Skip to main content

Commons Chamber

Volume 14: debated on Monday 30 November 1981

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

House Of Commons

Monday 30 November 1981

The House met at half-past Two o'clock

Prayers

[MR. SPEAKER in the Chair]

Oral Answers To Questions

Wales

European Regional Development Fund

1.

asked the Secretary of State for Wales what is the value of the grants allocated to Wales from the European regional development fund since 1975.

Grant commitments from the fund total £111·5 million.

Does my right hon. Friend agree that that is an impressive figure? What steps is he taking to ensure that the people of Wales know the extent of the assistance being provided by the EEC?

The figure is perhaps even more impressive, because the total of identifiable grants and loans to date is £805 million. My right hon. and hon. Friends and I take every opportunity to draw the attention of the Welsh people to the importance of the assistance, and also to the damage that would be caused if Britain withdrew from the Community.

Is the Secretary of State aware of the Hungarian company that is about to complete a factory in Eire, no doubt supported by EEC grants? It is designed to put 27 million light bulbs into the British market. Will that not cause enormous damage to the jobs provided by Thorn at Merthyr and other British light companies? Instead of praising the EEC, what action will the right hon. Gentleman take to defend the jobs threatened by such Hungarian-Irish fiddles?

The hon. Gentleman's remarks emphasise the importance of making every possible effort to encourage inward investment in Britain so that jobs are created for Welsh workers, not elsewhere in the Community. If we withdrew from the EEC we would still face competition from the factory in Ireland, but without the possibility of attracting similar investment for Britain.

Does the Secretary of State know whether Welsh business people are taking full advantage of EEC funds?

There is general awareness of the availability of such assistance. We recently took the opportunity to advertise and draw attention to the low interest schemes that have been introduced in both steel closure and rural areas. We shall continue to do everything in our power to make companies aware of the existing advantages.

Does my right hon. Friend know how many people in Wales are currently employed by transnational companies? What would be the probable reaction of such companies should Britain withdraw from the Community?

At least 55,000 people are employed in overseas companies or their offshoots. There is no doubt that a considerable number of such companies are established in Britain solely because they see this country as a base for entry into the European market.

How much of the £111 million is additional to what would have been spent anyway, and how much is mere replacement and, therefore, of no net benefit to Wales? As Northern Ireland has overcome the additionality hurdle, will the Minister ensure that Wales also has those funds additional to other expenditure?

The funds are additional to the resources available in the United Kingdom. Therefore, they enable us to reduce the total of public spending that would otherwise exist. It is right that Britain should retain control of where that assistance is directed and not surrender it to others outside this country.

Unemployment Statistics

2.

asked the Secretary of State for Wales what is the increase in unemployment in Wales since May 1980.

4.

asked the Secretary of State for Wales what are the actual numbers and the percentage increase in unemployment since May 1979 when he assumed office.

At 12 November 1981 the seasonally adjusted level of unemployment stood at 158,400, an increase of 77,200 or 95.1 per cent. over the corresponding level at May 1979, and of 65,000, or 70·5 per cent., over the May 1980 level.

Will the Secretary of State assure us that he will strongly resist attempts to make real cuts in unemployment benefit? Has he read of the unprecedented scenes in Shotton high street last week when several hundred men queued to apply for the 200 smelter jobs at Shotton? Bearing in mind the youth unemployment lobby today, how does he propose to bring to Wales real jobs for the young unemployed?

In my speech last week I began my remarks on unemployment benefit by saying that the options for the greatest economies had been closed. I argued that that was not an area in which significant cuts could be made.

I know of the scenes to which the hon. Gentleman referred. We are undertaking a massive programme of infrastructure improvement, of building advance factories and of provision for attracting new industry into the area. We have greatly extended the special measures and the youth opportunities programme.

Is my right hon. Friend aware that the policies of the Labour Party, including withdrawal from the EEC, would be likely to push up unemployment in Wales by as much as 100,000? Is he further aware that the Social Democratic Party has so far come up with no suggestions for dealing with the unemployment crisis? Is he also aware that unless the Government do something about unemployment, without clobbering those who are already unemployed, they will lose the next election?

I have already said to my hon. Friend that I do not think that that is an area where there is room for substantial savings in public spending. I have made that absolutely clear, but I do not in any way underestimate the scale of the problem. It is encouraging that, in a year of severe recession, we have succeeded so far in allocating an all-time record number of advance factories to provide more factory space and more potential for jobs than in any comparable period in Welsh history.

Will the Secretary of State confirm that while the unemployment figure fell marginally in the rest of Great Britain, it increased, albeit marginally, in Wales last month? Is he aware that the unemployment figure of 170,000 represents about 3,000 additional people in the dole queue for every month in which the right hon. Gentleman has held office? Did the right hon. Gentleman see the Western Mail article last week that referred to the fact that Tenby, which he represents, has the rare distinction of being the worst unemployment black spot in Wales? May I therefore urge the right hon. Gentleman to consult his colleagues and see that we have a debate in Government time on the present level of unemployment?

This Government have given far more opportunities for debates on Welsh affairs than were provided by the Labour Government. We shall continue to do so. However serious unemployment in Tenby is, and although the percentages are too high, it is absurd to describe it as the worst unemployment black spot in Wales, because, as in other seaside towns, there are seasonal unemployment factors. It is worth noting that, though there has been a serious increase in unemployment in Wales it has not risen anything like as fast as in many other parts of the United Kingdom.

In view of the complacent nature of that reply, I beg leave to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

Council House Sales

3.

asked the Secretary of State for Wales whether he is satisfied that local authorities are making full use of the capital receipts from sales of council houses to finance further housing investment.

Under present arrangements local authorities can use half the net proceeds of council house sales to augment their capital allocations. I remind authorities that if they do not take full advantage of this facility they will be missing an opportunity to expand their housing programmes, which they can now do with some confidence.

What will those receipts amount to? Will my hon. Friend give us an assurance that those funds will be used by the authorities, some of which have complained about inadequate allocations?

The local authority returns for the first six months of this year show that total net receipts could be about £39 million. Of course the authorities may apply the prescribed proportions to supplement their housing allocations. The signs are that most authorities will spend their full allocations. It is not possible at this stage to predict whether all will make full use of their capital receipts this year, although I wish them to do so.

Does the Minister not appreciate that the construction industry needs a considerable infusion of Government money? That has been called for particularly by building trades employers and the trade unions involved in the industry. Many families in Wales are crying out for accommodation. Why does he not attend to the real problems?

I wish that the hon. Gentleman would listen to what he is told. I said that half of the net proceeds of the £39 million would be available to authorities for housing purposes. In addition, there will be the repayment of past lending and the proceeds from the sale of land, all in all amounting to about £30 million, which is the equivalent of the total budget of the housing corporation in Wales.

What was the allocation to housing authorities in Wales in 1979, and how does that compare with this year's allocation?

There have been reductions in housing allocations under both the Labour Government and this Government. The sale of council houses and of land will make significant additional moneys available not only this year but, in all probability, next year also.

Will my hon. Friend confirm that it is important that those moneys should become available to local authorities as soon as possible? What evidence has he that recalcitrant authorities, particularly after the offer notices have been sent out, are sending contracts and conveyance documents to would-be buyers?

That matter arises on a later question, but I assure my hon. Friend that about 12 per cent. of tenants in Wales, which is a significant proportion, have applied for the right to buy. We have fixed dates by which we expect local authorities to have dealt with those applications and sent out offer notices. Considerable progress has been made with sale completions, too.

Will the Minister confirm that, according to the figures in a Welsh Office publication, there are 25,000 people on the Welsh Office's so-called net waiting list and that, even with that figure, the housing programme in Wales has borne the heaviest share of public expenditure cuts imposed by the Government? If the profit from sales accrues to a local authority towards the end of the financial year, thereby making it extremely difficult for the local authority to use that money, will it be able to carry forward that money to the coming year?

The money is coming through now as sales are completed. The majority of local authorities have been surprised at the number of applications and the amount of private money coming in. The money is becoming available this year. The net receipts will also be available to those authorities next year, and they must recognise that they will be in continuing receipt of those moneys.

Unemployment Statistics

5.

asked the Secretary of State for Wales how many men were in employment in Wales on the same convenient date in each of the years 1960, 1965, 1970, 1975, 1980 and 1981, respectively.

At June in each of the years in question males in employment were 711,000, 708,000, 636,000, 618,000, 590,000 and 541,00.

Does the Secretary of State agree from those figures that, disastrous though the Government's policies have been for Wales, the records of previous Labour and Conservative Governments, especially when one takes into account that the 1960s were a period of a world-wide economic boom, appear to be just as bad?

I also notice that the sharpest fall was during the five years when Mr. Roy Jenkins was Chancellor of the Exchequer in the Government supported by the hon. Gentleman.

How much future growth in employment is likely to come from the microprocessor and associated industries? Why is Wales missing out so desperately on its share of those growth industries?

It is impossible to forecast, but it will be significant. We welcome major new projects in Wales, such as those launched by Inmos and Mitel, which are two of the key organisations. During the last few days I have had discussions at Swansea university, and I shall have similar discussions elsewhere with a view to stimulating science-based and high technology development, particularly in the vicinities of our universities.

6.

asked the Secretary of State for Wales how many registered unemployed persons there are in Wales; what percentage this is of the working population; and what proposals he has to improve employment prospects.

There were 170,221 unemployed persons on 12 November 1981, a rate of 15·7 per cent. Our main objective is to restore the competitiveness of industry and the national economy. We are also committed to a major programme of measures to reduce the impact of the recession on the unemployed, particularly the young unemployed.

How can there be competitiveness when our manufacturing industry is disappearing? It will not be there when the economic upturn comes. What measures is the Secretary of State taking to improve employment prospects? What hope can he give to those young people who were on the job express and are lobbying the House of Commons today, and who have no hope of getting jobs because of the Government's policies?

The effort to create new industrial development in Wales is proving astonishingly successful in the middle of a recession. The best long-term hope lies in the creation of new jobs in the growth industries. The improved competitiveness of industries, such as the steel industry at Llanwern and Port Talbot, provides the best guarantee of success. In the meantime, we have massively extended the special measures, which at present cover about 44,000 people in Wales, including more than 17,000 on the youth opportunities programme.

Is my right hon. Friend aware of the massive increase in productivity that has been achieved by British industry this year? Is he further aware that only by such means will secure jobs be found in Wales and the rest of the United Kingdom? Does he accept that that increase in productivity contributed to the 41 per cent. increase in engineering exports in the last quarter?

There have been striking export successes, despite the strength of the currency during much of that period. Later this week I shall be meeting the chairman of the British Steel Corporation to discuss the corporate plan. As my right hon. Friend the Secretary of State for Industry pointed out, there has been striking progress towards the achievement of the targets of that plan, which offers by far the best prospect for strength and stability in that industry.

Is the Secretary of State aware that since the Government came into office there has been a 400 per cent. increase in unemployment in Ogmore, 1,000 of the 7,000 unemployed being young people, many of whom are lobbying Parliament today? What do the Government propose to do to alleviate the problem? I remind the Secretary of State and the Government that it costs the country £4,500 per unemployed person per year. That money could be better spent on keeping them in jobs.

I do not seek to mitigate the scale of the problems that we face. I acknowledge that there has been a substantial increase in unemployment in the hon. Gentleman's constituency. The measures that we have been preparing—the infrastructure and other packages—are now producing striking results, with a sharp upturn in the number of inquiries and factory allocations. When figures were announced by my predecessor at the same period in the month in 1978, he talked of "remarkable successes". We have allocated far more factories this year than he did then to provide more jobs.

My right hon. Friend's concern for the young unemployed can be understood and appreciated, but will he represent to his colleagues in the Cabinet the difficulties of the 40 and 50-year-olds who are thrown out of work and whose problems are even more difficult?

Of course, I fully appreciate those difficulties. We can solve the problems only by restoring the health of the economy and by moving into a period when jobs are sustained by our competitiveness and ability to sell goods in world markets. I repeat that remarkable progress is being made. Although the unemployment figures are high, many people are getting jobs all the time, even in this difficult period. About 5,000 people a week move into new jobs in Wales.

Does not the Secretary of State realise that the success stories that he describes so pathetically at every Question Time are completely at variance with the true picture as we see it in Wales? Does he not also realise that the rosy picture that he has attempted to paint again today was not the picture portrayed to me last Saturday at Milford Haven in his constituency? If he is so sure of himself, will he publish the balance sheet that I requested last Question Time, or, better still, let us have a debate so that he can show the black spots and the goodies at the same time?

I do not believe that I have exaggerated. I have acknowledged the scale of the difficulties that we face. I am entitled to remind the House again that when the right hon. Gentleman and the Labour Government did less well they described the position to the Welsh Grand Committee as a "remarkable achievement". I believe that, in a period of severe recession, I am entitled to say that to do even better in the creation of new factories, in the number of allocations and in the provision of new jobs is also a remarkable achievement.

Council House Sales

7.

asked the Secretary of State for Wales if he is satisfied with the progress made by housing authorities in Wales with the sale of council houses to those tenants who have applied to buy them; and what is now the average period of waiting between the application to buy and the completion of sale.

We shall not be satisfied until all tenants who wish to exercise their right to buy have been able to complete their purchases. It is not possible to estimate the average waiting time, but approximately 12,000 tenants submitted applications to buy before 31 December 1980, and approximately 4,000 sales had been completed by 30 September 1981, almost 2,500 of them in the June to September quarter.

In view of the difficulties that certain local authorities appear to be experiencing in implementing the legislation, will my hon. Friend consider the possibility of fixing a maximum period between the receipt of a valid application to buy and completion of sale?

As my hon. Friend knows, we have asked local authorities to ensure that any backlog in the issue of offer notices for applications made before 3 April 1981 is cleared by the end of this year. I am grateful to my hon. Friend for his suggestion, because we are actively considering the idea of fixing targets for the completion of sales.

In Wales, what is the average amount received from the sale of a council house? What does it cost a local authority to replace such a house to meet the problems of the homeless? Do the Government intend to do anything to meet the difference that faces ratepayers, local authorities and council house tenants?

I can give the hon. Gentleman the figures. The average receipt is about £8,000. Of course it costs more to build a new house, but, as I said earlier, there are resources available to the local authorities which come from the sale of council houses and they must use them to improve their housing provision. New build is not the only answer. It is possible to improve old properties and to build for low cost. Various other initiatives are also open to local authorities.

How long does it take the Department to process applications from local authorities which wish to purchase from the private sector?

Municipalisation and purchase of properties by local authorities are allowed on only limited occasions, and obviously they require consideration by the Welsh Office. I cannot give the hon. Gentleman the average time required for such consideration, but I assure him that the Welsh Office acts as quickly as possible, depending on the individual circumstances.

I remind my hon. Friend that, of the 4,000 houses that have been sold in Wales, more than 1,000 have been sold in the Vale of Glamorgan in my constituency. As the Vale of Glamorgan is administered by a comparatively small authority, and as larger authorities have lower figures, is that not evidence that the larger authorities must be dragging their feet.

The position is not quite as my hon. Friend suggests. I commend the authority that is responsible for the Vale of Glamorgan, but, as my hon. Friend knows, no authority in Wales is refusing to carry out the Government's council house sales policy. There is activity, which has increased, throughout Wales. From this last quarter onwards, the rate of completions will be accelerating.

Beef Cows

8.

asked the Secretary of State for Wales how many beef cows there are in Wales; what were the corresponding figures for the last three years; and if he will make a statement.

Numbers of beef cows in Wales have declined from 194,400 in 1978 to 185,700 in June this year, but I am pleased to note the recent improvement in market prices, which will enhance the prospects for the industry. Welsh farmers will particularly welcome the Government's proposals to increase hill livestock compensatory allowances for beef cows by £2 in the coming year.

Is the right hon. Gentleman aware that there will be an acute shortage of home-produced beef in January due to adverse Government policies? What plans has he to safeguard the interests of the consumer?

The Government have taken a number of measures to help farmers through this difficult period. The most recent measure is the increase of £2 for hill beef cows, which I know has been widely welcomed. That increase will help to correct the imbalance that has been developing in the hills between beef and sheep. The beef suckler cow premium is providing assistance, as is the beef premium scheme. I am sure that all these measures are playing a part in the welcome increase in prices that is taking place.

Unemployment Statistics

9.

asked the Secretary of State for Wales what estimate his Department has made of the number of people who have been unemployed in Wales for 12 months or more.

On 8 October 1981, 50,078 people had been registered as unemployed for over 12 months.

Is the right hon. Gentleman aware that that is a staggering figure? It seems that 50,000 people in Wales now depend on supplementary benefit and social security discretionary payments instead of unemployment benefit. Is he further aware that the Government propose to establish centres—there will be one at Merthyr, for example—to interrogate and harass the long-term unemployed and to try to force them into looking for jobs far and wide? Will he make representations to his fellow Ministers and tell them how deeply resented and bitterly opposed will be the establishment of such centres in South Wales, especially at Merthyr?

The hon. Gentleman is wrong about what will be done at the centres. Preparation is being made for the change that will involve a movement to self-registration for unemployment. That will involve a transfer of responsibility from jobcentres to unemployment benefit offices. A series of investigations are taking place to ensure that the transfer of responsibility can be carried out effectively by the unemployment benefit offices.

Will my right hon. Friend note that what will no doubt be described in the press as a massive onslaught by Labour Members on this day of demonstration against unemployment is supported by five Labour Members on the Opposition Back Benches? On a separate point, will he endeavour as soon as possible to put an end to the nonsense whereby any unemployed person who seeks either to better himself by going on a course or by doing some voluntary work risks losing his benefit?

I shall take up the final issue that my hon. Friend raised. As to the point about the Opposition Benches, there is a difficulty, because I understand that a number of Labour Members are leaving the party.

What is the right hon. Gentleman doing to help the long-term unemployed through the Nissan car factory project? What news has he of that? Does he know that on Deeside about 8,700 workers are still presenting themselves for work, which the Conservative Government are not supplying?

Representatives of the Nissan car factory have met my right hon. Friend the Secretary of State for Industry within the past week to discuss further this important project. I understand that it is likely that the company will indicate its intentions early in the new year.

In view of the inadequate explanation about the interrogation centre that is to be established at Merthyr, I wish to give notice that I shall seek to raise the issue in an Adjournment debate.

Wales Council For The Deaf

10.

asked the Secretary of State for Wales what sum was allocated from the Welsh Office to the Wales Council for the Deaf in this current period.

None. A very recent application from the council for the funding of a special project is being considered.

I object strongly to the Minister's indifferent and uncaring attitude. Is he aware that this is the International Year of Disabled People? Does he realise that 120,000 people are suffering from deafness in Wales? What criteria does the Welsh Office apply for sorting out grants? Does its criteria amount to raffles, or what are they? Is he merely turning a deaf ear to the council's representations for aid to help it assist the deaf in Wales?

The hon. Gentleman has allowed himself to become carried away in an especially obnoxious manner. We have given the fullest consideration to the council's application. Government assistance is normally restricted to contributions towards the headquarters' expenses of the organisations that are national in scope. The Wales Council for the Deaf is a regional association of the Royal National Institute for the Deaf. Its sphere of interest is restricted mainly to South-East Wales. We have suggested to the council that it collaborates with other bodies such as the British Association for the Deaf, the British Association of the Hard of Hearing and the National Deaf Childrens Society, all of which operate in Wales. The Welsh Office suggested to the council that it should bring a project forward for consideration. We have given the application the fullest possible consideration. There is a great deal that we do for the deaf in Wales.

May I ask the Minister to reconsider the attitude of the Welsh Office towards the council? It is in no party spirit that I make that request. I think that I speak for all hon. Members on the Opposition Benches, with the possible exception of the hon. Member for Wrexham (Mr. Ellis), when I urge the hon. Gentleman to reconsider the council's application. I understand that its activities are confined largely to South-East Wales, but that is the area where the largest proportion of those who are unfortuate enough to be deaf is concentrated. I ask the Government to do everything that they can to assist the council. I am sure that somewhere in the Welsh Office there is some money that can be used to assist it.

May I assure the right hon. Gentleman that the issue is not the availability of money but the appropriateness of a grant in this instance. We have given the application every consideration. We are considering the council's latest approach. A number of hon. Members wrote to me and I believe that some of them may have already received my reply, in which I outlined what we are doing for the deaf in Wales. I know that you will be interested to learn, Mr. Speaker, that we have contributed £200,000 towards the Institute for the Hard of Hearing Research to enable research to be carried out at University hospital in Cardiff. We shall be contributing a further £50,000 per annum over the next five years.

Rate Support Grant

11.

asked the Secretary of State for Wales what factor he proposes to include for inflation of (a) salaries and wages and (b) goods and services in arriving at the rate support grant settlement for Welsh local authorities for 1982–83.

I shall be consulting the local authority associations in Wales shortly on my proposals for the 1982–83 RSG settlement.

Is the right hon. Gentleman aware of the great fear among Welsh local authorities that all that he will include for wage and salary settlements is about 4 per cent., whereas the going rate is substantially above that, and that this will be a back-door way of squeezing out jobs or pushing up rates? Can he assure the House that the allowance for wages and salaries will be realistic?

I am certain that the overall settlement for Wales will be very fair and reasonable. But, as it is intended shortly to consult local authorities under the statutory arrangements, and as my right hon. and learned Friend the Chancellor of the Exchequer will be making a general statement later in the week, it would be wrong to anticipate those announcements.

How can the right hon. Gentleman help the local education authorities that are coping with the problem of cuts and the withdrawal of free bus services? Has the right hon. Gentleman been following the issue in my constituency of the village of Broughton, whose children, it seems, must walk to school at Saltney?

That is a matter for the local authority, which has its own priorities, to decide for itself. My desire is to make sure that Wales gets a fair and adequate share of the available resources and that the overall settlement is satisfactory. When we come to make the necessary announcements, I think that it will be thought to be a very reasonable settlement.

Will the right hon. Gentleman use his influence in the Cabinet to ensure that the Local Government Finance Bill is dropped, in view of the tremendous opposition to it in Wales and on both of the House? In calculating the inflation rate, will he have regard to the tax and price index as well as to the retail price index to ensure that local authorities do not have to bear an additional burden because of the inflationary policies of the Government?

In deciding these matters we shall take account of all factors, including the penal demands placed on some ratepayers by a number of high-spending local authorities.

Essential Services (Emergencies)

12.

asked the Secretary of State for Wales whether any machinery exists within his Department for co-ordinating essential services in the case of an emergency endangering public services in any part of Wales; and if he will make a statement.

Yes. My Department's organisation provides for the handling of civil emergencies and for co-ordinating action, where this is appropriate, to maintain essential services.

Is the right hon. Gentleman satisfied that the level of expenditure on emergency plans for civil defence by local authorities in Wales of £400,000 in the current year provides for the same level of protection for the population of Wales as will be available to the right hon. Gentleman and his colleagues in their bunkers at Brecon and Bridgend?

Civil defence is the responsibility of my right hon. Friend the Home Secretary, but I hope that the hon. Gentleman will encourage his local authority to ensure that the maximum provision is made for those whom he represents in his part of Wales. I understand that the local authority is not meeting its full responsibilities in this matter.

New Industrial Undertakings

14.

asked the Secretary of State for Wales how many new industrial undertakings have been commenced in Wales during the past 12 months in advance factories and with help from the industry department of his Department, respectively.

Precise information is not available, but I estimate that more than 180 advance factories have been occupied in the past year, promising nearly 4,000 jobs. Some of these factories will, of course, have been allocated in the previous year. I can also inform the House that 251 factory units were allocated between January and the middle of November this year, totalling 1·4 million sq ft. Of these, 68 units were at Cwmbran.

Is my right hon. Friend aware that this is a remarkable achievement in all the circumstances? Will he express his recognition of this to all those concerned, including the members of the development corporation?

I shall pass my hon. Friend's remarks to the Welsh Development Agency and to the new town authority and the DBRW, which have helped to achieve this remarkable result. The development corporation also deserves our thanks and congratulations. My hon. Friend used the words used by my predecessor in 1978—"a remarkable achievement". At that time the figures were not as good as these.

Why does the Secretary of State Indulge in such fantasies with these optimistic forecasts about the economy? It is as though he had become a compulsive reader of Grimms' fairy tales, whereas the reality is that unemployment is reminiscent of the levels of the 1930s, with only one in five of our companies in Wales working to capacity, with redundancies continuing apace, with mortgages soaring—

The hon. Gentleman must ask a question and not merely give information.

Order. I think that the hon. Member for Newport (Mr. Hughes) is coming to the end of his question.

Why does not the Secretary of State realise the terrible depression that we are in and call for a complete turn round in the Government's policy?

These are not fantasies. They are facts. I was about new industrial undertakings and factory allocations. I have given the details. They are record figures, and I am entitled to draw them to the attention of the House.

I had a message from the hon. Member for Montgomery (Mr. Williams) that he might be delayed and be unable to be present for his question. Perhaps I should not have called it.

Rate Poundage

16.

asked the Secretary of State for Wales if he will estimate the average rise in rate poundage of Welsh local authorities in the next financial year.

Rating decisions by local authorities will be taken in the light of the 1982–83 rate support grant settlement. I shall be putting proposals to the Welsh local authority associations very shortly. However, I shall expect local authorities to keep rate increases to the absolute minimum consistent with the settlement.

Has my right hon. Friend seen the predictions that rates in South Glamorgan will rise by between 25p and 30p in the pound and that Howells department store in Cardiff reckons that for every 3p rise in rates one job is lost in its store, and therefore that a 30p rise in the rates will mean the loss of 10 jobs in one store alone, which can be maximised over the area?

It is not possible to make accurate predictions until the settlement is available. However, I see no possible reason for an increase of that order—except that a Labour council has taken over from a Conservative one.

Will the Secretary of State assure the House that no local authority will be allowed, on the pretext of not having finances available, to fail to undertake such statutory responsibilities as those under the Chronically Sick and Disabled Persons Act, and that if they need additional funds to carry out the requirements of such legislation it will be incumbent upon them to raise that money by means of increased rates?

It will be for local authorities to meet their statutory obligations, which means deciding on the allocation of their priorities and whether it is necessary to maintain all service and all manning levels in every case.

Will the right hon. Gentleman give the House his estimate of the amount of rate revenue lost as a result of tens of thousands of square feet of factory space lying empty in many local authorities and the corresponding loss of jobs associated with that empty space?

No, but I am told day in and day out by industry about the very large number of jobs being lost because of the high rate burdens placed upon industry and commerce.

Education And Science

Seilern Collection

17.

asked the Secretary of State for Education and Science what discussions he has had concerning the project for the sale of works of art which form part of the collection of the late Count Seilern, which he bequeathed to London university.

18.

asked the Secretary of State for Education and Science if he will take steps to ensure that the collection of the late Count Seilern is kept together.

I have been in touch with the parties concerned, and I am glad to say that an agreement has now been reached whereby, through contributions from the national heritage memorial fund and the Victoria and Albert museum, a major picture from the collection by Rubens will be purchased for the Courtauld Institute of the University of London. This will enable the executors to meet the residual liabilities of the estate, and the Courtauld to keep the collection intact.

May I extend my heartiest congratulations on the happiest possible outcome of such benevolent co-operation? Will the right hon. Gentleman now extend the same spirit and the same exercise to the preservation of the British film archives—the nitrate stock, which is literally dying day by day? Historic films are disappearing which we shall never be able to resurrect. Could not the right hon. Gentleman apply the same sort of exercise to this really critical problem?

I am exceedingly grateful to the hon. Gentleman for his congratulations. I know that he has played a part in all this, and I am grateful for what he has done.

The hon. Gentleman asks about the film archives. I suggest, with respect, that although this is an extremely important question, it is another one.

I should like to join in extending congratulations to my right hon. Friend. Will he now fortify success by ensuring that a future home for the collection is found in the State rooms of Somerset House, which are particularly suited both to the Rubens and the Tiepolos, which are the particular glory of the good count's collection? Will my right hon. Friend, in the meantime, as a one-off exercise, arrange for a special showing in the House of the most appropriate of all the Tiepolos, "The Allegory of the Power of Eloquence"?

I should have to consult those responsible before giving a firm undertaking. I shall write to my hon. Friend. I hope very much that a home can be found which will enable both the Courtauld collection and the Prince's Gate collection to be displayed in full. Somerset House is an excellent idea, although it is not my responsibility. I shall speak to my right hon. Friend the Secretary of State for the Environment.

I should like to add my congratulations to my right hon. Friend. Does not this underline the necessity for the Government's early acceptance of the Select Committee report on works of art, published as long ago as March?

I note that all parties in the House are anxious to see acceptance of the report. The Government are considering the matter with great care, and I hope that an announcement will not be delayed too long.

The Arts (Business Sponsorship)

19.

asked the Secretary of State for Education and Science if he proposes to take further steps to encourage and increase the business sponsorship of the arts outside London.

Yes. I launched a new phase in the Government's campaign to encourage business sponsorship of the arts in York last week, when I spoke to an invited audience from local businesses and arts organisations. I plan to hold similar meetings in other parts of the country.

Is my right hon. Friend aware that his activities in this sphere are welcome? Does he feel that business in general understands the advantages that accrue to it from such sponsorship of the arts?

I think that big business certainly understands. I am not sure that medium-sized and small businesses yet understand. One of the purposes of my campaign is to try to spread the message to slightly smaller businesses. I am grateful for my hon. Friend's support. I shall continue to pursue my activities throughout the country to the best of my ability.

Will my right hon. Friend accept that an outstanding example of this support is the Cambridge symphony orchestra? Cannot this example be well adapted elsewhere?

Yes. I am grateful to my hon. Friend for allowing me to address the Cambridge symphony orchestra dinner recently. I hope that the orchestra continues from strength to strength.

Will the right hon. Gentleman accept that, whatever the generosity of business firms, this can never replace the support that will always be needed from the State? This has not happened in any other country in the world. Is he aware that in the provinces as well as in London a large number of theatres are dark or crumbling away, including one in my constituency, which we are trying hard to save?

Will he make sure that besides encouraging firms and industry to support the arts, he will do his best to see that he gets a greater share of resources from the Chancellor of the Exchequer to support the arts?

The hon. Lady has a later question on the Order Paper that I am looking forward to answering. I agree with her that business support is a supplement and not a substitute. It is, however, an extremely valuable supplement, and one that is growing considerably.

When the right hon. Gentleman addresses business men—I hope that he will address them soon in Greater Manchester—will he emphasise the real spin-off that exists for business, since areas that become areas of cultural excellence attract staff of equal excellence?

I agree with the hon. Gentleman. There have been tremendous advances in Manchester in business sponsorship of the arts. This sponsorship has been a tremendous success in the past year.

Would there not be some considerable value, not only in continued appeals for business sponsorship by the right hon. Gentleman, but in a special appeal, in a particularly cold climate, to local authorities to defend and, indeed, to extend their cultural activities to offset some of the social and economic damage caused by the Government?

The hon. Gentleman, most uncharacteristically, slightly exaggerates his case. The Government have done nothing to damage the arts and have supported them in difficult economic circumstances as generously as any reasonable man could expect. I hope that local authorities will continue to support the arts. I hope that they will not discriminate against the arts. That is the message that I try to give them.

20.

asked the Secretary of State for Education and Science what advice he provides to arts organisations which are looking for business sponsorships.

I have just published a new booklet of guidance to smaller arts organisations about sponsorship proposals, and also a new edition of an earlier booklet issued by my predecessor. Both give advice that I hope will be widely read and acted upon. I shall send my hon. Friend a copy.

Will my right hon. Friend accept warm congratulations for this positive step to enhance sponsorship of the arts? May I direct his attention to Mr. Horn, who is the chairman of the patrons and associates of Manchester city art galleries, and who does an excellent job? Does my right hon. Friend agree that this sort of impact on the arts is the pattern to be followed?

Yes. Manchester city art gallery was one of the first in the field, and I endorse what my hon. Friend says. I have noticed a demand by smaller arts organisations for advice on making an approach to business. I hope that the booklet will be helpful. I shall bring it to their attention wherever possible.

Library And Information Services Council

21.

asked the Secretary of State for Education and Science if he has now received the latest report of the Library and Information Services Council and what steps he proposes to take.

The council has recently sent me its latest report. I am most grateful to it and I am arranging for the report to be published.

Will my right hon. Friend make it clear that he does not regard this council as a head waiting to be hunted by my hon. Friend the Member for Carlton (Mr. Holland), and that, on the contrary, it does a very good job? Is my right hon. Friend convinced that he is making the maximum use of modem British information technology?

The council, which has been recently reorganised, does an extremely good job. It has published an interesting report which I am sure the House will want to consider in due course. The report recommends the study of electronic publishing, a review of manpower and training, and extra information services for small firms, which could be of immense value. I shall pursue this matter as best I can.

Craftsmanship

22.

A great deal of progress has been made, particularly through the work of the Crafts Council, which in January will open a new exhibition gallery and information centre in London.

I am grateful for that information, which I welcome. As our craftsmen enjoy a high reputation, abroad as well as at home, does my right hon. Friend agree that one of the best ways in which the Government can help to increase the number of craftsmen and encourage more people to take up crafts is to provide assistance with outlets where they can sell their work? Does he not consider that this is an important factor where the Government could provide help?

Yes. It is extremely important. I agree that there is an immense spin-off for British industry from the high standard of work of British craftsmen. This can have a great effect on the products of British industry. It is important that there should be more outlets where craftsmen can sell their works. The new gallery in the West End of London is a tremendously important site and will have a considerable effect. I shall want to watch the situation closely.

I recognise that one of the right hon. Gentleman's predecessors made an enormous advance in support of crafts. Will he continue that excellent support by providing help where craft centres, in the present economic climate, are in some danger of collapse? In view of the enormous public response to native craftsmanship over the last few years, will he look upon this as a particular problem that requires more financial assistance from the Government?

The hon. Gentleman raises a number of points. It is important to keep up support for the Crafts Council. I shall do my best to see that that happens. However, some of the points that the hon. Gentleman makes are more the responsibility of my right hon. Friends. I shall look at what he says and see what can be done.

Public Lending Right

24.

asked the Secretary of State for Education and Science whether he has completed his consultations on the proposed public lending right scheme.

Can my right hon. Friend inform the House when he feels that the scheme will be fully operational?

That is not yet absolutely clear. I should like the House to examine the scheme when I put it before hon. Members, I hope just before Christmas, or, if I am unlucky, very early in the new year. I hope that it will be generally welcome. Most of the points raised by interested parties have been met and I hope that hon. Members will support the scheme.

I do not wish to appear too antipathetic this afternoon, but does the right hon. Gentleman accept, that there have been years of delay during which we have been talking about implementation of the scheme? There is always another excuse for not introducing it. Is the right hon. Gentleman aware that the House—or the more cultured sections of it—is impatient to see the scheme? When can we see it? We want no more promises that are not kept.

With respect to the hon. Gentleman, his party was in power for a considerable time during this period.

We started the Bill. I am about to produce the scheme. We shall get it going. I hope that the hon. Gentleman will consult the Leader of the Opposition. I am doing him a good turn. We shall have it before the House at the earliest opportunity. I look forward to receiving his congratulations.

Arts Council (Grant)

25.

asked the Secretary of State for Education and Science if he will increase the grant to the Arts Council.

My luck is in today, having two goes at the Minister.

Does the Minister accept that unless the resources of the Arts Council are increased considerably—I hope that the Prime Minister is also noting this—in order to care for the problem of inflation as well as the expansion of growth of the arts, many artists, orchestras, theatres and companies will not be supported by the Arts Council in the coming year, which will create a very serious situation?

I note what the hon. Lady says. I must ask her to await an announcement in due course. What she has said has a great deal of force. We shall have to do the best that we can.

European Council (London Meeting)

3.32 pm

With permission, Mr. Speaker, I will make a statement on the meeting of the European Council under my chairmanship at Lancaster House on 26 and 27 November and which my noble Friend the Secretary of State for Foreign and Commonwealth Affairs also attended. I have arranged for copies of the agreed statements issued by the Council to be placed in the Library of the House.

As chairman, I welcomed Mr. Papandreou, the Greek Prime Minister, who made a statement about the economic problems of Greece and his Government's attitude towards the Community. Dr. FitzGerald was also attending the European Council for the first time as Taoiseach.

We spent a lot of time discussing all the matters which arise under the mandate given to the Commission on 30 May 1980. As the House is aware, these cover, first, the reform of the common agricultural policy; secondly, the development of other Community policies, in particular economic, regional and social policies; and, thirdly, the problem of the Community budget. A thorough examination highlighted four matters which will require further work. These are, first, the problems arising from the Community's milk surplus; secondly, the way to deal with Mediterranean agriculture; thirdly, the share of agricultural expenditure within the Community budget; and, fourthly, how to adjust the budget so that no member State is put into an unacceptable financial situation. Foreign Ministers will have a special meeting within the next few weeks to carry forward the work and submit recommendations to Heads of Government.

We hope that in this way it will be possible to reach an understanding on these matters before the next meeting of the European Council at the end of March. It is understood that agreement on each issue covered by the mandate is, and will be, conditional on an overall solution. There are important issues at stake for all member States and not least for the United Kingdom. It will take time and further effort to get a satisfactory answer.

The European Council also discussed the economic and social situation and the difficulties facing the Community at a time of continuing world recession. There was general endorsement for the views put forward by the Commission, in particular that the objectives of fighting inflation and unemployment needed determined policies to bring public deficits under control, to keep production, distribution and unit labour costs in check. Such policies would encourage interest rates to ease and would help productive investment to expand. The Council was agreed that special attention must be given to youth unemployment, which is of great concern to us all. We were agreed on the need for more training for young people.

Chancellor Schmidt and Signor Spadolini drew the attention of Heads of State and of Government to the ideas put forward by their Governments for a "European Act." Foreign Ministers will now examine the ideas and report back to a future European Council. In this context, the Council also noted the London report on political cooperation issued by Foreign Ministers on 13 October. This embodies a stronger political commitment to co-operation on foreign affairs and strengthens the machinery for political co-operation.

Heads of State and of Government also discussed a number of other important issues, including East-West relations and the Middle East. The Federal Chancellor told us about his important conversations with President Brezhnev on the occasion of the latter's recent visit to Bonn. We all agreed on the importance of keeping open the channels of communication between East and West. We welcomed the commitment of the United States, announced in President Reagan's speech of 18 November, to achieve major mutual reductions in nuclear and conventional weapons systems.

As the agreed statements make clear, the Council also restated in strong terms its concern at the continuing Soviet occupation of Afghanistan.

My noble Friend gave an account of the visit of the Polish Foreign Minister to London. The Council confirmed its determination to continue to do what it could to support Polish efforts towards the recovery of the Polish economy.

Finally, the European Council reaffirmed its commitment to complete the enlargement negotiations with Spain and Portugal. I am glad that these have advanced during recent months.

It was disappointing that we were not able to make more specific progress on the major issues on the mandate. This was, none the less, a meeting which helped to lay the basis for the difficult and far-reaching decisions which have to be taken soon. We intend to make sure that those decisions, which will affect the future of the Community for years ahead, safeguard the interests of the United Kingdom.

I thank the right hon. Lady for making a statement. I do not wish to cover all of the matters that she has raised. However, does she not think that it would have been better to have been completely frank with the House and with the country and to have acknowledged that no progress has been made towards achieving the objectives that she has set and that the House of Commons, on a number of occasions, has laid down in specific terms?

The right hon. Lady's statement has underlined that each country defends its own self-interest, that once again Britain has failed to get any lasting improvement on the financing of the CAP, on the budget, and on the transfer of resources from rich to poor countries, and that even when we have the Presidency of the Council we are unable to make any progress. That is surely what the right hon. Lady should acknowledge.

Is there any prospect whatever of fresh budget arrangements which will guarantee that, over a reasonable period, Britain is not a net contributor, and that there will be a real transfer of resources from rich to poor countries? Will the right hon. Lady at last take account of the resolutions on this subject that have been passed by the House?

Does the right hon. Lady really believe that the countries with vested interests will ever agree to the reform of the CAP and that she can properly reform it from within the Community? Will she give an undertaking that, unless the CAP is reformed, Britain will block any fresh agreement on agricultural price fixing this coming spring?

I come to what the right hon. Lady said about unemployment. Surely it is a most pitiful result that a meeting of this character should produce so few results on this paramount subject. Was anything agreed about dealing with mass unemployment? Why did the British Government refuse to support the initiatives and proposals that were made by President Mitterrand on this subject and the programme of expansion on which he is seeking to get some other countries to agree? Why is our country one of those which is holding back?

Has the right hon. Lady had a chance to read the comments of her right hon. Friend the Member for Sidcup (Mr. Heath) on this summit? Does she think that the tactics that she employed in Dublin have had any effects in producing the negative results here? We in the House of Commons would be glad to support her if she would stand up for the resolutions that have been passed here, but so far she has failed to do so at any of these meetings.

Finally, I should like to question the right hon. Lady about the report that she says she was glad to receive from the Federal German Chancellor on his discussions with President Brezhnev and others. We are also glad to hear the reports. Does she agree with the statement made by the Federal Chancellor that he is quite convinced that the Soviet Government come to the negotiations eager to secure settlements? When we brought back that same information from Moscow, the Foreign and Commonwealth Office did not seem to understand. Now that the Federal Chancellor has said it to her perhaps the Government will be ready to acknowledge it. The Opposition want to see those negotiations succeed. We shall do everthing in our power to help them to succeed.

At the summit we discussed the whole range of Community policies. Indeed, I have never heard so many matters, ranging across Community policies, discussed at any summit. They concerned each and every nation represented there, and, naturally, every nation fights its own corner. That is not surprising—we fight ours. On the whole, we have fought ours rather more vigorously than the right hon. Gentleman's Government did. We all have interests in common, and I believe that it is in our common interest that the Community should continue. Within that common interest, we also wish to secure the very best possible arrangements for Britain.

There are very difficult decisions to take with regard to the common agricultural policy. The existing policy suits a number of member States, but some find it inequitable and not at all sensible. We must continue to try to achieve a policy which treats their requirements reasonably and which, in the end, is much more sensible—towards a prudent pricing policy, prices which are nearer world prices, which produce fewer surpluses and, therefore, take a much smaller proportion of the agriculture budget. It will take time but we must continue to try to achieve that policy.

Almost every member nation is concerned because it has an unemployment problem. The right hon. Gentleman referred to French expansion, and I remind him of two things. First, even when France has expanded her deficit it is still a smaller proportion of gross domestic product than Britain's. I further remind him that, even with a very much smaller deficit than Britain presently has, France had to cut her capital expenditure programme by the equivalent of about £1·3 billion.

As to the suggestion that we did not get much further because of the attitude taken in Dublin, I remind the right hon. Gentleman that, had we been left with the budget arrangements with which his Government left us, we should this year be paying about £1·4 billion to the Community budget. We got it well down in our budget negotiations and this year it appears that we shall be paying about £55 million. That is the measure of what the Conservative Government have done for Britain.

The criticisms of the Prime Minister's conduct in Dublin came primarily from her right hon. Friend the Member for Sidcup and it was in that context that I put the criticism to the right hon. Lady. I hope that she will read the article and see whether she agrees with it.

With regard to the expansion programme, the figures of the French budget and its borrowing requirements, the French Government are proposing an expansion programme such as some of the Prime Minister's right hon. Friends might wish to support. The Opposition want to know when the British Government will be prepared to undertake consultations with other countries—within Europe or out of it—on a programme of expansion. If the Prime Minister will not agree with the French Government on such proposals in the European Council, will she have bilateral discussions with President Mitterrand to see whether we can have a common programme to tackle unemployment instead of the British Government holding back?

The Prime Minister says that she still has hopes of reforming the common agricultural policy. Can she give us a date by which she thinks any real reform may be achieved?

No, because this is part of the continuing work on the mandate referred to the Foreign Ministers. There are serious and difficult problems. Yes, the interests of member States are different—on the budgetary chapter, on the CAP and on other policies. That is why we all said that we would not agree to any particular reform until we had an overall reform, so that each and every country felt it had a reasonable deal from all the changes in the mandate.

With regard to French expansion, if there is a very low deficit as a proportion of the GDP, there is obviously more scope for increasing borrowing and lending and therefore one starts from a much higher deficit. Even with French expansion, their deficit is lower than Britain's. Even on the programme of expansion that the French Government have announced, they have had to retreat from some of the additional announced expenditure on capital and to take back about £1·2 billion or £1·3 billion.

Order. I propose to allow 20 minutes for questions to the Prime Minister. It should be possible to accommodate everyone in that time.

The Prime Minister did not tell hon. Members in the statement what her attitude was to the proposals advanced by Herr Gensher and Signor Colombo for greater political cooperation in Europe. Is this not a timely proposal at a time of great European interest in the disarmament issue? Would it not have been opportune, during the British Presidency, to make moves towards joining the European monetary system? Will the Prime Minister respond to the specific assertion of her predecessor, who wrote in The Times this morning:

"The other members of the Community were not prepared to reach agreement on matters affecting British interests directly because of the way they had been treated at the Dublin Summit on other topics."?

The Dublin and Luxembourg summits produced the best budgetary arrangements for the United Kingdom that any Government have been able to achieve since Britain entered the Community. I am sorry that Liberal Members do not like the fact that we got such a good deal. Clearly they could never have got it and they are jolly jealous that someone else did.

Britain's attitude towards the German and Italian proposals must be considered very carefully. They propose new arrangements for political co-operation—even on security matters—and that obviously does not suit all members of the Community, because at least one of them is neutral. They also propose some new councils—one for judicial and one for cultural matters—and I have not the slightest doubt that some will adopt different approaches to the prospect of having new councils. They also propose some increased powers for the European Parliament. I imagine that varying views will be taken, even in this House, about some of those things, and everything must be considered carefully by the Foreign Ministers before the matter returns to the European Council. I have not the slightest doubt that the House, in specialist Committees and on the Floor, will also wish to consider those matters carefully.

We were asked if we would join the EMS. However, the question of the EMS comes up at the next Council, because it will then be three years since it was started. Britain's exchange rate has fluctuated considerably because the United Kingdom has a petro-currency. In that respect we differ from other members of the Community. We should have to consider that very carefully if there were any question of our going into the EMS.

I congratulate the Prime Minister on the patience and determination with which she has sought a restructuring of the Community budget and policies to the mutual advantage of all Community members. However, does she agree that the danger of summit conferences is that they raise expectations too high and that it would usually be better for detailed negotiations to be conducted by the Council of Ministers, as provided in the Treaty?

Will the Prime Minister be a little more optimistic about the prospects of Britain's joining the European monetary system? We are always told that we cannot join when the pound is too weak and that we do not need to join when the pound is too strong.

Will the Prime Minister also say whether any decision was taken about the establishment of the European Foundation in Paris, which was agreed by the Council in 1977 and 1978? It would be comforting if some of the Council's decisions could be implemented by those who are answerable for them.

The European Foundation in Paris was not discussed during the London meeting. We had many other things to discuss but I have taken note of my right hon. and learned Friend's point.

With regard to the EMS, Britain's exchange rate against the deutschemark and the dollar has varied considerably recently. One thing we should have to decide would be the rates at which Britain would go in. In view of the fluctuations we have recently had, that would be extremely difficult. We shall be discussing the whole question of the EMS. Britain belongs, as my right hon. and learned Friend knows, to the support system but not to the exchange rate system. The future of the EMS will come up for discussion at the next Council.

I entirely agree with what my right hon. and learned Friend said about detailed mandates. It is not right for Heads of State and of Government to be discussing detailed matters about how much manioc we should import, about structural surpluses, about import and export policy and agriculture, details of wine, olive oil, and so on. I should have been extremely surprised had we been able to come to specific conclusions on these matters. I agree that it is much better if these matters can first be taken much further in the specialised Councils.

Will the Prime Minister accept that she has the support of the Social Democrats in the firm decision she has taken about the mandate of 30 May, although we are concerned that there was not better preparation in the matter? Will she also accept that we believe it is right to go for a long-term, comprehensive solution, which will take into account the interests of all member States, as the only way to achieve a satisfactory solution of Britain's special problems?

I agree with the hon. Gentleman. We were trying to get a longer-term solution last time. We thought that when the question of the budget came up again this time we would probably be nearer to the 1 per cent. VAT ceiling, and that therefore all member States would have an interest in securing a fundamental restructuring of the budget. We are not at the 1 per cent. VAT ceiling, and considerable further moneys have come in from co-responsibility levies. Therefore, there is no dire necessity on the part of all members to reconsider the restructuring. That makes things somewhat more difficult, and there is no shadow of doubt but that there will be a problem in getting a longer term commitment of the kind that we would wish to have, or a structure on an equitable basis as between the prosperity per head of member States. We shall just have to continue our efforts.

Will my right hon. Friend agree that, although it is a perfectly fair point that under the previous Labour Government our contribution to the budget represented about £18 million per week and now represents only £1 million, and that that is a considerable achievement, there is far more to the EEC than the economic position and the budget?

With regard to the Geneva conference which is opening today, will my right hon. Friend agree that it shows the extreme importance of the principle of negotiation from strength, without which the negotiations would not have begun? Will she also agree the the zero option proposal genuinely represents one of the most solid and important possibilities for stability in Europe?

I agree, of course, that the Community means much more than economics, but, taking the whole swathe of Community policies, each State must feel that it gets a fair deal, as would be expected between partners.

With regard to my hon. Friend's points about the Geneva conference which opens today, and about the zero option and nuclear disarmament, I entirely agree that we can negotiate only from strength. Chancellor Schmidt had been very forthright before President Brezhnev arrived in Bonn, having said that he was all for the zero option announced by President Reagan if it could be negotiated. Chancellor Schmidt also said that he would make it abundantly clearly to President Brezhnev that if the zero option could not be negotiated, and if there were no substantial advances in disarmament to keep the balance of power, the Pershings and cruise missiles would have to go into place at the due time in 1983. That was the right way in which to put the matter to President Brezhnev, so that he, too, would have a very strong incentive, as we all have, to have effective negotiations.

The Prime Minister's gloomy and dispiriting story proves yet again that we shall never achieve a fundamental reform of the CAP. As the right hon. Lady said, the Heads of Government met in May and gave their mandate to the Commission, they considered the proposals in June, and they told their Ministers to consult intensively and get a solution by November. Does the right hon. Lady recall that the Lord Privy Seal told the House that

"it is accepted by all the countries that it is necessary to arrive in November at a position where the Council can take decisions."—[Official Report, 29 October 1981; Vol. 10, c. 1047.]
Once again, the whole thing has ended in a debacle and, as Gaston Thorn said, there is no principle of compromise and solidarity. Is it not clear that we shall have better relations with the other countries only when we arrange our relations with them other than on the basis of membership of the EEC?

No, Sir. It would be highly damaging to the whole of industry and jobs in industry in Britain if there were to be any question of our leaving the Common Market. It is our biggest export market, and many jobs depend upon our membership.

With regard to the mandate, the hon. Gentleman is right in saying that we considered the procedure in June, following the report that we had received form the Commission. The matter was held up because of the results of the French election. The new French President said openly that he would not be in a position for some months to consider how to tackle the mandate. Therefore, the permanent officials' committee did not get down to work until September, so we lost the time from June to September. It is not surprising, therefore, that we have not been able to reach agreement this time.

The meetings in Dublin and in Luxembourg were difficult, but we had arrived at the precise time when decisions had to be taken, and the whole community knew that they had to be taken. They were taken, and Britain got a very fair deal.

Will my right hon. Friend, in any further discussions or meetings, consider very carefully the threat of the Community to withdraw regional development grants to Britain, particularly in regard to the South-West of England? This is a very serious matter. It is totally unfair. It would cause more unemployment in the South-West. May the matter be dealt with speedily, please?

I believe that that matter has not been finally determined. I know that my hon. Friend worries about it. We had a long discussion about regional policy, because the suggestion had been that the quota section of the fund should be applied only to the four less prosperous countries, but it was agreed that no country could be excluded from the fund. I shall look into the matter.

Does the Prime Minister recall, and will she confirm, that the mandate for the budget agreed on 30 May was for two years, extendable to a third year, 1982? In the event of agreement not being reached in 1982, has the Council agreed that the arrangement should continue until agreement is reached?

No, because the refunds due for 1982 would not come in until 1983, and we hope to get very much further and to have a budget agreement before the end of 1982. The previous budget agreement was for three years, with a particular formula for the first two years, and then, in the absence of a general agreement, a similar formula to continue for the third year. I hope that we shall get an agreement on all aspects of the mandate, which does not cover only the budget; it covers the CAP and the other policies as well.

May I remind my right hon. Friend that the French do not usually include the borrowings of nationalised industries in their Government deficits, and that in that and several other important respects it is difficult to compare our PSBR with theirs? More particularly, and at the risk of creating another split, may I urge my right hon. Friend to continue to regard with considerable scepticism the arguments in favour of Britain joining the European monetary system?

In addition to the point that my right hon. Friend has already made about our petro-currency, will she bear in mind that everything that we could and should achieve as a result of membership of the EMS could be better achieved by our own national efforts and that, far from doing anything to weaken our inadequate influence on interest rates and exchange rates, we should be seeking to increase that influence?

I am very much aware of the differences in calculating the overall borrowing requirement. That is why I tend to use the term "deficit" as referring much more to the central Government deficit, because of the complications which arise once one goes beyond that.

I would need to be convinced that there was positive advantage for Britain in going into the EMS. I agree very much with my hon. Friend's reasoning. One of the reasons for having a European monetary system was that it would require all countries to run what I would call sound financial policies, and having that firm and stable exchange rate would make it that much more necessary to have such policies. That has turned out to be not altogether true. For example, Ireland and Belgium are running deficits of 15 per cent. of gross domestic product. They are already in considerable difficulties, and the inflation rate varies between about 5 per cent. and over 20 per cent. So that reason does not seem to be prevailing. It appears that, if we want a stable exchange rate and a stable Europe, we must return to the formula used by my hon. Friend. We have to run our own economies properly; there is no substitute for that.

In view of the unfortunate outcome of the conference with regard to budgetary matters, and in view of the fact that the Arab summit at Fez terminated somewhat abruptly, is it not the more important for the EEC to continue its foreign policy initiatives, particularly the Venice declaration, regardless of obstruction by Israel and the United States Government, as a possible way of achieving peace in this dangerous area?

We are very well aware of what happened at Fez, but as we had issued a few days previously a statement, agreed with the Ten about our attitude to Middle East problems and to the Sinai force, we did not feel that we had anything else to say. The hon. Gentleman will be aware that we agreed to respond to the invitation of the United States and Egypt to offer a small contingent for the Sinai force under the terms of the Israel-Egypt treaty, but we said at the same time that we, the Ten, were signatories to the Venice declaration. That declaration persists, and we hope to take it forward. We had nothing fresh to say on top of that.

Did my right hon. Friend raise the matter of Greece, and were any decisions taken about Greece, in the light of the statement by Mr. Papandreou that his Civil Service would not enforce any Common Market regulations that might be to the disadvantage of Greece? Has it been made quite clear that if Greece withdraws from the EEC she cannot expect to keep any of the advantages that she had whilst she was a member?

We did not refer to that matter. Greece is still a member of the EEC, and is obviously trying to get as reasonable a deal as she can. Clearly she was particularly concerned with the debates and arguments about Mediterranean products. Mr. Papandreou took a considerable part in our discussions, and I imagine that Greece is considering her future very carefully, as it is clear that membership of the EEC offers clear advantages, not only for each country but for the EEC as a whole.

Does not the Prime Minister agree that the Genscher-Colombo proposals for greater political union are tantamount to suggesting a federal European State in which this country and this Parliament would lose much of their sovereignty? Is the right hon. Lady aware that there is no mandate in this country for such a federal union, that there is no support for it in the House, and that she herself has expressed opposition to it? So there is little support for it. As she has expressed her opposition to a federal European State on previous occasions, why did she not kill the proposal stone dead?

First, I do not believe that the proposals amount to a federal European State. Secondly, in my opinion, the idea of a federal European State would not have a ghost of a chance of getting anywhere.

If the lack of agreement on two major issues—contributions and the CAP—continues, will my right hon. Friend be prepared to consider proposing to resolve the matter by winding up the CAP, even if that means an alteration of the treaty? Secondly, as fishing negotiations will take place before the next meeting of the Council, can she give a clear assurance that this Government will never agree to an agreement which does not include a 12-mile exclusive limit?

The fishing negotiations were to be held this week, but they have been postponed until mid-December because of the election in Denmark. I cannot say what will finally emerge, but I am convinced that my right hon. Friends the Minister of Agriculture, Fisheries and Food and his Minister of State will get a fair deal for our fishermen.

My hon. Friend well knows that the CAP is of great advantage to a number of member States. It emerged from discussion that States were prepared to follow prudent pricing policies to ensure that European and world prices came closer together. If we can get agreement in that respect, we shall ensure that less money is spent on disposing of surpluses in the CAP. If it is further agreed that agriculture is run in such a way that structural surpluses are not created, many of the problems of the CAP will be considerably diminished.

Welsh Water Authority

4.7 pm

I should like to make a statement on the reorganisation of the Welsh water authority.

Hon. Members will recall that in July this year I issued a consultation document proposing changes in the structure of the Welsh water authority. My main proposal was for a reduction in the membership of the authority from its present 35 to about 10 members. I also put forward three possible options for safeguarding the interests of consumers: first, the appointment of local committees based on the WWA's seven divisions; secondly, a single committee for the whole WWA area; thirdly, consumer representation on the WWA itself.

I have now considered the responses—over 100 in number—to the consultation document. Apart from the local government bodies, a majority favoured the proposal to reduce the size of the authority, and most responses also preferred my first option for consumer representation.

However, in recognition of the arguments put forward by the local authority organisations, I have decided that the authority should be somewhat larger than the number I originally proposed. Instead of 10 members, I now intend, subject to parliamentary approval, to appoint 13 members. Of these, one will be the chairman, two will be appointed for their knowledge of fisheries and land drainage respectively, four will be appointed to represent the interests of county and district councils, and the remaining six to provide the widest possible expertise, including experience in management, finance, business, including agriculture, industrial relations or personnel matters. A board of 13 members, plus the chief executive who whould normally attend their meetings, will, I believe, be small enough to secure the speedier decision making and other improvements in management which I regard as necessary.

As regards the consumer interest, I have decided in favour of a modified form of the first option set out in my consultation paper. I propose to ask the authority to set up five local consumer advisory committees covering district council areas approximating to the various WWA divisions, or combinations of them. I envisage that consumer, agricultural, industrial, commercial, local government, and amenity interests will be represented on these committees, the membership and functions of which will be laid down in guidelines drawn up by my Department in consultation with the various interests concerned. These arrangements will be subject to review in due course in the light of wider decisions by the Government on the structure of consumer representation in publicly owned industries generally.

My proposals relating to the membership of the authority itself will need to be implemented by means of an order, subject to the affirmative resolution procedure, made under sections 2 and 3 of the Water Act 1973. I will lay the draft of such an order before Parliament tomorrow.

As I am sure the Secretary of State will realise, most of us on the Labour Benches cannot understand the undue haste in connection with the reorganisation of the Welsh water authority. The consultation document was issued on 27 July. The deadline for observations was 11 September, 46 days afterwards and that included the holiday period, which certainly affected local Government. In addition, an order will be placed tomorrow regarding the membership of the authority. Is the Secretary of State aware that the order is being placed exactly one day before the Secretary of State for Wales meets the Select Committee on Welsh Affairs to discuss this matter?

Does the right hon. Gentleman accept that it seems to the Opposition that if there is an urgent problem affecting the water authority in Wales, it is one not of organisation and structure but of the level of charges that the authority has to impose now that the equalisation Bill has been withdrawn?

A membership of 13 for the council is better than 10, but the reduction in members of the authority from 35 to 13 is going too far. Does the right hon. Gentleman accept that that number does not enable the authority adequately to represent the various interests in Wales and that four places for county and district councils is not adequate?

My reading of the proposals for the membership of the authority is that the Secretary of State will make all the appointments. May I remind him of the comments made by the Conservative Party when it was in Opposition about the number of quangos set up by the Labour Government? Is not the Secretary of State now making the strongest quango in Wales and one that is under his direct control?

Does the Secretary of State agree that local consumer advisory committees are desperately important to us and that it is a pity that the statement did not include guidelines that would have given us details of both the membership and function of the committees? I regret that there is no suggestion of an all-Wales consumer body because the Labour Party holds the view that there are all-Wales issues that affect consumers generally inside Wales. They should have some representation on consumer matters.

The consultative document suggested that the local consumer advisory committees could be something akin to the community health councils. Is the Secretary of State aware that most people to whom I have spoken believe that the community health councils are toothless tigers and do not wish to see the same happen in the water industry?

Will the Secretary of State delay the introduction of the order until those who are interested have had the opportunity to comment on it and certainly until the guidelines that he mentioned have been seen by those directly affected?

I cannot accept the accusation of undue haste, as we put forward the proposals on 27 July. Responses to the document were asked for by 11 September. We extended that period for a large number of individuals and took account of representations after that date. I met local authority organisations on 1 October. There will be a further opportunity for consideration before we debate the proposals.

My hon. Friend the Under-Secretary will be giving evidence to the Select Committee this week. The practice of Government has always been that they must be allowed to proceed with their legislative programme, even if a Select Committee subsequently decides to look into the matter. Subsequent to our putting forward the original proposals the Select Committee took the decision to examine the subject of water generally.

The level of charges is a matter of concern to everybody. Precisely because of that, I wanted to strengthen the management arrangements of the authority. The right hon. Gentleman referred to appointments being made by the Secretary of State. They will be made after widespread consultation. The original system, under which 20 members of the 35-strong authority came from the local authorities, does not provide an effective control system or proper consumer consultation. I shall certainly bear in mind the suggestion that the guidelines should be published before the order is debated. If it is possible, I shall seek to do that for the help and guidance of the House.

I note what the right hon. Gentleman says about an all-Wales body. A clear majority of representations were in favour of the solution that I have adopted, or something similar. I remind the right hon. Gentleman that the Welsh water authority's responsibilities cover parts of England as well as Wales.

Many community health councils will resent the way in which the right hon. Gentleman derided them as toothless tigers. During consultation on the reorganisation of the Health Service we received wide representations in favour of maintaining community health councils, including some from the right hon. Gentleman, who then said that the councils were extremely important for the Health Service.

Order. If hon. Members are as brief as Welsh Members usually are, I hope to call all those who have been standing up.

Does the Secretary of State accept that members of an authority who are appointed almost exclusively on functional criteria are almost bound to adopt a corporate rather than a representational view of their duties? Does he also accept that the appointment of four additional members from local authorities will perpetuate the confusion about the authority's precise role, and that for a genuine marriage of local democracy and operational efficiency a more radical solution is required?

I cannot accept that the presence of four members from local government will have the adverse consequences suggested by the hon. Gentleman. I am sure that they will seek to carry out their corporate responsibilities as well as any other members of the authority. The view of the Monopolies and Mergers Commission in its report on the Severn-Trent authority was that the previous cumbersome structure inherited from local government, with its variety of committees, was totally unsatisfactory for managing a business such as the water industry.

Is my right hon. Friend aware that most of my constituents think that the Welsh water authority is a cumbersome and over-large organisation and that they will be pleased that he is doing something about it quickly? However, is he also aware that they will not be impressed by members of the Labour Party who seem to want the Government to do nothing and whose remedy seems to be to advocate the formation of larger committees?

I thank my hon. Friend. As the MMC report said, the size of the Severn-Trent authority resulted in a complex committee structure requiring expensive administrative and other support services. One of the benefits that I hope to obtain from the reorganisation is a saving of about £100,000 a year on administration alone.

Does the Secretary of State agree that if the reorganisation of the Welsh water authority is to run smoothly and successfully he must give an assurance to the people of Wales that they will pay less for their water than their counterparts in England? They have paid more in past years. Will he also give an assurance that the land under the jurisdiction of the Severn-Trent authority will be handed to the Welsh authority? Why does not the Secretary of State introduce a system of election for members of the authority instead of appointing them?

The hon. Gentleman refers to the cost of water. I do not believe that the best way to lower charges in such an industry is to have an elected membership for the authority. It is important to select members on the basis of the wide management and business experience which they can bring to the task. I can, of course, give no assurance about charges, but one of the objects of the operation is to improve organisational efficiency. We were finding it increasingly difficult, with the previous cumbersome structure, to attract the type of people who were likely to run the organisation efficiently because people were not prepared to work in such an organisation. As to the hon. Gentleman's suggestion that we should change the geographical boundaries for which the authority is responsible, we have no proposals to do so.

Is the right hon. Gentleman aware that what matter most are the prices and charges made by the Welsh water authority, especially now that it is going over to direct billing? When will the right hon. Gentleman make a statement about the greater equalisation of water charges throughout the United Kingdom, because within the Welsh water authority, consumers are paying very nearly the highest charges?

The Government have made their position plain on previous occasions. We replaced a system which, far from providing for the equalisation of water charges, transferred considerable resources to those authorities that did not need them from authorities that did.

My right hon. Friend's statement is consistent with the recommendations of the Monopolies and Mergers Commission regarding Severn-Trent, which is a comparable body. The plan has been endorsed by the chairman of the Welsh water authority, which will commend it to many people in Wales. Will my right hon. Friend answer one question to clarify the responsibility of members of the authority in respect of the new local advisory committees? Does he intend that one director should be particularly responsible for the areas of each of those five committees?

There is no intention to break up board responsibility in that way, but it is intended that those consultative committees should have access to senior management and to the chairman and members of the authority's board. Therefore, they will have the right to make their views effectively known to the authority.

I thank the Secretary of State for making this statement to the House rather than to the very select Select Committee on Welsh affairs, because an opportunity is thereby given to less select Members to join in. Answerability is a big problem for the people of Wales. Will there be any requirement for the 13 members to visit the advisory committees, so that there is some liaison? Will the Secretary of State tell us whether there will be any geographical balance among the 13 members, and say why there are only five, rather than seven, advisory committees? Might there not have been a stronger argument for eight committees and for saying that they should be related to the county councils and therefore have some relation to directly elected members?

What is the likelihood of the 13 members of the authority, receiving payment, in view of the £20,000 per annum salary of the part-time chairman? Finally will there be an opportunity to debate the order on the Floor of the House?

There will be an opportunity to debate the order on the Floor of the House. With regard to payments, changes in the arrangements are not possible under existing legislation, but they could be considered at a future date, if we should decide to legislate further.

On the questions of answerability and geographical balance, in making the selection I shall certainly have in mind the desirability of members coming from different parts of Wales, but there will be no need for individual members to be responsible to particular parts of Wales. They will act as a collective board, taking collective decisions. I shall explain the arrangements for the consultative councils in greater detail when the House debates this issue. We considered the proposal that they should be based on county council boundaries, but there is no correlation between county council boundaries and the operating divisions of the water authority. With regard to the proposal to reduce the number of bodies, there are at least a number of divisions that fall naturally together, and the decision to bring them together makes the relationship to the county councils in those particular cases, rather easier than it would otherwise have been.

When will the new Welsh water authority begin its duties? Does the right hon. Gentleman realise that Welsh local authorities will be deeply disappointed—because they have been strongly represented in the past—that 36 districts and eight counties will have only four representatives altogether? Is the right hon. Gentleman prepared to reconsider that point, as the Select Committee on Welsh affairs is looking at the whole issue and will be taking evidence from those local authorities?

I hope that the authority will take over in its new shape from 1 April, which will coincide with the appointment of a new chairman. I have considered local authority representation carefully. My original proposal was that there should be no direct local authority representation. I now propose to have four such representatives. There were several possibilities. We considered having two representatives. However, I felt that if we had four representatives there would be a reasonable chance that the interests of the districts and counties would be taken into account. There was also the possibility and desirability that the interests of the English parts, covered by the Welsh water authority, would be taken into account. I remind the hon. Gentleman that every district and county will be represented on the consultative bodies, at a consultative level.

Will my right hon. Friend note that I welcome his statement? Does he think it prudent or tactful to make the statement today? Does he not think that accusations will be levelled at him, saying that his statement has shown some discourtesy towards the Select Committee?

The simple fact is that I announced my intentions in July, before the Select Committee on Welsh Affairs decided to consider the subject of water. It has always been the practice that the Government put forward their legislative programme and proceed with it—if they can get the consent of Parliament—whatever Select Committees may subsequently decide to do. It is probably not possible for the Select Committee to produce its report in time for us to proceed before the chairman retires. However, I shall take note of any deliberations that take place in the Select Committee during the intervening period. I have made a statement on the Floor of the House and have had widespread consultations. The matter will be debated in the House so that Parliament, including members of the Select Committee, will have every opportunity to make their views known.

Is the Secretary of State aware that when the Select Committee embarked on the current inquiry no sign was given that a decision was imminent? Therefore, the Secretary of State has acted with an unnecessary urgency, which has been caused only by the chairman's impending retirement. It has been suggested that one of the vice-chairmen should have specific responsibility for consumer interests. Does the right hon. Gentleman accept that?

I cannot accept what the hon. Gentleman said about timing. I have made my intentions clear from the beginning. Indeed, I made them clear when we began consultations and when I made my original statement to the House. The right hon. Member for Rhondda (Mr. Jones) has pointed out that I had laid down the date by which responses should be received. Since then, I have extended the date.

The hon. Gentleman asked about a vice-chairman or other member of the board having specific responsibilities. I decided against that course. Emphasis on consumer consultation should be made at the divisional level. Those bodies should have a right of access to the chairman and a right to make their views known to the board. It would not be right to place that responsibility on one member of the board.

Party Political Broadcasts

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

"the allocation of time for party political broadcasts for 1982".
It is a specific matter, because I have just heard this afternoon that despite my representations, the Lord President of the Council and Leader of the House of Commons has decided to go ahead with chairing discussions between the Chief Whips of the Conservative, Labour and Liberal parties and representatives of the Independent Broadcasting Authority and the BBC about the allocation of time for party political broadcasts in 1982; the third year after the general election, when one-third of party political broadcasts are allocated on the results of all subsequent by-elections, as stated in the report of the "Future of Broadcasting", Cmnd. 6753, paragraph 18:17.

It is an important matter, because time is to be allocated for broadcasting for the whole of 1982. This will affect the way in which the Social Democratic Party—which in its own right already appears to command greater national support than any of the three parties represented at the discussions—is able to present its case fairly to the electorate during the time before the next general election, and will undoubtedly influence the allocation of time during that election.

This matter must be of concern to all hon. Members and to millions of citizens outside the House. It is urgent because the Crosby by-election result was announced only on Friday and these discussions will be taking place at 5 pm today. This, therefore, is the last opportunity to discuss the issue and to have the meeting postponed so that the House can make its view clear that the SDP should be represented at these discussions as of right, before any final decisions are made about broadcasting in 1982.

This matter goes to the roots of parliamentary democracy. The Social Democratic Party is now the third largest party in the House since 1935. We are not dealing just with a by-election success of a new party in the country, but with a new party in the House—a situation without precedent since the inception of political broadcasting in 1936 and the recommendations of the Ullswater committee.

The right hon. Gentleman gave me notice this morning that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,

"the allocation of time for party political broadcasts for 1982".
I listened with care to the right hon. Gentleman, because he has raised some important matters, and many factors are involved in the issues that he raised. The House has asked me to give no reasons for my decision when I announce the result of an application under Standing Order No. 9.

I listened with very great care to the right hon. Gentleman and to the application he made on behalf of his party, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Eton Axles Ltd

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

"the announcement by Eton Axles Ltd. of Newton Aycliffe that it is to make approximately 250 of its work force redundant, including 50 apprentices".
Eton Axles is the largest employer of males in Newton Aycliffe, which serves the whole of south-west Durham. It has already run down its work force from 1,200 to just over 700 in the past 18 months. It now proposes to get rid of a third of the remaining workers, including nearly 50 engineering apprentices. One out of every four males in the surrounding areas is already out of work, while one in every two youngsters must enter the youth opportunities programme. Subsequently, fewer than a quarter are getting work. Every job is being chased by more than 50 unemployed people.

I hope that the House will agree that its business should not proceed without fully debating the effects of these redundancies upon the workers, their families and the whole area, but especially the devastating effect upon the redundant apprentices.

The hon. Gentleman gave me notice this morning that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,

"the announcement by Eton Axles Ltd. of Newton Aycliffe that it is to make approximately 250 of its work force redundant, including 50 apprentices".
The House knows that whenever I receive an application in connection with the closure of a factory and unemployment, my decision obviously causes me considerable anxiety, but the House also knows that I do not decide whether this matter should be debated. I merely decide whether it should be debated tonight or tomorrow night.

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

Comptroller And Auditor General

Motion made, and Question proposed, That this House do now adjourn.— [Mr. Budgen.]

I have a ruling to make before we turn to the subject of today's debate. As the House is aware, both the papers which it now intends to discuss address themselves to proposals that would involve legislation, and any debate from which reference to these proposals was excluded would be incomplete. I am therefore willing to exercise the discretion granted to me by Standing Order No. 16 and to permit incidental reference to matters requiring legislative remedy. "Incidental" is a term that will be interpreted with sympathy.

It also happens that part of the content of a Bill that is at present before the House will be relevant to the debate, and the question of anticipation therefore arises. The House will recall that a similar situation arose in the debate on the first Supply Day this Session. I therefore now repeat the ruling that I gave on 12 November, that it would
"be wrong, in my view, for any right hon. or hon. Member to attempt today to canvass in detail the provisions of the Local Government Finance Bill",
but that
"Subject to that restriction, a wide debate is possible."—[Official Report, 12 November 1981; Vol. 12, c. 672.]

4.36 pm

I hope that the House will forgive me if I begin by paying tribute to a few people who have been especially helpful in producing an excellent report.

First, I thank my colleagues on the Public Accounts Committee who have worked almost beyond the call of duty to enable us to produce this report. I am proud to be the chairman of such a hard-working Committee, and I am grateful to my colleagues for helping to produce the report.

Secondly, I am sure that my colleagues would like me to thank our Clerk, Helen Irwin, who did a wonderful job and gave the help required by the Committee to draft this report. We are all grateful to her. She deserves the highest commendation for the work she did.

I should also like to thank the Comptroller and Auditor General, Sir Douglas Henley. Although he is not responsible for the report, and disagrees with some parts of it, he was nevertheless of great help to us on both this and many other occasions.

Finally, I thank all the witnesses who gave oral and written evidence that was extremely helpful to us. I particularly have in mind the three Members of the House who gave evidence. As always, the right hon. Member for Taunton (Mr. du Cann) gave useful evidence. I think of the excellent work that he did as chairman of the Public Accounts Committee and of the Treasury and Civil Service Committee. I know how much work the right hon. Gentleman has done on this important subject. I thank also my hon. Friends the Members for Norwich, South (Mr. Garrett) and Nottingham, West (Mr. English), both of whom have been of enormous help to the Committee in drafting this report.

The role of the Comptroller and Auditor General is not a party political question, but it is very much a House of Commons issue. I hope that it will be clear that the Public Accounts Committee went into the subject in some depth, but I regret to say that we have had what can only be described as an appalling and shameful response from the Treasury. The Treasury has not simply rejected our recommendations, but has replied to a carefully argued case in a negative and utterly inadequate way. Indeed, the response is negative and inadequate even by Treasury standards.

The objectives of the Treasury and of the Public Accounts Committee are the same. We all want value for money, efficiency and effectiveness in the auditing of public spending. I agree with the three "guiding principles", as they are called by the Treasury, in paragraphs 3, 4 and 5 of the White Paper. Paragraph 3 states:
"The first is the principle of Ministerial responsibility to Parliament".
Pargraph 4 states:
"The second principle is the need for high standards of financial stewardship and prudence in handling public money."
Paragraph 5 states:
"The third principle derives from the evidence that standards of audit, both external and internal, of Government Departments require improvement."
The White Paper might have added that those principles apply to private industry, but there is no doubt that they should have the support of the House. I agree with the principles, but there are major differences about how we achieve their objectives. I know that the Financial Secretary was not responsible for drafting the Treasury reply, so it is possible that he might disagree with it, but I regret the Treasury's failure to concede the essential, central principle of our report, which is the need for true parliamentary accountability in the spending of public money.

We all know that "Ministerial responsibility to Parliament"—the first of the guiding principles—is no substitute for real parliamentary accountability. It is a red herring. No one wishes to diminish ministerial responsibility to Parliament, but the Treasury must know that that does not provide for "parliamentary accountability" in the spending of public money in any sense of the words. Parliamentary accountability plus the independence of the auditors and the need to improve efficiency and effectiveness in the public audit service were, to use the Treasury words, our "guiding principles". With those principles in mind, I wish to deal with the main parts of the report, including the local authority audit section.

I begin with the area in which there is virtual agreement between the Government and the PAC on the nature of the audit, although I know that even here the Government agree only, as they say in paragraph 7, with "most" of our report. First, we recommended legislation. In paragraph 2.20, quoting what the Government said in their Green Paper, the report states:
"'The Government believe that any new statutory framework for the C & AG's operations should provide for his continuing examination of value-for-money in the expenditure of public funds and for him to report to Parliament as appropriate on the results of his examination in this field'."
That was the Government's view in their Green Paper. I agree with what the Government say in paragraph 6 of the White Paper that, even without legislation, the Comptroller and Auditor General is not and has not been inhibited from further improving the value-for-money and efficiency examination that he has carried out. The House and the PAC would be concerned if obstacles were put in his way. The best way to be sure that that does not happen is to put the matter on a statutory basis.

I hope that I am not unduly critical of the Government when I say that they do not wish to introduce legislation because—as this is a House of Commons issue—the final shape of the legislation would rest with the House, not with the Treasury. If that is unfair, the Minister can easily put the matter right by telling us that the Government meant what they said in paragraph 6 of the report—that they are keeping the matter under review. We know that those are words normally taken from the Treasury shelf when they do not propose to do anything. If my fears are unfounded, the Minister can put the matter right by telling us today that, as we have a light legislative Session—perhaps even lighter now—he will recommend the introduction of legislation to deal with our proposals.

Although the Government do not say so in paragraph 6, I assume that the word "most" is used, even in this aspect of the report, because of the Public Accounts Committee's views in paragraphs 2.17 and 2.18 that there should be earlier publication of Appropriation Accounts if the House of Commons is to have meaningful control over Supply. In that respect, I welcome the interim report of the Procedure Committee. The Minister will correct me if my assumption is wrong, but I believe that the PAC and the House would prefer it if the Minister told us straight that he did not wish the House to have real control over Supply and would prefer that billions of pounds continued to be granted to the Executive on the nod, as as been the case for centuries. That would be preferable to the arguments that are customarily put forward. I hope that the Minister can tell us today—especially as we have such an independent-minded new Financial Secretary—that things are different now and that I am wrong in my assumption about the Government's attitude towards the sort of reform proposed in our report.

I turn now to the main question on the range of the audit, including the local authority audit. Our recommendations stem from the guiding principle of parliamentary accountability. Therefore, we believe that it is essential that the Comptroller and Auditor General, reporting through the PAC to the House of Commons, should audit or have access to all bodies in receipt of money voted by Parliament. I should have thought that was an unexceptionable principle that the Financial Secretary could support.

Our recommendations to meet that basic objective are summarised in paragraph 8.10 of the report. The objectives are attacked by the Treasury with what I can only describe as more red herrings in paragraph 8 of the White Paper, which states:
"The Government agree that an essential part of the role of the C & AG is to ensure accountability to Parliament for public money, but as mentioned above, they wish to see more, not less, involvement of the private sector in the audit of public spending, and to avoid over-loading the C & AG."
We on the Public Accounts Committee made it clear that we welcomed the involvement of private auditors. That cannot and must not detract from the primary objective of parliamentary accountability, to which the Government pay lip service in this section of their response, only to be followed in the next paragraph by a repetition of the other red herring about ministerial responsibility. It must be said that parliamentary accountability does not detract from ministerial responsibility. It helps to make true ministerial responsibility possible if we have parliamentary accountability of the kind that we recommend. Perhaps that is why the Treasury rejects our recommendations. The Treasury says that it prefers the Monopolies and Mergers Commission to deal with matters affecting the nationalised industries and other public corporations. It says that it would welcome a PAC examination, but with the Comptroller and Auditor General having access only to the reports submitted by the MMC and the Department. In other words, there would be no access to the accounts of bodies in receipt of substantial sums of money voted by the House of Commons.

I believe that it is worth repeating what we said in paragraph 4.11 of the report:
"Parliament has no means of satisfying itself that ministerial intervention in the running of the industries is soundly based. The only satisfactory means of giving Parliament that assurance, we believe, is to give the C & AG access to the books and records of the nationalised industries."
I hope that the House will agree with that statement. However, it must be emphasised that the MMC is concerned not with the monitoring of ministerial involvement, but with carrying out efficiency investigations and then only at ministerial request.

I have seen the speech of Mr. Glyn England, the chairman of the Central Electricity Generating Board. He was complimentary about the investigation undertaken by the MMC, but not about ministerial involvement. In his speech on 20 October, he said:
"No Minister at any time discussed the conclusions of the report with me … Ministers, but their action or inaction, in my view threw away a considerable part of the benefit that might have been derived from the £600,000 or £700,000 spent in all on this investigation, partly by the electricity consumer and partly by the taxpayer."

Would my right hon. Friend make it absolutely clear that the Public Accounts Committee would welcome greater access to the books of British Leyland in respect of public funds?