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Commons Chamber

Volume 35: debated on Thursday 27 January 1983

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House Of Commons

Thursday 27 January 1983

The House met at half-past Two o'clock

Prayers

[MR. SPEAKER in the Chair]

Private Business

Cornwall County Council Bill Lords (By Order)

Hampshire Bill Lords (By Order)

Nottinghamshire County Council Lords (By Order)

Shrewsbury And Atcham Borough Council Bill Lords (By Order)

Orders for Second Reading read.

To be read a Second time upon Thursday 3 February.

Oral Answers To Questions

National Finance

Falklands Campaign (Costs)

1.

asked the Chancellor of the Exchequer what has been the total so far of advances from the Contingencies Fund in respect of expenditure by Departments related to the Falklands war and subsequent costs.

As I told the hon. Member on 23 December, £12 million. The amounts charged to the Contingency Reserve are also set out in my answer of 23 December to the hon. Gentleman.

That is £12 million compared with the £15 million that would be needed to solve the water workers' claim. How does it compare with the £37 million which is the total expenditure of the British Council and the £38 million which is our total aid to India? How does the expenditure on the Falklands compare with the £500 million that is needed urgently for rail investment? Should we not get these matters into prospective?

The hon. Gentleman knows that the figures to which he has referred for other items of expenditure have nothing to do with his question, which is a limited one about advances from the Contingencies Fund. As he knows, that is a special form of financing, which is required to provide money in advance of parliamentary approval for a portion of the expenditure on the Falkland Islands.

What is the total amount of public expenditure that has been incurred in answering all the questions that have been asked by the hon. Member for West Lothian (Mr. Dalyell) for weeks and weeks on this subject?

I fear that that is a level of expenditure which is so complex in its composition as to require a certain amount of research to discover.

Employment Creation

2.

asked the Chancellor of the Exchequer whether he considers that his 1982 Budget has achieved the encouragement to employment which he anticipated.

The Government's consistent policy, maintained in my last Budget, is to reduce inflation and so create the conditions for sustainable recovery, and hence better employment opportunities. The prospect now is for further modest recovery. The outlook for employment can be further improved by continued reduction of costs and further moderation in pay settlements.

When does my right hon. and learned Friend expect unemployment to start falling—this year, next year or 1985?

Even in answer to my hon. Friend I do not intend to break the practice of successive Governments of not forecasting trends of unemployment. By laying the foundations, to which I have referred, for continued success against inflation we are likely to make the speediest progress.

Has the Chancellor read the recommendations of the Confederation of British Industry for his Budget? Will he now take the measures that are needed to contain the inflationary effects of the fall in the pound, so that industry can take advantage of the recovery in competitiveness without the costs being passed to the consumer?

I have, of course, studied the CBI's recommendations and agree with the implications of the hon. Gentleman's question. The fall in the pound will help to improve competitiveness only if it is combined with still lower pay settlements and still greater improvement in productivity.

Does my right hon. and learned Friend agree that the fall in the value of oil represents a very important stimulus to British manufacturing industry, particularly in the west midlands? Will he undertake that the Government will make no attempt whatever to hold up the price of oil?

My hon. Friend knows that this country is a price taker and not a price maker in the oil markets. It is right that although the modest fall in the price of oil represents both gains and losses for this country, the overall effect is likely to be beneficial. It would, however, be in no one's interest if the price of oil were to fall too far too fast.

The Chancellor must recall that when he presented his last Budget he described it as a Budget for industry, for jobs and for people. Is he aware that since he presented that Budget unemployment has increased by 270,000 and manufacturing output has fallen by 1½ per cent.? Does he not agree that his Budget judgment was wholly wrong? What does he intend to do to have some impact on the problem of unemployment and falling output?

I remind the right hon. Gentleman that the growth in output in the United Kingdom since the spring of 1981—[HON. MEMBERS: "1982".]—1982 is a little over 1 per cent. In Japan there was a rise of 3 per cent., while in all the other countries of the summit seven output fell substantially during that period.

Real demand rose in Britian by 4 per cent. last year. If we are to achieve the growth in output that that makes possible, it is all the more necessary for us to continue to improve our competitiveness.

Industrial Competitiveness

3.

asked the Chancellor of the Exchequer what was the decline in United Kingdom competitiveness since May 1979, as measured by relative normalised unit labour costs.

Relative actual unit labour costs are probably the best single measure of competitiveness, since they take account of recent improvements in productivity. But United Kingdom relative normalised unit labour costs are now around 15 per cent. worse than in the second quarter of 1979. This deterioration reflects the fact that United Kingdom wage increases have been higher than those of our competitors, as the effective exchange rate is now 5 per cent. below the figure for the second quarter of 1979.

How is it possible for the Government to claim that their policy is deliberately—rather than accidentally—increasing the competitiveness of British industry when, in reply to my hon. Friend the Member for Blackburn (Mr. Straw) on 22 December, the Government admitted that three-quarters of the 20 per cent. increase in improvement in the cost-competitive position of British industry was derived directly from a fall in exchange rates and other minor factors?

Why does not the right hon. and learned Gentleman come clean and admit that the only developments of any benefit to British industry during the past 12 months derived from exchange rate movements and had nothing to do with the Government's tight monetary policies?

That is simply not true. The cost of labour has increased at a much lower rate than in past years and done well compared with most of our competitors, which is an important part of the progress that has been achieved. The Government's action to reduce industrial costs by such measures as the fall in the national insurance surcharge is also of considerable significance.

The hon. Gentleman is doing less than justice to Britain, never mind the Government, in failing to pay heed to the substantial improvement in productivity, which has had an important effect on industry.

As the Treasury is at last admitting that it takes the sterling exchange rate into account, will the right hon. and learned Gentleman now tell us what is the Treasury's exchange rate policy?

I am not aware of any new statement that entitles the hon. Gentleman to suggest that there has been any change. He knows that the Government do not have an exchange rate target, but regard changes in the rate as one of several indicators of the relative tightness or laxity of monetary policy.

Does my right hon. and learned Friend agree that the sharp fall in the rate of inflation has been a major boost to Britain's ability to compete? Is it not true that in May 1979 our inflation rate was higher than that of most of our competitors, and that it is now lower?

There is no doubt that the improvement in inflation during the past year has been to the dramatic benefit of Britain.

As the right hon. and learned Gentleman well knows, any dramatic improvements in the past year have come about because the pound is a little more sensibly valued than a year ago. Will he understand that we cannot for long sustain—certainly not to the benefit of Britain—a dishonest pound?

If the right hon. and learned Gentleman does not have an exchange rate policy, he certainly has an interest rate policy. Does he not understand that the rise in interest rates from 9 to 11 per cent. during the past six weeks is imposing an intolerable burden on British industry? Is he aware that not only do we have the highest real interest rate since the war, but that it is higher than in any other country with which we are trying to compete?

The right hon. Gentleman, wittingly or unwittingly, wholly distorted my answer to the last question. I referred to a dramatic improvement in inflation. That has nothing to do with the exchange rate—quite the reverse. The fall in the value of the pound tends to have an adverse effect on inflation, not a favourable one. Therefore, the Government are perfectly entitled to point to the great improvement in inflation.

Any adverse movement in interest rates, when compared with the substantial fall during the past year, would be as nothing compared with the effect on interest rates of the implementation of any of the right hon. Gentleman's policies.

Argentina (Loans)

4.

asked the Chancellor of the Exchequer, further to the reply of the Prime Minister on 20 December, Official Report, c. 352, what progress has been made with the loans by the International Monetary Fund and British banks to Argentina.

An IMF executive board meeting on 24 January approved Argentina's application for a SDR 1·5 billion stand-by facility in support of an economic stabilisation programme. A drawing of SDR 0.5 billion under the compensatory financing facility was also approved. A short-term bridging facility for $1·1 billion provided by a group of international banks was signed at the end of last year. British banks are participating in this and are taking part in negotiations which are currently in progress for a $1·5 billion medium-term loan.

Is the Minister aware that the Tory Government and the guarantees of the Prime Minister in answer to a question on 20 December have sent a lifeboat to Argentine banks? How do the Government and the Prime Minister reconcile that with the Fortress Falklands policy? Are they not propping up a Fascist regime? The Government talk about brave boys dying on the beaches, yet they are propping up the Argentine banks with British taxpayers money? What hyprocisy that is.

I hope that the hon. Gentleman feels better for having got that off his chest. May I try to explain to him—

Order the hon. Member for Bolsover (Mr. Skinner) asked his question and he must allow the answer to be given.

The loans to which my original answer referred have an important contribution to make towards helping Argentina's economic adjustment and thereby safeguarding the health of the international financial system. The purpose is to ensure that Argentina continues to service its existing debts. If it did not, that would create problems for the entire international banking community and have repercussions for British trade.

If the hon. Gentleman does not understand that—

I accept what my hon. Friend said, but is he not aware that there is widespread concern that we are backing loans to Argentina while that country is still spending considerable amounts on rearming? If it was not doing so, it could service its debts.

As the Prime Minister has made clear, the loans are not for arms purchases but to help Argentina to continue to pay its debts. Tight IMF ceilings on both external credit and on credit to the public sector should inhibit the diversion of funds to military expenditure.

Is the hon. Gentleman aware that there is some dispute over the size of the foreign debt incurred by Argentina, with its central bank disagreeing with its Economic Ministry to the extent of $4 billion? In view of the large packages which the hon. Gentleman mentioned, and which have been supplemented by the news that we had at lunch-time today, should not this serious difference be resolved before these large packages are finally implemented?

I noted the reports in the press to which the right hon. Gentleman referred, but that is a matter for the Argentine authorities to sort out among themselves. We cannot arbitrate between their different estimates, but whatever the exact figure—

—it is clear that Argentina would have been faced with serious debt service difficulties without the arrangements agreed with the IMF, the commercial banks and other creditors. That could not have been in the interests of the international community.

As the Prime Minister told us last night that we must not talk to the Argentines until the formal ending of hostilities, is it right that we should lend them such large sums of money?

I am surprised that the right hon. Gentleman, with his experience of these matters, should imagine that it would be in the interests of the international trading community that arrangements should not have been arrived at to enable the Argentine Government to continue to service its national debt.

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

Free Ports

5.

asked the Chancellor of the Exchequer if he will make a statement on what progress the working party on free ports has made.

The working party has recently visited Rotterdam, Shannon and Hamburg to examine the facilities available in these localities. It has discussed Community rules with a representative of the Commission. In the immediate future visits will be made to a number of traders to examine the facilities currently available in the United Kingdom. In addition, the working party will consider all this evidence together with any additional contributions offered by industrial and commercial interests not directly represented.

I thank my hon. Friend for that helpful and full response. Will he affirm that, contrary to reports in the media, the Government have not taken any financial decision on this matter and that those decisions will be taken on the merits of the scheme, including the extra new jobs which the free ports may provide? Will my hon. Friend give some idea of the time scale of the Government's decision on this matter?

I assure my hon. Friend that he should not believe everything that he reads in the press. I speak from experience. I can give him the assurance that he seeks. The working group is examining all aspects of the issue and is doing so with a completely open mind. Our ambition is to complete our work as swiftly as possible so that if it should be the view of the working group, and if that view is subsequently accepted by Her Majesty's Government, that there is a need for change in existing legislation, provision can be made for that in this year's Finance Bill.

If that is the case, why did the hon. Gentleman sack the hon. Member for Aberdeen, South (Mr. Sproat) from the working group?

I was just trying to think who was the hon. Member for Aberdeen, South.—[Interruption.] My hon. Friend the Under-Secretary of State for Trade expressed an interest in attending the first meeting of the working group, and did so. In general, however, the Department of Trade, like other Departments of State, is represented on the working group, and most effectively, at official level. I should tell the hon. Gentleman as well that he should not believe everything that he reads in the papers.

Income Tax

6.

asked the Chancellor of the Exchequer by how much the basic rate of income tax would have to be reduced in order to restore the proportion of total taxation, direct and indirect, and including national insurance contributions taken from the income of a family—wife not working, husband in work—with two dependent children on (a) average earnings and (b) 75 per cent. of average earnings to its level in 1978–79, from its level of 1982–83.

As my right hon. Friend the Financial Secretary told the hon. Member for Islington, South and Finsbury (Mr. Cunningham) on 23 November, the figures are about 4p and 6p in the pound respectively. Even without such reductions, the take-home pay at all levels of earnings is higher in real terms today than under the last Government.

Is it not appallingly misleading to have an increase in taxation of £8 a week, in effect, for the cases that the hon. Gentleman has quoted, when the Tory party claimed that it would cut taxation, but has managed to increase it dramatically at the same time as introducing mass unemployment?

The fact of the matter is that the overall tax burden has inevitably risen because of the increased public expenditure due to the recession and by the need to keep borrowing under control. The reductions in the high rates of tax on the highest incomes need no excuse. The fact remains that take-home pay at all levels of earnings is higher in real terms than it was under the previous Government.

With regard to family incomes, has my hon. Friend read today's Financial Times and seen the article by Mr. Samuel Brittan recommending an increase in child benefit to £7 a week? Does my hon. Friend agree with Mr. Brittan that

"When anti-poverty considerations and economic incentives point the same way, this the very least that is needed"?
At a time when low-paid workers are in dispute over wages, will my hon. Friend and his right hon. Friends bear in mind the attractions of meeting the needs of those with real problems by increasing child benefit, rather than by giving way to blackmail and giving blanket increases in wages?

I cannot anticipate my right hon. and learned Friend's Budget, but many of the benefits to which poorer families are entitled, such as child benefit, family income supplement, retirement pensions and so on, have gone up more rapidly than inflation since 1978–79.

The Minister is up to the Treasury's old trick of breaking statistics. Is he aware, as a result of the questions answered by his colleague, that, as a proportion of average earnings, taxation at every level up to twice the average earnings has risen under the Government? As my hon. Friend the Member for Hammersmith, North (Mr. Soley) said, the average family is paying £8 a week more in taxation than it was before. Is not the truth that the burden of taxation has risen so much under this Government that to get it back to its level under Labour would cost not 6p off income tax, but 9p, or £9 billion?

Although the hon. Gentleman is correct in saying that the proportion has gone up, the real level of take-home pay has gone up. My constituents live on their take-home pay.

Economic Forecast

7.

asked the Chancellor of the Exchequer what prospects he sees for the recovery of the economy.

Although developments in the world economy have continued to hold back recovery at home, average GDP was 0·75 per cent. higher in the first three quarters of 1982 than a year earlier. Lower inflation and better productivity are providing a basis for a strengthening and sustainable recovery. The forecast published in the autumn statement was for growth of 1·5 per cent. in GDP in 1983.

Is the Chancellor aware that his absurd wild goose chase after sound money has imposed the lowest level of industrial production for 17 years? Why does he not now abandon his three-year mirage hopping predictions of recovery and argue for a co-ordinated boost for demand in the Western world and give some hope of jobs to my constituents in the northern region?

I understand, and the House understands, the emphasis that the hon. Gentleman places on the prospects for sustainable growth in employment. However, I remind him that during the first two years of his Government, which the right hon. Gentleman the Leader of the Opposition described as a period of signal success, unemployment doubled, while inflation rose by 27 per cent. and earnings rose by 30 per cent., and it was only after reference to the IMF that the policies could be put back to a sensible form. This is the first Government since the war to pass on a lower average rate of inflation than they received from their predecessors. We do not intend to change that.

If the right hon. and learned Gentleman persists in regarding the lower rate of inflation as almost the only factor necessary for recovery for this and other economies, will he explain why the inter-wars period, which was a period of low, sometimes zero, inflation, and sometimes negative inflation, was so markedly less successful economically than the 25 years from 1948 to 1973?

The right hon. Gentleman could draw a number of different conclusions from that analysis. He must recollect that inflation was falling at the beginning of the 1930s. The 1930s was, in fact, a period of little, or zero, inflation. We have experienced one of our most substantial growth periods during this decade. I must remind the right hon. Gentleman that since the spring of 1981 growth in this country has been moving forward, in contrast to that in almost every country in the summit seven. It is by laying the foundation to bring down inflation and by continuing to improve other supply conditions in the market, including emphasis on the need for pay moderation, that we shall secure both growth and sustainable employment.

My right hon. and learned Friend referred to the state of the world economy. Can he say what action the Government are taking to follow up the suggestion of the United States Secretary of the Treasury that there should be a new Bretton Woods-style conference to bring about greater monetary stability and to stimulate world trade?

The suggestion of the United States Treasury Secretary for a new Bretton Woods-style conference is not to be taken literally, for very sensible and practical reasons. There is no purpose in our trying to reassemble a conference of the kind which, at the end of the war, established the present international financial institutions, when they are already in place. We need, of course, to improve and strengthen them. It is that among other things to which I shall be devoting my attention as chairman of the interim committee. One objective—it was among those set out at Bretton Woods—is to move towards a world of greater stability of exchange rates. That, again, is something that I shall have in mind.

The right hon. and learned Gentleman must be aware that in talking of the international trade prospect, which is undoubtedly very gloomy, the pursuit of his own policies in the last three-and-a-half years, and the active advocacy of those policies to other countries, means that he has contributed in a marked degree to the world recession about which he now complains. In recalling what he sees as the record of his Government, is he not aware that GDP in this country has fallen by 5½ per cent. since the second quarter of 1979? Can he think of any other country in the world, let alone a country that has become an oil exporter, that has suffered anything like a comparable disaster in the same period?

The right hon. Gentleman knows that the growth performance of this country over many years has been significantly below that of other countries. It is therefore inevitable that, at a time when growth throughout the world is falling, we should suffer initially more seriously because of our history. I come back to the fact that our growth performance now shows the prospect of moving ahead of other countries. It is virtually universally agreed that until the world succeeds in establishing success against inflation it will not be possible to lay the conditions in which growth can begin to be resumed. It is on that basis that the world outlook is now beginning to improve.

Industrial Competitiveness

8.

asked the Chancellor of the Exchequer when he next intends to meet the Confederation of British Industry to discuss the level of international competitiveness.

My right hon. and learned Friend's next planned meeting with representatives of the CBI is at the meeting of the NEDC on Wednesday 2 February, when it is likely that the discussions will touch on competitiveness.

Has my right hon. and learned Friend noted the CBI's Budget representations, which, not surprisingly, urge more assistance to industry? While there may be a case for assistance to specific areas of industry, for example energy intensive industries, surely the overwhelming argument that my right hon. and learned Friend should be considering is the need for more assistance for income tax payers, particularly by raising the threshold?

I am grateful to my hon. Friend for giving his views on the CBI's representations. A balance has to be made. That will be made by my right hon. and learned Friend in due course when he comes to determine his Budget decisions.

Does not the right hon. and learned Gentleman agree that the dismal economic climate and the low level of demand brought about by the Government's economic policy has made matters infinitely more difficult for British industry in facing international competition?

No. I do not agree. I think quite the reverse. The readiness of the Government to tackle the fundamental and deep-seated problems of the British economy by dealing with inflation and taking action to remove the restraints on industry on the tax side and on the control side is setting in train a situation that will lead us to advance out of recession in far better shape than our competitors.

Is my right hon. and learned Friend aware that some of us hope that the Chancellor will be able not only to raise thresholds but to help the competitiveness of industry, on which the future good health of the country relies?

I accept that this, too, is an important consideration to bear in mind in formulating the Budget.

Does the Minister still believe that industrial recovery is just around the corner?

It is the hon. Gentleman rather than I who is stuck in a record groove. We stand by the forecast that we made in the autumn statement of a modest improvement in the economy in the course of 1983.

Stamp Duty

9.

asked the Chancellor of the Exchequer what was the yield from stamp duty charged on the purchase of dwelling units in 1981–82.

The estimated yield from transfer of residential property in 1981–82 was £315 million. The yield this year is likely to be slightly less because of the increase in the threshold in March 1982.

I appreciate that the thresholds were raised in the last Budget. May I ask my hon. Friend to bear in mind that this impost is a considerable additional burden for many purchasers of properties? Will he promise to communicate to the Chancellor of the Exchequer in good time before 15 March the fact that many people think that it would be fair and reasonable if the raising of the thresholds of this tax became a continuing and annual process?

I shall get my hon. Friend's message across. It has not been the practice to increase the stamp duty threshold each year. House prices have not increased very significantly over the past year. It should be borne in mind that two-thirds of house purchasers do not pay stamp duty.

Does my hon. Friend agree that without indexation the burden increases, particularly for those who have to move to find jobs? At a time of high unemployment, should not the Government increase the threshold?

My right hon. and learned Friend increased it last year. As a result, there are now about the same proportion of home buyers paying stamp duty as there were in 1973. About 90 per cent. of house purchasers get the benefit of the threshold and reduced rate band.

European Community (Budget Refund)

10.

asked the Chancellor of the Exchequer if he will make a statement concerning the current state of negotiations related to United Kingdom refunds from the European Community.

As the House will recall, the European Parliament rejected on 16 December the Council's draft supplementary and amending budget for 1982 making provision for the United Kingdom's basic refund for 1982. The Council has this week considered new budgetary proposals prepared by the Commission and will now be holding informal discussion with the Parliament prior to establishing a new draft supplementary budget for 1983. It is hoped that this can be established in time for formal consideration by the Parliament in the week beginning 7 February.

Does the Minister agree that out of the £13,000 million EC budget, this country contributes about £2,000 million and gets back about £1,000 million? Does he further agree that the discussions he has mentioned in respect of the proposals of the Council for a £400 million additional rebate to this country is subject to the consultation procedure, agreed between the Council and the Assembly in Paris last summer, which requires both of them to agree? Is it not a fact, in that case, that the Assembly has a veto on this sum due to the United Kingdom?

I agree with the hon. Gentleman that the present constitution of the budget between the member partners of the Community is unsatisfactory. That is why Her Majesty's Government have persistently pursued the objective of a long-term solution. The hon. Gentleman will recall that the Parliament shares our ambition in that respect. This is precisely what the Parliament has called upon the Council of Ministers to achieve. The negotiations with the Parliament must now proceed.

I should point out to the hon. Gentleman that the Commission has already lodged in a separate fund in London the payments that were due in respect of the last financial year.

Does my hon. Friend agree that a time limit must be placed on the negotiations? He has said that consultations will take place again in February. Is it not a fact that it is within the power of the European Parliament to drag this out for months? Would that not be quite intolerable and unacceptable to most hon. Members?

I agree with my hon. Friend that it is our purpose to see the conclusion of these negotiations and the payment of the sums agreed in respect of 1982 as soon as possible, but I do not think that we should, at this stage, speculate about actions that might need to be taken in the event of failure to achieve such an agreement in due time.

Has the Minister seen the report in today's Financial Times to the effect that, far from the European Assembly seeking to co-operate with the Council and the United Kingdom Government, the president of the assembly, Mr. Pieter Dankert, is setting his face against a settlement except on wholly unacceptable terms, including no special budget deal with Britain after this year? Given the point made by the hon. Member for Dorset, West (Mr. Spicer) that the assembly can drag this out and veto any attempted deal by the Council, when, instead of talking tough, will the Government act tough and refuse to pay any further money over to the EC until we get a proper deal?

Our right to what the hon. Gentleman describes as "a proper deal" has been recognised by the Council of Ministers. I must reiterate that, whatever the president of the assembly may have said, the assembly has been demanding that there should be a long-term solution to the budget problem. That is precisely the objective of Her Majesty's Government as well. So we share an objective with the Parliament and we want to see that objective achieved as soon as possible.

Manufacturing Output

11.

asked the Chancellor of the Exchequer if he is satisfied with the recent performance of the economy in terms of gross domestic product growth and output by manufacturing industry.

Recent figures, particularly for manufacturing output, confirm that there was a hesitation in the recovery last year, partly reflecting the unexpected length and depth of the world recession. But with lower inflation, improved competitiveness, and the prospect of some growth in the world economy, the outlook for 1983 is for a modest rise in output.

As the economy clearly did not bottom out in April 1981, does my right hon. and learned Friend feel that the latest CBI proposals understate or overstate the need for new resources in the economy?

Contrary to what my hon. Friend says, there has been growth in output in the economy since the second quarter of 1981. Indeed, growth during that period, as I have already said, exceeded that in all seven summit countries except Japan. I shall, of course, consider the representations made by the CBI.

Is there nothing that can pierce the right hon. and learned Gentleman's complacency? Is he not aware that last week's disastrous output figures show that house completions were at their lowest level since 1947, that the output of commercial vehicles was at the lowest level since 1953 and that steel output was lower than in Poland? As the output of manufacturing industry has fallen by 2 per cent. since the right hon. and learned Gentleman last assured me that we were at the end of the recession, would he care to tell the House when he expects us finally to reach the end of the recession?

The hon. Gentleman must take account of the factors that I have already pointed out. There was growth in output between the first three quarters of last year and the first three quarters of the preceding year. During last year there was a 4 per cent. growth in real demand in our economy. There is expected to be a growth in real demand in the economy in the year ahead. The key factor is for British manufacturers and producers to go on improving their competitiveness so that British goods fill a larger rather than a smaller share of that market.

Tourism

13.

asked the Chancellor of the Exchequer if he will introduce further fiscal measures aimed at stimulating the development of tourism in the United Kingdom; and if he will make a statement.

A number of Budget representations on the tourist industry have been received, which are being considered in the normal way.

As the tourist industry provides employment for more than 1·5 million people and in 1981 attracted more than 11 million visitors to Britain, who spent £3 billion in valuable overseas currency, does my hon. Friend agree that there is an extremely strong case in the forthcoming Budget to increase the level of industrial building allowances for hotels to 50 per cent. and to make additional funds available for section 4 aid for approved tourist projects?

Those are among some of the representations that we have received and are being examined in the normal way.

Civil List

14.

asked the Chancellor of the Exchequer if Her Majesty's Government will make it their policy when bringing forward proposals for increases in annuities to recipients on the Civil List for 1983–84, to reduce the proposed amount of each increase by the amount in excess of the rate of inflation by which that annuity was increased in 1982–83.

No; this policy is neither appropriate nor necessary. The policy is to increase annuities to recipients on the Civil List in line with increases in other public service cash limits and this policy will continue for 1983–84. Details will be published when the Supply Estimates are presented to Parliament in March.

Since the right hon. and learned Gentleman lays great stress on the need for restraint in wage and income demands and would prefer ideally a nil increase this year, would it not be a wonderful example for him to set by having a nil increase for these particular well-heeled individuals?

The hon. Gentleman should remember that annuities are paid to members of the royal family largely to meet their official expenses, which includes the wages and salaries of staff necessarily employed. The whole House would prefer to conclude that the economical nature of the arrangements for the support of the monarchy in this country would stand comparison with those for any head of state in any other country in the world.

Prime Minister

Engagements

Ql.

asked the Prime Minister if she will list her official engagements for Thursday 27 January.

This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

To minimise the health hazard through broken pipes in the water supply, does my right hon. Friend agree that, where the strikers have refused to do such repairs, they should be put out to private contract?

Private contractors are certainly one option, but I think it would be far better if the unions were to end this unjustified strike, especially hearing in mind that they have been offered on average £145 a week by an independent mediator to whose appointment they agreed. Most people will feel that with that on offer, it is totally unjustified to put the elderly, children and everyone else in great difficulty with water supplies.

On the issue of arms control, will the Prime Minister tell us what is now her exact position on the zero option? Is it as rigid as it was before Christmas, that it is that or nothing, or has she modified it?

I do not think that the right hon. Gentleman has heard what I have said on a number of occasions. Zero is the very best option, because it would mean none of a whole class of nuclear weapons on either side. There is no substitute for that as the best option. But right back at the time of the NATO double track decision in December 1979 we agreed that we should have to have equal numbers on both sides, and President Reagan came in with the zero option later. So if we cannot get zero we are back to equal numbers on both sides, but equal numbers must be carefully counted. There must be no bogus counting.

Has my right hon. Friend yet had an opportunity to speak to the genuine representatives of the fishing industry to establish their reaction to the common fisheries agreement, which was reached in Brussels earlier this week?

I understand that the three main organisations of the fishing industry are very well pleased with the excellent arrangements reached by my right hon. Friend the Minister of Agriculture, Fisheries and Food and my right hon. Friend the Minister of State this week. It is very good news that, after seven years, we have managed to reach a common fisheries policy and I hope that one day it will be followed by a proper budget solution as well.

Has the right hon. Lady had time today to study the answer that was given to my hon. Friend the Member for Stockport, North (Mr. Bennett) to the effect that, according to the latest figures, there are 1,700,000 children in families forced to live on supplementary benefit, on the poverty line? Does she not agree that something must be done immediately to deal with this problem? What will she do in the Budget?

Really, the right hon. Gentleman knows that he has to wait for any pronouncements in the Budget. That has been so under all Governments. He equally knows that, as under this Government, so under his Government, the numbers of children of the unemployed on social security benefit increased, and increased substantially. The answer is not so much what we can do on social security, where our record is that social security benefits have in fact kept pace with inflation—[Interruption.] On social security. I was very careful in what I said. I said it precisely, if right hon. and hon. Gentlemen would listen carefully. We have to try to get industry and commerce in a better state so that they can compete and can sell goods the world over.

Does the right hon. Lady accept that the terrible figure of 1,700,000 represents nearly a doubling of the figure since she came into office and became responsible for these matters? Apart from the increasing unemployment, which, of course, has contributed to the total, the other factors in reducing the standard of life, especially of children who have to live in these conditions, are the cut in the real value of child benefit and the cut in the real value of unemployment benefit. I am asking the right hon. Lady to say that something will be done in the next Budget to help some of the poorest people.

The standard of social security payments is about double what it was in real terms when it was introduced in 1948.

Q2.

asked the Prime Minister if she will list her official engagements for Thursday 27 January.

In view of the talks that are taking place in Geneva and the fact that nuclear disarmament is the most important item on the world agenda, does not my right hon. Friend find it curious that someone who aspires to the prime ministership of one of the most important countries within the North Atlantic Alliance found it possible to go to Moscow recently but has not found it convenient to visit Washington for the past 28 years?

I think that all previous Leaders of the Opposition have realised the importance of the relationship between Britain and the United States. I hope that the Leader of the Opposition, holding a statutory office as he does, will soon repair the omission.

Will the right hon. Lady take some time out of her busy schedule to communicate to the President of the Irish Republic the concern felt by the House that the British embassy was bugged by, as I understand it, a previous coalition Administration?

Inquiries are being made and will be made. I am not quite certain what the facts are. I have read the reports.

In view of the action that the European Parliament is taking to deny the United Kingdom the receipt of refunds from its budget contributions, will my right hon. Friend today consider netting-off, in the sense of withholding our own conributions to the European Community?

I share my right hon. Friend's concern about the action of the European Parliament in that it has said that we cannot have our 1982 refunds in full unless a lasting solution is reached for the 1983 refunds.

We, too, would like to have a lasting solution to the 1983 refunds and we have been trying to find one, but the matter is not wholly within our power to bring about. We hope, therefore, that both matters will be resolved—both the 1982 refunds and a lasting solution from 1983 onwards—by negotiation so that there can be no question of withholding. I shall be raising the whole matter of the budget, which is extremely important to this country and to the health of the Community, at the European Council.

Has the right hon. Lady approved the involvement of British banks in raising loans for Argentina, especially when Argentina's indebtedness was partly due to the purchase of arms that were used against our people in the Falklands? If she does approve of it, does this position accord with the stand that she took in the House yesterday?

I understand the hon. Gentleman's concern. I believe that there have been questions about the matter to my right hon. and learned Friend the Chancellor of the Exchequer. As the hon. Gentleman will know, Argentina's indebtedness is part of the indebtedness of the Latin American countries. It is part of the problem of the present world banking crisis. It is being resolved through the IMF—

We are part of the IMF and it is being resolved through the IMF by a programme agreed with the IMF. Will the hon. Gentleman please realise that I understand why he is worried, and so am I? Equally, I must say to him that it is not in our interests that there should be defaults either on capital or interest on any of the debts of Latin America.

Does the right hon. Lady's reply mean that, while she is not prepared to talk to anybody in Argentina, she is prepared to join others in lending Argentina money?

I do not think so. I think that the right hon. Gentleman must take fully into account what I have said. Argentina now has an agreement through the IMF and it is not in the interests of the banking system that there should be a default with the situation as it is. In the sense that British banks are taking part, they are doing so because it is in the interests of this country and of the Western financial system.

Bearing in mind the hostility that was expressed on both sides of the House about this matter a few minutes ago, will the right hon. Lady come to the House again and reverse this policy? Will she then tell us that we shall stop any loans from this country until hostilities have ceased?

I share such feelings—right hon. and hon. Members must accept that—but it is not in the interests of the financial system of this country or the West—

—that there should be default on either interest or on capital. If there were, the consequences would be very serious. The money is not lent for armaments. It is lent on condition that Argentina follows an economic policy that has been approved by the IMF. Ultimately, it is in the interests of this country that we subscribe to the IMF.

If we lend money to Argentina, what control does the right hon. Lady have over how it spends that money?

I accept that if one lends money for one purpose it releases money for another purpose—[Interruption.]

It is not in the interests of this country to bring about a collapse of any bank or banks. If the right hon. Gentleman wished to pursue that policy, he would have to be responsible for the disastrous consequences that would ensue.

Will my right hon. Friend welcome the statement made by the general manager of Abbey National that it will be holding its interest rates for at least the next six months?

I do indeed. I thought that it was excellent news, together with some of the other services that the Abbey National is thinking of offering.

Q3.

asked the Prime Minister if she will list her official engagements for 27 January.

I refer the hon. Gentleman to the reply that I gave some moments ago.

Would the Prime Minister care to visit the garden gate at Flint End, Durrants Lane, Berkhampstead to extricate the Secretary of State for Employment from his conflict with the local building industry?

Reverting to what we were talking about earlier, will my right hon. Friend confirm that Her Majesty's Government are prepared to negotiate with Argentina on everything except the question of sovereignty of the Falkland Islands?

I confirm what I said yesterday about that. We would wish to negotiate on matters of trade, but Argentina refused to do so and that, of course, we must accept.

Will the right hon. Lady take time off today to tell her Secretary of State for Employment to stop his ill-informed and frivolous intervention in the democratic machinery of my union, the General and Municipal Workers Union? Is she aware that the rule on ballots quoted by the Secretary of State refers to branch action, which does not yet have the endorsement of the national executive? Is she aware that the executive introduced a ballot in which 80 per cent. of the members participated and that what is normally a responsible body of men voted 3:1 in favour of a strike? Is it not time that the Government stopped playing party politics with the water dispute and got genuine negotiations going?

I support my right hon. Friend the Secretary of State for Employment in what he said. I understand that the hon. Member for Chester-le-Street (Mr. Radice) might be an official of that union. I am not sure, because he did not say so.

Order. I shall take the hon. Gentleman's point of order now, but he has only to wait a moment until the Prime Minister sits down, when I shall call him to make his point of order.

The hon. Gentleman knows that the unions agreed to the appointment of the mediator. He has now pronounced what he is prepared to recommend what amounts on average to £145 a week. That is an average. Some water workers will get more and, of course, some will get less. That average offer of £145 a week was made by the mediator whose appointment the unions agreed. Under those circumstances, I hope that the hon. Gentleman will agree that this strike and its continuation is unjustified.

On a point of order, Mr. Speaker. I said quite plainly that I was a member of the General and Municipal Workers Union. I said that it was my union.

On a point of order, Mr. Speaker. Out of 36 questions tabled to the Prime Minister today we have reached only No. 3. We are all interested in what the Leader of the Opposition has to say, hut I think that he rose six times today. It would help Back Benchers on both sides of the House if you, Mr. Speaker, imposed some restraint on the number of times that he asked questions.

On a point of order, Mr. Speaker. I am aware that you have considerable difficulty when the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) rises during Prime Minister's Question Time, because as he is the leader of a so-called political party you have some obligation to call him. However, would it be possible for you to have a quiet word with him and suggest that today, and certainly since Christmas, he has been abusing his position in that respect?

Order. I am accustomed to points of order about hon. Members being called to speak, but not about stopping them being called.

Haemodialysis (Contingency Plans)

3.32 pm

(by private notice) asked the Secretary of State for Social Services what contingency plans he has made for the continuation of haemodialysis in hospital renal units in the event of diminution of water supplies.

It is agreed by both sides in this dispute that every effort should be made to avoid industrial action which would prejudice public health and public safety. We do not at this stage, therefore, expect there to be any prolonged interruption in water supplies to renal units. Health authorities have, however, been advised to make contingency plans for hospitals generally which might include transfer of patients to hospitals which are least likely to be affected.

May I turn the Minister's attention away from the emphasis on kidney machines in hospitals to the successful policy that successive Administrations have carried out for dialysis in the home? Is he aware that, in the event of patients at home being unable to continue using their kidney machines, they will either die or have to be transferred to a renal unit?

Therefore, has the hon. and learned Member made contingency plans for district health authorities to inform water authorities where those paients' homes are? Secondly, has he laid on the necessary extra ambulance service? Thirdly, is he aware that already overstretched renal departments are short of nursing and technical staff and will be forced to maintain a 24-hour dialysis programme? Will he take contingency measures to increase the nursing provision in renal units that may be called upon to accept many renal failures that have previously been dealt with successfully by home haemodialysis?

I am glad to say that both health and water authorities have updated lists of patients on home dialysis. If there is any interruption to supplies to the homes of such people, it will be treated as an emergency. I am also glad to say that there have already been a couple of instances where, I understand, water supplies have been restored to those districts where it is known that a home dialysis patient is living. If there were an interruption to water supplies, it would be necessary to transfer patients to hospital. I am satisfied that hospital renal units can cope with any foreseeable event unless there is a prolonged and general interruption of the water supply. I am glad to say that both sides in the dispute agree that such cases should be treated as an emergency. That arrangement has worked so far.

Is the Minister satisfied that water authorities can provide the required number of water tankers in an emergency? Is he aware that I am given to understand that Thames water authority is able to supply one hospital in my area that has 13 units but that it will not be able to supply other areas in London in which there are some 14 hospitals? Does he therefore agree that the urgency is to make contingency plans to provide the necessary water tankers?

The unions have undertaken to meet those emergency needs. So far, I have no reason to believe that any grave crisis has occurred anywhere. Hospitals are treated as emergency cases, but most of them can cope with a short interruption. They may have to transfer patients or restrict admissions if supplies are interrupted for more than 24 hours. I repeat that both sides in the dispute agree that emergency requirements should be met and that there should be no threat to public health.

Business Of The House

3.36 pm

Will the Leader of the House state the business for next week?

The Lord President of the Council and Leader of the House of Commons
(Mr. John Biffen)

Yes, Sir. The business for next week will be as follows:

MONDAY 31 JANUARY—There will be a debate on a motion on the fishing industry.

The relevant orders and documents will appear in the Official Report. Motion on EEC Document 5326/82 on insurance against civil liability in respect of the use of motor vehicles.

TUESDAY 1 FEBRUARY—Remaining stages of the Transport Bill (Allotted Day).

WEDNESDAY 2 FEBRUARY—There will be a debate until about seven o'clock on the youth training scheme, and afterwards a debate on trade.

The House will be asked to agree the Civil and Defence Votes on Account and the Winter Supplementary Estimates.

Proceedings on the Representation of the People Bill [Lords], which is a consolidation measure.

THURSDAY 3 FEBRUARY—Opposition day (6th Allotted Day). There will be a debate on an Opposition motion on the report of the Serpell committee on railway finances.

Motion relating to the Supply of Services (Exclusion of Implied Terms) Order.

FRIDAY 4 FEBRUARY—Private Members' Bills.

MONDAY 7 FEBRUARY—Proceedings on the Consolidated Fund Bill.

May I put a few matters to the right hon. Gentleman that arise out of the replies given to questions a few minutes ago? First, the Prime Minister said that there was British participation in loans to Argentina. That gives rise to anxiety on both sides of the House, as was shown by the questions that were asked a few minutes before the Prime Minister came into the Chamber today, especially in the light of undertakings that she gave before Christmas.

I hope that the Leader of the House will ensure that the Prime Minister makes a further statement in the house next week about that matter. It obviously gives rise to considerable anxiety, especially when she is saying that no talks must take place until Argentina properly recognises the end to hostilities. There should be a statement on the subject.

The right hon. Member for Taunton (Mr. du Cann) mentioned the impasse with regard to the EC budget. I hope that the House will take note of what he said, because it is what the Opposition have been urging for a long time. If we are to be taken seriously on the subject, the Government should make a statemet about how they will deal with the problem. I hope that a statement will soon be made on that subject.

There has been a breakdown in the talks between Belize and Guatemala. At the same time, President Reagan is insisting that he will continue to send arms to Guatemala. There is considerable concern in the Government of Belize. We have British troops there, partly to guarantee the integrity of Belize. We all know that the situation has been delicate for many months, indeed several years. In the light of that breakdown, the Government should make an early statement.

As we have often suggested and urged before, there should be a full day's debate, or perhaps a longer debate, on disarmament. The discussions open in Geneva today. There is widespread interest and concern throughout the House and the country on the subject. I hope that the week after next there will be a major debate in the House on disarmament so that hon. Members can put their views.

I shall ensure that the right hon. Gentleman's remarks on loans to Argentina are drawn to the attention of my right hon. Friend the Prime Minister.

As to how the House should be best informed of the continued discussions on the EC budget and the British contribution, my right hon. and learned Friend the Chancellor of the Exchequer will of course be anxious to keep the House informed by statement for a host of reasons, some of which were touched on by my right hon. Friend the Member for Taunton (Mr. du Cann).

I shall draw to the attention of my right hon. Friend the Foreign Secretary the interest that the right hon. Gentleman has evinced in our relations with Belize and the relationship between Belize and Guatemala. I am certain that that interest is widely held in the House.

Future debates on disarmament take on topicality by virtue of the resumption of the Geneva talks. I cannot promise that there will be a debate next week. As to thereafter, that is a matter that we can discuss. However, as I have said hitherto, that subject need not be debated solely in Government time.

Has my right hon. Friend noted that on Thursday next I propose to devote the Adjournment debate to the important question of overseas student fees? As the Government are belatedly coming to important decisions on the subject, can my right hon. Friend arrange for Ministers from each of the Departments concerned—the Department of Trade, the Foreign Office and the Department of Education and Science—to be present so that they may have the benefit of my advice and that of other hon. Members who will take part in the debate?

I congratulate my hon. Friend on his good fortune in having the Adjournment debate on Thursday. He is a most formidable advocate. I shall ensure that his message is passed on to the quarters that he mentioned.

Bearing in mind the despondency, irritation and demoralisation among the people of Lanarkshire and Scotland as a whole as a result of the statements that have been made by the Secretary of State for Industry and the chairman of the British Steel Corporation about Ravenscraig, will the corporate plan for the steel industry, which is vital to the people of Scotland, be presented next week, with a view to ensuring that the steel industry in our country continues?

I appreciate that the hon. Gentleman speaks with great feeling in the light of the situation affecting his constituency, which also touches steel manufacturing areas throughout the United Kingdom. The British Steel Corporation's corporate plan for 1983–86 has still to be received by my right hon. Friend the Secretary of State for Industry. At the moment I cannot go further than that.

Can the Leader of the House tell us whether the Home Secretary will lay before the House next week the immigration rules in their revised form, and may we expect an early debate on the subject?

No, I cannot confirm that. However, I dare say that all will be revealed before too long.

In view of our exchanges just before Christmas, may we have a statement next week or a paper on the constitutional questions raised by the conduct of the Northern Ireland Assembly and its Committees?

I acknowledge at once the importance of the point that my hon. Friend has raised. I shall pass on his anxieties to my right hon. Friend the Secretary of State for Northern Ireland.

Will the Winter Supplementary Estimates fall to be considered under the new procedure recommended by the Select Committee on Procedure (Finance) and approved by the House last Session? If so, shall we receive any guidance from the Liaison Committee on how the matter should be handled?

I am grateful to the hon. Gentleman. It might be helpful if the House were aware that it was agreed that the Liaison Committee should decide, following consultation, whether it would be appropriate to have an Estimates day during which certain Estimates could be debated. I am informed that the Liaison Committee decided against recommending any of the Winter Supplementary Estimates for debate, but that gives no guide for the future.

The Leader of the House will have heard the debate yesterday and will have been aware of the exchanges between my hon. Friend the Member for Harlow (Mr. Newens) and me, on the one hand, and the Prime Minister, on the other, on the supply of arms by this country at this very moment to Argentina, although Argentina has not ceased hostilities. Can he arrange for the Secretary of State for Defence to make a statement tomorrow on that aspect? It is a worrying matter not only for us but for the country.

I shall draw the attention of my right hon. Friend the Secretary of State to the right hon. Gentleman's point. Perhaps the matter could proceed through the usual channels.

Order. Before I call anyone else, I should like to say to the hon. Member for Sheffield, Heeley (Mr. Hooley) that on Monday I hope to make a statement about the way in which we shall conduct our debates on the Consolidated Fund under the new system.

Has my right hon. Friend had an opportunity to notice that on Monday 7 February seven questions are tabled to the Secretary of State for Wales, to which nearly 40 minutes have been allocated for answer, one to my hon. Friend the Member for Wokingham (Sir W. van Straubenzee), who represents the Church Commissioners, for which five minutes is allowed, and 11 to the Minister for the Arts, for which there is a maximum of 10 minutes? Bearing in mind that Wales is represented at most by 36 Members, who seem to have little interest in Question Time, with due deference to you, Mr. Speaker, and all Welsh Members, and that London has 92 Members, will my right hon. Friend invite the Welsh Members to allocate from time to time a period of theirs to London Members for a London Question Time?

Not without much clearer evidence of an overwhelming desire for such a dangerous innovation.

Order. I propose to call the hon. Members who have been rising in their places. I hope that they will be brief and to the point.

Although the debate on youth training is welcome and long overdue, it is only part of a wide range of matters covered by the Government's White Paper on the new training initiative. When my right hon. Friend the Leader of the Opposition pressed for a debate a few weeks ago, he specifically asked for a debate on the new training initiative. Will it be permissible on Wednesday to have a wider debate than a debate within the narrow confines of the youth training scheme, important as it is, so that we can raise some of the other important matters?

I can best help the right hon. Gentleman by saying that the debate arises on the motion for the Adjournment. The interpretation thereafter must be for the Chair.

Has the attention of the Leader of the House been drawn to early-day motion 234?

[That this House, bearing in mind the Order relating to the provision of financial assistance to people who have purchased Airey-type industrialised houses, and who are now faced with considerable expense due to premature deterioration, which received the approval of this House on Monday 24th January, calls upon Her Majesty's Government, as a matter of urgency and impartiality, to extend the provisions of this Order to cover people who have bought housing accommodation from their local authority built by other industrialised systems, and to local authorities dealing with this problem in the properties that remain in their control.]

The motion refers to industrialised housing. It was tabled by my hon Friend the Member for Leeds, West (Mr. Dean) and other of my right hon. and hon. Friends. Is the right hon. Gentleman aware that if he can persuade the Secretary of State for the Environment to bring in a new order covering all those who have purchased industrialised housing he will have the support of many Opposition Members?

As the hon. Gentleman appreciates, this matter was debated on Monday and an Adjournment debate will take place early next week. I shall draw his remarks to the attention of my right hon. Friend the Secretary of State for the Environment.

Has the Leader of the House had an opportunity to see early-day motion 244 which calls for an inquiry to be set up into the allegation made in the report "Poor Law" about "Operation Major" in Oxford on 2 September?

[That this House, gravely concerned at the allegations made in the report "Poor Law" into "Operation Major" inOxford on 2nd September 1982, calls upon Her Majesty's Government as a matter of urgency to carry out an enquiry into these allegations.]

Would the right hon. Gentleman arrange for a Minister to make a statement to the House or for the motion to be debated at an early opportunity since there are serious allegations about the way in which the police and the social security authorities behaved on that occasion?

I am unable to promise any Government time for an early debate on this topic. It is suitable for the private enterprise initiative of an Adjournment debate.

Has the right hon. Gentleman seen early day motion 240, signed by 102 Members?

[That this House expresses serious concern over recently-announced closures in the United Kingdom paper industry, particularly the closure of mills in the Trinity, Wiggins Teape and Thames Board Mills Groups; understands that the underlying reasons behind these closures of high energy costs and heavy duty oil tax, in comparison to foreign competitors, cheap imports being the dumped surplus capacity of the industry's competitors, are well known to Government and have been emphasised by many honourable and Right honourable Members in debate and at Question Time; and therefore urges the Prime Minister to give Cabinet consideration to a programme of constructive intervention to give support and protection to the British papermaking industry before its total eclipe by unfair competition.]

It draws attention to the dire state of the paper industry. There have been 1,000 redundancies in my constituency and 200 in Bury. The blame is put on the economic and energy policies of the Government. Will the right hon. Gentleman arrange for an early debate on this subject so that policies can be formulated to save this vital industry before it is too late?

I cannot speedily offer the hon. Gentleman the kind of debate he requests in Government time. The question of trade is intimately affected.

I am glad that the hon. Gentleman confirms that. In that case, he might be able to make his speech on Wednesday.

Is the Leader of the House aware that it is essential that a statement should be made on the involvement of British banks in loans to the junta in Argentina, bearing in mind the unsatisfactory reply which was given a few moments ago by the Prime Minister? Is he also aware that many people in this country are undoubtedly coming to the view that to give loans to banks in Argentina that could well be used to enable Argentina to buy weapons is, in many respects, betraying the dead who fought against the aggression committed by the junta in the first place?

I do not propose to take this opportunity to debate the matter with the hon. Gentleman. Last week we had an economic debate, a great deal of which was devoted to requesting the Chancellor of the Exchequer to be part of a collective Western initiative to secure appropriate credit terms to enable Third world economies to survive.

As to the hon. Gentleman's first request, I can say no more than I have already said to the Leader of the Opposition.

With regard to Thursday's business on the Opposition day, the Leader of the House will recall that the Secretary of State for Transport was asked for a further statement on the Serpell report following its introduction. I expect the Secretary of State to have a full answer to early-day motion 227.

[That this House condemns the decision to spend more than £500,000 on consultants to the Serpell Committee; and is especially concerned that the members of the committee had a financial interest in the consultants, contrary to rules governing the tendering for, and acceptance of, such contracts.]

The motion draws attention to the breach of the accountants' rules. Many people feel a sense of outrage about the allocation of the subcontract work for the Serpell report. Two members of the Serpell committee have been lining their pockets with massive fees, amounting to more than £½ million for consultancies in which they had a direct financial interest. The House expects a full and comprehensive explanation.

I have every confidence that my right hon. Friend the Secretary of State for Transport will deal comprehensively with the hon. Gentleman's point. Alas, I do not have the same confidence as to his satisfaction.

The Leader of the House said that he would have a word with the Prime Minister about her activities in lending money to the Argentine after the 1,000 deaths in the Falklands war.

In her closing remarks last night the right hon. Lady suggested that those who were calling for talks with the Argentine were confined to Opposition Members. However, her very good friend, Ronnie Reagan, has suggested on several occasions that she should open talks with Argentine. Would the Leader of the House find out whether the Prime Minister telephoned President Reagan to ask about that?

As my right hon. Friend the Prime Minister has not had the advantage of hearing the hon. Gentleman's remarks, I will make sure that they are passed to her.

Does the Leader of the House recall that on a number of occasions the right hon. Member for Taunton (Mr. du Cann) has urged that there should be a debate on the Civil Service? In view of the decline in morale in the service, will he arrange for a debate on this important subject?

I am afraid that I cannot now be more forthcoming in response to the charming blandishments of the hon. Gentleman than I have been on previous occasions. It is an important topic, but there is no early prospect of Government time to debate it.

I am pleased that the Leader of the Opposition and hon. Members on both sides of the House have joined in the call for a statement to be made on the question of loans to Argentina, especially as the Prime Minister, in an answer on 20 December, gave a guarantee on behalf of the Government that the Bank of England would underpin any defaults. That was one of the conditions required by the people who were engaged in those activities.

Will the right hon. Gentleman also bear in mind that an answer is required on the question of the Inland Revenue changes in arrangements for offsetting tax for those banks and financial institutions that are engaged in activities with countries, including Argentina, that are rescheduling their debts? If it is right for British banks to get tax offsets as a result of those loans, it is equally right for many people in this country to get tax relief, including widows who under this Government are paying tax on less than £37 a week.

I note with interest that the hon. Gentleman feels that he has been the pioneer of the development of opposition on this topic, and that rather late in the day he has been joined by the Leader of the Opposition. I am unable to help him further than to refer him to the remarks I made to his right hon. Friend some moments ago. I shall refer the remarks and requests of the Leader of the Opposition to my right hon. Friend the Prime Minister.

Should the Prime Minister be less than anxious to rush into the House to make a statement justifying loans to the Argentine junta which allow it to buy arms from the West, what other opportunities can the right hon. Gentleman suggest are open to us to raise this matter in the near future?

I suggest to the hon. Gentleman, who has been a Member of the House for a long time, that his tongue was truly in his cheek when he made that comment. There were opportunities last week when my right hon. and learned Friend the Chancellor of the Exchequer took part in the debate on economic affairs. It was represented in the most direct fashion that this country had an obligation, collectively with its Western partners, to ensure that credit was arranged for Third world countries that prevented the impending collapse of the trading economies of those countries, thus endangering employment in the Western world.

There are endless opportunities for the right hon. Gentleman to raise this matter and doubtless different nuances of the argument will be deployed on different occasions. No doubt that will also characterise the exchanges that involve my right hon. Friend the Prime Minister.

[The following statutory instruments and European Community documents are relevant to the debate on the fishing industry on Monday 27 January:

Specified Sea Fish (Prohibition of Fishing and Fishing Methods) (Variation) (No. 5) Order 1982 (SI 1982 No. 1845),

Sea Fish (Specified Waters of Member States) (Prohibition of Fishing) Order 1982 (SI 1982 No. 1848),

Sea Fish (Specified United Kingdom Waters) (Prohibition of Fishing) Order 1982 (SI 1982 No. 1849),

Demersal Fish (Specified Northern Waters) Licensing Order 1982 (SI 1982 No. 1850),

Specified Sea Fish (United Kingdom Fishing Boats) (Prohibition of Fishing) Order 1983 (SI 1983 No. 14), Specified Sea Fish (United Kingdom Waters) (Prohibition of Fishing) Order 1983 (SI 1983 No. 15).

(Un-numbered)

Commission's compromise proposals tabled on 26 October 1982.

Doc. No. 10372182

Fisheries Conservation: beam trawling

Doc. No. 10391/82

Community Tariff quotas for 1983

see 1st Report of European Legislation Committee, Session 1982–83, HC 34-i, paras. 2, 3 and 4 respectively

(Un-numbered)

Amendments to Commission proposals on Common Fisheries Policy

(Un-numbered)

Commission Declaration of 21 December 1982

see 6th Report of European Legislation Committee, Session 1982–83, HC 34-vi, paras. 1 and 2 respectively.]

[Debate on 31 January on Motor Insurance (Docs. Nos. 9747/80 and 5326/82)

Relevant Reports of the European Legislation Committee

23rd Report Session 1980–81—HC 32-xxiii para. 1

18th Report Session 1981–82—HC 21-xviii para. 2

7th Report Session 1982–83—HC 34-vii para. 1]

Ballot For Notices Of Motions For Monday 14 February

Members successful in the ballot were:

  • Sir Brandon Rhys Williams
  • Mr. T. H. H. Skeet
  • Mr. Ray Mawby

Orders Of The Day

Pig Industry Levy Bill

Order for Second Reading read.

4 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food
(Mr. Alick Buchanan-Smith)

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

In view of the importance of this measure, I trust that neither the House nor the Bill will be delayed too much. The House is well aware of the broad terms of the background to this modest but important measure. It has been introduced in response to the grave concern of the pig industry about the spread of Aujeszky's disease. Anxiety has been expressed in the House over a number of years. The genesis of the Bill goes back to an Adjournment debate initiated by my hon. Friend the Member for Eye (Mr. Gummer). Although my hon. Friend cannot speak on the Bill as he now holds office in the Government, I am sure that he has considerable satisfaction in that the ideas sparked off in that Adjournment debate are now reaching legislative fruition. No one has been more persistent or patient than my hon. Friend in ensuring that such a measure reaches the statute book.

The Bill's detailed provisions relate to powers to be given to the Meat and Livestock Commission to raise a levy, the proceeds of which will be used to pay compensation and other costs arising from the initiation of a control and eradication scheme in respect of Aujeszky's disease. The House knows the background to this problem. This disease is a viral infection that primarily affects pigs. Clinical signs are usually most apparent in suckling pigs and pregnant sows. Piglets almost invariably die from the infection.

Spread of the disease is mainly by the movement of infected pigs. It exists in all other European countries and most other parts of the world. It has been known to exist in Great Britain since 1953 and has been of greatest concern in areas where our pig population is concentrated. That is true of the eastern counties, part of which my hon. Friend the Member for Eye represents, and of other areas, particularly in Yorkshire. My hon. Friend the Member for Howden (Sir P. Bryan) has also been particularly active in seeking, on behalf of the industry and his constituents, measures to deal with the disease.

Over the past four or five years, pig producers have become increasingly concerned that steps should be taken to deal with the disease on what might be regarded as traditional animal health lines by means of a slaughter policy. If it is to be eliminated, it is essential that the slaughter of infected herds is followed by disinfection. Vaccination, which is practised on a wide scale in other countries, cannot be considered as an option.

The possibility of a control and eradication policy has been under discussion for some years. A major difficulty has been that under the animal health legislation my right hon. Friend the Minister of Agriculture, Fisheries and Food is bound to pay compensation for animals slaughtered for animal health purposes. Additional Government funds are not available to meet such expenditure in the case of Aujeszky's disease.

The Government have made it clear that if producers registered enough support for an eradication policy and were prepared themselves to provide the funds for the payment of compensation, further consideration could be given to an eradication programme. To determine their attitude, a poll of producers was undertaken by the Ministry in 1981, but the results did not meet the agreed criteria for proceeding. In the meantime, we introduced, with producer support, further subordinate legislation to control the movement of pigs from herds where clinical disease had been confirmed. That legislation continues to apply.

In the light of further discussions last autumn among my right hon. Friend, the presidents of the National Farmers Unions and other producers' organisations, it was agreed that there should be a further poll of pig producers to determine whether they wished to proceed with a programme for the eradication of Aujeszky's disease, with the compensation and other costs being met by a statutory levy on pig producers. My right hon. Friend made it clear that he had no hesitation in declaring himself in favour of the proposals, which represented a real opportunity to rid the country of this troublesome disease.

In the event, the poll of 26,000 producers, owning 7½ million pigs, showed that 86 per cent. of those who replied, who own more than 5½ million pigs, were in favour of an eradication scheme with compensation being met by a levy on producers. As the owners of 75 per cent. of the total pig population are in favour of proceeding in this way, the Government have decided to make the necessary arrangements. I am grateful for the expressions of support that we have already received from both the official Opposition and other parties that, given this level of producer support, we should try to deal with the disease. That demonstrates the wide agreement among the interests concerned and the political parties that we should proceed to do so.

That, then, is the genesis of the Bill. Its specific purpose is to provide the mechanisms for funding the agreed eradication programme on a basis acceptable to those who voted for the programme. The most practial way for pig producers to finance compensation is by using that section of the Agriculture Act 1967 which enables the Meat and Livestock Commission to submit to agriculture Ministers a scheme for the imposition of charges on producers for various defined purposes. The Bill extends this power to enable the commission to raise a levy specifically to meet the costs incurred by the Minister as a consequence of exercising his powers under the Animal Health Act 1981 in relation to Aujeszky's disease and for the purpose of making payments in respect of consequential losses suffered by owners of pigs which are slaughtered.

The poll document sent to producers explained that compensation payable to owners of slaughtered herds would be a maximum of £300 for any one pig slaughtered. In addition, the producers' organisations proposed to compensate owners for the costs arising from disruption of their business on the basis of 20 per cent. of the compensation paid for the slaughter of breeding stock, weaners and fattening pigs which are part of a breeder-feeder operation on the same premises; and 5 per cent. of compensation for the slaughter of fattening pigs on separate premises, as the latter can return to full production much more quickly.

I emphasise that the Government cannot depart from the long-established rule, applied in compensation for the slaughter of animals for disease control reasons, that no consequential losses can be borne from public funds. It is significant that the industry has been prepared to take the responsibility for consequential losses.

On the other hand, I should also make it clear that it is the Government's intention to support the eradication policy fully through the veterinary service and the facilities of the agriculture Departments. The cost of Ministry staff involved, including work which the veterinary service undertakes in its professional capacity, will be borne by the Ministry of Agriculture and the other Departments responsible on the departmental Votes. That is important for the industry, because this is a partnership operation. The costs of administration, staff and the veterinary services will be borne by us out of our departmental Votes, and we hope to be able to contain that expenditure within existing provisions.

Producers will be responsible for meeting through the levy compensation costs and the relatively small additional costs arising from the employment of valuers to determine the compensation due to them, the employment of slaughterers when pigs must be killed and the costs of feeding stuffs that must be destroyed.

Although it is difficult to forecast the number of infected herds that must be tackled, the best estimate that we can make is that about 250 herds will have to be slaughtered. Most of the work would be undertaken during the first year of the campaign, subject of course to demands on veterinary manpower that may arise if there are outbreaks of other important diseases.

It is expected that the Meat and Livestock Commission levy on producers in the first year of operation would be 30p per pig slaughtered or exported live. That is expected to yield £4 million. Clearly, the levy for future years must be decided in the light of the progress made, because the first years of the scheme are likely to be the most critical. To facilitate the financial arrangements, the industry is arranging to set up a limited company that will become the body responsible for receiving the proceeds of the Meat and Livestock Commission levy for reimbursing my right hon. Friend for the costs that he will incur in compensation for slaughter, and for paying directly to farmers the consequential loss compensation that I have already mentioned. It is obvious that the proceeds of the levy will not be adequate in the initial phase of the campaign to meet the costs that arise. Therefore, the industry is making arrangements for the company to raise funds to meet the excess of expenditure over income during that period. As a safeguard, disbursements from the Meat and Livestock Commission to the company would be under ministerial direction.

I make no apology for dealing in slightly greater detail with the provisions of the Bill than one would normally do on Second Reading, because I hope that the House will facilitate the further stages of the Bill this afternoon. Therefore, I wish to anticipate, with the indulgence of the House, points that might arise later.

Clause 1 provides for the raising of the levy by the Meat and Livestock Commission, the proceeds of which will be used to reimburse the Minister of Agriculture for the compensation that he has paid to owners of slaughtered herds, and to compensate owners for consequential losses. The levy will be the subject of a scheme made by the commission and confirmed by statutory instrument. The new levy, as distinct from existing levies raised under the Agriculture Act 1967, would be raised only from the pig sector. The cattle and sheep sectors will be unaffected. It is important that only those who will benefit directly from the eradication policy should contribute towards the measures.

Clause 1 also provides the mechanism by which the commission may transfer levy funds to any other person and by which that other person may make payments for the purposes of the levy scheme. I have already explained to the House the arrangements that the industry is making, so the reasons for this should be clear.

The reference to "any other person" relates to disruption payments. Will my right hon. Friend clarify the powers of the Ministry vis-a-vis "any other person" and the discretion available to that person?

As my hon. Friend realises, during the first year of the scheme, when the producers intend to set up a company to raise the necessary funds to meet the higher expenses, we must have the power to enable us to instruct other persons to do that. At the same time we must build into the scheme arrangements to ensure that no costs of compensation fall permanently on the Government. That is why we must set up a limited company capable not only of receiving and disbursing the levy funds but of raising sufficient finance in the early stages of the scheme by way of a commercial loan. We must have that power, and safeguards must be built into those powers to ensure that there is proper control and answerability.

I am grateful to my right hon. Friend, but I am still not clear how the Minister intends to give instructions to a limited company. Does he intend to be represented on the board or will the articles of association be drawn in such a way that the company may not be eligible for registration?

I shall continue with the details of the Bill now, but if the House is agreeable I hope to speak again at the end of the debate, when I will be happy to answer my hon. Friend's point. The provision is somewhat unusual, so my hon. Friend is right to raise the point.

As to the collection of the levy, I take it that the levy would be made on all fat pigs. Does it affect fat sows as well?

It might be helpful if I could, with the leave of the House, deal with hon. Members' detailed points at the end of the debate.

Clause 2 enables the Minister to exercise control—this may deal with some of the points raised by my hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton)—over the transfer of funds from the commission to the company. While there is no doubt that this cooperative venture, if I may call it that, has the wholehearted commitment of all involved, it is necessary to ensure that the formal arrangements for handling funds are appropriate for moneys that are raised by statutory levy. The provisions of the clause enable us to assure ourselves and to satisfy Parliament that that is so. However, I shall be happy to return to the point later in the debate to clarify any points that my hon. Friend wishes to raise.

Clause 2 also provides for the application of any surplus that may arise in ways that are beneficial to the industry that provided the funds. It is right that any surpluses that may be available—we do not know that they will be available, but I shall be delighted if they are and to know that our budgeting for the scheme may have turned out to be optimistic rather than pessimistic—should be used to benefit that part of the industry that paid the levy. I know that that matter causes anxiety to producers and the organisations, but if money is available it will he returned to the sector that provided the funds.

Clause 3 ensures that any money paid by the commission to the company from the levy receipts but not yet applied by the company to make compensation payments should be held on trust for the commission. That will ensure that, in the unlikely event that the company goes into liquidation, those moneys are available to the commission. I hope that the House will agree that, unlikely though that eventuality may be, in legislation we must anticipate every eventuality, and this extra assurance should be provided.

I apologise for interrupting my right hon. Friend, but I must return to Committee soon. I am a little worried about how the surpluses may be applied for the benefit of the industry. It would be helpful if my right hon. Friend would tell the House at the end of the debate how that could be done. Will he also tell the House how any shortfall in the first year can be guaranteed under clause 1? I do not understand from the Bill how any shortfall can be guaranteed, and whether the Minister or someone else will do that.

I shall return to my hon. Friend's latter point later, because several hon. Members have been worried about that. It is impossible to be specific about surplus funds now. The levy-raising scheme is under the aegis of the Meat and Livestock Commission, which is answerable to the House for the discharge of its functions. I would not like to speculate on, nor could the Meat and Livestock Commission be tied to, the specific purposes for which surplus money should be ploughed back into the industry in two or three years' time. What matters is that surpluses, if they arise, should be ploughed back to benefit the section of the industry which the levy payers represent. To try to anticipate what circumstances might be appropriate for using surplus funds would not make sense and would be purely speculative. What is important is that the benefit goes back to those who have paid the levy.

It may be helpful to the Minister if we raise the question not of what the surpluses may be but of the mechanism he will devise to see that the levy is evened out as the position in regard to the disease improves so that there will not be a surplus accruing in the fund. This is something that he can foresee. Presumably he can deal with this at the beginning of the debate rather than at the end.

I have already dealt with that; the hon. Member may have missed it. I said that we expected the levy to be 30p per pig for the first year of the scheme, although I said that I could not anticipate what it would be in later years. We are dealing with a disease and until we get the scheme into operation, no one can say exactly how many herds will be affected or how many pigs will have to be slaughtered. Under the Bill there will be a facility to vary the levy in later years in accordance with the degree of expenditure that may prove necessary.

To take an example, I remember when swine fever was debated in the House. An eradication scheme was resisted by successive Governments because of the high cost that would be involved. When a scheme was introduced, the best expectations of everyone about the time it would take to eradicate the disease were exceeded. The most optimistic expectations were realised.

Perhaps we might be optimistic now. We may not be justified in being optimistic. One cannot tell. It would be sheer speculation if one tried to predict what will happen in the later years of the scheme. With the commitment to be made in the early years I hope that we shall achieve enough to make sure that proper and effective eradication is achieved in the shorter rather than in the longer term.

Clause 4 details those parts of the Agriculture Act 1967 concerning the Meat and Livestock Commission which will or will not apply to it in this role. Clause 5 simply contains the usual interpretation, and so on.

I apologise for having tried to deal with the Bill in a relatively short speech but, on the other hand, its purposes are relatively straightforward. They are accepted by the industry although there is concern on detailed points, which has been voiced in the interventions. At the same time I hope that I have anticipated to some extent some questions that may be raised in the debate. We see the Bill performing an essential function in a unique arrangement for dealing with an animal health problem.

My right hon. Friend has made it clear that he believes this is the right time to act to rid Great Britain of an increasingly troublesome pig disease. If we manage to get the Bill speedily on to the statute book we intend to make a start on eradication as soon as we reasonably can, subject only to any physical problems of getting the scheme into operation. If the House will speed the passage of the Bill we shall do our best after it becomes law.

Notwithstanding any differences of detail, the measures that we propose conform entirely with the animal health traditions that we have always followed and that have served us so well for more than a century. This is another milestone in the programme of disease eradication, of which we can be justifiably proud. Other countries are envious of our record. In that spirit and anticipating the cooperation of the House I commend the Bill to hon. Members.

4.24 pm

I endorse the desire of Opposition Members to give the Bill a speedy passage. The sooner it is on the statute book and the scheme is in existence the better. I hope I will not sound presumptuous if I quote from the report of the European assembly of 10 May 1979 when that body debated a report curiously called:

"Motion for resolution tabled by Mr. Hughes on the urgent need for eradication measures to control nervous diseases in pigs".
What I said then was:
"These two diseases, enzootic bovine leukosis and Aujeszky's disease, are showing a disturbing increase throughout the Community and there are areas where Community action supplemented by effective national action can be most effective. Therefore the plea contained in these documents, that we do not pretend that these diseases will go away, but that we recognise the need for a much more active policy, is a very real one, and I regret deeply that one of the last actions of recent Labour Government in the United Kingdom was to refuse to embark upon an eradication scheme for Aujeszky's disease in the United Kingdom. But whether or not any of these are zoonotic and can affect man is beside the point. The damage they do to some of the highest quality breeding stock of cattle and of pigs throughout the Community is very serious indeed, and it is in this veterinary sense that the Community will make progress."
I retract not one word either of the criticism of my colleagues in the Labour Government or of what I said nearly four years ago in the European assembly. Following the decision of the outgoing Labour Government, on 24 June 1980, the present Government indicated clearly an alternative course for dealing with Aujeszky's disease. I quote from the press statement:
"The alternative course, which we favour, is that owners of herds at risk from the disease should be encouraged to take more stringent measures of prevention control, including the use of vaccine. We should give immediate attention to applications, under the medicines act procedures, for the licensing of the inactivated Aujeszky's disease vaccines for use in this country. Properly applied, these vaccines should give substantial protection from the disease and, in an infected herd, should reduce the weight of virus and prevent loss. To delay the licensing of a suitable vaccine while it is subjected to a field trial in this country—as has been suggested—would in our view serve little purpose."
Regrettably, no Government can be proud of their policy towards that disease in British pig herds. The Bill will put that right. Because the number of cases of the disease fell sharply during much of 1980 and 1981 the Government and the pig industry felt at ease. In the first half of 1980 there were 14 outbreaks and in the second half of 1980, eight outbreaks. In the first half of 1981 there were five outbreaks and the same number in the second half of that year. However, in the first half of 1982 there were 25 outbreaks.

It is sad that we have only embarked on this eradication scheme after too many producers have suffered from too much loss. There can be no doubt that it was in the Government's power to eradicate the disease with significantly less loss to the national pig economy than will result from this scheme. Whether the money comes from the Exchequer or the industry is almost immaterial. The disease could have been eradicated with a slaughter policy some years ago at less cost to the pig farming community. That is my sorrow, and I make no party political point about it because, as I have said, I held the same view when the Labour party were in government. We should have gone for a Government-funded eradication scheme then, before the spread of the disease. We failed. Both the Conservative and Labour Governments embarked upon a policy which, regrettably, has not succeeded.

In the middle of last year there was a new poll to see whether the producers would go for the necessary agreement. It would be remiss not to follow the statistical line of the Secretary of State for Employment. In a press notice of 20 October 1981 the Minister of Agriculture, Fisheries and Food states clearly that the earlier poll
"confirms that the response itself, and the number of producers in favour of a scheme, were well below the figure of 75 per cent. which was the agreed criteria for acceptance."
Let us analyse the statistics of the agreement upon which the Bill is based on the same terms that the Secretary of State for Employment analyses the agreement with the General, Municipal, Boilermakers and Allied Trades' Union. On this occasion 42·3 per cent. of producers voted, or, to use their phrase, completed and returned the questionnaire. They owned 85·8 per cent. of the total pig population. By some curious machinery, if one owns a pig one is held to have the right to vote for its eradication. Therefore, 74·3 per cent. of 85·8 per cent. of the pig owners voted in favour of an eradication scheme. I find it difficult to see how that meets the criteria for rejecting the poll in 1979–80 of 75 per cent. It is not even 66⅓ per cent., but so be it.

The hon. Gentleman seems to suggest that the ownership of pigs is almost irrelevant. Surely the implication of what the hon. Gentleman is saying is that even if a farmer has no pigs at all, his opinion could have weight. If the main pig producers felt strongly about this, it must make sense in terms of approval of the scheme. In fairness to the Government, that must be so.

I am not saying that at all. I am saying that if in October 1981 the poll was rejected because the figure was well below that of 75 per cent., which was the agreed criterion for acceptance, under no circumstances can 74·3 per cent. of 85 per cent. of pigs be counted as 75 per cent. of anything. One thing cannot be said about the water workers' dispute and a completely different thing about this poll. I fully accept that there is an overwhelming desire on the part of pig producers to accept the scheme. That has been clearly expressed. However, a low poll in one area cannot be acceptable while a low poll in another is unacceptable. One may not care for it but that is the choice.

As I said, I shall not seek to delay the passage of the Bill in any way. However, will the Minister look closely at clause 1 subsections (5) and (7)(b)? Subsection (5) states:
"the proceeds of any levy imposed under a pig industry levy scheme … shall be applied solely in making payments for the levy purposes."
What is the position of hounds in hunt packs who have been supplied with diseased meat and have had to be slaughtered? Will there be compensation for the consequential loss to the owners of those hounds from the levy? I make no bones about it; I am not in the business of hunt hounds compensation. However, if I bought some infected meat in good faith for my boxer dogs and they had to be destroyed I should want to know whether I was covered under the levy.

Secondly, clause 1(6) says:
"The Commission may make arrangements for payments to be made for the levy purposes by any other person and may for that purpose pay sums collected by them in pursuance of any such scheme to the person for the time being responsible in accordance with any such arrangements for making payments for the levy purposes."
I am extremely unintelligent, and if that means anything to the hon. Gentleman I shall be grateful if he will elucidate it for my benefit, if not for the benefit of others. In my opinion, it is a fairly meaningless and long sentence.

The following subsection refers to
"expenses incurred by the person so responsible".
What expenses are to be permitted under this scheme?

My final query concerns Northern Ireland. Will the Minister elucidate the situation there? Clause 5(5) says that section 4(4)
"extends to Northern Ireland in so far as it applies in relation to returns or information".
Am I right in assuming that it does not? I accept that there has not been an outbreak of Aujeszky's disease in Ulster so far, to my knowledge, but what is the long-term position there?

We welcome the Bill and wish it high-speed progress to the statute book. The sooner that this eradication scheme is in effective operation the better. I regret, however, that we wasted five years when my party was in power and four years under this Government.

4.42 pm

I shall not follow the hon. Member for Durham (Mr. Hughes) in what he said, except to say that we should be grateful that a start has now been made. That is what is important. I think that there were reasons for the delay in the past. It is not for me to defend the Socialist Government, but there were reasons. There was perhaps also delay by my hon. Friends, because of course the agreement of the industry had to be obtained, and there was some division there.

I welcome the Bill. It is a real step forward in dealing with this distressing disease in pigs. In the past the disease has taken a steady toll of producers' profits and of course it undermined their confidence. Those are two important factors. In producing food for the nation there has to be confidence in the farmers and there have to be profits. Without profit, one will not get the food. It is as well for Opposition Members and people outside to realise that farmers are in business to make a profit, and they must have confidence. In my opinion, this Bill will ensure that. Anything that can be done to maintain that confidence and eradicate the disease must be right.

At present profits are rather low in the pig world. An outbreak of this disease lays low the pigs, and it is distressing for any fanner who has a serious disease affecting his herd, flock or pig unit. That is why I sincerely welcome this Bill, and I am grateful to the Minister for what he said.

I want the pig industry to flourish. I want the pig industry to produce more pigs and healthy pigs, so that we may have a larger share of the home market. At present the production is almost 100 per cent. pork pigs. On the bacon side it is an entirely different matter. I want United Kingdom farmers to have a larger share of the home market in bacon. I believe that the Bill will help in that way by giving confidence in better profitability. I am not satisfied that the Danes have such a large share of our home bacon market. Measures should be taken to change that, and this is one measure that will go some way to help in intensive production areas such as Yorkshire.

We have made great progress in this country in the eradication of disease. During my long time in agriculture I look back on the eradication of tuberculosis, brucellosis, and foot and mouth, which is certainly well contained. The consumer should be grateful to a nation and a Ministry of Agriculture, its official and vets, who have contributed so much to the eradication of these terrible scourges. We are ahead of many other European countries. It is strange that again the United Kingdom is taking the lead in Europe in the eradication of disease. I pay tribute to the Ministry and to our vets. This is another disease which I hope will be elminated by this eradication scheme.

I do not want to delay the passage of the Bill. The quicker we can get it through, the sooner we can get the scheme under way. To that end we should make our speeches short. However, I want to ask one or two questions. First, the NFU is concerned about the full cooperation of the slaughterhouse sector in the handling of the pigs. I am connected with a slaughterhouse, and in my view it should be made clear that pigs once slaughtered cannot do any harm or in any way damage the consumer.