. It is not for me. I do not propose to comment on the hon. Gentleman's second question.

I welcome the statement of my right hon. and learned Friend on the movement towards implementing the important recommendations made by the Warnock committee. As it will be a lengthy and fundamental process for the schools, I invite my right hon. and learned Friend to comment on the deep implications and the effect that it will have upon schools that take children with a certain form of handicap. Of course, I welcome such an arrangement. It will have a valuable effect on children in the schools. However, it might be difficult to move into a situation in which more than one area of handicap is taken. That will require deep thought and consultations with teachers and everyone concerned. May I have my right hon. and learned Friend's view?

I do not think that our implementation of the Warnock committee recommendations will necessarily have the consequences that my hon. Friend fears. In the report Mrs. Warnock makes it clear—she takes a much wider definition of education need and recognises that it will cover many who now require remedial education during different parts of their school life—that those who have serious educational need for which provision is not generally available in the ordinary sense will be recorded as such. The local education authority will have to assess whether there is availability in an ordinary school for their education or whether they should, in view of their degree of disability, go to a special school in consultation and, it is to be hoped, in agreement with the parents. Therefore, it is not intended by Mrs. Warnock that there should be no role for the special school. There is a wider area of educational need, a wider area of assessment and a greater degree of flexibility between the different areas of assessment.

I very much welcome the statement. The implementation of the Warnock committee's recommendations might involve increased expenditure on access, adaptation of buildings and mobility. Will the right hon. and learned Gentleman's Department undertake to meet such costs? Will he make it mandatory for the parents of handicapped children to be represented on any governing bodies that are established?

One of the specific recommendations is the representation of the local authority on the governing body of any school. I shall consider parental governing representation. I hope that that is one of the matters that we shall be able to deal with in the White Paper. Such representation would be in accord with the Education (No. 2) Bill, which provides for elected parents on other bodies.

I turn to the hon. Gentleman's first question. I know that he was unable to be present when I made my statement. I cannot go beyond what I said at that stage. Undoubtedly there are substantial resource implications in certain of the recommendations of the Warnock committee's report. Their implementation will have to be considered in the light of the economic situation and the need for restraint that that entails.

Has a policy decision been reached on recommendation 733? It is contained in a formidably argued, well written and highly readable report. Recommendation 733 proposes that every resource centre, special class or place that is organised internally by the head teacher can have as much material support related to its needs as would have been given formerly to one designated by the local education authority. Some of us believe that this is an important recommendation. Has any conclusion been reached?