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Commons Chamber

Volume 990: debated on Monday 4 August 1980

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House Of Commons

Monday 4 August 1980

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Message From The Queen

Her Majesty The Queen Mother

The Vice-Chamberlain of the Household reported Her Majesty's Answer to the Address as follows:

I thank you most sincerely for your loyal and dutiful address on the occasion of the eightieth birthday of Her Majesty Queen Elizabeth the Queen Mother.

I am deeply moved by this expression of your great pleasure on this joyful occasion and I welcome your intention to send a message to Her Majesty Queen Elizabeth the Queen Mother offering your cordial congratulations and expressing your warmest desire for her long continuing health and happiness.

Messages From The Council Of State

Double Taxation Relief

The Vice-Chamberlain of the Household reported Her Majesty's Answers to the Addresses, as follows:

I have received your Addresses praying that the Double Taxation Relief (Taxes on Income) (Canada) (No. 2) Order 1980, the Double Taxation Relief (Taxes on Income) (Cyprus) Order 1980, the Double Taxation Relief (Taxes on Income) (New Zealand) Order 1980, and the Double Taxation Relief (Taxes on Income) (Sweden) Order 1980, be made in the form of the drafts laid before your House.

I will comply with your request.

I have received your Address praying that the ratification by the Government of Japan of the Protocol set out in the schedule to the draft order entitled the Double Taxation Relief (Taxes on Income) (Japan) Order 1980, which draft was laid before your House, an order may be made in the form of that draft.

I will comply with your request.

Private Business

British Transport Docks Bill

Scottish Widows' Fund And Life Assurance Society Bill

Lords amendments agreed to.

Southern Water Authority Bill Lords

Order for Third reading read.

To be read the Third time Tomorrow.

South Yorkshire Bill Lords

Read the Third time and passed, with amendments.

London Transport Bill (No 2) Bill

Considered; to be read the Third time.

Alexandra Park And Palace Bill Lords

Greater Manchester Bill Lords

Orders for Second reading read.

To be read a Second time upon Tuesday 28 October 1980.

Felixstowe Dock And Railway (No 2) Bill


That the Promoters of the Felixstowe Dock and Railway (No. 2) Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than Five o'clock on the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;


That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;


That there shall be deposited with the Bill a Declaration signed by the Agents for the Bill stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in the House in the present Session;


That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time (and shall be recorded in the Journal of this House as having been so read) and, having been amended by the Committee in the present Session, shall be ordered to lie upon the Table;


That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;


That these Orders be Standing Orders of the House.

—[ The Chairman of Ways and Means.]

To be communicated to the Lords, and their concurrence desired thereto.

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


That the Promoters of the Greater London Council (General Powers) (No. 2) Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than Five o'clock on the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;


That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;


That there shall be deposited with the Bill a Declaration signed by the Agents for the Bill stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in the House in the present Session;


That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time (and shall be recorded in the Journal of this House as having been so read) and, having been amended by the Committee in the present Session, shall be ordered to lie upon the Table;


That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;


That these Orders be Standing Orders of the House.—[The Chairman of Ways and Means.]

To be communicated to the Lords, and their concurrence desired thereto.

Greater Manchester Bill Lords


That the Promoters of the Greater Manchester Bill [Lords] shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further proceedings not later than Five o'clock on the day before the close of the present Session and that all Fees due on the Bill up to that date be paid;


That if the Bill is brought from the Lords in the next Session the Agents for the Bill shall deposit in the Private Bill Office a declaration, signed by them, stating that the Bill is the same, in every respect as the Bill which was brought from the Lords in the present Session;


That as soon as a certificate by one of the Clerks in the Private Bill Office that such a declaration had been so deposited has been laid upon the Table of the House the Bill shall be deemed to have been read the first time and shall be ordered to be read a second time;


That all Petitions against the Bill presented in the present Session which stand referred to the Committee on the Bill shall stand referred to the Committee on the Bill in the next Session;


That no Petitioners shall be heard before the Committee on the Bill, unless their Petition has been presented within the time limited within the present Session;


That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;


That these Orders be Standing Orders of the House.—[The Chairman of Ways and Means.]

Message to the Lords to acquaint them therewith.

Oral Answers To Questions


Industrial Growth Forecasts


asked the Secretary of State for Industry what representations he has had from the Confederation of British Industry on the growth prospects of British industry in the next two years.

I met officials of the CBI on 24 July to discuss the economic prospect. The CBI reiterated its support for the Government's economic policies, but also made plain to me its concern over the effect of high interest rates and a high exchange rate on the prospects for industry and therefore its desire that the Government, and particularly the local authorities, should press on with reducing their spending and borrowing.

Is my right hon. Friend aware that since then more and more messages have been coming in from British industry of closures, lay-offs and short-time working? Is it not therefore necessary to tell the Treasury that if it maintains the high bank rate for too long—I accept that it has been necessary to keep the high rate for a time to reduce inflation—there is a danger of overkill? If too many businesses go down, arising from a bombed-out situation, the Government will find themselves—

Order. The hon. Gentleman is arguing a case. He has asked two supplementary questions.

Order. Does the hon. Gentleman mind if his first two supplementary questions are answered?

Does my right hon. Friend agree that the Government will have to make greater efforts and spend more money to help not only large, but small, businesses?

The message that my hon. Friend wants to reinforce is surely one not only for the Treasury but for all Government Departments, all local authorities and the whole of the public sector. The bulk of industry's problems are made much worse by the public sector's overspending.

Will the Secretary of State tell the House how many private representations he has received from big business men? Do they really support the policy of deliberately worsening the slump to discipline the unions, to reduce inflation and to weed out the inefficient? That seems incredible to me.

The hon. Gentleman has his assumptions wrong. In general, private business is behind the Government's policy, though it is desperately anxious that the Government should secure the lowering of inflation and interest rates, which can come only from reduced public sector, including Government, spending.

Does my right hon. Friend agree that interest rates would not now be so high if the public sector were not so dependent upon the amount of borrowing that it has to do? Secondly, does he accept that the private sector of industry would be a great deal better off if it had not paid so much in wages over the past two years?

I noticed that the Secretary of State did not once refer to growth prospects in reply to his hon. Friend the Member for Rutland and Stamford (Mr. Lewis). I understand why he did not do so. Has the right hon. Gentleman seen the Financial Times survey, reported today, in which the bulk of British industrialists claim that it is not high wages that are causing their present difficulties, but lack of demand? As this lack of demand is the direct result of Government deflationary activity, is it not about time that we had another U-turn?

because while imports are still pouring in there is a huge potential demand which British business is not able to meet because its products and prices do not satisfy our constituents in our high streets.

Paper Industry


asked the Secretary of State for Industry if he will make a statement on his recent meeting with representatives of the paper industry.

I met representatives from the paper industry on 21 July, when we discussed the industry's situation.

Does my right hon. Friend agree that we face the threat of the virtual extinction of the manufacturing of news print in Britain? Does he accept that that has arisen despite good labour relations and considerable improvements in productivity? What steps are the Government taking, or what steps can they take, to ease the threat?

I accept that the industry faces difficult pressures. I accept, too, that there are a limited number of possibilities, which are now being discussed between the Government and the industry.

Is the Secretary of State aware that about 60,000 jobs in the paper and cardboard industry are in jeopardy, principally because of the Government's insistence on raising the price of energy? Is he aware also that if that continues there is no way in which our industry will be competitive vis-á-vis its overseas competitors?

It is true that energy prices throughout the developed world are making it difficult for industry. That is one of the factors that it is raising with us.

Is not the increasing cost of energy one of the greatest burdens from which the paper and board industry is suddenly suffering? Is my right hon. Friend aware that the enormous increase in energy prices is breaking the camel's back?

My hon. and learned Friend will know that energy prices are a matter for my right hon. Friend the Secretary of State for Energy. The industry is arguing strongly that energy prices are damaging it.

Does the Secretary of State accept that British industry is paying much higher energy costs than its foreign competitors? Does he agree that what is needed, if the industry is to survive, is Government action at least to put it on a par with its competitors? Will he take the opportunity to announce that under section 7 of the Industry Act 1972 he is prepared to give assistance to Bowaters' Ellesmere Port plant to save 1,500 jobs?

I must not assume the responsibilities of my right hon. Friend the Secretary of State for Energy. There might be an argument whether, and if so the degree to which, the industry is paying more than its competitors. I have told the House that Bowaters and the industry are having discussions with the Government.

British Steel Corporation


asked the Secretary of State for Industry by what amount the taxpayer has subsidised the British Steel Corporation in the last 10 years; and how much this works out per household and person.

Over the 10 years to the end of March 1980, the Government have provided or guaranteed the British Steel Corporation about £4,700 million in loans and advances of capital to finance its capital investment, working capital, revenue deficits and other cash requirements. This is equivalent to £ 235 per household and £85 per person in the United Kingdom. No dividend on public dividend capital has been paid since 1974 –75. Interest on loan capital has been paid at a decreasing level in the past two years—since April 1978—because of the issue of interest-free finance under section 18 (1) of the Iron and Steel Act 1975.

As taxpayers have had to bear a considerable burden in the past decade, does my hon. Friend think it not unreasonable that taxpayers should now try to get an assurance from the Government that henceforth subsidies for the corporation will be confined to investment in sound capital projects, rather than merely to prop up the industry at the same manpower level, which by any token is a relatively high-wage low-productivity industry?

I am sure that the chairman of the corporation will have taken on board the force of my hon. Friend's comment. We look forward with great interest to receiving, and await urgently, the chairman's proposals.

Does the Minister agree that over the years the industry has been badly managed? Is it not a fact that a steel industry is vital and basic to a modern industrialised nation? Does the hon. Gentleman agree also that other countries have been more successful in disguising their subsidies—for example, the West German coking coal subsidy? Is the hon. Member for Chipping Barnet (Mr. Chapman) suggesting that we should turn our steel workers in South Wales into hotel porters and their wives into domestic servants in the South-East of England?

I shall attempt to answer two out of the four supplementary questions put to me. The hon. Gentleman ignores the fact that the West German subsidy is designed to give coal a price that is equivalent to the world price. The corporation is currently importing steel at world prices to balance its load. As one who has known the industry for many years I recognise that there are problems, but the hon. Gentleman's condemnation of management is too sweeping and does not help the argument.

Order. I appeal to Ministers to answer one supplementary question only, because hon. Members are entitled to ask only one.

Does my hon. Friend agree that the best service that could be done to the taxpayer and to the employees of BSC would be to sell the profitable bits of the corporation to the private sector?

Again, a question has been raised that must be very much in the mind of the chairman of the BSC in relation to his proposals. Such arguments cannot be taken in isolation at Question Time.

How much harder would all those households have had to work if we had had to import the £30 billion of steel that the BSC has produced over the past 10 years?

As the hon. Gentleman knows, he has posed a question that it is not possible to answer. Substantial amounts of money are involved and the British taxpayer has shown great faith in the industry. I support the BSC, but it must become profitable, not only in the interest of the industry, but in the interest of the many steel-consuming industries, on which this country's wealth essentially depends.

Does the Minister agree that the existence of a British bulk steel industry has been of enormous value to British industry during the past 10 years? If so, will he ask his right hon. Friend the Secretary of State to tell his 4 million-dollar man that British bulk steel will not best be preserved by closing down steel mills in South Wales?

I support the general proposition that this is a vital industry on which the whole of our industrial infrastructure depends. However, it must be competitive, not just in its own interests, but for the reasons that I outlined earlier.

Northern Region


asked the Secretary of State for Industry if he will take steps to encourage the development of new industry in the Northern region.

Much of the Northern region already qualifies for the highest rates of regional and other industrial assistance.

Is the Minister aware that last Friday, 1 August, will be known as "black Friday" in the history of the Northern region, because the Government's new policy on downgrading much of the Northern region was implemented on that day? What percentage will unemployment have to reach before the Department of Industry and its Ministers consider re-establishing the special development area status that exists in much of the Northern region?

Of the Northern region, 88 per cent. is to remain an assisted area. As regards the precise percentages, the hon. gentleman will know that we are guided by the Industry Act and by the criteria that it sets out. They include a series of factors other than the level of unemployment.

Does my hon. Friend agree that those who live in the Northern region and in other depressed regions can take comfort from the fact that the Government have recently made several decisions, such as investment in Inmos and investment through the NEB, in biotechnology, and have shown that they are not bound by the dogmatism of which the Opposition accuse them? The Government have shown that they are willing to intervene and to help the regions where it is felt appropriate.

We shall take into account my hon. Friend's remarks. He will appreciate that the role of the NEB is to help those areas in which sufficient incentives have not yet been created for the private market system to finance modern technological development on its own. In due course we hope to create such circumstances.

Does the Minister appreciate that his answer will give no satisfaction and bring no joy to the many thousands of unemployed in the Northern region? Has not the time come for the Secretary of State to make a decision about the establishment of the Northern Development Agency? Together with his team of Ministers, will the Secretary of State encourage the Treasury to reduce the minimum lending rate, in order to assist small industries in the Northern region and other development areas.

I shall pick one of those questions for reply, in accordance with your suggestion, Mr. Speaker. We are considering the arguments put forward about the Northern Development Agency.

Does the Minister stick by the damned nonsense that he trotted out on Tyne Tees television—

Order. However strongly hon. Members may feel, there is no need to use anything other than parliamentary language.

If the word "damned" offends you. Mr. Speaker, I withdraw it. I apologise. Does the Minister stick by the arrant nonsense that he trotted out on Tyne Tees television, to the effect that the only way of getting new industries into the area was for redundant workers to spend their redundancy payments on opening new businesses?

If the hon. Gentleman had paid more attention to what I said on that television programme he would have realised that I did not say that that was the only way of doing it. I said that there were parallels between those who used their post-war credits to start businesses that are now quite substantial and the opportunities for redundancy pay to be taken collectively by groups of workers, in some cases, to create new businesses and jobs. It is not a panacea, and I did not suggest that it was.

Manufacturing Industry


asked the Secretary of State for Industry if he will consider initiating new steps to assist manufacturing industry.

The Government's policies of cutting public spending, reducing inflation, promoting enterprise, fostering small business, and restraining the excessive claims of the public sector, will create a climate in which industry can prosper. Financial assistance to industry also has a part to play, but industrial success depends on action by management and work force to improve competitiveness.

That reply comes from fantasy land. In view of the CBI's latest industrial survey, does not all the evidence point to a deepening recession, mounting unemployment and many closures all over the country? Given that, is it surprising that the Secretary of State for Industry is viewed as the grave digger of British industry and of British jobs?

My reply did not come from fantasy land. It is true that the prospect is one of deeping recession, which in turn reflects world recession, oil price increases and our own sustained decline in competitiveness in recent decades. It is fantasy on the part of Opposition Members to ignore that crucial factor, which is within our control.

Does my right hon. Friend agree that if, when circumstances allow, his right hon. and learned Friend the Chancellor of the Exchequer were to alleviate or abate the employers' national insurance surcharge—which was so unwisely laid on British industry by the previous Labour Government—that might help British industry?

The answer is "Yes" but my right hon. and learned Friend would surely say that that would either have to be done at the expense of reducing public expenditure elsewhere or by raising taxation or borrowing.

Is the Secretary of State aware that interest rates would have been a good deal lower today if the Government had not abolished exchange controls?

I wonder whether the right hon. Gentleman is correct in being so confident and in deciding what decision-makers all over the world would have done about the exchange rate, which in itself has some connection with our internal financial affairs.

Does my right hon. Friend agree that the abolition of national wage bargaining is of major importance to manufacturing industry and to employment prospects?

I am being tempted by all sorts of subjects outside my responsibility. Wage bargaining that ignores crucial local factors of supply·demand and profit does great damage to those firms and workers concerned.

Why is the Secretary of State being so modest about his Government? Why does he not take credit for his right hon. Friend's recent Green Paper on the streamlining of bankruptcy procedures, which must make life so much easier for him now that we have a record number of bankruptcies?

We still have some way to go before we reach the level of bankruptcies achieved by the Labour Government in 1975, 1976 and 1977.

Post Office Equipment


asked the Secretary of State for Industry what estimate he has made of the extent to which United Kingdom industry will be able to respond to official encouragement to manufacture private sector telephone and telecommunications equipment following his statement on 21 July.

From my consultations with the industry I believe that the majority of United Kingdom companies will be well placed to respond to the market opportunities that our proposals will open up, but in order to allow the industry time to adapt to the changed circumstances we intend to phase in the new regime.

I thank my hon. Friend for that reply. Is there now not a tremendous opportunity open to the industry? What steps will my hon. Friend take if, in the early stages of the development, inferior equipment comes in from the Far East and elsewhere?

The purpose of phasing in is to try to ensure that imports do not flood the market. A continuing certification procedure will be carried out.

Does the Minister accept that it is not a lack of Mickey Mouse telephones, but a basic lack of investment, that is causing the problem confronting our telephone service? Since his policy does nothing to alleviate that lack of investment, does he accept that the 20 per cent. increase in charges and rentals announced recently is only the forerunner of a continuing series of higher increases, longer waits for connections and a basic deterioration in the standard of telephone services?

The telephone system will benefit because of the increased traffic that will come about through the increased number of pieces of equipment available to the consumer.

British Materials Handling Board


asked the Secretary of State for Industry on what grounds he authorised his Department's sponsorship of the British Materials Handling Board.

Financial support for the British Materials Handling Board by the Department was authorised by the previous Administration.

Is my hon. Friend aware that the board recently announced its coming into existence in a letter consisting of 20 foolscap sheets to hundreds of British firms, promising the creation of many working groups and offering visits by members and officers of the board to, and I quote—

Order. The hon. Gentleman knows that he cannot quote during Question Time.

I apologise, Mr. Speaker. Does my hon. Friend agree that this quango should have been stifled at birth?

This is not a quango in the accepted sense of the term. The Institute of Materials Handling, which was instrumental in setting up the board, meets in part the financing of the board's activities. I have taken note of what my hon. Friend has said. It might help him to remember that the Government have no plans to extend the funding beyond 31 March 1982.

Aid To Industry


asked the Secretary of State for Industry if he will review the Government's policy on aid to industry in the various regions.


asked the Secretary of State for Industry what plans he has to review the assisted area status of different parts of the country in the light of worsening unemployment and industrial prospects since he last made announcements on this matter.

The Government thoroughly reviewed regional industrial policy, including assisted area gradings, before making last year's announcement of changes. We are continuing to watch closely the position in different parts of the country, but we must maintain reasonable relative stability in the grading of assisted areas if investment incentives are to remain effective.

Is the Secretary of State aware that his policies are consigning an increasing number of Leeds schoolchildren straight to the dole queue, where they will remain for the foreseeable future? Is that not a disgraceful policy? For God's sake, when will he alter it?

I do not accept the connection between changes in regional policy and unemployment among school leavers, in Leeds or elsewhere. If the original regional policy which I changed was so magic in its effect, why did unemployment among school leavers rocket every year under the Labour Government?

Is the Secretary of State aware that while the national unemployment figures have increased by 44 per cent. under the present Government, in West Yorkshire the increase is 59 per cent., and in Batley a massive 97 per cent.? Will the Secretary of State examine again the position of the textile and engineering towns in the West Riding and ensure that he restores the regional assistance which they so desperately need in their current economic plight?

The hon. Gentleman is exaggerating the effect of the regional assistance that was available. The Government remain willing to reconsider the relative position of any constituency if an application is made to them to do so.

Is my right hon. Friend aware that the greatest aid to industry in the regions is the conquest of inflation, because business will not invest to expand until the rate of inflation comes down? I welcome his measures to help the regions, but will he ensure that such measures are not taken at the expense of the need to control inflation?

My hon. Friend has identified the key problem. Until we reduce public spending as a proportion of national spending, interest rates and inflation will not be brought down and industry will not have the chance to recover.

Is the Secretary of State aware that the fact that when aid to North-East Lancashire industries has been withdrawn unemployment has rocketed—in some cases doubling in 15 months—is proof positive that he and his Government do not care tuppence how many thousands are thrown on the dole? If the Government care about unemployment in the regions, will the Secretary of State give a commitment to reinstate the regional assistance that North-East Lancashire has lost?

No, Sir. The Government have carefully retained special development area status for the worst hit parts of the country, precisely because we need to focus the incentive to invest.

When stimulating new industry and industrial growth, will my right hon. Friend examine certain industries which he sponsors and which are involved in the recycling of waste, such as paper, metals, glass and plastics? Does he agree that without subsidy but with direction and leadership from the Government, such industries might move more quickly?

I hope that my hon. Friend will either tell me, or write to me about, what he has in mind.

Does the Secretary of State agree that the problem is not so much one of aid to areas as the damage to areas that has been done by the Government? Will he take on board the fact that energy prices for the glass, foundry and paperboard industries are having a disastrous effect on those industries in the regions? Will he and the Secretary of State for Energy ensure that energy prices here are brought into line with European prices?

There is an argument about the charges being made. However, energy prices have rocketed, and our industries have to live with increased energy prices.

Does my right hon. Friend realise that aid to the regions must penalise other areas of the United Kingdom, including the West Midlands, which is the manufacturing centre of England?

Certainly the extra money that the Opposition are so free in spending comes out of the pockets or the handbags of their and our constituents.

Will the Secretary of State confirm that in every area that he has deprived of intermediate area status unemployment has skyrocketed in the 12 months since he made his announcement? Does he accept that such areas will be damaged further by the proposed enterprise zones? Does he agree that another review of regional policy is required?

The hon. Gentleman has answered his questions out of his own mouth, because unemployment has risen all over the country in the last year, whereas assisted area status was changed only in the last month.

European Community (Membership Benefits)


asked the Secretary of State for Industry if he will undertake a study of the effects on manufacturing industry of European Economic Community membership.

The benefits and effects of membership of the European Community are wide-ranging; a study of one sector alone would be of limited value.

Since energy prices in the United Kingdom are much higher than they are in some of the subsidised countries in Western Europe, with devastating effects on some industries; since interest rates, for good reason, are higher in the United Kingdom than in the rest of Europe, again with cost effects on industry; and since our exchange rate is very high, does my hon. Friend agree that all those grave disadvantages together have allowed for a massive increase in European manufactured imports? Can he say what the advantages are to manufacturing industry of membership of the EEC and how—if only one question might be asked—this outweighs the disadvantages?

We have to take the view of business as recorded today in a survey by the Institute of Directors, which stated that more than half of those interviewed thought that, overall, there were benefits from European membership.

Will the Minister say what benefits have accrued to manufacturing industry in the East Midlands from membership of the EEC, as the area is cascading into short time and insolvencies and desperate difficulties of unemployment are arising in a region that was previously prosperous?

The hon. and learned Gentleman knows as well as I do the serious situation in the textile industry. I suggest to him that membership of the European Community, and having the strength of the Community behind us in negotiating the multi-fibre arrangement, have been of benefit to the textile industry, which would not otherwise have existed.

Will my hon. Friend be careful that he does not encourage people to make the EEC a scapegoat for everything that goes wrong in this country? Would it not be more true to say that the problems of manufacturing industry arise from not being competitive? They are problems that would be with us whether we were inside or outside the Common Market, except that outside the Market they would be much more difficult.

My hon. Friend makes my speech for me. He is right on every count. There is no question but that our industry would be worse off outside the Common Market. It is up to our manufacturers to take advantage of the considerable opportunities that are open to them.

In view of the Minister's reply to his hon. Friend the Member for Eye (Mr. Gummer) and in view also of the fact that this year the deficit on trade in manufactured goods with the EEC will reach £5 billion, which does the hon. Gentleman think is more to blame: membership of the Common Market, or the Government's industrial policy?

The right hon. Gentleman's views on the Common Market are well known. He does not disguise them. The fact is that our manufactured exports to the Common Market have gone up four times as fast as they have to the rest of the world. I repeat what I have just said. It is up to our manufacturers, who are perfectly capable of taking advantage of the opportunities open to them. We have certain advantages. Our wage rates are half those in the Common Market. We are not competitive at the moment. We can become competitive, and then we can compete.

The hon. Gentleman has not answered the question. There is a £5 billion deficit this year. How will he remedy it? Who does he blame?

The fact is that, overall, in real terms, the deficit decreased in 1979 against 1978.

Manufacturing Industry


asked the Secretary of State for Industry what was the index of production in manufacturing industry in the most recent month for which figures are available; and what was the figure in the same month in 1974.

The index for manufacturing stood at 97·2 in May 1980. In May 1974 it was 109·2.

Does my hon. Friend agree that the figures that he has quoted show a most unsatisfactory trend? What steps are the Government taking to ensure that demand for the products of manufacturing industry rise, so that output will rise as well?

My hon. Friend is right to draw attention to this problem. It is one that the Government recognise, but it cannot be divorced from the world recession. As regards Government activity, there are a number of aspects on which the Government have made it plain that they can help at the present time; for example, on the question of enlightened public purchasing, their attitude to research and development, and over a whole range of issues, where constructive policies are in hand.

As my hon. Friend has mentioned Government public purchasing, will he confirm that there is a better than even chance that ICL will be awarded the contract for the Inland Revenue computer?

That is an interesting question, but it goes wider than the original question.

In the light of the Minister's reply, will he take time to consult his right hon. Friend the Secretary of State about his extraordinary ideas on the relationship between moonlighting and entrepreneurial endeavour?

I do not know what the hon. Gentleman has up his sleeve. On his basic argument, he must recognise that these matters should be examined in a wider international context.

Raw Materials (Stockpile)


asked the Secretary of State for Industry what steps are being taken by the Government to stockpile raw materials essential to manufacturing industry, particularly metal manufacture.

The Government are consulting industrial, mining and financial interests about the prospects for the supply of essential minerals for which United Kingdom industry is dependent on overseas sources. The need for stockpiling is being discussed in these consultations.

At least that is an improvement on previous answers. Is the hon. Gentleman aware that some other Western European industrial countries, such as West Germany, are not sitting back and consulting but are taking active steps to stockpile essential industrial raw materials? Is he aware that so long as the instability in South Africa continues to increase that is a prudent line of action?

We are, of course, aware of what happens among our Common Market partners. The hon. Gentleman will, surely, agree that it is best to have thorough consultations on a matter of considerable strategic and economic importance.

Is my hon. Friend expecting a blockade? Are we going to blockade South Africa? Or is that country going to blockade us? There is surely no possible reason why this country should consider stockpiling any material at the taxpayers' expense.

My hon. Friend knows that it is not just South Africa from where some of these commodities come. It must be sensible to consider whether we should stockpile some vital raw materials.

South Yorkshire


asked the Secretary of State for Industry, in the light of the large pockets of unemployed persons, and the danger of further redundancies in the South Yorkshire area, if he will take steps to bring new industries into the area.

Most of South Yorkshire continues to be an assisted area. But industrial development there—as elsewhere—depends primarily on setting the national economy on the right course, as our policies are intended to do, together with the enterprise, skill and realism of management and workers.

Does the hon. Gentleman realise that my constituents in the Dearne Valley, both at Wombwell and Mexborough employment exchange areas, have lost all hope of any promise given by this Government being realised? Is he aware that declaring the Mexborough employment district a development area has created more unemployment, more short time and more threatened redundancies for the future? When are the Government going to rebuild industry—to which the Prime Minister has referred—to provide a better standard of living for our people? When will that happen?

That is, indeed, the programme of this Government. Nobody would expect the Government's programme to be achieved in the course of its first year or 18 months in office. The hon. Gentleman is talking sheer humbug if he pretends otherwise.

On a point of order, Mr. Speaker. Is it in order for the Secretary of State to shout "Humbug" across the Floor of the House?

Further to that point of order, Mr. Speaker. The moment that the hon. Gentleman had asked his apparently angry question, he winked at one of his hon. Friends.

Order. It is possible that the hon. Gentleman's eyelid moved. We are anxious to make progress with questions. To accuse anyone of humbug is not our normal custom.

I withdraw the word "Humbug". I do not withdraw the observation that the hon. Gentleman winked, smiled and laughed at one of his hon. Friends.

On a point of order, Mr. Speaker. I give notice that I shall raise this matter on the Adjournment at the earliest possible moment after the Summer Recess.

South Yorkshire


asked the Secretary of State for Industry if he will revise the arrangements for the assistance of industrial development in South Yorkshire in general and in the Rother Valley constituency in particular.

I have no plans to reverse the decisions announced in July last year on regional aids in South Yorkshire.

Is the Minister aware that South Yorkshire is not amused at the Government's attitude or at the comments that have just emanated from the Government Front Bench? Will the hon. Gentleman make clear whether any other part of the Western world has experienced the same rate of astonishing and rapid unemployment? Does he consider that our constituents should attribute this situation to economic incompetence, or to sheer political indifference?

I think that the hon. Gentleman will find that Canada has had a similar experience, but none of the other countries in the Western world has suffered the inheritance and the legacy left to us by the previous Government.

Is my hon. Friend aware that we in West Yorkshire are sick of our jobs being drained away to the coal areas of Rotherham, and to the steel areas, where they are subsequently wasted? We should welcome a more even-handed attitude.

I shall keep in mind the points that my hon. Friend has made. The Government care so much about unemployment in the areas where it has been entrenched for years that we have thought it right to give priority to those areas in our assisted area policy.

Is the Minister aware that working people in South Yorkshire have the skill, expertise and desire to co-operate with management, but what they do not have is the backing of the Government? High interest rates, other high charges and the Government's policies are ruining the basic industries of South Yorkshire.

I am not sure whether that was a question or an observation, but if the hon. Gentleman will be patient he will find that the policy of controlling inflation in the way that we are doing will produce the results that he desires.

Law Of Confidence


asked the Attorney-General when he anticipates receiving the Law Commission report on the law of confidence.

I do not expect to receive the Law Commission's report before the end of the year.

Does the right hon. and learned Gentleman not agree that the decision in the BSC and Granada Television case has created new and perilous possibilities of confrontation between journalists and the rule of law? As the Prime Minister has said that she wishes to defer consideration of legislation to change the law and to overrule that decision until after the Law Commission has reported, will the Attorney-General urge the commission to act more swiftly and to produce answers and proposals for legislation in its report?

No doubt the Law Commission will bear in mind the decision of the House of Lords and the judgments when they are given at the beginning of next term.

Will my right hon. and learned Friend accept that, whatever may happen in future, the rule of law is the rule of law, that the law ought to be obeyed and that attempts to prevent the law from being obeyed are to be thoroughly deplored?

That concept is one of the reasons why I hope that the Law Commission will have plenty of time in which to consider what I believe to be a very important decision of the House of Lords.

Does the right hon. and learned Gentleman agree that the number of decisions that require to be taken on the law affecting the news media is ecalating? Has any consideration been given recently to the reports of the Phillimore committee on contempt, the Faulks committee on defamation or the Younger committee on privacy? Is it not time to consider the whole package of privileges, restrictions and safeguards affecting the media and to invite Parliament to take some decisions on the merits, rather than allow the courts to take piecemeal decisions on the precedents?

The right hon. and learned Gentleman will have to admit that his Government did not show any great anxiety to deal with any of those reports. As he knows, it is our intention to publish a Bill on contempt early in the next Session. The other important matters are still under consideration.

British Broadcasting Corporation


asked the Attorney-General, further to his reply to the hon. Member for Orpington (Mr. Stanbrook) 18 July, what his reasons are for refusing to publish his correspondence with the chairman of the British Broadcasting Corporation relating to offences allegedly committed by members of the staff of the British Broadcasting Corporation under the Prevention of Terrorism (Temporary Provisions) Act 1976.

There was an Adjournment debate in the House on Friday, as a result of which the BBC decided to publish those letters. They were not published by me, because I regard letters between myself and those to whom I write saying that they are not to be prosecuted as confidential.

The House will be grateful for what my right hon. and learned Friend said in his speech on Friday, the clear warning that he gave to the BBC and his letter to Sir Michael Swann about these disgraceful incidents. Does he agree that in its reply the BBC purports to imply that there is some imprecision about section 11 of the Act? Will he therefore confirm that it is the duty of any employee of the BBC, or of any other medium, who has any contact with known or suspected terrorists to report that fact immediately to the police or security forces?

I think that I made that clear in the debate on Friday. I have to say that I regret the manner of the reply of the BBC in not accepting the law, which I think is clear on this point.


asked the Attorney-General what representations he has received following his decision not to institute proceedings under the Prevention of Terrorism Act 1976 in connection with recent incidents involving the British Broadcasting Corporation.

My hon. Friend was himself able to hear the representations I have received, in the course of the debate last Friday.

While expressing appreciation of what my right hon. and learned Friend said on Friday, may I suggest that the reply from the BBC amounted, in the eyes of at least some, to a rejection of his warning? Is he therefore considering other ways in which the seriousness of the warning might be brought to bear on the BBC?

I think that the press comment that followed the debate initiated by my hon. Friend emphasised that what I said was the law and that I would be stricter in future. In particular, it stressed that I was making clear that it was a stern warning.

Is it not deeply disturbing that there appears, at least to the layman, to be one law for large public corporations and another for private individuals?

The approach of Law Officers of any party is always the same, whether a large corporation or an individual is involved. The various factors that I took into account were set out in detail in the speech that I made on Friday.

Does the right hon. and learned Gentleman accept that it is important that the Law Officers should preserve their discretion over prosecution and should not regard it as vital that prosecution must follow automatically whenever they get evidence of a breach of the law?

I am grateful for the right hon. and learned Gentleman's comment. As far as I know from the records, it has been the practice of my Department for many years that because a case may show prima facie evidence, it does not always follow that it is necessary for there to be a prosecution. There are other ways of dealing with cases, apart from always prosecuting.

Mr Albert Dale Braeuninger


asked the Attorney-General if he will refer to the Department of Public Prosecutions, with a view to prosecution under section 5 the Wireless Telegraphy Act 1949, the case of Mr. Albert Dale Braeuninger.

Can the right hon. and learned Gentleman confirm that unauthorised telephone tapping within the United Kingdom is a criminal offence, even if it is carried out by foreign diplomats, such as United States' diplomats working in this country? Can he also confirm that the White Paper on telephone tapping did not cover overseas telephone calls being routed through the United Kingdom? If I send him further evidence that criminal offences in that regard are taking place, will he answer "Yes" to my question in future?

I shall certainly receive any evidence that the hon. Gentleman has which is material to this matter. Beyond that, I refer him to the answer given by my right hon. Friend the Prime Minister on 17 July.

Surely the reply of the Prime Minister was merely a device, well known to Governments, to block further scrutiny by the democratically elected assembly of Parliament. Is it not the Government's duty to take action when at least a prima facie case is made out in an important, albeit small circulation, weekly journal to show that there is a breach of the law, with the Post Office feeding in material to a foreign Power?

I do not believe that any lawyer reading the article in that journal would even start to believe that it showed a prima facie case.

Bail (Legal Aid)


asked the Attorney-General whether he has now considered the recommendations of the Royal Commission on Legal Services relating to the provision of legal aid for bail applications; and if he will make a statement.

As at any one time there are at least 5,000 unconvicted people in prison awaiting trial, as each costs the community £112 per day, as the prisons are overcrowded and as about half those defendants are found not guilty or given non-custodial sentences, is there not some reason for anxiety? Since those represented before a judge in Chambers have five times the prospect of being given bail as do those who rely on the Official Solicitor, may we have an early decision on the proposals?

It is right to emphasise that the Official Solicitor always gets a much higher proportion of hopeless cases. Those who instruct a private solicitor when there is no prospect of success will be advised by the solicitor not to go on, and they will probably accept his advice. The Royal Commission made about 370 recommendations. Many of them are of great importance and we are having to look at them as a whole. I appreciate the problems that the right hon. and learned Gentleman has raised.

Does the right hon. and learned Gentleman agree that the arrangements for the provision of legal aid are unsatisfactory in many respects, besides those that relate to applications for bail? For example, is he aware of the difficulties of parents seeking to recover custody of their children in care, because those parents are not eligible for legal aid? Is it not important that urgent consideration should be given to the possibility of bringing forward recommendations to provide for a complete overhaul of the legal aid system?

I shall see that the hon. Member's views are made known to my right hon. Friend the Home Secretary.

Does the Attorney-General appreciate that a great deal of injustice is done in many instances when legal aid is not available for bail appli- cations? Does he agree that in a previous incarnation he sympathised with legal aid being extended into this area?

I have not lost any of my sympathy with the position of those awaiting trial, especially when they are still before the magistrates, who do not have the remedy of going to the Crown court and my feelings that they should be offered every facility. However, we have to look at that recommendation with all others, and there are others of high priority, too.


On a point of order, Mr. Speaker. In answer to my hon. Friend the Member for Harlow (Mr. Newens), the Attorney-General, who I notice has leapt out of the Chamber, said that he would draw my hon. Friend's remarks to the attention of the Home Secretary. About bail, that might be relevant. However, my hon. Friend was asking about parents trying to get back their children, which is a civil matter and the responsibility of the Lord Chancellor who, as we know, does not wish this matter to be discussed in any Select Committee of the House. I hope that the Attorney-General will draw my hon. Friend's remarks to the attention of his noble and learned Friend as well.

I am sure that what the hon. Member for Nottingham, West (Mr. English) has said will be brought to the notice of the Attorney-General. I was very kind to the hon. Member for Harlow (Mr. Newens). I allowed him to go beyond the scope of the question, which was limited to legal aid for bail applications. I exercised my discretion in the last week before the recess.

Clegg Commission

On a point of order, Mr. Speaker. Many hon. Members coming to the House today will have seen reports in the press saying that there was to be a statement about the abolition of the Clegg Commission. A report in The Times, for example, has the headline

"Abolition of Clegg commission on pay is expected today."
That is a major statement of policy, if it is to take place.

We know that some questions for written answer were put down on Friday. Even so, I think that the House would find it extraordinary if there had not been an application for a statement on this subject to be made by the Prime Minister. Therefore, I am asking whether you will indicate to us, Mr. Speaker, whether the Prime Minister has asked to make a statement today on this subject. The Opposition and, I think, the whole country will imagine that on a matter which may affect grievously the rights of the public service there should be a statement to the House of Commons.

I know nothing about this matter. I have received no request. If I had, of course, I should have granted it.

Adjournment (Summer)

Motion made, and Question proposed

That, at its rising on Friday, this House do adjourn till Monday 27th October and that this House shall not adjourn on Friday until Mr. Speaker shall have reported the Royal Assent to any Acts which have been agreed upon by both Houses.—[ Mr. MacGregor.]

I have not selected the amendment tabled by the hon. Member for Keighley (Mr. Cryer).

3.32 pm

When hon. Members go up for the long recess, one of the many anxieties which they take with them is the sense that on matters affecting individual constituents, especially those which fall under the heading of health and social services, they will have no parliamentary opportunity for several months of bringing pressure to bear upon Ministers.

I feel that this is a proper occasion to press upon Ministers matters which, during the three months that we shall be absent from this place, may be the subject of ministerial discretion where that ministerial discretion seems at present not to be consistently or equitably exercised. I wish to detain the House for a few minutes to raise a subject of which I have given notice to the Minister of State, Northern Ireland Office, who is responsible for health and social security, although I take this opportunity to say to the Chancellor of the Duchy of Lancaster that the care and fullness with which he has dealt with the individual matters raised in previous debates of this kind have been very much appreciated: and no doubt he, too, will have had notice of my point.

It was on 5 March this year that, as a result of a parliamentary question, it came to my notice that there was an extraordinary variation in the use by different health boards in Northern Ireland of their right and duty to give assistance in certain cases with the installation of telephones. I have in mind especially cases where elderly persons of limited mobility, who might be in medical danger if they were unable to communicate rapidly through the telephone, could be assisted.

The figures showed an enormous and inexplicable variation between, for example, 0·85 per thousand of the population in the Northern region and 0·27 per thousand in the South region, where my constituency is located. I therefore put down a further question seeking the explanation of this from the Minister concerned. He confirmed in his reply that
"The telephone scheme is administered in accordance with uniform criteria laid down by the Department"
—this only made the problem more difficult—and went on to say that the fact that application was
"a matter for the judgment of the Board staff"
together with differences in
"matters such as population densities"—[Official Report, 12 March 1980; Vol. 980, c. 699.]
He said that these might account for the variation.

Considering that differences in the distribution of aged families might at any rate account for some of the immense disparity, I put down a similar question but restricted it to assistance with the telephone for persons aged 65 years and over. The result on 26 March was to show up an even more crass disparity. For example, the rate per 1,000 population aged 65 or over was 4·2 in the Southern region but 13·4 in the Northern region. On the face of it, figures such as that seem to me to show that whatever may be the uniformity of the criteria the administration of the scheme is unsatisfactory and must surely cause hardship, especially in the region to which I have drawn attention.

It is impossible to suppose that between the different regions, which are very large and each represent roughly a quarter of the Province, there can be demographic or other differences sufficient to account for that inequity. I was impressed when my hon. Friend the Member for Belfast, South (Mr. Bradford), whose constituency is not one where this problem might be thought to be all that pressing, passed to me a letter which he had received from a community worker. With permission, I shall quote one or two sentences from that letter, since it refers to this matter:

The community worker said:
"I am concerned that the present system does not have the safeguard of an appeal procedure if help or assistance is refused to a person by the Board. Recently I have heard of several decisions made by our local office which I personally feel have been grossly unfair, but unfortunately the individual does not have the right of appeal and the decision has to be accepted as final."
I thought that that was a very apt illustration of anxiety which I know is shared by at least some of my colleagues and is evidently felt more widely.

Whether the correct answer is to have an appeals procedure, I do not venture to say. I should hesitate to institute yet another procedure of that kind, with all the deterrent trappings, from the point of view of ordinary members of the public, which tribunals, and so on, can have.

However, with the House rising for a matter of three months, I consider that the evidence constrains the Northern Ireland Office, especially the Minister of State in charge of health and social security, to institute a detailed investigation of the manner in which the scheme is being applied by the different boards in order to end the serious unfairness and failure to render an intended service which the figures appear to disclose.

It should not be too difficult, by taking appropriate samples from each of the board areas, to understand how the scheme is being worked and how it is being interpreted, and to bring what surely must be only fairness and justice into the working of the scheme, particularly for those in the areas where its application has clearly been too limited. I hope that the Leader of the House will be able to say, in the all too common slang expression, that the matter has been "taken on board" by the Minister of State concerned.

3.40 pm

I should like to raise on or two wider matters than those dealt with by the right hon. Member for Down, South (Mr. Powell), because my support for the motion is qualified. That qualification centres around the use which will be made of the recess by Ministers, and particularly by their officials. I am perfectly content that the House should rise for three months and that Ministers should be answerable to us over that period only by correspondence, so long as they set their officials some homework.

To start with the Treasury, I should like the Chancellor of the Exchequer to commission a study from his officials of the benefits of abolishing stamp duty for first-time home buyers, where it has become an unnecessary example of fiscal drag. The burden on first-time buyers is probably £50 million, and abolition should help to increase the mobility of the working population without an intolerable cut in taxation.

It would be useful if the Chancellor also commissioned a study of the advantages of abolishing corporation tax, which no longer serves the purpose for which it was designed. It is a burden and a bore for industry, it does not yield much and everyone would get on much better if it were abolished. However, I concede that there should be a study of the advantages of doing so.

I would also ask for a study of the advantages of a return to what used to be known as schedule A, by which the prudent householder was encouraged to spend money keeping his house in good order. I concede at once that I might be said to have an interest as a director of a company in the home improvement industry, but the importance of the matter goes wider than any such sectional interest. It is to the nation's advantage that its houses should be kept in good nick and that there should be no growth in the black economy.

Most hon. Members know that many householders these days have their houses painted or their roofs repaired or other tasks of that sort done by little men who do not necessarily declare every penny that they earn to the taxman—to put it as mildly as I can. If it were possible to restore schedule A, not merely would the householder be encouraged to be prudent and sensible, not only would the Inland Revenue benefit, but there would be a significant drop in the unemployment figures, because all the little men would on the surface cease to be members of the black economy. That is a profitable way in which the Chancellor's officials could spend the coming three months.

The Northern Ireland Office has an important task to which Ministers are apparently committed—that of reviewing the arrangements whereby they make free with our money in grants and loans to businesses in the Province. That should be reviewed and the review should be finished before the House returns, since some deplorable situations seem to be arising.

For instance, an organisation called Lear Fan Ltd. has recently been formed with a Government contribution totalling £3·4 million. The Under-Secretary of State for Northern Ireland has properly said that it is not the Government's normal practice to disclose the other funds which may be made available from public resources to such a company, but in this case the company itself is telling people that it has also negotiated Government loans and guarantees of $50 million.

If it appears above the surface that the taxpayer is providing only £3·4 million but the actual or prospective commitment is about £25 million, Ministers should bring their review forward with maximum urgency so that the House may know all about this matter as soon as we reassemble. I make no comment on the merits of this project, but I am worried about the financing of it and the control over it which the House should have.

There is a matter on which the Ministry of Defence and the Department of Industry should do some joint work and on which recommendations should be made to Ministers. That is the evaluation of a conscious strategy of support for British manufacture from public procurement—particularly in defence projects but in other areas as well. I should like those two Departments, possibly together with the Treasury, to study the advantages to be derived from calculating the true cost of some procurement programmes in terms of what I would call a "red, white and blue pound". Money spent overseas is gone for ever, but public money spent here costs us less in the end—precisely how much less it is impossible to calculate, but some people say that it is 30p in the pound less.

That is an overwhelming argument for placing in our own economy as much as possible of necessary spending on defence and other things, and for declaring the reasons for it. If there were a study, Ministers would be able to inform us when we return.

There are other such suggestions that I could make. I would dearly like the Department of the Environment to take the regional water authorities by the scruff of the neck and shake them until some of the staff fell out. I hope that we can have a report along those lines. If such a report appears before the recess ends, I shall not be the first to complain. Many of us feel that the regional water authorities and the whole water industry are totally out of control and that their principal activity has become one of writing themselves blank cheques. Ministers may take a different view, but their civil servants would be well employed writing a forceful and not necessarily long report on this thoroughly unsatisfactory state of affairs.

I hope that all these points can be connected. This work should be done for a particular and additional reason. I am not asking for any U-turn. The Government's policies are right and they are working, but the closer they come to the point where results begin to show, the more important it is that we should be ready with the second-stage policies. Whether that happens during the recess or later on, when we reassemble—whether the upturn in the American economy, which is so dominant in the Western world, comes sooner rather than later—it is essential that Departments, industry and individuals should be ready to take advantage of the economic upturn, which will come when the results of the Government's policies begin to flow.

The present situation may mislead us in some ways. I am not one who thinks that wage increases are the sole reason for our present economic predicament. I certainly do not think that the price-cutting war in the high street is encouraging since it represents de-stocking, which means that firms are trying to turn goods back into cash because the price of cash it too high. Nor does it presage a sudden upturn in demand.

The really important thing for the second stage of our economic policy is that there should not be a self-perpetuating collapse in demand, which would do enormous damage to the economy's prospects of recovery. It is true that there has been a sharp drop in demand. As de-stocking goes on, the requirement to refill the pipeline will help to raise the level of demand to a degree.

It is most important that we should maintain that demand in the productive sector. A high priority must be to curb the demand on the non-productive sector of our economy and to see that the demand goes where it will really do good, namely into the productive sector. That must be the aim of Ministers whether the House is sitting or not, and I wish to be assured that that is very much in their minds over the next three months, which is a longish time for us to be away. I wish to be assured that if there is need during that time for a touch on the tiller, the Ministers will be ready to give it and that their officials will be working—as they will be working themselves—on the longer-term policies which I hope we shall soon find ourselves ready to implement.

3.50 pm

I cannot hide my disappointment, Mr. Speaker, at the fact that you did not call what I thought was an eminently reasonable amendment that would give some power to Parliament as opposed to initiative being entirely in the hands of the Government.

Before the House approves the motion relating to the recess, I think that we should discuss two principal items. The first is the application of the criteria by the Government for the restoration of regional assistance. We know that it is set down in the Industry Act 1972, as amended, but the Government are very evasive about what they propose to do. On the one hand they say that regional assistance will not produce jobs, and, on the other, at a time of steel works closures and the rest, they say that they are providing more regional assistance. The Government cannot have it both ways.

I make specific reference to my constituency of Keighley, where the achievement of the Conservatives, after five years of below-average employment under a Labour Government, is that the unemployment level there has increased by no less than 77 per cent. Unemployment in Keighley is at its highest level since 1945 and is now markedy above the national average. That is due to a number of factors, not least of which are the policies of the Government.

I have been trying to find out from the Government how long that level of unemployment has to persist before they take action. When they removed intermediate area status from Keighley last year the Government argued—31 July was the start of the two-year abolition period—that the unemployment level in my Constituency was below the national average. That was the Government's criterion for removing intermediate area status from Keighley. The Government now say that, though unemployment in Keighley is above the national average, it is no good examining the experience of three, four or five months. How long must we wait for the Government to take action? They argue that regional policy is not the sole panacea—none of us says that it is,—but it certainly helps.

Will the Government tell us when the entrepreneurs are going to arrive? The entrepreneurs are part of the Government's alternative philosophy. Giving cash handouts by way of tax concessions to the already well-off, while cutting public expenditure to finance those handouts, is supposed to produce jobs. Yet no member of the Government will say how long that will take. The Government say that many industries are in decline, that productivity is low, and that labour relations are not good. They say that those are the reasons for unemployment, not the lack of entrepreneurs. Let me remind the Government of one of the industries that is in difficulty in Keighley and West Yorkshire. The general secretary of the National Union of Dyers, Bleachers and Textile Workers said of the industry:
"It has rationalised and reorganised. It has invested heavily in new plant and machinery. Its improvement in productivity is second to none. It has not been subject to exorbitant wage claims and its record of disputes is as good as any other industry and better than most. Yet, after a decade of doing what the Tories say we should do, the result in 1980 will be a loss of up to 100,000 jobs."
In an industry where all the Government criteria have been met, people are still facing massive redundancies. So what will the Government do to repair that damage. It is a matter of particular concern because a large proportion of people on the unemployment register are young people. The view expressed by the local paper recently was:
"Unemployment is now at its highest since records began in 1945 with almost 9 per cent. of the local work force on the dole. In addition, a growing number of firms are operating on short time and according to Keighley Jobcentre manager, Mr. Vic Boyce, the immediate outlook is not very promising."
It is reasonable to ask what the Government propose to do about that. What will the Government do about the multi-fibre arrangement and its application now? I do not mean in 12 months' time following renegotiation. I wish to know what Government action will be taken now? We are in the position where there will not be sufficient of the industry left for the MFA to have much meaning.

What about pulling interest rates down? It is absolute nonsense to argue that we have high interest rates because of the public sector borrowing requirement. Under the Labour Government, the PSBR was a higher proportion of GDP and we had a much lower rate of interest. There is no automatic connection between the two. If the Government were concerned about the economy and about small firms, they would pull the level of interest rates down. They are able to do that.

A complaint was made to me by one of my constituents whose firm had borrowed £80,000 in order to modernise during the term of office of the previous Administration. The firm was then paying interest at the rate of 8 per cent. Now it is paying almost double that rate of interest. That is how firms get into financial difficulties. That is the way jobs are lost. I emphasise that the House needs, before we go into recess, some definite idea of what the Government propose to do to rescue those jobs. The Government are creating two nations, one clinging on to jobs and seeing their prospects diminishing week by week and the other constituting the dole queues which are lengthening week by week.

That tragedy has not been created by chance. It has been created as a deliberate act of Government policy. The Government are using unemployment, as they see it, to reduce inflation. That is nonsense, because it means an increase in costs in many ways. It also means that there is little hope for the millions who are on the dole.

Secondly, I am concerned about a matter which I hope the Govenment will look at during the recess. It is a matter of major legal concern and, as I understand it, the Government are the Government of law and order. Section 19(2) of the Health and Safety at Work etc. Act 1974 sets out the law as it should be operated concerning the appointment of the Factory Inspectorate, the agricultural inspectorate and others by saying
"Every appointment of a person as an inspector under this section shall be made by an instrument in writing specifying which of the powers conferred on inspectors by the relevant statutory provisions are to be exercisable by the person appointed; and an inspector shall, in right of his appointment under this section—
  • (a)be entitled to exercise only such of those powers as are so specified; and
  • (b)be entitled to exercise the powers so specified only within the field of responsibility of the authority which appointed him."
  • From that it is clear to a sensible, straightforward person that the powers must be specified in writing. What is the position of the Health and Safety Executive and the warrant of appointment of inspectors? I believe that the House does not discuss health and safety at work often enough. We should have a debate on the subject. We lose many days in strike action and this is a much more important topic than some others.

    The 1,300 or so warranted inspectors carry identical warrants. They are not differentiated as required by the law. That means that the mines and quarries inspector carries the same warrant as the nuclear inspector, the agricultural inspector, the factory inspector and the alkaline inspector. That is not fair to the occupiers of factories.

    If an inspector arrives to examine, for example, an installation under the various detailed and technical regulations covering electrical installations how is the occupier of the factory to know that the inspector is sufficiently qualified? The warrant will not tell him. If the occupier has duties under the law to notify the inspectorate is it right, if, for example, a nuclear installation is involved, that he fulfils that duty by notifying the agricultural inspectorate? That is the position now.

    The Health and Safety Executive says that the adjustment is made by administrative means. That, however is not the law. The executive does not exist to make the law conform to its administrative niceties. It exists to obey the law and to see that it is enforced. It is therefore most unsatisfactory for the occupier, the public and employees for the powers and duties of an inspector not to be clearly defined by law as the law says they should be.

    I hope that the Leader of the House, who has a difficult job to reply to all these subjects, will be able to assure me that the executive and the commission are bringing their powers of scrutiny to bear on this matter. It has already been the subject of at least one report from the Select Committee on Statutory Instruments, which pointed out that one instrument that was brought forward was ultra vires—I am referring not to the one that was debated last week but to another.

    We must ensure that the law that we pass is clear and unambiguous. We should not leave it to the judiciary to tell the executive what its duties are. It is the job of Parliament and the Government to ensure that the law is enforced.

    4.2 pm

    I hope that the hon. Member for Keighley (Mr. Cryer) will forgive me if I do not debate the two points that he raised. Instead, I wish to raise with my right hon. Friend a matter that greatly concerns a part of my constituency and the large number of people who will be travelling through Exeter airport on holiday during the next few weeks. I hope that my right hon. Friend will be able to give me assurances on this subject, so that we shall be able to adjourn on Friday with this issue having been cleared up. Alternatively, I hope that he will be able to obtain answers from one of the Ministers in the Department of Trade on a number of the queries that I wish to raise.

    On the night of 24 July a Viscount aeroplane carrying 62 people had a remarkable forced landing just outside Ottery St. Mary. Hardly any injury was sustained. It was a remarkable achievement by the pilot in bringing the aircraft down on what is about the only piece of level ground in the area. Most people who have seen the crashed aircraft regard his achievement as almost a miracle.

    However, certain questions arise, and in view of the publicity that has surrounded the whole incident, and since I have been unsuccessful in raising the matter in the House until now, I hope that the Minister will be able to provide me with the necessary answers.

    Will the Minister state categorically that the findings of the inquiry by the Department of Trade will be made public? That is of considerable importance. Will he confirm that the investigation will obtain all and full co-operation from the Spanish authorities concerning the fuelling of the aircraft before it left Spain? A number of extremely unpleasant reports are circulating. If they are untrue they are highly libellous and slanderous. I do not wish to further them in this debate. It seems wrong that anybody—I am thinking particularly of an ex-Minister who was responsible for these matters and who was commenting on the incident only yesterday—should make assumptions until the inquiry has reported in full.

    However, the House and the people concerned have a right to know that the Spanish authorities will be giving every facility to the British inspectors when they check up on all aspects of the fuelling of the aircraft before it left Spain. Will my right hon. Friend state clearly that no fault for the accident can be attributed to Exeter airport in respect of the facilities, the radar, or any other matter? In other words, will he confirm that the fact that the aircraft was bound for Exeter and was perhaps only five miles from the runway does not mean that any blame for the crash can be attributed to the airport or the airport authorities? I ask that because many tens of thousands of people will be travelling through Exeter airport over the coming months. Although the airport has the name of another constituency, it is in my constituency. All the many people from the South-West who will be using the airport must be reassured that it lacks no facility and that no blame for the crash can be put on the airport and its authorities.

    I shall be grateful for answers to those questions. My right hon. Friend will understand why it is necessary for this matter to be dealt with before we rise for the Summer Recess. If we were to be here for another two or three weeks, I should not be bothering my right hon. Friend with these matters. If my right hon. Friend is able to answer some of the points I have raised or ensure that Ministers in the Department of Trade can provide the necessary answers, I shall be most grateful.

    4.7 pm

    I should be a hypocrite if, after the late debates, the numerous lobbies and the constituency problems of the past few weeks I pretended to view the onset of the recess with anything other than relief. I accept that the matter which I seek to raise may require some thought by the Government. If the Leader of the House can assure me that the Government will consider the matter and will bring it before the House early next Session I would not seek to oppose the motion for the Adjournment for the recess.

    That is not to say that this is not a matter of some urgency, because for numbers of my constituents and of the constituents of my bon Friend, the Member for Birmingham, Perry Barr (Mr. Rooker) the summer promises to be very bleak. I shall quote yet another example of the problems arising from the present unhappy state of British industry, particularly industry in the West Midlands. The widespread industrial closures of the past few months have made all the greater the impact in the West Midlands because of the relative suddenness of the transformation from relatively high prosperity and relatively lower unemployment to the position where closures occur almost daily, and where an increased number of unemployed persons is chasing a diminishing number of vacancies.

    Birmetals is a company which forms part of the Birmid Qualcast group of foundries. It is situated in the Woodgate area, outside my constituency. However, its 900 employees live in a number of constituencies in this heavily populated area, and a substantial number live in my constituency. A number also live in the constituency of my hon. Friend the Member for Perry Barr and of the hon. Member for Halesowen and Stourbridge (Mr. Stokes). I wish to deal with the problems of those workers.

    The sad story began in August 1979, about a year ago. I have no direct knowledge of the events. I am piecing the story together, and I will listen to any corrections. The management proposed to restructure the company and brought in auditors for that purpose. Wage agreements had previously been negotiated between the management and unions on an annual basis, running from August to August. Because of the restructuring in August 1979, the management suggested that the agreement should be for only a six-month period, from 1 August 1979 to 1 February 1980, with a new agreement in February 1980. The unions accepted that proposal and gave their entire co-operation. A pay increase for manual workers of 12½ per cent. was accepted. The company indicated that each group of employees would receive equal treatment. But, while the unions representing the shop floor employees accepted at 12½ per cent. increase, the staff, as defined within that company, received a 14½ per cent. increase and the managers received a 17½ per cent. increase. I say that lest the House should imagine that the offer which the unions accepted was excessive.

    As the six-month period drew to a close, the unions sought to re-open negotiations with a view to a new agreement, as had been suggested. They asked for 20 per cent., which has been represented as an effective cause of all that followed. But anyone with experience of industrial negotiations will appreciate that that was an opening bid. There was nothing to indicate that the unions would not settle for less. They expected the management to complain that the demand was too high and to make a counter offer. Had the management wished the company to continue manufacturing, there appears to be no explanation of why it did not make a counter offer, but it made no offer. One can only conclude that it had no intention of reaching agreement. The dispute procedures having been exhausted, with no offer from the management, the unions gave notice of industrial action. That step must have been foreseen by the management, but no attempt was made to suggest an alternative.

    In the event, the only employees who took industrial action were the drivers and loaders in the dispatch department. They ceased to load lorries. The other employees continued to report for normal working. The management approached all the other manual employees, group by group, and instructed them to load lorries. First, those employees were being asked to work as strike breakers. No one with any understanding of industry could have expected them to comply with that instruction. Secondly, it was work for which the majority had no training. The work requires fit people with a knowledge of how to load and unload, failing which it can be dangerous. Women of up to 59 years of age and men of up to 64 years of age were asked to carry out the work, and some of them could not have done so safely. Thirdly, I am told that the duty to perform that work was no part of their contract. The matter may have to be decided by an industrial tribunal, and I shall pursue it no further now. In other circumstances, I may have been tempted to add more colourful comments.

    The other employees declined to replace those who normally loaded the lorries. The company subsequently laid off the entire work force for six weeks and then dismissed everyone. Some of those employees had 40 years of fairthful service with the company. Not a word was said about redundancy or severance pay or other benefits. Not surprisingly, the employees are claiming compensation for unfair dismissal before the appropriaate tribunals.

    I have great respect for the right hon. and learned Gentleman. He is not being in the least bit controversial, and nor shall I be. The factory that he mentions is only a few hundred yards outside my constituency, and 200 of my constituents are involved. They have been to see me on a number of occasions. The slight difference of emphasis that I make is that I consider the 20 per cent. claim to have been absurd, reckless and most unwise. Although there may have been faults on the management side, the 20 per cent. has a great deal to answer for.

    With his usual fairness, I am sure that the hon. Gentleman will accept that any opening bid in negotiations invited by the management would at least be expected to attract a counter offer. The immediate cause of the problem was that no counter offer was made.

    It was necessary first to explain how the situation arose. I come now to the present problem, and I do not believe that the House should adjourn before dealing with it. The employees, on applying for unemployment benefit, were told that they were not entitled to benefit. And the reason was not that they had been dismissed for misconduct. Had that been suggested, the matter would have been investigated, and had they been dismissed for that reason the situation would have been understandable. But it appears that their disqualification rests on section 19(1) of the Social Security Act 1975, as amended by section 111 of the Employment Protection Act 1975, which reads:
    "A person who has lost employment as an employed earner by reason of a stoppage of work which was due to a trade dispute at his place of employment shall be disqualified for receiving unemployment benefit so long as the stoppage continues … but this subsection does not apply in the case of a person who proves—
    (a) that he is not participating in … or directly interested in the trade dispute which caused the stoppage of work".
    That raises a number of issues. The first is whether the stoppage was due to a trade dispute or whether a decision had already been taken by Birmid Qualcast to close down the company in any event. Some believe that the confrontation was deliberately brought about by the management, after it had decided that the company should not continue in production. Secondly, even if the initial stoppage arose from a trade dispute, the question arises whether a trade dispute continues to be the reason for the stoppage. We do not know whether the management is saying that if the dispute is resolved it will open the factory with the same work force and resume production. Thirdly, the employees' case is that, even if there was a trade dispute, they were not participating in it. They simply declined to do work which they were under no obligation to do.

    Those are issues which have to be resolved. There is machinery to resolve them, although the House may wish to consider whether we should introduce machinery which operates more quickly. These employees are receiving no money. It does not help someone who has starved to be subsequently told that he was entitled to the money and that he will recieve the arrears.

    But it is the fourth issue to which I wish to invite attention. The scheme of that section is understandable. It says that if the stoppage of work which led to the claimants' being unemployed was due to a trade dispute he shall be disqualified from benefit. Even if the merits of that rule are questionable, it is at least comprehensible. But it would be monstrous if there were no exceptions. If the trade dispute was not of the claim- ant's making, if he played no part in it, or if he was in no way concerned with it, is he still to be disqualified from benefit? It is said that if the stoppage was due to a trade dispute, even if the claimant did not participate in it or support it, and it was brought about without his wishes, he is disqualified if he is directly interested in it. If these employees may benefit from the outcome they are disqualified from receiving benefit whether participating in the dispute or not.

    Some of my hon. Friends will remember the old grade or class provision which disqualified employees from benefit if the stoppage arose from a trade dispute which was not of their doing and even if it was against their wishes. That was a monstrous provision. Some of us campaigned against it for many years, and it was repealed in 1975 by the Government of whom I had the honour to be a member. But it seems that we failed to bolt the back door, because a claimant is still disqualified if he is interested in the trade dispute. That is a monstrous injustice.

    That problem may not have been obvious in the past when stoppages were relatively few, but now that companies are closing their plants in fearsome numbers, looking for confrontations which will excuse them from making redundancy payments and enjoying the prospect of beating the unions, with a union-bashing Government looking on like the vestal virgins of ancient Rome, that provision is likely again and again to lead to manifest injustice as it has for my constituents and those of my hon. Friend the Member for Perry Barr and the hon. Member for Halesowen and Stourbridge.

    The House ought not to adjourn until the Government have at least indicated that, after the recess, they will come forward with proposals designed to correct that injustice.

    4.21 pm

    I am grateful for this opportunity to raise a matter which is causing concern to those whom I have the honour to represent in this House and could be decided by my right hon. Friend the Home Secretary before we reassemble after the long recess. For that reason. I am anxious to raise the matter now. The subject is the Local Government Boundary Commission for England's proposals for electoral arrangements in Hertfordshire.

    Together with others who are interested, I received a letter dated 18 July 1980 which included the final proposals for the county of Hertfordshire. I find when I come to the St. Albans district, which I represent, the statement:
    "We replaced six of the 10 electoral divisions proposed by the county council"—
    which is Conservative controlled—
    "by six divisions proposed by the St. Albans Constituency Labour Party."
    I make no complaint on that point. The point at which I become anxious is when I read further in the report:
    "St. Albans City Council made no observations on our draft proposals".
    On reading that, I made inquiries of the St. Albans city council and found that, contrary to what is stated in the report, the council had submitted observations on the proposals on 29 March last. On discovering that, I contacted the Home Office and the Local Government Boundary Commission's office to make that point abundantly clear. Less than a fortnight later, in a letter dated 1 August 1980, which has been sent to the permanent under-secretary of state for the Home Department, it is said:
    "The commission did not receive the district council's previous letter of 29 March 1980".
    It is said that it had been lost in the post. It goes on:
    "The commission have now seen and considered a copy of the Council's letter of 29 March but they do not wish as a result to propose any change in their recommendations in Report No. 390."
    I cannot believe that, having taken from March to July to make final proposals, the commission can within a fortnight decide that, having looked at the city council's letter, it has no wish to change any of its recommendations.

    It is clear that the basis of the proposals was that the city council had no observations to make, and the commission makes it clear that it had taken account of other representations which it had received. Therefore, it is difficult to believe that in such a short time, other than for reasons of convenience, it should reach the conclusion that the city council's observations were of no concern to it.

    I have received 70 letters from constituents during the past fortnight whilst I have been trying to grapple with this problem. My anxiety is that their representations and those made originally by the city council might be ignored and that my right hon. Friend the Home Secretary might reach a conclusion on the matter before he has had an opportunity to read or properly decide upon those representations.

    Therefore, I hope that before the House goes into recess I shall receive an undertaking that the Home Secretary will take into consideration the observations which he has now received from the city council. If the commission considers that they are insufficient for it to take note of, at least the Home Secretary should look carefully at them before reaching a decision on this important matter. I hope that my right hon. Friend will give me the assurance that I seek.

    4.25 pm

    I should like to raise a matter which I think merits the attention of the Leader of the House. I have raised this matter repeatedly in recent months with the Government. I refer to the impact of high electricity and gas prices on industry, especially steel making in the Sheffield area.

    I cannot do better than to inform the House of the financial impact that such energy price increases is having on the British Steel Corporation in the Sheffield area this year. The director of the public steel sector in South Yorkshire and on Humberside, John Pennington, has stated that the BSC in Sheffield will be paying £52 million this year for electricity and that that represents half of his production costs. At a press conference a month ago, he stated:
    "If we pay the increased electricity charges, we go out of business."
    We are all familiar with the tremendous problems which have beset steel making in recent years. I am not sure that we are as yet sufficiently aware of the threat that increased energy charges is presenting for steel making. There are other extra costs from increased rates, other public utilities and raw materials. The BSC has to meet and absorb those increased costs by increased efficiency, because it cannot increase its prices. Moreover, it has to compete with rivals in Germany and France who, on the best information available, are protected against such penal energy charges. John Pennington is concerned that if recent increases in electricity charges are maintained and repeated over the next few years, electric are steel making will become uncompetitive and the large electric are operators will go out of business.

    The plight of the private sector is even more serious. Private steel also has to contend with increases in the prices of raw materials, local rates, gas and electricity and, more recently, telecommunications. It is expected to absorb those increased costs by increased efficiency. Private steel, like public steel, has done remarkably well, but there is a limit to what either sector can do.

    Furthermore, the private sector is even more locked into a pricing structure than is the BSC. Nominally the BSC is the price leader, but, as some of my hon. Friends representing steel constituencies know, the real power lies with the European Commission.

    Nothing could more clearly illustrate the contradictions that the Government have allowed to creep into their industrial and financial strategies than these large increases for gas, electricity, telecommunications, rail and post. The Government are making impossible the attainment of those other targets that they are setting for public sector industries—notably the British Steel Corporation.

    We know that over the last few weeks some breathing space has been granted to the BSC. But what of private steel? I was interested to hear the Prime Minister say in the censure debate last Tuesday that some aid would be granted to Dunlop. I sympathise with the plight of Dunlop. It is wholly deserving of that aid. I shall not taunt the Government about U-turns. However, Dunlop does not quite fit into the strategy that I had come to identify with the Secretary of State for Industry. With the best view that one can take of it, Dunlop certainly does not lie in the growth sector. I can only assume that Dunlop is being assisted in order to modernise or to be helped over temporary difficulties.

    Those are precisely the criteria that private steel would claim for itself. I hope that the Leader of the House will convey to his right hon. Friend the Secretary of State for Industry the plight of private steel. I hope that he will ask whether his right hon. Friend is prepared to act as a long stop for private steel as well as for public steel and firms such as Dunlop. I do not have much optimism in inviting the Leader of the House to do that, because, as I have already said, I have raised this problem with the Departments of Industry and Trade as well as with the Prime Minister. I shall not detain the House by quoting from the last letter that I received from the Department of Industry. I know that my hon. Friends will not be surprised to learn—I suspect one or two Conservative Members as well—that I received no encouragement whatever from the Department of Industry that it is prepared to assist firms now under threat from penal energy charges, nor is it prepared to take any step to ease their competitive position in the face of more advantageous trading terms enjoyed by their Continental rivals.

    I go back to the contradiction to which I have already referred and the target that the Government have imposed on the BSC. The BSC will run out of cash in the autumn. Mr. MacGregor is expected to submit his plans in the next few weeks, which are widely expected to propose more closures and redundancies on top of the existing programme of 52,000 jobs.

    I therefore hope that the Leader of the House will point out to his right hon. Friend that it is one thing for the BSC to be saddled with a target which, however burdensome, it is struggling honourably to meet, and another thing, simultaneously, for the BSC to be saddled with increased costs arising directly out of Government policies which, to say the least, do not square with the first strategy.

    I know directly from one or two industrialists that what upsets them at present—perhaps a growing number of them—is the apparent indifference on the part of Ministers to the practical problems that industry is facing and the simplistic solutions that are sometimes suggested for overcoming them. Those are harsh words to address to a Conservative Government who traditionally, and by reputation, are expected to have a closer acquaintance than any other party with the feelings and wishes of industrialists. Some of us have reason to believe that when Labour was in Government during the 1970s that attitude was changing. Some industrialists are now quite uncertain about where sympathy and understanding of their problems really lie.

    I cannot do better than to inform the House that only last week I received a copy of a letter addressed to the Department of Industry from the chairman of a large steel firm in my constituency, who pointed out that he found it inconceivable that the Minister should feel that he could do nothing on steel price policy and that he would prefer to leave it to the European Commission and take no steps himself. The chairman referred to similar correspondence that he has conducted in recent months with the Department of Industry. He said that if that correspondence was a fair reflection of what the Department was prepared to do for men in industry such as himself, "God help us all". He concludes his letter by saying:
    "We want men to run this country, not mice".
    I do not think that he is by any means alone in his thinking about the Department of Industry and, perhaps, other Departments of State.

    What industry wants more than anything else is some tangible evidence of sympathy and support in coping with the dangers that it now faces. Such sympathy and support have become more and more necessary because of the combined effects of Government policies and the growing economic recession.

    4.37 pm

    In view of the amount of time that is available for this debate, I shall not comment on the speech of the hon. Member for Sheffield, Attercliffe (Mr. Duffy), except to say that many firms in the Midlands, including firms in the private steel sector, understand only too well some of the problems that he outlined. Unlike the hon. Gentleman, I support the Government's measures in general, but I am disturbed at the fact that among our competitors in France and Germany the price of gas is half what it is here. I still await a satisfactory answer to that question from the Government.

    Before stating why I think we should not disperse for the Summer Recess, I should like to add one comment to the speech of my respected neighbour, the right hon. and learned Member for Warley, West (Mr. Archer), with whom I have close and friendly relations, about the strike at Birmetals. In the account that he gave, he omitted so say—at least, according to my information—that the unions which in the past had good relations with the management unfortunately allowed some young hotheads to gain great influence. That has a lesson for all of those now in employment—that they must attend their union meetings and make sure that their views are expressed.

    I feel that we should not adjourn for the Summer Recess until we have discussed education. I do not mean education narrowly, in the sense of the assisted place schemes, or even in the context of the Labour Party's proposal to try to abolish private education. In my view, there should be a debate on education in the wider sense, because it affects the life and future of the nation in a tremendously important way.

    The assisted places scheme is a very modest measure, intended to replace in some small way the direct grant schools. Those schools, in the view of many people, afforded a marvellous ladder up the slope for any boy or girl of parents of modest means who could not afford to pay the fees for private education.

    The Opposition opposed the measure bitterly, for quite mistaken reasons, but their objection pales into insignificance compared with the recent proposals of the Labour Party to abolish, if it can, all private education. It is nothing short of a totalitarian proposal, depriving parents of a fundamental right, and is fraught with the most dangerous implications. It almost seems to presuppose a one-party, all-powerful State where everyone has to be moulded into the same form, without any deviation being allowed.

    If this proposal were to be formally adopted by the Labour Party and published in its election manifesto it would cause immense resentment among large sections of the electorate, including many Labour Party supporters. I often wonder why the Opposition are so opposed to private education. It cannot be because private education does not fill a need and is not highly successful. I am afraid that it is because of sheer prejudice, based on envy and a sense of egalitarianism: because everyone cannot afford private education, the Opposition say that no one should be allowed to have it.

    Does my hon. Friend agree with the point of view put forward recently by Dr. John Rae, the headmaster of Westminster school? He said that what parents do about the private education of their children must be a private matter, but when they make it the subject of public discussion, as they have done, and when many of them have educated—and continue to educate—their children at public schools, it becomes a matter of public hypocrisy.

    I am very grateful to my hon. Friend for his intervention. It brings me to my next point, which is that education is so important to the nation and its future that no party in the State should be so arrogant as to want to use it for its own political ends.

    We have all seen the Labour Party's successful attempt to destroy the greater part of our grammar schools in this country—many of them with old foundations, with long years of service to the community, and with standards of scholarship, behaviour and moral principles second to none.

    Most grammar schools, alas, have now been destroyed, and the Labour Party attack has been switched to the public schools. The case for the public schools needs to be stated fearlessly in the House, and before we adjourn for the Summer Recess. The public schools are an almost unique institution in this country. They take in boys and girls of a quite broad band of intellectual attainment and potential, but they also look for other qualities, such as leadership, the ability to mix, and soundness of character. A public school tries to train the whole person—I am glad that the Opposition Front Bench spokesman, the right hon. Member for Ebbw Vale (Mr. Foot) is nodding, as he went to a public school l—and not just the brain. The fact that many public schools are boarding schools must make their task easier. Underlying many public schools is their strong Christian tradition, including service to the community.

    The product of the public schools has never been so badly needed as today. Far from trying to close these schools, the Labour Party should be trying to help more public schools to open, so that more boys and girls would have the opportunity of going to them.

    We all know that for years the products of the public schools went into the Empire, they went abroad, they went into the Civil Service, the Church, the Armed Forces and the City. Now the need is equally great in other spheres, particularly manufacturing industry. I am certain that one of the reasons why industry in this country has had such an unsuccessful record since the war has been the lack of public schoolboys in our factories—boys who could become foremen and managers and give the sort of leadership for which they are trained. It is sorely needed in many of our factories today. I can think of a very large factory, owned by a public corporation, only a few miles from my own constituency, which would benefit from such leadership. The nation must train its leaders, and the public schools have always succeeded in doing this.

    Another sphere in which public schoolboys are needed in larger numbers is the police force. I yield to no one in my admiration for our police. I believe that they are the best in the world. But they could be even better if public schoolboys, in larger numbers, could be persuaded to join the force, and if there were a college for training future officers, such as there used to be under Lord Trenchard.

    The House seldom debates leadership. When we do, it sometimes causes giggles on the Opposition Benches. I am talking now not about leadership of the Labour Party but about leadership throughout our society, at every level. The French take the greatest pains over it in their different highly specialised and selective schools and colleges, and I understand th at the Russians do the same.

    In a democracy we must not, above all, be afraid of leadership and of training men and women for it, We have it in the highest degree in the Armed Services. I wish the rest of the country could catch them up. I believe that the retention—and, indeed, the extension—of the public school system would be the best way to do it.

    4.49 pm

    I shall not follow very closely the speech made by the hon. Member for Halesowen and Stourbridge (Mr. Stokes). Perhaps it will not be out of order to remind the House that the public schools were originally founded to help the children of the poor to get a decent education, but the ruling class moved in and took over those institutions.

    A dominant feature of British industry over the past decade or so has been that it has been run by the elitist wealth-owning class of this country. It has made a hopeless mess of most of our industries. But I must not follow the temptation to go too far along that road.

    I am opposed to the motion, for a particular constituency reason. It relates to the siting of the enterprise zones. In March of this year we received a Treasury document which short-listed the enterprise zones. One of the zones listed was the town of Bilston, where the steel mills had been closed, creating great difficulties for some of my constituents. Although the development of enterprise zones is highly controversial on the Labour Benches and does not receive a wholehearted welcome, it is greatly welcomed in Wolverhampton. All parties in Wolverhampton, the trade unions and industry, welcomed the statements in a Treasury document to the effect that Bilston should be one of the zones. However, to my amazement, and to the great displeasure of the Wolverhampton council, the Prime Minister made no mention of Bilston in terms of one of the zones in the censure debate on Tuesday. Therefore, there must be some change in Government policy. We have had no explanation why the change has taken place.

    In March, immediately following the reference to Bilston as one of the seven zones, the Wolverhampton council called a special meeting of its economic development sub-committee. It invited local industrialists, local trade unionists and the trades council to attend. It had a long and constructive meeting, and the zone was welcomed. There were 34 industries represented at the meeting and 12 firms offered their enthusiastic support. Richardsons Development Ltd. offered immediately £5 million to develop areas of land adjacent to the steelworks for factory development.

    The Wolverhampton council immediately sent a constructive document to the Secretary of State for the Environment. It contained a great deal of information and many maps. It worked energetically and constructively to produce a scheme that would create jobs for some of the 1,800 steel workers who had been made redundant.

    The Secretary of State for Industry made a statement on 16 July and he recited all the steel-producing areas where there were special problems arising from closures. No mention was made of the closure at the Bilston steelworks. I questioned the Secretary of State and he promised faithfully that he would write to me in detail about help for Bilston. I have received no reply from the right hon. Gentleman. After the energetic response of all parties in Wolverhampton, including the trade unions and industry, and offers to help make the enterprise zone a success, the House will understand that massive disillusionment has taken place.

    There was an emergency meeting of the council's economic sub-committee and the town clerk has written to the Department of the Environment to ask the Secretary of State to meet a small delegation of members of the council, the trade unions and industry to discuss why the Government have had second thoughts, apparently, about the zone that was promised to Bilston.

    For 100 years steel has been a major means of employing the Bilston work force. Steel making was closed down last year. We lost 1,800 jobs. The rolling mills, which were guaranteed for five years, are now to close, with a loss of 450 jobs, During the past 10 years 200 factories have been closed down in Wolverhampton and a large part of my constituency. During that time 16,000 jobs have been lost. Bilston, a part of my constituency, will become a wilderness of despair unless we get some early and urgent assistance from the Government.

    I hope that the Leader of the House will take note of my remarks. I am raising an urgent issue. My constituency needs some definite information before the House goes into recess for three months. I hope earnestly that the right hon. Gentleman will take up these issues with the Secretary of State for Industry—bearing in mind that the right hon. Gentleman has promised to help steel areas—and with the Secretary of State for the Environment. For the reasons that I have stated, I am opposed to the motion.

    4.55 pm

    The issue to which I wish to turn the attention of the Government before the House rises for the Summer Recess is the transferability of occupational pensions. I am aware that the evident appeal of such a subject at this late stage in the Session must be questionable. However, I ask my right hon. Friend the Leader of the House to listen carefully to the case that I shall be deploying. At a time when we are again emphasising the need for mobility of labour there can be little doubt that the freer transferability of occupational pensions is high on the list of factors that would facilitate that desirable objective.

    It is often said that public service pensioners are much better off than their private occupational scheme contemporaries because their pensions are index linked. That is so. I contend that they are much better off because there is free transferability between Government Departments and agencies. There is no such obvious free transferability between one private company and another.

    Successive Governments of both parties have understood the need to hasten the process of transferability. I pay tribute to the Labour Government for introducing the Social Security Pensions Act 1975, under which an earnings-related guaranteed minimum pension is required to be provided when a person leaves a firm. It was not appreciated by that Government—it is sometimes not appreciated by many outside the House—that to leave such a guaranteed minimum pension accumulating at inadequate interest rates at a time of high inflation can only lead to the erosion of the total pension that a man finally draws at the age of 60 or 65 years.

    It is a fact that public service pensions are index linked whereas private occupational pension schemes are not. It is also a fact that on transferring from one occupation to another a previous pension contributed to by the individual is not dynamised to take account of inflation after departure to another company. The Government understand the urgency of putting this matter right. They have asked the Occupational Pensions Board to try to solve the dilemma by making recommendations. When the Prime Minister is rightly calling for a greater mobility of labour, added urgency is needed to get the issue finally resolved.

    Let us consider the problem confronting Mr. A and Mr. B, who both join a private company at the age of 25 years. Mr. A stays with the company throughout his working life until 65 years of age, while Mr. B leaves at 45 for a job with a better salary with another company. Mr. A's pension is accumulating at current interest rates but Mr. B's contribution to his former employer's pension fund is accumulating at only a modest rate. Assuming that Mr. A and Mr. B earn in parallel to the age of 65 years, Mr. A will have a pension up to 20 per cent. better than Mr. B's. That must be a major disincentive to the mobility to which my right hon. Friend has recently drawn our attention.

    Why not merely transfer Mr. B's contributions to his new firm? On the face of it, that would be a simple solution. I fear that it would be too simple. First, not every private pension scheme is on all fours with its competitor. Secondly, to expect a new firm to be well disposed to looking after contributions made when it had no responsibility for Mr. B is to stretch the employer's responsibility. After all, the employer may have attracted Mr. B to his employ by means of an increased salary. He may feel that that it where the responsibility should end.

    In such a situation, the State has not and should not have a major role in the solution of the dilemma. I have some knowledge of occupational pensions both as an hon. Member and as a result of previous employment. I submit with all the force at my command that there is something that the Government can do, and that would cost nothing other than the time of some of the Inland Revenue's staff.

    My submission is quite simple. Instead of leaving the contribution with the original employer, with little growth, and instead of expecting the new employer to accept retrospective responsibility, the employee should be able to take his contribution, plus any part of the contributions of his original employer, and place them in an institution's fund under section 226 of the Act. On the face of it, this is an easy solution. One is inclined to ask why it has not been used before. What is to stop a man from taking such an obvious course of action? I fear that the answer is that investment of a lump sum return of contribution is reserved, under section 226, for the self-employed. It is impossible for a person who has not been or who is not about to become self-employed to take advantage of a single investment under that section.

    An amendment to the law is necessary My suggestion should enable the cash uptake to be invested once only on the same basis as that available to a self-employed person. That would allow past pension contributions to accumulate as favourably as future contributions. It would help to equate the disparate positions of Mr. A and Mr. B. Its very simplicity and lack of involvement in Government expenditure encourages me to urge this course of action on the Government.

    I shall outline the advantages in simple terms. First, it would introduce an element of fairness between the man who stays with one employer and the man who changes jobs from time to time. Secondly, it would assist mobility of labour, to which the Government have recently turned their attention. Thirdly, it would provide an incentive to move, where all the circumstances point to the desirability of doing so. Fourthly, it is the essence of simplicity. Indeed, I hope that that will not be seen by the Inland Revenue as a reason for not turning its attention to my suggestion.

    I hope and believe that the Government will see the force of this fundamentally simple argument, and that they will turn their attention to equating the situation between Mr. A and Mr. B, which is manifestly unfair.

    5.3 pm

    I am sure that the Leader of the House will not be surprised if the first Welsh Member to speak in this debate raises the subject of the job crisis in the Principality. However important the transferability of pensions is, it pales into insignificance in comparison with the immediacy and urgency of that crisis.

    On 30 July the Select Committee on Welsh Affairs, created by leave of the Government, reported. I commend the report to the House. It concluded:
    "there exists in Wales not a jobs gap but a jobs chasm into which the economic and social structures of large parts of Wales are in danger of falling. Only a sustained programme of Government assistance to the Principality can prevent this."
    That quotation gives some idea of the measure of the problem facing us. Indeed, that problem was made manifest to my colleagues and I as we journeyed to London from Wales. We have been brought face to face with the daily deterioration of the economy of our area.

    Although the three-month recess may give Government Ministers an opportunity to travel in Wales and to see the crisis at first hand, it would be wrong to go into recess without having received some response to that crisis. Despite the Government's helpful response last week in relation to Inmos, and despite the one enterprise zone that we have been given, which will assist the lower Swansea valley, the Government have not understood the measure of the crisis. I need hardly remind the Leader of the House of the great political gaffe that the Prime Minister made in Swansea two or three weeks ago. Despite the sensitivity in Wales on the issue of job mobility, she suggested that those in Wales—no doubt she was referring to the skilled—should be ready to move, as their fathers had done, to other parts of the country in search of employment. This issue was raised last Monday during Question Time. When pressed to inform the House about the whereabouts of those job "El Dorados", the Secretary of State said that there were job opportunities in the constituency of my hon. Friend the Member for Ogmore (Mr. Powell), in that of the hon. Member for Cardigan (Mr. Howells) and in the Heads of the Valleys.

    Does my hon. Friend also recollect that the Secretary of State said that there were job opportunities in Bridgend? He made that statement in immediate response to a question that I had put, which highlighted the number of redundant workers in the Bridgend area. I pointed out that 4,000 people were already registered at the Bridgend employment exchange and that 500 students, who were not included on the register, were out of work. That means that 4,500 people are seeking work in the Bridgend area. There are only 38 vacancies. The Secretary of State said that if people wanted to be mobile they should move into Bridgend. My hon. Friend knows that last Monday a further 1,000 redundant steel workers registered in Bridgend because they had been made redundant at the Margam steelworks.

    It is clear that neither jobs nor houses exist. If hon. Members need further evidence, they need look only at early-day motion 848, which states:

    "in Cardigan there are just 55 vacancies for 561 unemployed, at the Heads of the Valleys, Merthyr, with 2,864 unemployed, there are only 122 vacancies, Aberdare with 2,937 unemployed has a mere 51 vacancies and Ebbw Vale, with 4,792 unemployed, has only 179 vacancies.
    The Secretary of State counsels the people of Wales to travel to such areas. How out of touch he must be. In the next few months he will have to get ready to take cover from the people of Wales. The figures illustrate that he is out of touch.

    I am sure that the hon. Gentleman wishes to present a balanced picture. The headline of my local paper states:

    "Firm can't find men for skilled jobs."
    The firm's order book is overflowing. The chairman said:
    "We would like to expand, increase output … There is absolutely no shortage of work … we will have to import the workers we need."
    The picture is not as straightforward as the hon. Gentleman may think.

    The hon. Gentleman should have a word with the Secretary of State for Wales. I recall another Conservative canard last week in relation to British Rail. It was said that British Rail had many jobs for people who sought them, but that was contradicted a few days later by the British Railways Board. I wonder whether the statement reported by the hon. Member for Flint, West (Sir A. Meyer) will be contradicted.

    The history of West Glamorgan's difficulties is clear. In July last year the Conservative package reduced the level of grant available for development areas from 20 to 15 per cent., abolished regional development grants and changed not only the rate but the boundaries.. As a result Swansea was downgraded to intermediate area status with effect from 31 July. Similarly, Neath was downgraded to development area status.

    These changes were modified on 19 June, when the Secretary of State for Industry announced that the Port Talbot travel-to-work area was to become a special development area. The constituency of Newport was also affected. However, that is manifestly not enough. The Government have failed to take into account the interdependence of the whole West Glamorgan area and of the part of Mid-Glamorgan represented by my hon. Friend the Member for Ogmore. It is absurd in the extreme to regard a travel-to-work area as involving Port Talbot when, because of the ease of communications, workers from Neath. Swansea, Llanelli and Bridgend travel into the same area. It is absurd that there should be dramatic changes in the status of the areas.

    Perhaps the ultimate absurdity was in relation to the Duport site, which was moved recently from Port Talbot to Neath to gain the advantage of the special development area status which Neath then enjoyed. Now the situation has changed. Port Talbot is a special development area and Neath is a development area, and the Duport site, which the West Glamorgan county council seeks to develop, has lost its status.

    The position is deteriorating daily, partly because of the general recession—and we can make political points about that. It is also because of factors specific to West Glamorgan and South-West Wales. I refer to the steel closures. Throughout, the Government have failed to see the interests of what the local regional geographers call "Swansea Bay City" and the interdependence of that whole work area. That was underlined clearly in the Select Committee's report.

    If the Government take us seriously—and there is a large question mark over that—they must take four actions. First, they must upgrade Swansea and Neath because of the deterioration and dramatically worsening picture which the area presents. The figures speak for themselves. In June 1980 unemployment in the Swansea travel-to-work area was 8·5 per cent. In July 1980 it was 10·1 per cent., and the forecast for May next year is 11·9 per cent. The figures for the Neath TTWA are 9·4 per cent. in June 1980 and 11 per cent. in July 1980, and the forecast is 18 per cent. by May next year. That is before the bulk of the Port Talbot redundancies reach the unemployment books. Those areas must be upgraded.

    Secondly, the Government must end the uncertainty about the future of the Port Talbot and Llanwern steelworks, which hovers like a cloud over the whole of South Wales. Thirdly, an investment which is within the powers of Government could bring enormous jobs benefit to West Glamorgan and Mid-Glamorgan. I refer to the go-ahead for the new Mar-gam pit. The area straddles West Glamorgan and Mid-Glamorgan. The National Coal Board is geared to go ahead almost immediately. It would directly create 1,000 new jobs in the construction period of seven or eight years at a cost of about £20 million per annum. However, there would have to be some modification in the external financial limit of the NCB.

    That proposition is linked to the Venice summit and the new emphasis on coal. It is also linked to the bonus which Britain expects from the EEC budget agreement of 30 May this year. Extra funds will be available for social and regional projects and for infrastructure projects related to the coal industry. Six pits with over 4,000 jobs are under direct threat. In the light of the extra money that will be available from EEC funds as the result of the budget settlement, we hope that the Government will examine carefully net pit investment at Margam, which could yield enormous dividends for an area of high unemployment.

    Fourthly, I refer to a matter which has been pushed hard by my hon. Friend the Member for Aberavon (Mr. Morris). I raise the issue with his permission in his absence. It concerns the apprentice school at the British Steel Corporation's premises at Port Talbot. There is considerable spare capacity there as a result of the steel recession. From evidence to the Select Committee we know that the level of apprenticeships in Wales is already among the lowest in the country. Since the facilities are there, the Government could provide extra training in schools for young people in a very deprived area at relatively little cost.

    If the Government fail to measure up to the challenges and let us down, and if they fail to respond to the jobs crisis, there is a danger of increasing social tension and distress in South Wales. That is not a matter which has been paraded by people who wish to foment such unrest, but it is the considered view of the all-party Select Committee. We look to the Government for a response to our jobs crisis.

    5.18 pm

    I shall detain the House for only a few minutes. It would be wrong for the House to go away without an expression of sympathy and support for the good people of Manchester who currently are labouring under probably the worst city council in the country.

    On 12 March the council agreed a budget of £208 million. By 19 June the policy committee was saying that it had to make a cut of nearly £22 million. The dates are relevant. The only event to intervene between the two dates was the May election. The council has put itself in the position of being forced to cut its cloth to face a possible deficit by the end of the year of about £20 million and is now forcing through an inevitable series of cuts amounting to about £15 million. It is thereby exhibiting the worst form of local government.

    I wish to draw attention to what happens when a city council behaves, for reasons of political difference, bloody-mindedness or simply in an effort to win local elections, in such a thoroughly cynical way. Let us consider some small aspects of what is being done. The council says that one of its first tasks is to get jobs into the city centre. I support that aim. The council is maintaining expenditure on various forms of publicity and job support and that action is supported on both sides of the council. However, the burden of rates on businesses in the city centre is astronomical. Stores are paying rates of hundreds of thousands of pounds, reaching even to £1 million. The burden of rates continues to rise, despite the fact that the Government have increased the amount given to Manchester by 22 per cent. this year.

    It is not sufficient for the council to say that it cannot do anything about that situation. The biggest cynicism is that the council has got itself into the position of running the city for the benefit of its employees rather than for the benefit of the citizens. That is not a glib statement. More and more people are administering less and less.

    In 1971, there was one council employee for every 18·61 citizens. In 1974, there was one employee for just over 16 people. In 1979, there was one council employee for every 12 citizens and this year there is one employee for every 11·28 people. I ask you, Mr. Deputy Speaker, where in the House is there a supporter for the proposition that in times of great stringency, when the businesses of the city are under great strain, the city council should not only exempt itself from the difficulties but should increase the burden of its manpower on the people of the city?

    Secondly, council tenants are to face an increase of £2·50 on their rents. Some would say that that is a bad thing to happen. It will certainly be a great strain for the families concerned. However, that position has arisen because the council has refused to consider the matter for the past three years. It has postponed making decisions, and consequently the rent rises will come with great force.

    Can my hon. Friend tell us the average rent in Manchester?

    I cannot give an accurate figure. In the situation that has arisen in Manchester it is difficult for the local electorate to do much. There is built into the city structure tremendous inertia and vested interest. Even though the electorate is feeling the burden, it is almost impossible for voters to do much about it in a reasonable time.

    The Government are taking steps to bring pressure to bear on Manchester, and I hope that they will continue to do so. I do not want to see the powers of local government weakened, but the behaviour of places like the city of Manchester will make it difficult for local autonomy to be maintained. The people of Manchester are doing well by their own efforts, in spite of the council. But, my God, it is a close-run thing.

    5.23 pm

    I am sure that the people of Manchester are fair enough to recognise that their council is doing a first-class job in the face of Tory cuts. If there were a referendum in Manchester, I am sure that the hon. Member for Manchester, Withington (Mr. Silvester) would get his reply. Indeed, the fact that there is a large Labour majority on the council is a sufficient answer to the unfair point that the hon. Gentleman raised.

    I wish to raise three matters. We shall be starting the Summer Recess when the economic situation is getting even worse. The recession in the economy is deepening, as the Secretary of State for Industry admitted at Question Time today. The right hon. Gentleman suggested that it was due to overseas factors, but that was not quite what we heard before the general election.

    We have the worst unemployment level since before the war. All the indications and forecasts are that it will get much worse. We have nearly 2 million registered unemployed, and one wonders what the number will be when the House returns on 27 October. The House should be concerned about the industrial and economic situation and I hope that if things get worse the Government will recall Parliament.

    Unemployment is spreading throughout the country. My right hon. and learned Friend the Member for Warley, West (Mr. Archer) and my hon. Friend the Member for Wolverhampton, South-East (Mr. Edwards) have already referred to the situation in the West Midlands, that once prosperous industrial region where, even in pre-war days, families from the worst-hit parts of Britain were able to find employment. Today, there are redundancies, decline, depression and pessimism in the West Midlands. Most of that has arisen since the Government came to office.

    Between 1 April and 30 June this year, more than 12,500 redundancies were officially announced. We are often reminded by Government spokesmen of the number of trade unionists who voted Tory at the election. I concede that that is true, but I doubt whether many trade unionists, certainly in my part of the world, would be so keen to vote again for a party that has brought back a level of unemployment that we have not seen for 40 years.

    A chamber of commerce survey in the borough of Walsall showed that 48 per cent. of firms in the area plan to make workers redundant in the next three months. The survey showed that only 19 per cent. of businesses were working at full capacity. A total of 50 per cent. of companies in the town were losing orders and 58 per cent. will have a decreased turnover next year.

    It is understandable that the local chamber of commerce, which is not necessarily the strongest defender of my party, has said that it wants a change in Government policy. It is particularly keen to see a sharp reduction in interest rates. When one also takes into account the present value of the pound one can appreciate why it is difficult to export successfully.

    I make no excuse for referring to my town before the House is asked to approve the motion to rise for the recess. There are nearly 11,000 out of work in Walsall—an unemployment rate of 9·7 per cent.—and the number of vacancies totals 170.

    It is understandable that we should be concerned about unemployment nationally and how it affects our own people. It is all very well to quote statistics, but translated into human terms unemployment means despair, poverty and humiliation for thousands of our constituents. One of the best reforms of post-war years was the elimination of the sort of unemployment that the country had to suffer before the war. We now see the return of what I can describe only as near-mass unemployment. The Government have got us into that situation.

    The second matter that I wish to raise relates to The Observer. It has been announced that the paper intends to close on 19 October, a week or so before we return from the recess. I do not want to go into the details of the dispute, but the Government, and certainly the Secretary of State for Employment, have a duty to intervene if it seems that the newspaper is definitely to close.

    The management of The Observer has not said that it will be willing to sell the paper or the title. It has said only that the paper will close if the dispute cannot be resolved.

    There are many occasions when I do not agree with the editorial policy of The Observer. However, it would be most unfortunate to lose such a serious and informative paper. In view of that, every step should be taken by the Secretary of State for Employment, by the use of his good offices and the conciliation and arbitration machinery, to ensure that the paper does not close.

    The final matter that concerns me is the sale of arms to Chile. I hope that we shall not be told that this is necessary to help resolve our own unemployment difficulties. The level of unemployment will not be altered by exporting arms to a tyranny such as the Chilean junta. My first concern in this matter relates to the Leader of the House and the way in which the decision was announced. One would have thought that a controversial decision such as lifting the arms embargo on Chile would have been announced in the House. Instead, the news came in answer to a written question.

    The Leader of the House has often told us that apart from his obvious responsibilities as a Cabinet Minister and a senior member of the Government, he has duties and responsibilities to the House itself. On such a controversial matter as permitting the resumption of arms sales to Chile, in my view the Leader of the House should have made sure that a statement was made in the Chamber. I consider it rather contemptible and cowardly to treat the House in this manner. It is a controversial matter. Whatever one may think of the rights or wrongs of it, it certainly is wrong that such a controversial decision should be announced in an offhand manner in reply to what may well have been a planted written question.

    I raised the matter when we discussed the Adjournment motion for the Easter Recess. My right hon. Friend the Member for Ebbw Vale (Mr. Foot) made his own comments at the time, as he will remember.

    We have had no chance to debate the decision before rising for the Summer Recess. Obviously I consider the decision to be quite wrong. However, I should like to consider the manner in which the Government took the decision to resume arms sales to Chile.

    On 10 March of this year, the Minister of State, Ministry of Defence said in another place during exchanges about arms sales to Chile that the Government would not export arms to a country which was guilty of torture. The noble Lord said during the same exchanges that arms would not be sold to what would be regarded by the Government as repressive regimes. That, he said, was the clear policy of the present Government.

    Is there any doubt that torture and repression occur in Chile? The Government seem to believe that they do, because last December they voted for a United Nations General Assembly resolution condemning the increased use of torture in Chile.

    The Government have recognised the state of affairs. In answer to a question about Chile on 7 February, after the resolution had been debated in the General Assembly, my hon. Friend the Member for Hackney, Central (Mr. Davis) asked about it, and a Foreign Office Minister replied:
    "We are aware of the view expressed in this report that the rate of the improvement in the human rights situation has slowed considerably during the past year. Our concern was evident from our vote in favour of a recent United Nations General Assembly resolution. The return of an ambassador to Chile"—
    the Minister was attempting to justify the decision—
    "will assist us in making Her Majesty's Government's views known to the Chilean Government at the highest level."—[Official Report, 7 February 1980; Vol. 978, c. 310.]
    No one can deny that since the officers—the band of traitors who now rule Chile—overthrew political democracy in 1973 in the notorious coup, many people have been tortured, including a British citizen, Dr. Sheila Cassidy. Indeed, it was as a result of her torture that the last Government decided rightly to withdraw our ambassador from that country. Although I am opposed totally to an ambassador from Britain being sent to Chile, at least the Government have some justification on the basis that we have diplotac relations with many countries to whose views we are opposed. However, permitting arms to be sold to what—even in the Government's mind, judging by the way that they acted at the United Nations last December—is a regime which bases itself on repression and torture is an admission of the worst type of hypocrisy.

    The Prime Minister often boasts of her commitment to human rights. Repeatedly she says at Question Time how much in favour of human rights she is, albeit that usually she is referring to Eastern Europe. She cites the action that she took over the Olympics. In common with my right hon. and hon. Friends, I am extremely critical of violations of human rights in Eastern Europe. Those who know my views and have heard me speak on the subject will know that I am no defender of repression in Eastern Europe. But at least I am consistent. I do not justify the resumption of arms sales to a tyranny such as Chile. That is why the Prime Minister is guilty of the worst type of hypocrisy, in common with other members of her Government.

    The need is clear. It is to permit this House to debate this very important matter before rising for the Summer Recess. As I have said, the Leader of the House has not carried out his duties to this House. It is because I feel so strongly about the matter that I urge that a proper statement be made to the House even at this late hour. I do not want any statement in reply to this debate. I have no doubt that a suitable brief will be supplied to the Leader of the House. There should be a proper statement to the House from the Lord Privy Seal or from the Prime Minister.

    To those three issues, therefore—the high level of unemployment, the difficulties of The Observer newspaper and, even more importantly, the sale of arms to Chile—I urge that the House should give serious consideration before we rise for the Summer Recess.

    Mr. John Wells. If the hon. Gentleman wishes to remain seated, that will be quite in order.

    5.37 pm

    I wish to raise a matter which in my view should be debated before right hon. and hon. Members go away for the Summer Recess, namely, the conduct of the Southern water authority in particular and the activities in general of the entire water authority system.

    At the beginning of business today, the Southern water authority presented a small and innocuous Bill to which I objected, not because I was against the whole Bill but because one of its provisions was offensive. The Bill is entitled:
    "An Act to dissolve the Commissioners for the Newhaven and Seaford Sea Defence Works and the Shoreham and Lancing Sea Defence Commissioners; to confer further powers on the Southern Water Authority; and for other purposes."
    Considering the activities of the Southern water authority, in my constituency and elsewhere in the South of England, I believe that it might have been a great deal better if a Bill had been presented at 2.30 today entitled
    "An Act to dissolve the Southern Water Authority and to confer further powers on the Newhaven and Seaford Sea Defence Works Commissioners."
    I can see no reason why the Newhaven and Seaford sea defence commissioners could not run the Southern water authority a great deal more cheaply and a great deal more efficiently.

    The sad fact is that under the 1972 Act the Newhaven and Seaford commissioners will vanish, anyway, quite apart from this little Bill. Therefore, the offensive item in the Bill is that it gives fresh powers to the Southern water authority.

    I understand that under clause 12 pensions are to be paid to two gentlemen currently employed by the Newhaven and Seaford commissioners who already are past the age of retirement. They are to get compensation.

    We live in an era of Government restriction. It is my belief that all these matters should be aired throughly before we go away for three months. It seems to me that the Southern water authority management is grossly overstaffed and unsympathetic to our constituents. I am glad to see so many hon. Members from my part of England in their places. They will be aware of the problems faced by our constituents. In particular, the Southern water authority has been sending out direct billing to people, threatening to cut off their water supply if they do not pay, including people to whom the authority does not even supply water. That seems to be demanding money by false pretences, because it would not be able to carry out its threat anyway.

    I have a pathetic letter from a constituent who was worried that his water supply would be cut off because he had not paid something which, in truth, he had paid. I admit that the chief executive of the water authority wrote a grovelling letter of apology, as well he might. He had still frightened my innocent constituent, who had paid in April and was threatened in July and into August. This is not good enough. Such bullying tactics should be brought before the House.

    I trust that my right hon. Friend the Leader of the House will not seek to reply tonight, but will speak quietly but firmly to my right hon. Friend the Secretary of State for the Environment to ensure that all water authorities are brought more closely under the control of the House, if not before the recess at least soon after we come back.

    5.41 pm

    Before adjourning for the recess, the House may care to note that the Transport Act 1980 was given its Third Reading on 25 March. I understand that the provision to permit car sharing by private motorists is to become effective on 6 October 1980. However, the Act does not apply to Northern Ireland and the Minister responsible for such matters in Northern Ireland, the hon. Member for Beckenham (Mr. Goodhart), has stated that he intends to seek a suitable opportunity to promote similar legislation in Northern Ireland. The House could be forgiven for wondering why it should be necessary to wait for what the Minister calls "a suitable opportunity" before bringing the law in Northern Ireland into line with that in Great Britain. One might have thought that an ideal opportunity occurred when the Bill was drafted.

    As hon. Members prepare to depart for the Summer Recess, I invite them to reflect over the next three months on how they could spare themselves much waste of time and loss of sleep if they persuaded those who manage the business of the House to end the farce of devoting 1½ hours, usually in the middle of the night, to consideration of a Northern Ireland order that repeats, in slightly different form, sometimes in identical form, the Great Britain Bill that made the order necessary.

    During those three months, a gap will be created between the law in Great Britain and that in Northern Ireland. It will be a gap that could affect United Kingdom citizens in a real and perhaps costly fashion. Many motorists in Northern Ireland to whom I have spoken are under the impression that the legislation will apply automatically to the whole of the United Kingdom. Many citizens of Great Britain, moving, perhaps temporarily, to Northern Ireland, will naturally assume that this innovation, which has attracted more interest, for example, than an obscure clause in a social security Act, applies to the United Kingdom. They will say "Did not Parliament, which governs the whole kingdom, solemnly debate and approve the new provisions? Did we not read about it in all the papers?" The newspapers, naturally, will not have informed their English, Scottish and Welsh readers that one part of the country has so far been excluded.

    I need not take up the time of the House to list the many and varied traps into which otherwise law-abiding citizens may fall in the interval that will elapse before the Minister finds what he calls a suitable opportunity. Those citizens have a right to be protected against the possibility of their incurring serious liabilities. The House cannot adjourn and leave this trap for the innocent and the unwary. The Government will have to display a much greater sense of urgency than that shown so far by the Leader of the House. In his reply to my question last Thursday, the right hon. Gentleman simply indicated that his right hon. Friend intends to introduce legislation, adding
    "we shall avoid any unnecessary delay.—[Official Report, 31 July 1980; Vol. 989, c. 1735.]
    There ought not to be any delay. Any delay, never mind unnecessary delay, could have been avoided if the Government had legislated originally for the kingdom as a whole. Their failure to do so saddles them with a responsibility to ensure that such an important alteration in the law becomes operative simultaneously throughout the United Kingdom. I trust that before the debate ends the Leader of the House will be in a position to assure hon. Members that steps will be taken by the Government to ensure that the law on this important matter is made effective on the same date throughout the entire area for which the House legislates.

    5.46 pm

    I am delighted to follow the hon. Member for Antrim, South (Mr. Molyneaux). I agree entirely with his appeal to the Government for the universal application of legislation throughout the United Kingdom.

    I wish to raise the matter of the difficulties of the United Kingdom paper and board industry. I begin by declaring an interest. I have worked in and for the United Kingdom paper and board industry since 1974 and still continue to do so in a small way. The paper and board industry is a heavy capital-intensive industry. There are about 150 pulp, paper, and board mills, employing about 60,000 people and producing 4·2 million tonnes of paper and board. The mills are largely concentrated in North Kent, London, the Home Counties, Lancashire and central Scotland.

    The problems affecting the paper and board industry are the problems currently affecting many industries in the country—high inflation, a strong currency, high interest rates and high energy costs. I believe that we should debate the plight of this industry—the matter has not been debated in this Session—before the Summer Recess. A number of questions relating to the industry need answering.

    I should like first to examine the question of import penetration of the United Kingdom market. In 1976, imports took 45·2 per cent. of the market. In 1979, the figure had risen to nearly 50 per cent. Tariffs on paper and board were swiftly harmonised after the United Kingdom joined the European Economic Community. Zero rating was reached in mid-1977.

    From 1976, imports of paper and board from France, Germany and the Netherlands into the United Kingdom, based on the new productive capacity installed in the late 1960s and the early 1970s, began to grow substantially. The figures are revealing. Imports from France rose from 34,000 tonnes in 1976 to 130,000 tonnes in 1979, an increase of 253 per cent. The equivalent figures for West Germany were 73,000 tonnes to 155,000 tonnes, an increase of 95 per cent.; for the Netherlands, 69,000 tonnes to 114,000 tonnes, an increase of 50 per cent. The percentage increase for Italy was 125 per cent. In that period, total imports from the EEC rose from 244,000 tonnes to 526,000 tonnes, an increase of about 100 per cent.

    The comparison with other countries is striking. Imports from Sweden went up by 6 per cent., Finland by 1 per cent. and Norway by 20 per cent. Imports from Austria fell by 12 per cent. and from Canada by 16 per cent.

    There are several reasons for thee dramatic figures. One difficulty is that the United Kingdom industry uses a high percentage of energy and has to pay a high cost for it. It is difficult for Members of Parliament to get the most up-to-date figures from Ministers at the Department of Energy, but I ask the Leader of the House whether the Government believe that United Kingdom energy costs should be competitive with those of the other EEC countries. Once that is established, we can start to look at the facts.

    According to the facts that I have, there is a remarkable disparity of costs between a typical small United Kingdom paper mill and its equivalent overseas competitors. In July 1980, it cost £49·70 a tonne for energy to produce paper in the United Kingdom; £35·60 in West Germany; £33·20 in France: £23·90 in the United States; and £14·80 in Canada. As a result, the German product is 4 per cent. cheaper than the United Kingdom product, the French is 4·7 per cent. cheaper, the American is 7·3 per cent. cheaper and the Canadian is 9·9 per cent. cheaper.

    I should like to give some examples of the difficulties faced by paper and board mills in the United Kingdom. The firm of Portals Limited makes our banknotes. There is no shortage of demand for money, yet foreign competitors can now undercut our prices for banknotes and high security papers by up to 25 per cent. Following the 50 per cent. increase in gas prices in 1978 and again in 1979, energy costs now represent an alarming 78 per cent. of total variable costs of production for that firm. Its associated companies abroad can now sell bank paper at lower prices than the United Kingdom mill can produce it.

    Another example is Bible papers for religious publications. Imports from France are 20 per cent. cheaper than the domestic product and will undoubtedly cause short-time working in the second half of 1980.

    Reed Paper and Board (United Kingdom) Limited makes 16 per cent. of all paper and board produced in this country. Over the last three and a half years, when the retail price index has risen by about 54 per cent., because of good investment and good profitability. Reed's total costs have risen by only 24 per cent., but over the same period the percentage of energy content in total costs has risen from 12 to 21.

    In addition. Reed pays £3·2 million at the current annual rate to the Customs and Excise on heavy fuel oil. It should be remembered that Reed sells newsprint. The selling price of Canadian newsprint in dollars has risen from 100 to 154 over these three and a half years, but its price in the United Kingdom in pounds has actually fallen, from 100 to 99. The Government could help the beleagured paper and board industry immediately by considering the removal of the Excise duty on heavy fuel oil for industry.

    Another firm, TPT Limited, has had its margins cut, particularly by high oil and gas prices. That company finds it ridiculous that oil should be priced 16·2 per cent. higher at British mills—£97·20 a tonne—than at TPT's German board mill, where it is currently £83·63.

    I will give just one more example to end with—that of a good, medium-sized paper and board firm with a turnover of £12 million. It exports 70 per cent. of its product, of which 70 per cent. is sold for dollars. That mill has suffered severely from the strengthening of the pound. It has lost £20,000 in profit for every cent that the pound has strengthened against the dollar. Thus, with the pound strengthening to the equivalent of 20 cents of the American dollar, that firm has lost £400,000. In addition, the company has been investing in what is a high technology product and has to find £450,000 in interest annually. A reduction of 5 per cent. in interest rates would give the company relief of over £100,000, but that would not offset the £400,000 lost in export profit.

    I should like to deal now with board mills. Since 1976, sterling has strengthened in real terms by 27 per cent. against the dollar, 15 per cent. against the deutschemark and 25 per cent. against the Swedish krone. This has allowed imported boards to enter the United Kingdom from those countries at prices well below those of British boards, so that imports have now secured nearly 40 per cent. of some markets. United Kingdom board mills are making losses and some have, regrettably, already closed. If this trend continues, most mills will close within two years. Not even the most modern and efficient units, with low labour costs, can withstand that sort of pressure.

    For example, the costs of German mills are expected to rise by 8 per cent. over the next year, but those of United Kingdom mills may rise by 15 per cent. That will have a devastating effect on the United Kingdom's prices and profitability. In the absence of any weakening of the pound, and assuming no further strengthening, the only solution is to bring cost increases below 5 per cent. in the next 12 months and to maintain them at that level thereafter.

    Costs in the public sector and other factors under Government control are major obstacles to that achievement. The costs of energy, posts, rail transport and rates are expected to increase by an average of about 25 per cent. over the next 12 months. That will affect about 20 per cent. of mill costs and will directly increase overall costs by about 5 per cent. The effect is also felt indirectly via supplies and services, adding about another 1 per cent. to mill costs. Overall the public sector will cause board making costs in the United Kingdom to rise by 10 per cent. thus making it quite impossible to achieve the inflation rate of 5 per cent. at which survival is possible.

    Faced with that situation we must have straight answers from the Government about what will be done to help the United Kingdom paper and board industry. The Government must act quickly. They must examine energy costs to ensure, at best, that they are no higher than the lowest in the EEC and that they are equal at worst. Other public sector costs should not rise by more than 10 per cent. in the next 12 months. If possible it should be less. The Government must consider the abolition of the national insurance surcharge.

    I accept, as does the industry, that the main thrust of Government policy is to bring down the rate of inflation. As soon as that is achieved interest rates must come down to single figures and must be kept there as long as possible.

    Will the hon. Gentleman please explain to the House what measures he is advocating in the context of energy pricing?

    Mr. Proctor