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Commons Chamber

Volume 46: debated on Monday 25 July 1983

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House Of Commons

Monday 25 July 1983

The House met at half-past Two o'clock

Prayers

[MR. SPEAKER in the Chair]

Private Business

London Transport (Liverpool Street) Bill

Lords amendments agreed to.

King's College London Bill Lords

Order for Third Reading read.

Queen's consent, on behalf of the Crown, Signified.

Read the Third time and passed, without amendment.

Lloyds Bowmaker Bill Lords

Order for Third Reading read.

To be read the Third time tomorrow.

Standard Chartered Merchant Bank Bill

Read the Third time, and passed.

Oral Answers To Questions

Energy

Energy Assets (Privatisation)

1.

asked the Secretary of State for Energy if he has any plans to privatise or denationalise any publicly owned energy assets.

I laid an order on 7 July taking over the British Gas Corporation's interests in certain offshore oilfields.

Will the Secretary of State take this opportunity to deny the front page story in The Times today that the Chancellor of the Exchequer is about to announce further sales of publicly owned assets? Does he agree that to sell off such valuable publicly owned assets as British Petroleum and Britoil would be an act of monumental folly?

I do not agree with the hon. Gentleman. The majority of BP is already owned by the private sector. The Chancellor will make his announcement at the appropriate time.

Does the Secretary of State agree that, were the Government to sell off BP shares, they would have a duty to the taxpayer, at the very least, to sell them when they could maximise the return to the taxpayer and that there could not be a more unfortunate time to sell BP shares than at present?

It is for the Government to judge when and how to sell and, having done so, to defend that judgment.

Will my right hon. Friend confirm that he is going rather further than just considering the sale of BP shares and is actively looking at the introduction of private capital into the British Gas Corporation and the electricity supply industry?

The Government made it clear in their election manifesto that they were interested in seeing what areas of the public sector could sensibly and rationally be moved to the private sector. That examination is presently taking place and one result is the announcement that I made in answer to the main question about the transfer of BGC's oil assets as a result of an order laid on 7 July.

Does the Secretary of State agree that the Government's dogmatic policy of returning our natural energy resources to private industry is a disaster course which is likely to lead to the position that we were in immediately after world war I when the Sankey report said that our natural energy resources were too important to be left to private greed and speculation?

I sympathise with the hon. Gentleman's old-fashioned Socialist views, but I very much disagree with them.

The Secretary of State will be aware that later today the Chancellor of the Exchequer proposes to give a written answer about the sale of assets within his responsibility. Is it not disgraceful that he cannot tell the House of Commonse about that during energy questions at the Dispatch Box and be open to questions from hon. Members? Is it not a symptom of the Government's arrogance that they want to use a subterfuge to declare their policy before they scurry off for the recess without providing the opportunity for a debate?

On a point of order, Mr. Speaker. Is it not the normal practice that an oral question takes precedence over a written question and that it is not in order for the Secretary of State to refuse to answer questions in the area for which he is responsible, such as those relating to British Petroleum and gas and oil assets, on the excuse that a written question is being answered by the Chancellor of the Exchequer which is clearly one which, to put it no higher, has been tabled with the Government's understanding? Will you give a ruling on this matter which, although I do not wish to delay Question Time, is of great importance?

I appreciate that, but this is of fundamental importance. I respectfully support the view that an oral question must take precedence over a written question. Will you, Mr. Speaker, bear in mind that, instead of answering a proper question on the Floor of the House, the Secretary of State blandly said, "No, Sir," and sat down?

I am not responsible for answers from the Dispatch Box, nor can I anticipate what is to be in a written answer.

Domestic Gas And Electricity

2.

asked the Secretary of State for Energy by what percentages gas and electricity prices to the domestic consumer have risen since May 1979.

Domestic gas prices have increased by 112 per cent. and domestic electricity prices have increased by 82 per cent. since May, 1979, but 2·5 million low-income customers obtain £350 million of assistance in meeting their fuel bills.

Will the Minister come clean and admit that such terrific increases have been forced on the industry by the Government and that they should therefore be regarded as a concealed tax increase to be added to the already increased tax burden suffered by most families under this Government?

I completely disagree. The hon. Gentleman knows that five years ago commercial consumers of gas subsidised domestic consumers to a high degree. That is not in the best interests of industry. I trust that the hon. Member realises that the use of coal and oil accounts for more than 50 per cent. of the cost of electricity and that those costs have gone up much faster than inflation.

Will the Minister confirm that tariffs have been skewed against industrial customers? Does he agree that it is high time that something was done to ensure a more equitable distribution of those costs, which are largely coal-related?

Unless we have sensible and proper pricing, particularly for gas, energy will not be properly used and our industry will not be competitive with industries in other countries.

Does the Minister accept that prices for domestic and industrial consumers have risen far faster than the rate of inflation? Is that not related to the Government's brutal policy of relying upon price to achieve conservation? Given the effect upon many millions of people — more than the number that he suggested — is it not time for a reappraisal of that approach?

I should have more respect for the hon. Gentleman's comments if he acknowledged the considerable help that the Government have given to less well off consumers. The hon. Gentleman should acknowledge that there has been no increase recently in the price of electricity. One hopes that increases in electricity prices will be contained within the rate of inflation now that the adjustment mentioned earlier has taken place.

Is not the principal reason why domestic gas prices have had to rise faster than the inflation rate in the past three years that they were held down for party political reasons in the period up to the 1979 general election? Does not the way that that industry was treated in that period provide a good reason why political parties should not interfere in the future?

My hon. Friend is right. If one is interested in jobs and in industry developing and competing fairly, one must have a realistic policy. That policy has been, and is being, tempered by what we are doing for the less well off consumers.

If inflation is seen by the Government as the number one enemy, how in he name of heaven does the Minister square their policy with a 112 per cent. increase in one of the fundamental heating costs for British families? Given that the British Gas Corporation made an enormous profit this year and that the Government are taking £500 million a year in the gas levy, could not they use a little of that money to reduce gas prices to the domestic consumer, thereby cutting inflation at a stroke?

If the hon. Gentleman had listened to what I said he would know that £350 million is spent on helping less well off domestic gas consumers. We inherited complete unrealism, and that required some work and effort. The hon. Gentleman's party did not pick up the bill, so there is no point in his criticising those who had to.

Electricity Supplies

3.

asked the Secretary of State for Energy what proportion of the electricity supply in the United Kingdom was coal-generated in the most recent year for which figures are available; and how this compares with the figure for 1974.

In 1974 coal generated 56 per cent. of the United Kingdom's public electricity supply. By 1982 this had risen to 74 per cent.

Does my hon. Friend agree that the figures show that satisfactory progress has been made since 1974? Does he anticipate any significant change, one way or another, in that figure in the next few years?

The House will recognise that coal will continue to be the major fuel at least until the end of the century. Any answer to my hon. Friend's question strictly depends on the competitive nature of pricing.

Will the Minister confirm that, as a result of the incident at Selby coalfield this week, less coal will be available for the generation of electricity? Does the Minister accept that there is great concern that a flooding of that nature can take place when the project has so far cost £1,000 million and is blessed with all the mining expertise and modern technology? Does he agree that there must be an investigation by Her Majesty's inspectorate, mining engineers and geologists to ascertain whether it was a one-off incident or whether it will be common to the Selby coalfield, and whether the coalfield will be safe?

The Selby incident is unfortunate. It is primarily a matter for the coal board, which has issued a statement this afternoon. That throws a more informative light on the matter. The board must continue to deal with the incident.

How will Ferrybridge, Eggborough, Drax and other power stations be supplied with coal if Selby cannot supply them? Will the incident have a long-term effect on the mine? How did the incident suddenly occur —a parliamentary party was there last week and had no knowledge of it? How did the problem suddenly surface?

This is a matter for the NCB to assess. The first assessment suggests that the incident is such that it sees no reason for delaying the start of the second west face, scheduled for late December. I do not think that that will be delayed. In relation to supply to power stations, my hon. Friend is aware of the large stocks available.

I return to the question by the hon. Member for Staffordshire, Moorlands (Mr. Knox). Does the Minister agree that coal-fired power stations in Britain remain partially unused because of lack of demand as a result of the economic recession triggered by the Government?

Given the state of energy demand, there is a lack of demand for certain types of fuel. The question by my hon. Friend the Member for Staffordshire, Moorlands (Mr. Knox) referred to the substantial preponderance of coal among the fuels required for electricity generation. That is the important point.

Severn Barrage

4.

asked the Secretary of State for Energy what assessment he has made, in the context of the Severn barrage project, of possible methods of financing the project; and if he will make a statement.

The primary objective of the two-year study to be carried out by the Severn tidal power group, details of which were announced by my right hon. Friend the Chancellor of the Exchequer on 12 May, will be to assess the technical and financial viability of a barrage built and operated by the private sector.

Does my right hon. Friend agree that this highly desirable project will be difficult to finance in the public sector or the private sector because it is bound to take many years to come to fruition? Will he, therefore, seriously consider the possibility of its being financed by an indexed loan linked to the price of electricity?

One of the main purposes of the assessment is to examine finance. My hon. Friend mentions an interesting idea, the practicability of which is worth further examination. I recommend that my hon. Friend refers any ideas to the Severn tidal power group for its consideration.

I welcome what Ministers have said this afternoon about the sale of capital assets in relation to energy, but does my right hon. Friend agree that it is not considered good business to sell capital assets to meet the deficit on current account—

I am coming to that, Mr. Speaker, if you will forgive me for a second. Does my right hon. Friend not agree, therefore, that in the case of the Severn barrage, where a feasibility study is recommended by the Bondi committee which will cost about £45 million, that part of the money released by the sale of capital assets should be used to meet the cost of that project?

The whole purpose of the Severn tidal power group study is to consider the various aspects of these matters. The Government are putting money into that survey. We have to wait for it in terms of practical feasibility and financing.

Shell Oil Company

5.

asked the Secretary of State for Energy when he last met the head of the Shell Oil Company.

Is the Secretary of State aware of the absolute chaos that resulted from the recent petrol price increases at the end of which it was the motorist who suffered? Just where is the competition in petrol pricing when one sees garages throughout London charging 183p? I am sure that in many other parts of the country the price is very much higher. When will the Secretary of State make it clear to petrol companies that it is time there was meaningful competition in petrol prices and not the enormous cartel which goes on and on?

We last had energy questions on the day that BP announced an increase which was never sustained because of the level of competition that exists.

Will my right hon. Friend explain why he has had consultations with the Shell Oil Company and other major oil companies in respect of the Petroleum Stocks (Amendment) Order, but has not consulted the Association of United Kingdom Oil Independents?

National Coal Board (Investments)

6.

asked the Secretary of State for Energy what is the value of investments in firms in the private sector held by the National Coal Board or its nominees.

The book value of the NCB's holdings in private sector associated companies or partnerships in the United Kingdom was £22·4 million as at 27 March 1982. Corresponding figures for March 1983 will appear in the board's accounts which will be published shortly.

Is it not thoroughly undesirable that a public institution that makes huge losses at the taxpayer's expense should nevertheless have money tied up in private companies, the directors of which include former chairmen of the National Coal Board?

I fully understand my hon. Friend's view on this matter. Indeed, I must concur that we share a general view on privatisation. Steps will be taken with regard to the National Coal Board. My hon. Friend should know that both the board and the other shareholder in Sankey are taking active steps to sell that company.

Petrol And Diesel Prices

7.

asked the Secretary of State for Energy if he will consult the various oil companies operating in the United Kingdom which sell petrol and diesel fuel to forecourt operators to see whether a system of stabilisation of prices can be agreed for urban, rural and island areas in the United Kingdom.

Petrol prices should be determined by competition, not agreement, between the oil companies.

Is my right hon. Friend aware that the Treasury's tax take is 53 per cent. of the windfall which is 5·7p more this year than at the same time last year? Is he further aware that the maximum forecourt margin is 6·5 per cent. in the rural areas? There is no way in which people can operate in these circumstances. I accept that competition is desirable, but it is a deterrent for rural areas because of the subsidies granted to the urban districts. Will my right hon. Friend ensure that something is done for a generalisation of prices throughout the country?

Matters of taxation are for my right hon. Friend the Chancellor of the Exchequer. No doubt my hon. Friend will channel his remarks in that direction.

In certain urban areas companies have been active with the temporary sales allowance, but now more encouragement has been given for the temporary sales allowance in rural areas. That is a move which I shall seek to encourage with the oil companies.

Is the Minister aware that the effect of statutory istrument No. 909, the Petroleum Stocks (Amendment) Order, will inevitably mean that certain smaller petrol companies, many of which serve the rural areas, will have to find an extra £500,000 to finance their stocks, which will, by the Government's own admission, result in a 2p to 3p increase in petrol prices and will also, by the Government's own admission, result in the closure of outlets? Does the Minister realise that this will yet again disproportionately hit rural areas? Has he any intention of annulling or amending that order?

I do not agree with the hon. Gentleman. The purpose of that order is to ensure the security of supplies to those areas. I regard it as equally important to ensure the same security of supply to the rural areas as we do to the urban areas.

Do not companies such as Nickerson Fuel Oils Limited, the directors of which went to see my right hon. Friend Lord Gray of Contin, face the possibility of going out of business as a result of the order?

Bearing in mind that the Government's stated intention is to decrease inflation, and their announcement this afternoon of further sales in oil and energy, does the Minister agree that to sell off assets in oil and energy will diminish the Government's influence in trying to stabilise energy prices across the country, for example for petrol? Does he further agree that what he is doing is minimising the efforts that he can make?

I would be interested to know whether BP operates a more competitive policy than other companies in the rural areas. If it does, and the hon. Gentleman can demonstrate that, I shall consider his question.

Does my right hon. Friend agree that competition should not be organised by the Government, and the important thing is that any person or organisation in the petrol business should be able to offer lower prices to get a higher market share without turning itself into a major oil company?

That is a good thing. A significant factor for the rural areas is the tremendous effort many of these companies make to maintain those supplies.

Gas Meter Readers

8.

asked the Secretary of State for Energy how many meter readers are employed in the gas industry; and what were the figures in 1981 and 1982.

The latest figure available, at 31 March 1983, was 1,588. At the same date in 1981 and 1982 the figures were 1,695 and 1,670 respectively.

Is the Minister aware that meters are not being read, that slot meters are not being emptied and that this is causing great indignation, particularly with regard to estimated accounts? Is the Minister further aware that many people with slot meters are afraid to go out in case the meters are broken into and they are made responsible for the loss? Will he make representations to the chairman of British Gas to employ more meter readers at a time of high unemployment and thereby provide a better service?

I am aware of the problem, although I think that perhaps it applies more in certain areas than in others. I shall draw this matter to the attention of the chairman of British Gas and see what action he thinks appropriate. I know that British Gas is concerned about this matter and I am grateful to the hon. Gentleman for drawing it to the attention of the House.

What discussions have taken place among interested industries to see whether joint readings can be made, so saving labour?

Various discussions have taken place and various studies have identified certain economies that could be made. However, there are considerable practical difficulties, and it would also take a considerable time to bring such a scheme into operation. Therefore it would be misleading to say that there is a quick answer along these lines, although I hope that all the various public utilities concerned will continue to consider this matter with a view to bringing it into effect.

Is the Minister aware of the particular concern among pensioners in the SEGAS area about the long delays—more than six months in some instances—in emptying their prepayment meters. Is he aware that this is resulting in the build-up of substantial sums which are becoming the target for break-ins and burglary? Will he make a particular effort with regard to the SEGAS area when he approaches British Gas on this problem?

I know that British Gas and the area concerned are worried about this problem. I shall draw to the attention of the chairman of British Gas what the hon. Gentleman has said.

Will my right hon. Friend accept that most hon. Members feel that there is no reason why gas meter readers should not read electricity meters at the same time? What are the significant practical difficulties that make this obvious solution so difficult to achieve?

What was raised earlier was the issue of common readings — probably a reference back to the telephone system and central computer control. That, in simple physical terms—installation and so on—raises short-term practical problems.

As hon. Members on both sides of the House have dealt with the problems arising from meter reading, will the hon. Gentleman take the matter seriously and act urgently on it? Is he aware that we are reflecting a growing problem?

How much of the standing charge is accounted for by meter reading? Am I right in suggesting that it is substantial?

Meter reading is obviously a factor, particularly in relation to British Gas, which is the subject of the question. Various ways have been identified in reports on the standing charge to achieve greater economies. I shall do what I can to press British Gas to implement any savings that can be made.

Is the Minister aware that the problems that have been raised about difficulties in the gas industry apply also in the electricity industry? Will he comment on the case of a constituent of mine who has not had her electricity meter emptied for eight months, the result being that the meter is full and she is effectively cut off from supplies? That appears to be the policy, at least of the LEB, which is not emptying meters on certain council estates.

If the hon. Gentleman will give me details of that case I shall be happy to take it up with the chairman of the area board.

British Gas

10.

asked the Secretary of State for Energy when he last met the chairman of British Gas.

Is my right hon. Friend aware that more and more gas boards are sending out estimated bills, some of a very high order, which are causing distress and problems in particular to pensioners and those on low incomes? Will he discuss that with the chairman when he next meets him?

I recognise the problem. If a consumer disagrees with the estimate provided, there is provision on the back of the bill for him to submit his own reading, and the gas region will, on receipt of that, re-issue a bill based on the consumer's figures. I hope that that fact will become more widely known.

I allowed the hon. Member for Brighton, Kemptown (Mr. Bowden) to ask that supplementary question, but I should make it plain to the House that in future I shall follow the practice of my precedessors of not calling supplementaries to questions which do not reveal their subject matter, other than open questions to the Prime Minister.

Natural Gas

11.

asked the Secretary of State for Energy what proportion of natural gas sold by the British Gas Corporation is imported.

Between 20 and 25 per cent. of the British Gas Corporation's gas supplies are imported, all from the Norwegian sector of the Frigg field.

Is this not far too high a proportion for Britain, which has substantial gas reserves of its own? That is a clear reason why it was necessary to pass the Oil and Gas (Enterprise) Act. How is that Act progressing in encouraging greater exploration of our gas reserves in the North Sea?

British Gas has a responsibility for security and continuity of supply and it entered into these contracts, I believe rightly, to fulfil its obligations. However, I find it encouraging—I hope that my hon. Friend does, too — that gas activity on the United Kingdom continental shelf is now greater than for some time. Seventeen exploration appraisal wells were started last year in the southern basin compared with only two in the previous year and none in the three years before that, so the trend is encouraging.

What attitude will my right hon. Friend take should British Gas decide to try to purchase Sleipner gas from the Norwegian sector?

That is the subject of commercial negotiation between British Gas and the various Norwegian bodies. The chairman is keeping in touch with me and my right hon. Friend. At this stage I can only say that negotiations are continuing and that we shall consider the issue when proposals are to be made.

North Sea Oil

12.

asked the Secretary of State for Energy whether he is satisfied with the current level of North sea oil development activity.

I am satisfied with the current level of North sea oil developments; 22 oilfields are in production and two more are expected to come on stream shortly.

Does the Minister acknowledge that the taxation regime has led to a severe gap in orders for fabrication yards, which is causing real concern, and that there is no evidence that it can be plugged? Does he also acknowledge that although oil development is going ahead, the collapse of the gas-gathering system has meant that many of the associated gas developments are not going ahead and that is why we are having to pay up to 35p a therm to import Norwegian gas?

I disagree with the hon. Gentleman on the last point. As for the general position, the announcements made in the Budget and the changes that are taking place—in royalties, for example—will be of considerable assistance in the spheres mentioned by the hon. Gentleman.

There have been 147 significant discoveries of oil and gas in the North sea. Does my right hon. Friend agree that recent changes in legislation have made it probable that at least 20 fields will be developed?

I should not wish to put an estimate on the figures, but I believe that a great deal of activity will now take place to the benefit of the country and of the supplying industries.

Does the Secretary of State concur with the view of the previous Minister of State, Department of Energy, Lord Gray, that there is one platform construction yard too many in Scotland?

I do not know the specific statement to which the hon. Gentleman refers. The new measures which are being taken should mean more for that industry.

National Union Of Mineworkers

13.

asked the Secretary of State for Energy when he next intends to meet representatives of the National Union of Mineworkers; and what he expects to discuss.

Was my right hon. Friend able to tell them, as he told the House today in answer to question No. 3, that the proportion of coal-generated electricity had increased in the last eight or nine years from 56 to 74 per cent.? As that is a clear indication that the Government are committed to the future of the coal industry, does he agree that it might be helpful to establish some sort of working relationship with Mr. Arthur Scargill?

I appreciated the manner in which the officers of the three mining unions came to the meeting and discussed the problems of the industry. During that meeting I made it clear that the Government intended to see that the coal industry had a good and successful future. I was able to point out that, during the years of the Conservative Administration, £3 billion had been invested in the coal industry.

As the Secretary of State has revealed some of the discussions that he had with the NUM representatives, will he say whether he discussed with them the further uses of coal, such as liquefaction and gasification? Is he aware that the NUM is getting sick and tired of Government excuses for not starting the Point of Ayr pilot scheme?

I am anxious to look at any scheme that is designed to make a sensible use of coal, including liquefaction. During a considerable recession, the Government have made enormous resources available to the coal industry, which have enabled it to store surplus coal and to enable improvements to take place in consumption in various spheres. I shall be eager to look at any suggestion for the practical, sensible and economic use of coal.

Severn Barrage

14.

asked the Secretary of State for Energy if he is yet in a position to report on the consultations with local authorities and other interested parties over the proposals in the Severn barrage committee's report.

Views and comments by local authorities on the Severn barrage committee's report were fully considered. With regard to the study announced on 12 May, I understand that the Severn tidal power group is in touch with local authorities and will maintain this contact.

I thank my hon. Friend for that reply. Have any representations been received from bodies, public or private, against the proposal for a barrage from Brean Down to Lavernock Point? If so, what? If not, what is causing the Government to drag their feet in implementing the feasibility study recommended by the Bondi committee?

The Government are not dragging their feet. As the Chancellor of the Exchequer announced a short time ago, we are financing 50 per cent. of the study that is being carried out. Members of the study will be having discussions not only with local authority representatives, but with the various environmental interests, the Countryside Commission and others. We must see how the group gets on; and, as I said, the Government are committed to the financing of it.

British Gas (Offshore Oil Interests)

15.

asked the Secretary of State for Energy when he expects to dispose of the British Gas Corporation's offshore oil interests.

I hope to complete the disposal of the British Gas Corporation's offshore oil interests as soon as possible.

Will my right hon. Friend confirm that he has no intention of letting the sale of offshore oil interests take as long as the sale of onshore oil interests, which has been entirely under the control of the British Gas Corporation? Will he further confirm that potential oil assets will include producing assets and prospective acreage?

Yes, I confirm the latter part of my hon. Friend's supplementary question. I have no complaint about the progress that has been made in the disposal of offshore and onshore interests over the period for which I have been responsible.

Is the right hon. Gentleman aware that in replying to question No. 1, which was tabled by my hon. Friend the Member for St. Helens, North (Mr. Evans), he gave a different answer from that which he gave the hon. Member for Engield, North (Mr. Eggar)? The Government's proposals to sell off public assets are coming out in dribs and drabs. Is the right hon. Gentleman not ashamed of the fact that he is unprepared to answer questions on the Floor of the House in the knowledge that the Chancellor of the Exchequer is to make a specific statement later? We shall be fobbed off with a written answer on which the Government cannot be questioned. Is this not the arrogance of power?

When the right hon. and learned Gentleman resumes his place after such an onslaught, he should try to stop smiling.

My right hon. Friend the Chancellor of the Exchequer will answer questions for which he is responsible and I shall answer questions for which I am responsible.

House Of Commons

Parliamentary Questions

19.

asked the Lord Privy Seal if he will propose the setting up of a Select Committee to consider the practice and procedures of the House relating to parliamentary questions.

This is a matter for the House and could be included in a general review of procedure.

Did the Leader of the House follow the exchange on question No. 1 between the Secretary of State for Energy, my hon. Friend the Member for St. Helens, North (Mr. Evans) and my right hon. and learned Friend the Member for Monklands, East (Mr. Smith)? Can he imagine any previous Conservative Chancellor of the Exchequer whom he and I have known—Selwyn Lloyd, Reggie Maudling, Ian Macleod or Tony Barber —treating the House and their senior Cabinet colleagues so disdainfully? Should we not have a Select Committee on the parliamentary manners of the Chancellor of the Exchequer?

I regret that I was not in the Chamber for the exchanges on the first question on the Order Paper. The issue which the hon. Gentleman raises could well be included in a general review of procedure.

Will the Leader of the House tell us what he thinks is the usefulness of Question Time if the Chancellor of the Exchequer flatly refuses to answer straight questions that are put to him?

I have always found Question Time of immense value in the parliamentary battle. The questions that are not answered often prove as useful in the campaign as those that are.

Will my right hon. Friend inquire into the number of questions that are tabled to each Minister? When he has done so, will he write to me or make the information known in some way so that the House can assess which Department attracts the most questions? Is he aware that the Department of Transport seems consistently to attract the most questions? Will he therefore try to ensure that the parliamentary timetable is scheduled to take account of this?

Should a general review of procedure encompass Question Time, I am sure that the point made by my hon. Friend will be considered.

Will the right hon. Gentleman reconsider the rearrangement of Question Time, because questions that are taken on Monday afternoons come up once every three weeks whereas those taken on Wednesdays, which include the important Question Time attended by the Secretary of State for Scotland, come up every four weeks?

The hon. Gentleman and his hon. Friends have already raised this issue. I am anxious and prepared to consider it through the usual channels if there is a desire for change. Were any change essayed, it would affect many other questions.

Is the right hon. Gentleman aware of what happened this afternoon when, in response to question No. 1, the Secretary of State for Energy declined to give information to the House which the Chancellor of the Exchequer will indubitably give in a written answer within the next few minutes? Is that the way in which the Government intend to treat questions that are tabled for Ministers who are responsible for their Departments? What does he think of this practice, bearing in mind his responsibility to protect the interests of the whole House? Does he agree that those who ask questions are entitled to receive honest answers from Ministers?

The right hon. and learned Gentleman's point could be considered in a general review of procedure. I shall refer his comments and anxieties to those of my right hon. Friends at whom they are directed. However, the right hon. and learned Gentleman has been long enough in the House to know that this is not the first time that such a practice has been adopted.

Lord Privy Seal

Magistrates (Appointments)

20.

asked the Lord Privy Seal how many magistrates appointments are made by the Chancellor of the Duchy of Lancaster.

Since 1974 the Chancellor of the Duchy of Lancaster has made 2,346 appointments to Benches in Lancashire, Greater Manchester and Merseyside.

In addition to appointing magistrates, does not the Chancellor of the Duchy of Lancaster have a moral responsibility for the conditions in which the courts have to operate? Will my right hon. Friend convey to the Chancellor of the Duchy of Lancaster the dismay that is felt by the members of the Stockport Bench over the delay in the Home Office in approving the site of the new court house?

I understand that the responsibility for that consideration rests with my right hon. and learned Friend the Home Secretary. I shall certainly convey to him my hon. Friend's sentiments.

Dependent Territories

21.

asked the Lord Privy Seal if he will propose the creation of a Select Committee on the British dependent territories.

No, Sir. Matters relating to the British dependent territories will be within the general terms of reference of the departmental Select Committee on Foreign Affairs when it is re-established.

Unlike most subjects considered by the Select Committee on Foreign Affairs, Parliament is directly responsible for the economic and social welfare and defence of residents of British dependent territories. Such people cannot expect independence, and most do not desire it. In the circumstances, would it not be right for them to have their own regular scrutiny of their own interests through a Committee of this House?

No. I am anxious not to encourage the proliferation of departmental Select Committees, for I think that that would react against their impact. I take that view all the more because the Select Committee on Foreign Affairs has the power to create a Sub-Committee.

What would be the promotional chances of any Tory member of a Select Committee who criticised the Prime Minister over the Falklands?

The Tory Party has an unequalled record of promoting critics of Prime Ministers.

How do the Government intend to give effect to the pledge in the Gracious Speech that the people of Hong Kong will be consulted on any future arrangements for the dependent territory?

My hon. Friend knows that that question goes much wider than the establishment of a departmental Select Committee. He may be encouraged by the fact that the departmental Select Committee on Foreign Affairs has already taken a keen interest in Hong Kong.

Procedure Review

22.

asked the Lord Privy Seal when he expects to complete his consideration of a general review of procedure covering all aspects of the House's business.

As soon as I am satisfied of the general wish of the House in this matter.

Will my right hon. Friend take this as an earnest consideration that a Select Committee on Procedure should be set up, to which hon. Members could be invited to make suggestions or representations on any procedural matter, especially Prime Minister's Question Time and the method and format of considering Bills in Committee?

The last occasion on which a Procedure Committee with general terms of reference was established was in 1976–77. I think my hon. Friend is entitled to suggest that we might consider the matter again. Should the House so resolve, I am certain that the topics he has mentioned would be very much at the heart of the Committee's considerations.

Is the Leader of the House aware that there is a growing body of opinion on both sides of the House that Back Benchers are being denied the right to question Ministers on important matters of Government policy, because of the increasing use of the subterfuge of giving answers to written questions on such matters? Will he take this issue seriously, as oral questions are the only check that we have on the Executive? Ministers are dodging their responsibilities at the Dispatch Box by giving answers to written questions.

I note the right hon. Gentleman's point. I am sure that a Procedure Committee with general terms of reference will want to consider the use of Question Time. I note that irritation has been caused today.

Civil Service

Minis

23.

asked the Minister for the Civil Service how many Departments are currently using MINIS or its equivalent.

All the Departments taking part in the financial management initiative are either using or making good progress in establishing management systems which, like MINIS, provide the information needed to monitor in detail the matching of resources to objectives.

Does my hon. Friend recall that the Select Committee clearly said that it wanted MINIS or equivalent systems introduced into all Departments of State? Is he completely satisfied with the progress that has been made in the past year and a half?

My hon. Friend knows that a White Paper on the work of Departments in this regard will be published soon. I assure him that a quiet revolution has been taking place in Whitehall and beyond. The Civil Service is now considerably smaller than in 1979—it numbers fewer than 650,000—and next year it will be the smallest since the second world war. Moreover, Ministers and senior civil servants are more involved in the management of their Departments than ever before. That is leading to cost-effective and sensible management regimes throughout the Civil Service.

As access to information raises questions about efficiency and security, will the hon. Gentleman ensure that the House has a statement before the recess on the vetting procedures that will be applied when the Department of Industry announces in September the decision that it has already taken to replace 42 of its security officers with members of a private security firm? Will he explain why that statement will not be made until September, when the House will be in recess?

That is a matter for my right hon. Friend the Secretary of State for Industry.

Equal Opportunities

24.

asked the Minister for the Civil Service what are his latest plans concerning the implementation of equal opportunity policy in the Civil Service.

I hope that in the autumn a programme of action on employment opportunities for women in the Civil Service will be announced and that a report on personnel policies and procedures, as they affect equal opportunities for members of ethnic minorities, will also be published.

Does that proposal include the required ethnic and sex monitoring as laid down by the new code of the Commission for Racial Equality and the draft revised code of the Equal Opportunities Commission? If not, why not?

I understand that the operative date of the code produced by the Commission for Racial Equality is 1 April next year. Guidance on how to operate under it will be issued to Departments. The hon. and learned Gentleman knows that there has been some experimentation on ethnic monitoring in the Civil Service. That has been shown to be effective, and it is being extended.

Does my hon. Friend agree that sometimes the statements of the Commission for Racial Equality and of the Equal Opportunities Commission pointing to ghosts that do not exist tend to cause more trouble than good?

—was prepared to defend every statement made by such quangos. I am not that brave.

Does the Minister agree that treatment of maternity leave is central to equal career opportunities for women in the Civil Service? Does he recall that his Department rejected any improvement in such provision a matter of days before a joint report on the subject was published in December? When can we expect the Government's response to that report, which has been on the table for eight months?

The right hon. Gentleman's recollection of the Government's statement when the review body's report was published is wrong. He has been misled by press reports at the time. As I said, the Government's response will be announced in the autumn.

Written Questions

25.

asked the Minister for the Civil Service if he will ensure that, in respect of those matters upon which he answers questions, the terms of Standing Order No. 8(7) are strictly complied with, and that an answer is given on the day specified by notice of a priority written question.

I always try to answer priority written questions on the due date, but occasionally the necessary research takes longer and a full answer is then given as soon as possible.

I appreciate that written answers for priority cannot always be given on the day named, for the reasons that the Minister has given. However, does he agree that there is a notional day procedure for a non-priority written question and that the answer is expected within about one week after that notional day? Will he examine the performance of Departments on that aspect?

I confirm that the Select Committee's report showed that ordinary written questions should be answered within a working week of their being tabled. The House has generally accepted that. I try to follow that practice, but, as the hon. Gentleman knows, when the questions are very involved, as is often the case with questions to the Treasury, it is impossible to meet the one-week requirement. In those circumstances, a letter is normally sent to the hon. Member concerned explaining what is going on. If the hon. Gentleman has any special cases in mind, I shall look into them or draw them to the attention of those of my right hon. Friends who are responsible for them.

Dispersal Policy

26.

asked the Minister for the Civil Service if there are any plans to disperse some civil servants presently working in central London to outer London boroughs.

Not within the dispersal programme announced on 26 July 1979, but the Laboratory of the Government Chemist will be relocated in 1988 from central London to Teddington.

As traffic congestion continues to get worse in central London, and as there is a prospect of London having its first completed orbital motorway in three years' time, is not my hon. Friend's answer significant? Might not the trend to have fewer civil servants located in central London and more located in outer London boroughs be convenient for the public and, perhaps, more civil servants?

One of the reasons for discontinuing the dispersal initiative of some years ago was the heavy public expenditure involved. The points that my hon. Friend has made will be taken into account if it is necessary to relocate work.

27.

asked the Minister for the Civil Service if he will list the responsibilities of the Minister for the Civil Service so far as the dispersal of civil servants is concerned.

The Minister for the Civil Service is responsible for overseeing the implementation of the dispersal programme announced on 26 July 1979.

Why have the Government been so coy about telling the Table Office what my right hon. Friend's responsibilities are in this matter? For example, in the development of policy, what consideration is given to ensuring that a sufficient number of senior civil servants are employed outside London?

I cannot comment on the coyness or non-coyness of the Table Office. I should have thought that that was a matter for you, Mr. Speaker. I have always found it extremely helpful in dealing with hon. Members. Information about the responsibilities of the Management and Personnel Office is to be found in documents that are available to the House.

With regard to senior civil servants, I am not aware of any particular case that is pending. If my hon. Friend has one in mind, perhaps he will draw my attention to it.

Does my hon. Friend agree that the key to dispersing civil servants is to disperse Civil Service work? Will he encourage our right hon. Friend the Secretary of State for Education and Science to disperse more of his Department's functions to its provincial centres.

As I have already said, an important issue that must be taken into account when considering dispersal is the cost to the taxpayer. It is important to ensure that we achieve the greatest possible value for money and do not get involved in dispersal programmes that will be costly to the taxpayer.

Is my hon. Friend aware that several Departments still have their typing done 300 or 400 miles outside London? The work is carried up and down the motorways by lorry. If the typing is to be done outside London, could my hon. Friend at least ensure that there are remote computer terminals?

Progress is being made in introducing information technology throughout the Civil Service. My hon. Friend is an expert on such matters. He will know that such a process takes time and involves considerable cost. I believe that typing work is sent out of London only when, in the judgment of those responsible for the management of the Department, that is the most cost-effective way of doing it.

Energy Assets (Sale)

3.30 pm

On a point of order, Mr. Speaker. As was made clear during the exchanges at Energy Question Time, it is common knowledge that the Chancellor of the Exchequer will today give a written answer in which he will detail assets to be sold by the Government, pursuant to a statement that he made in the House some weeks ago. It is also common knowledge that the right hon. and learned Gentleman has briefed the press on the contents of his reply.

By question No. 1 today my hon. Friend the Member for St. Helens, North (Mr. Evans) specifically asked the Secretary of State for Energy whether he had
"any plans to privatise or denationalise any publicly owned energy assets."
I believe that reference will be made in the Chancellor's written reply to energy assets that are to be sold off. Those assets are in the legal ownership of the Secretary of State. He holds them as a result of legislation passed by the House.

If a Minister, when he is answering for his own responsibilities, does not answer a direct question, but later in the day another Minister answers the question in written form, as a result of which he is not open to oral questioning, is that not a gross contempt of the House? Is not that manipulation such as we have not experienced in the House in recent times? Is it not gross arrogance on the part of the Government? Do you not have responsibility, not just to maintain the rules of order, but to ensure that Parliament is a meaningful place in which legitimate questions, properly asked, receive non-deceitful answers?

Further to that point of order, Mr. Speaker. I asked the Secretary of State for Energy a specific question about BP shares. We are now told by the press that there is a written question for answer which deals specifically with BP shares. I understand the dilemma of the Secretary of State. It is clearly stated in "Erskine May" that it is permissible for a Minister to refuse to answer a question because there is another similar oral question on the Order Paper, but it is not permissible for him to do so if the other question is a written question. Serious doubts about the whole practice of the placing of questions arise from the question on the Order Paper to which we are all referring.

The Chancellor of the Exchequer has now joined us. In view of his wide experience of selling shares, from Amersham to Britoil—his experience could hardly be described as very successful — would it not be reasonable for him to give us now the statement that he ought to have made? As the Leader of the House is here, would it not be reasonable for him to whisper in the Chancellor of the Exchequer's ear that this controversy could be quickly settled if the Chancellor were now to give to the House, in an oral statement, the answer that he is giving to the press through a written question? That would help us to get on with today's business.

I know that it does not come within your purview, Mr. Speaker, to state in what form questions should be answered, but it may be within your purview to tell the Government that, in view of the refusal of the Secretary of State to answer a specific question relating to energy, if there is anything in the Chancellor's written answer which relates specifically to energy they should answer the question orally now.

Further to that point of order, Mr. Speaker. I draw your attention to written question No. 337 in the name of the hon. Member for Keighley (Mr. Waller). As we all understand, that question is to be the vehicle which the Chancellor of the Exchequer will use to answer the question on asset sales. However, it does not refer specifically to energy sales. I accept that you are not responsible for the content of ministerial answers, but I asked a specific question on sales, on a matter for which the Secretary of State has direct responsibility. I also asked the Secretary of State to deny the leak in The Times today which foreshadowed the announcement which the Chancellor is apparently due to make.

Finally, I appeal to you, Mr. Speaker, as the protector of Back-Bench Members. Is there not a grave danger that if Ministers are embarrassed by questions for oral answer, which have to be tabled a fortnight before they are to be answered, they will get round the problem by asking one of their hon. Friends to table a friendly question for written answer? That is not in the interests of the House of Commons or the country.

Order. I have to protect the time of the House. I think that I should give a ruling on the matter.

Further to that point of order, Mr. Speaker. It appears that the Chancellor of the Exchequer wishes to avoid making a statement to the House and that he is skulking around the corridors issuing briefings to the press. The importance of this matter extends beyond the question immediately at issue.

Last Thursday the Leader of the Opposition asked the Leader of the House for a statement to be made on the Government's public expenditure plans. That issue is tremendously important to all Back Benchers. On your election, Mr. Speaker, you restated your commitment to the protection of Back Benchers. Every city in the land is under threat from the effects of the cuts in the National Health Service — [Interruption.] In my constituency, Mr. Chairman, the Yorkshire regional hospital—

Order. As the hon. Gentleman knows, I am not the Chairman. However, I have the drift of his supplementary question.

It is imperative that, before the House rises for the recess, the Chancellor should make a statement on the extent of public expenditure cuts. Every Member of Parliament—

Order. I think that I have the hon. Member's point. I believe that I can deal with the matter. We are about to move on to discuss the motion on the Adjournment of the House. It would be eminently reasonable to discuss this subject on that motion and suggest that the House should not adjourn until a statement has been made.

Further to that point of order, Mr. Speaker. Whilst one would wish to bow to your suggestion that the debate on the Adjournment provides a suitable opportunity to raise this issue, I doubt whether the Leader of the House, the Chancellor of the Exchequer or the Secretary of State for Energy will be present during that debate, in view of their usual attendance in the House. Would it be in order for the Chancellor of the Exchequer to give to the House the information that he is about to convey in a written reply? If he will not do so, are we not entitled to suggest that, in view of his wider responsibilities, the Leader of the House should comment on this reprehensible action?

Further to that point of order, Mr. Speaker. Apart from anything else, you are the custodian of parliamentary behaviour. On question No. 19 I asked the Leader of the House if he could imagine any previous Conservative Chancellor of the Exchequer whom he and I have known — Selwyn Lloyd, Reggie Maudling, Iain Macleod, or Tony Barber—behaving as the present Chancellor of the Exchequer has behaved. They would have come to the House and made their statements, whatever the issue. I put it to you, Mr. Speaker, that this action represents a change in parliamentary behaviour. The Leader of the House, who really cares about parliamentary behaviour and good manners, seemed to accept that that was a valid point. May I suggest that the House could overcome this impasse if the Leader of the House had a gentle word with the Chancellor of the Exchequer about the good manners shown by his predecessors.

Further to that point of order, Mr. Speaker. I ask you to rule on one of the points that have been raised. Is it in order for a Secretary of State, who is in possession of information that is to be given by a colleague later in the day, to refuse to impart it to an hon. Member who asks a specific and direct question about it?

Order. I do not think that I need take any more points of order, as I think I have been helped enough. My ruling on the point of order raised by the right hon. and learned Member for Monklands, East (Mr. Smith) is that that is frequently done. We may regret it, but it has frequently been done in the past.

Further to that point of order, Mr. Speaker. I very much regret having to raise this issue again. I have never quarrelled with the Chair, and do not intend to do so now, but you suggested this might be a suitable subject to raise on the motion on the summer Adjournment. Although I accept that the question that was asked may be a suitable subject for such debate, my question is for you to answer. I should like you to rule on whether Ministers have behaved properly in answering questions in the House. Surely that is not a subject for debate. It is for you to give a ruling on that, Mr. Speaker, and you may have to give some thought to it.

When the hon. Gentleman raised his first point of order he said that I was not responsible for the answers that Ministers gave at the Dispatch Box. That is sadly the fact. Well, perhaps not sadly, but gladly the fact. I am not responsible for what is said from the Dispatch Box and, furthermore, I know nothing of this supposed leak. What I do know is that the question tabled by the hon. Member for Keighley (Mr. Waller) was put on the Order Paper on Friday and that Ministers have up to a week to answer written questions. I have no knowledge whether this question is to be answered today, or some time before the House rises.

Further to that point of order, Mr. Speaker. I think I might be able to help you on that last point. Since you initially ruled we have had a conversation about when the written reply can be expected, and the Treasury has informed us that the answer will come over to the House at 4 pm. Thus, in 20 minutes' time the question and answer will be available to the House. Hon. Members may be tempted to continue to probe this issue until the answer is delivered. I understand that it would then be in order to move the Adjournment of the House under Standing Order No. 10, on the basis of the information contained in that answer.

It is rather strange that we should be tempted to raise points of order until that question is answered, when the Chancellor of the Exchequer and the Leader of the House are in the Chamber and can solve the problem very easily. I suggest, Mr. Speaker, that they are putting you in an extremely difficult position. Having heard this controversy, it is perfectly open to the Leader of the House to respond now. It would have been open to the Government to argue that they were holding back the information until the Stock Exchange closed, but that is clearly not the case if the Treasury intends to reveal the information at 4 pm.

Earlier, Mr. Speaker, you said that such a refusal frequently happened. That may or may not be the case, but many of us would like you to rule on whether that should happen and whether it is right that it should happen. Ministers often use written answers to reply to questions that should be answered by statements. However, that is not the issue today. The point is that the first question on the Order Paper to the Department of Energy relates, in part, to the statement which the Chancellor of the Exchequer intends to give in the form of a written answer. We would like a ruling on that rather narrow and specific point. Is it in order for a Minister to refuse to answer at Question Time on the basis that a written question will be answered at a later date?

I can only repeat that I am not responsible for the answers that Ministers give.

Further to that point of order, Mr. Speaker. Perhaps I can assist you. Under the Labour Government in 1974 exactly the same situation arose in my case. A question to the Secretary of State for Industry about British Leyland was pre-empted by a written answer.

Further to that point of order, Mr. Speaker. Would it be in order for the Chancellor of the Exchequer to make a statement to the House now? The House knows that he must have in his possession the answer that he proposes to give in written form. He is probably sitting with it in his hand. Is there anything in the rules of order that would prevent the Chancellor of the Exchequer from making a statement? The House clearly wants one, but the right hon. Gentleman clearly does not wish to give it.

If the Chancellor of the Exchequer wants to make a statement there is no reason why he should not make it—[HON. MEMBERS: "Now."] Order. I must be allowed to finish what I was saying. If the right hon. Gentleman wishes to do so, there is no reason why he should not make a statement after the statement on the EC Budget Council.

I do not think that any point of order can possibly arise. I have given my ruling.

On a new point of order, Mr. Speaker. Can the Chancellor of the Exchequer make a statement at the end of the statement on the EC Budget Council? Many hon. Members are incensed at what is happening, because the issue is important. Would it be possible for the Leader of the House to get to his feet now to say that the Chancellor of the Exchequer will make a statement immediately after that on the EC Budget Council? That would greatly help the House.

To help the House, may I assure the right hon. and learned Gentleman and other hon. Members that, after the statement that is to be made by my right hon. Friend the Financial Secretary, my right hon. Friend the Chancellor of the Exchequer will seek to catch Mr. Speaker's eye.

The hon. Gentleman has raised one point of order already and has heard the remarks of the Leader of the House. I do not propose to take any more points of order on this matter.

European Budget Council

3.47 pm

With permission, Mr. Speaker, I should like to report to the House on the outcome of last week's Budget Council in Brussels, at which I represented the United Kingdom. The Council had a discussion with the Parliament and finally established a draft supplementary and amending budget No. 2 for 1983 and a draft budget for 1984. These will now go forward for consideration by the European Parliament.

The draft supplementary budget No. 2 for 1983, as established by the Council, in response to a presidency compromise, makes provision for budget refunds for 1982 for the United Kingdom and Germany under the risk-sharing provisions of the 26 October agreement of 370 million ecu. The United Kingdom's share in this is around 305 million ecu-310 million ecu. In our view the total figure should have been 495 million ecu, including 408 million ecu for the United Kingdom. We are therefore left with a shortfall of about 100 million ecu gross, or 75 million ecu net. The equivalent sterling figures are £58 million gross and £43 million net. I voted against the presidency compromise, which included this provision, but all others voted for it, except the Danes, who abstained. I therefore made it clear to the Council, for formal inclusion in the minutes, that it had failed to discharge in full its obligations to the United Kingdom and that the community institutions must take the necessary action as a matter of urgency to ensure that the United Kingdom receives its full entitlement. The budgetary processes for 1983 are not yet completed, and the Government intend to ensure that this matter is resolved satisfactorily.

The presidency compromise was also unsatisfactory in that it included a cut of only 50 million ecu in the extra provision for agricultural spending proposed by the Commission. I argued strongly for a larger reduction.

The draft budget for 1984, as now established by the Council, will make provision of 1,202 million ecu for refunds to the United Kingdom and Germany, including 991 million ecu for the United Kingdom. In contrast with the 1983 supplementary, this gross provision correctly provides for a refund to the United Kingdom of 750 million ecu net, and so honours the Stuttgart undertaking fully.

The draft budget provides for agricultural guarantee expenditure of 16·5 billion ecu, as recommended by the Commission, but the Council decided to place 250 million ecu out of this total in the "reserve" chapter of the budget rather than "on the line". Together with two other delegations I argued for cuts of 1 billion ecu in the provision for agricultural guarantee spending, but this proposal was finally out-voted.

The draft budget makes provision for total non-obligatory expenditure, including the non-obligatory element in the United Kingdom and German refunds, to rise by half the maximum rate—that is, by 5·8 per cent. — but the combination of the large provision for agriculture with the necessary provision for United Kingdom and German refunds left little room inside the own resources ceiling for increases in the regional development and social funds.

Before either budget is finally adopted there will be extended negotiations between the Council and the European Parliament. During this period the Government will take all appropriate steps to ensure that the United Kingdom receives its entitlement to refunds for 1982 in full. My right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs will raise the matter at the Foreign Affairs Council at the earliest possible opportunity. I am sure that the Government can count on support for this from all sections of the House.

Is the Financial Secretary aware that the sad and sorry tale of the Government's performance which he has presented to the House this afternoon is a far cry from the Prime Minister's promise in her Winston Churchill memorial lecture? She said:

"I cannot play Sister Bountiful to the Community while my own electorate are being asked to forgo improvements in the fields of health, education, welfare and the rest."
The right hon. Lady explicitly committed her Government to seeking a broad balance between Britain's contributions and receipts, and she persuaded the House on 16 July 1979 to agree, by a unanimous resolution, to fundamental reforms of the budgetary arrangements so that Britain's contribution to the budget would not be greater than its receipts.

Given that clear commitment, is not the Government's record on the European Community budget one of continuing and mounting failure, and will the right hon. Gentleman recognise that that failure arises not least because the Government have no consistent policy towards EC spending? The Treasury claims to be seeking control of the Common Market budget, but such is the power of the farming lobby within the Conservative party that the Government have shown no serious intention or commitment to secure a fundamental reform of the common agricultural policy, which lies at the heart of the Common Market budgetary problems. Instead, the Government have allowed the cost of that absurd and wasteful policy to spiral.

The Financial Secretary referred to the draft budget for agricultural guarantee expenditure of £16·5 billion ecu, or more than £10,000 million. Does he recall that the expenditure on the CAP for this year is 41 per cent. higher than it was last year? In those circumstances, what guarantee can he give to the House that the budgeted amount of 16·5 billion ecu for next year will not be exceeded?

To return to the Financial Secretary's failure at the weekend, may I ask whether the right hon. Gentleman recalls that he was quoted in The Times as saying:
"We have lost a battle but not the war—and it will be a war to get it back."
Will the right hon. Gentleman tell the House this afternoon what weapons he intends to deploy in the war to ensure that we get our full refund? Will he explain why the Government have thrown away the key and central weapon, which is a veto on any increase in the 1 per cent. ceiling on VAT contributions? Why are the Government pussyfooting about, and why did they, at the Stuttgart summit and at the Foreign Affairs Council meeting, refuse to say categorically that Britain would veto an increase in the VAT ceiling?

When the Financial Secretary talks in his statement of the Community institutions taking the necessary action as a matter of urgency to ensure that the United Kingdom receives its full entitlement, what is that necessary action? When he says that the Government will take all appropriate steps to ensure that Britain receives its agreed entitlement, what will those appropriate steps be? Will the Government measure up to the task and block further spending on the common agriculture policy? Will they veto an increase in the VAT ceiling?

Is the right hon. Gentleman aware that the reason why he has suffered a further humiliation in a long line of humiliations, and why, for all the Government's bluster, contributions to the Common Market have been running at £100 million more in real terms under the Conservative party than they did under the Labour party, is that the other Community Governments have got the measure of the right hon. Gentleman and of the Prime Minister? They know, as we know, that the Government's sound and fury signifies nothing, and that they are willing to wound but, as ever, afraid to strike.

That remark comes ill from a member of the Labour party. I remind the House that our Common Market partners got the measure of the Labour Government's resolve and did not give them back even one ecu, whereas this Government have obtained more than £2·5 billion in refunds. At the Budget Council last week we secured agreement to gross refunds for the United Kingdom and Germany of 1,570 million units of account. We would have liked our full entitlement, but we received a great deal through the Council.

The hon. Member for Blackburn (Mr. Straw) asked about the power of the farming lobby, and it is true that nine out of 10 Community members would wish to increase expenditure on the common agricultural policy. We are always in a weak position in trying to control that expenditure. However, although we have allowed 16·5 billion ecu in the budget for next year, that brings us to the ceiling of what can be spent. There is no question of extra spending on agriculture next year, because the ceiling has beeen reached in the budget which has been put before the Council. At last we have a real weapon to control agricultural spending, which must now rest within that ceiling.

The hon. Gentleman might not know that last week my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs proposed a strict financial guideline to control future agricultural spending. That will be negotiated by the special Council, culminating in the Council in Athens in December, and at the Athens Council we intend to achieve proper control of agricultural spending.

The hon. Gentleman asked about future action on refunds. This is the first stage of the budgetary process. The proposal must go to Parliament, return to the Council and then go back to Parliament before the matter is concluded. During those exchanges there will be ample opportunity for my right hon. Friends to press their case and to do all that is possible to make the Community live up to its undertakings and its obligations. We shall do that.

Can my right hon. Friend confirm that the obligation to Britain in respect of the 1982 refunds is as legally binding on the Community as the obligation to meet price guarantees to farmers? Has he conveyed to his colleagues on the Council the growing impatience, even among those most committed to the European idea, at the chicanery and prevarication that continue to surround this matter?

I agree with everything that my hon. Friend has said. The regulations embodying the 26 October 1982 agreement create an obligation to pay sums to the United Kingdom under the risk-sharing arrangements. Last week, some other member states were arguing about the precise method of calculating these sums. However, the amount which the Council eventually included was based on an arbitrary cut and not on any principle.

Is the right hon. Gentleman aware that many hon. Members were glad to read his statement in the press that he was prepared—and therefore presumably the Government are—to go to war over this matter? Does he think that the threat was taken seriously by his colleagues in Europe? Is he satisfied with the result so far of the transfer of sovereign powers from this House to the institutions of the Community and to a directly elected Assembly?

My right hon. Friend the Prime Minister has made it clear that we sincerely hope that we can resolve this matter during the budgetary process, which must first be allowed to complete its course. I should hate to have to have recourse to withholding—this deals with the right hon. Gentleman's question about sovereignty—our contribution until the full budgetary process had run its course. It is as if the Government have lost a point in Committee, but the Report stage remains to put the matter right.

Will my right hon. Friend confirm that neither he nor the Government will allow any increase in the resources available to the European Community unless the deficits incurred by the common agricultural policy are substantially reduced?

The strict financial guideline which my right hon. and learned Friend put forward requests that the rate of increase in agricultural spending be limited to a proportion only of the rate of increase in Community own resources. If that were agreed, there would be a limit on agricultural spending.

First, will the Minister withdraw his remark that he would hate to have to have recourse to withholding our contribution, as it is a threat to act in breach of Community law? Secondly, will he accept that the Government's insistence on maintaining a rigid ceiling on total expenditure at the level that he has mentioned will be damaging to this country and to the Community in three respects? First, putting a ceiling on agricultural guarantee expenditure of the kind that he has mentioned would result in direct harm to the British farmer. Secondly, it would leave no resources for expansion of expenditure by the Community on unemployment measures and social spending. Thirdly, it would result in continuing the reluctance of our Community partners to accept any automatic refund to this country.

To say that one would hate to do something cannot be interpreted as a threat, and I stand by what I said. The conditions under which the Government are prepared to consider—that is not a strong word—any increase in own resources are, first, that a strict and binding financial guideline be placed upon the growth of agricultural expenditure and, secondly, that some financial mechanism be in place to ensure that no Community member state bears an unfair burden of the costs of Community policies. I should have thought that even the hon. Gentleman, and the House, would think that that was the correct way to proceed.

Does my right hon. Friend agree that, infuriating as is the loss of part of the refund for last year, and satisfactory as is the settlement for this year, it is far more important to secure a long-term sensible arrangement for financing the Community? Will he concentrate on that and invite hon. Members to concentrate on it also?

I agree with my hon. Friend. Already, two meetings of the special Council have taken place. The atmosphere was constructive and some progress was made. We hope to achieve an effective result by the time of the Athens Council meeting in December. My only sadness is that the events of last week do not give Her Majesty's Government as much confidence that those negotiations will come to a satisfactory conclusion as they would have had without any cuts in the refund.

If, to use the Financial Secretary's words, the Council has made an arbitrary cut in the 1982 repayments during the 1983 budget negotiations, what is to prevent it doing exactly the same with the 1983 repayments in respect of the 1984 budget?

The cut in the 1983 budget was in respect of the risk-sharing for 1982, an amount calculated under a complicated mathematical formula, depending upon the outcome of our net contribution and known as the "risk-sharing element". This might have been positive or negative. In fact, it was an increased refund due to us. The rebate for 1983, included in the 1984 budget, was a fixed sum—750 million ecu net—and that amount, properly grossed up and properly calculated, has been included in the 1984 budget. Therefore, there is no doubt that the Council has passed the money required to fulfil that obligation arising out of Stuttgart.

Does my right hon. Friend accept that, far from being a sad and sorry performance, as described by the Opposition, his performance held high hopes for a satisfactory outcome? I hope he understands that he is to be congratulated on the difficult negotiations, in which he took part over a long period of time. I hope he will agree that a set-back is one thing but that the determination to succeed remains—quite unlike the illusory changes made by the Opposition at the time of the referendum. The genuine benefits that we should receive in the end are still attainable and must be attained.

I am grateful to my hon. Friend. He might feel that some evidence of how hard we struggled to prevail in the Council for what was right can be derived from the fact that the Council lasted for two and a half days, including an all-night session of no fewer than 30 hours. I gather that that is a Community record, soon I hope, to find its way into the "Guinness Book of Records".

Why is it that every time the Prime Minister returns from the Community finance bill second reading in the Council of Ministers she returns with cries of triumph and rejoicing, while every time the right hon. Gentleman and his junior colleagues return from trying to pick up the pieces in committee they return whipped and have to admit that their European colleagues have defeated them once again?

I suggest that that is a question that the hon. Gentleman should ask the other budget Ministers of our Community partners at the Council. It is they who went back on the 26 October 1982 agreement, not I.

Does my right hon. Friend agree that if the House were so unwise as to pass legislation raising the VAT ceiling the necessary pressure upon the EC to reform its budgetary arrangements and, most of all, the CAP, would be lost?

I believe that my hon. Friend is entirely right in saying that. He will notice that no such proposal was included in Her Majesty's Gracious Speech.

Was the Minister misquoted by the press as saying that he would "go to war" over this? If not, what is the nature of the task force that he has in mind?

The hon. Gentleman is not living up to his usual standard. He did not mention the General Belgrano in that question. I said that we had lost a battle but had not lost the war. I repeat that.

Mr. John Townend