Skip to main content

Commons Chamber

Volume 79: debated on Wednesday 22 May 1985

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

House Of Commons

Wednesday 22 May 1985


[MR. SPEAKER in the Chair]

Oral Answers To Questions

Foreign And Commonwealth Affairs

Strategic Defence Initiative


asked the Secretary of State for Foreign and Commonwealth Affairs if he has made any further representations to the United States of America about the strategic defence initiative.

We remain in extremely close touch with the United States and our other allies about the strategic defence initiative research programme. We have made clear our support for United States research, which is necessary to balance Soviet efforts in this area.

Will the Foreign Secretary take the next opportunity available to him to impress on the Americans that he has some sympathy with Mr. Gorbachev's recently expressed view that the star wars programme increases the risk of nuclear war and sharply reduces the chances of reaching any accord on disarmament issues?

I shall not take the opportunity to put the point that the hon. Gentleman raises. I shall emphasise that the purpose of the United States in this respect is to achieve not superiority but balance, and in doing so to take account of the substantial Soviet programme for research of this kind. The Soviet Union has extensive ballistic missile defence programmes, has deployed the only anti-satellite system, has the only active anti-ballistic missile system in the world and has been undertaking research of this kind for a long time. For that reason we understand the United States' research programme.

Does my right hon. and learned Friend agree that since the beginning of time man has looked for ways of preventing weapons systems being delivered, that it is normal to research this programme, that there is nothing unusual about it, and that it is simply a continuation of what has gone on since wars began?

I agree with the general analysis offered by my hon. Friend. Against that background I stress the points that I made about the scale and nature of Soviet research into such matters. It is equally important to bear in mind that all aspects of arms deployment need to be considered in the context of the search for an arms control agreement that can be sustained.

Will the Foreign Secretary acknowledge that the development of these weapons is destabilising, as seen from the Soviet perspective, especially in the so-called transitional phase? Is there not a genuine danger that pressing ahead with the SDI could lead to the failure of the Geneva talks?

I cannot emphasise too strongly and too often the fundamental fact, with which I answered the first supplementary question, that research into defensive space systems of this kind has been undertaken for many years on a large scale by the Soviet Union. For that reason we support the research being undertaken by the United States. We also welcome the attempts by the United States to discuss these matters with the Soviet Union, and its clear statement that any SDI-related deployment must be a matter for negotiations. That is the right way to approach these matters.

Does my right hon. and learned Friend agree that the research programme holds out the prospect of a non-nuclear antidote being found against the firing of a nuclear weapon? If that prospect is realised, surely it will be to the eternal benefit of all mankind?

It has been made clear that the research programme is bound to take many years be fore one can reach any conclusions about what it is likely to produce. Obviously, one factor to be taken into account is that it may offer prospects of enhanced defence. It is important to bear in mind that the United States' research is consistent with treaty obligations. We regard the treaty obligations as an important element in preserving peace and stability. In that framework, the whole matter should be considered.

In view of the Secretary of State's reply to an earlier question, what representations has he made to the American Administration about the repeated statement of the American Defence Secretary to the effect that the United States will not negotiate the deployment. of the space defence system if it proves feasible? Is that not a clear breach of the understanding reached between the Prime Minister and President Reagan in December?

As to the research programme, since the Americans have made it clear that they are monitoring Soviet research and have published a list of experiments which they plan to carry out in this area, would it not be sensible to kill the thing at birth by seeking a ban by both sides on all space defence-related experiments, which could be verified, and already have been?

The right hon. Gentleman must refrain from over-simplifying the matter. Although some research has been identified as taking place, including the nature of the deployment undertaken by the Soviet L nion, both sides believe that a system for the monitoring of research would, in practice, be unattainable. The important feature to notice is that the United States has repeated many times that any SDI-related deployment must be a matter for negotiation. The Americans emphasised that not just in the Camp David points, but during the Prime Minister's visit to Washington in February and on several ether occasions.



asked the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to seek to visit Honduras.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs
(Mr. Tim Renton)

My right hon. and learned Friend has at present no plans to do so.

Will the Minister welcome the reported pact in Honduras whereby the head of the Supreme Court will be released from gaol and the President will not be allowed to interfere in the forthcoming elections? Will he communicate his support to those in Honduras who wish to disarm the Contras, maintain their national security by not allowing the United States to use their country as a centre of counter-insurgency against Nicaragua, and wish to establish normal, peaceful relations with the Government of Nicaragua? Will he support them, or will he follow President Reagan obediently?

As the hon. Gentleman will know, there were conflicting reports last week about border incidents between Honduras and Nicaragua. The best way to promote peace in the area is to follow the aims of the Contadora group, which we firmly support. As the hon. Gentleman will also know, a settlement between trade unionists and the constitutional groups in Honduras was announced yesterday. President Suazo has gone to Washington for discussions with President Reagan.

Is it not true that the border between Nicaragua and Honduras is now a serious flashpoint? No matter what we say about supporting the Contadora group, the reality is that the United States is losing its head and trying to push troops so near to the border that the Nicaraguans may do something in self-defence and we may have the beginning of another Vietnam. Could we not use our immense influence to cool the President's ardour in this direction and try to get a peaceful settlement?

If the hon. Gentleman reads carefully the reports of yesterday's meeting between President Suazo and President Reagan, he will see that there was a balanced approach on both sides to the problems that he described. The hon. Gentleman and I would agree that the best means of settling the matter is through the Contadora group's attempts to achieve peace throughout the area.



asked the Secretary of State for Foreign and Commonwealth Affairs whether he is satisfied with the current state of relations with India.

We attach great importance to maintaining the very close relations we enjoy with India. My right hon. Friend the Prime Minister visited India in April, and we hope to welcome Mr. Gandhi here soon.

Does the Foreign Secretary realise that the problems with the Westland helicopters are symptomatic of the worst relations between the United Kingdom and India for many years? If we are to retain the good will of Prime Minister Gandhi and most of his Government, should we not make a generous gesture in the form of aid, together with a review of our law, which manifestly failed to deal with the supporters of terrorism after the tragic assassination of Mrs. Indira Gandhi?

The hon. and learned Gentleman takes a close interest in these matters. I ask him not to conclude that the Westland helicopter matter had an effect, or flows from an effect, on bilateral relations. Mr. Gandhi expressed some technical reservations about those helicopters, and further information on them was supplied to the Indian Government. We have not yet received a formal response.

The hon. and learned Gentleman is right to draw attention to the behaviour of a small and unrepresentative group of Sikh extremists in Britain. We utterly condemn their behaviour, which did much undeserved harm to the reputation of their community, the great majority of whom are law-abiding. It should be understood that those who break the law will, like any other citizens, suffer the consequences.

Should we not be thanking our Prime Minister, who, in spite of a tiring and exerting visit to the far east, still found time to visit Mr. Gandhi? It is her usual practice. When touring abroad, she likes to call in on Delhi to keep up our very good relationships. Is it not a fact that the Indian nation is now interested in purchasing many other types of British goods?

I gladly endorse the tribute paid by my hon. Friend to my right hon. Friend the Prime Minister. He is right to draw our attention to our exports to India, which last year totalled no less than £780 million. I should like to remind the House that Mr. Gandhi is expected to visit the United Kingdom this year. He has accepted an invitation in principle, and I am sure that he will be warmly welcomed by the British people.

Is the Foreign Secretary aware that many British citizens belonging to the Sikh religion, who are law-abiding, are desperately concerned at the continued violence against Sikhs in India, and are anxious that that should not spill over into this country? Will the right hon. and learned Gentleman make representations to the representatives of the Indian Government, to express our concern at the continued problems being faced by members of the Sikh community in India?

I understand the concern expressed by the hon. Gentleman on that matter. It is right to acknowledge that the Indian Prime Minister has made several statesmanlike moves in relation to the problems in India. He has released the Akali Dal leadership, legalised the All-India Sikh Students Federation, and organised a judicial inquiry into the riots after Mrs. Gandhi's assassination. Those moves deserve to be acknowledged.

Will my right hon. and learned Friend confirm that he is not entirely happy with the state of affairs in India? Apart from the helicopter deal that fell through, the Indian Prime Minister is at present on his first official visit abroad to Russia, where he is now, and will be for the next week, and his next official visit abroad is to Washington, where he will be for another week. As India is the biggest democracy in the free world, will my right hon. and learned Friend assure the House that he is a little concerned about the situation? We want to get the Indian Prime Minister into Britain as soon as we can.

Of course, I am anxious to ensure that the close relations to which I referred in my original answer are maintained and strengthened, but it is worth reminding the House that both the Prime Minister and myself met the Indian Prime Minister in Moscow. As has been said, the Prime Minister herself visited New Delhi not many weeks ago. So, too, have my right hon. Friend the Secretary of State for Transport and my right hon. Friend the Minister for Overseas Development. Several other ministerial visits to India are planned in the fairly near future. As I have said, Mr. Gandhi has accepted an invitiation in principle to vist the United Kingdom this year. What my hon. Friend says underlines the point that he will be warmly welcomed by the British people when he comes.

South Africa (Detentions)


asked the Secretary of State for Foreign and Commonwealth Affairs what representations he is making to the South African authorities over the detention order under section 29 of the Internal Security Act of officials of the United Democratic Front.

We have consistently condemned the practice of detention without trial and have made our position clear to the South African authorities on many occasions. We have expressed our concern about the recent detention of the United Democratic Front officials to the South African Government.

Does the Minister agree that it is ludicrous for the South African ambassador to seek to argue that the judiciary for this issue in that country is acting independently of the wishes of the Government?

The South African judiciary has, on several occasions, acquitted people who have been charged with treason or other politically related offences. Therefore, it would be wrong to suggest that the South African judiciary does not have considerable indepen-dence. We hope that anyone who is brought before the South African courts will be considered by the South African judiciary on the basis of the evidence that is presented.

Is the Minister aware of the renewed concern in this country and elsewhere at the number of people held in detention in South Africa and the deaths of some of them in very suspicious circumstances? How long will it be before the Prime Minister and the Foreign Secretary speak out in forthright terms against the racial tyranny in South Africa and make people there recognise that this country is no ally of that regime and that the community in this country condemns the practices which take place in South Africa?

As my right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign Secretary have both made clear their abhorrence of the apartheid system on many occasions, I see no need for any change of policy of the kind suggested by the hon. Gentleman.

Does my hon. Friend agree that the judiciary in South Africa has to operate, as all judiciaries should, within the law of the land and that that is exactly what is happening?

My hon. Friend is correct, but at the same time we must make clear our own view that a system of detention without trial precludes those so detained from appearing in court and establishing whether they are rightly in custody.

Is this not yet another example of the South African Government's legal tyranny persecuting leaders of black opinion who are committed to non-violence? Does the hon. Gentleman agree that that underlines the failure of the so-called constructive engagement and how little has really changed in that appalling country? Will the Government now start to isolate South Africa economically before we have to do so, following lamely after the Americans?

There have been a number of important reforms in South Africa which we have welcomed and which have been rightly welcomed by the international community, including the hon. Member for Swansea, East (Mr. Anderson) when he wound up the last foreign affairs debate for the Opposition. Nevertheless, if the South African Government are serious about wanting a policy of dialogue with genuine representatives of black opinion in that country, it is difficult to understand why they continue to charge and to detain without trial leading members of the United Democratic Front. I entirely reject the suggestion that a policy of economic sanctions would make any helpful contribution to achieving the objectives that the hon. Gentleman seeks.

Hong Kong (Refugees)


asked the Secretary of State for Foreign and Commonwealth Affairs how many refugees are currently being held in the closed camps in Hong Kong; how many were moved out of the camps in the last month for which figures are available; and if he will make a statement.

At 9 May there were 5,646 Vietnamese refugees in closed centres in Hong Kong. During April 277 refugees were resettled from Hong Kong, of whom 142 were from closed centres and 135 from open centres.

The closed camps are a matter of great concern to the British Government and to the Government of Hong Kong and neither Government wish to maintain them longer than is absolutely necessary. We are urgently considering the recommendations of the Sub-Committee on Race Relations and Immigration and will give our response to the House as soon as possible.

Does the Minister agree that those figures show that the population of the camps has remained substantially the same for six consecutive years and that at the present level of take-up the camps will still exist in 10 years' time? Is he aware that many of us regard conditions in those camps as a disgrace for which he and the Government are responsible? Will he explain why in 1984 Britain took fewer refugees than any other participating nation—one twentieth of the number taken by the United States, one twelfth of the number taken by Australia and a quarter of the number taken by Canada? Does he agree that that is utterly inadequate?

To describe conditions in the closed camps or, indeed, the camps generally as a disgrace is absolutely unwarranted and unfair. Mr. Hartling, who has recently in Hong Kong, stated publicly that in his view the Hong Kong Government were treating the refugees well. That should be stated clearly in this House, too. Of course we do not wish closed camps to be retained any longer than necessary, but the House should note that in the past 10 years Hong Kong has taken no fewer than 100,000 refugees in transit. Hong Kong has absorbed 14,000 refugees and Britain has taken nearly 20,000. That, too, should be acknowledged. We are doing our utmost to ease the problem and we shall be responding to the Sub-Committee shortly.

Does my hon. Friend agree that the Hong Kong Government have acted most commendably in their acceptance of refugees from Vietnam? Will he confirm that the only reason for having closed camps is the fear that their abolition would lead to an even greater influx of Vietnamese refugees? In responding to the Sub-Committee, will my hon. Friend bear in mind that if this country accepted a small number of Vietnamese refugees other countries could probably be persuaded to take many more?

I note my right hon. Friend's last point, and we are considering urgently our reply to the Select Committee. The Hong Kong Government should be praised for looking after the refugees for over 10 years. It is very important to note that since the introduction of the closed camps in Hong Kong in July 1982 there has been a substantial decline, compared with the rest of the region, in the rate of arrivals of Vietnamese refugees.

Does the Minister of State agree that it is somewhat indulgent for those involved to congratulate themselves upon the 1997 agreement when this great humanitarian problem, which is a challenge both to this country and to other civilised nations, remains unresolved?

I must tell the hon. Gentleman, if he did not hear me say it in a recent Adjournment debate, that we are treating this matter with the utmost urgency. We wish this problem to be resolved and the closed camps to be ended as soon as possible, but this has to be balanced against the very real problems with which the Hong Kong Government have to grapple in terms of numbers of arrivals.

Will my hon. Friend accept that the free world as a whole has an obligation both to the Hong Kong Government, which is carrying the burden in the way that he described, and to the refugees—not only to those in the closed camps but to some of those who are in what are described as transit centres where they have been living for several years? Is there not a very real obligation upon us to try to help, and is it not true that other nations are looking to Britain to take a lead in order to solve this international problem?

I acknowledge my hon. Friend's point, and I commented on these matters in my evidence to the Select Committee. But the House should not lose sight of the cause of this problem. Because of the gross abuse of human rights in Vietnam there have been more than I million refugees from there during the last 10 years. If only Vietnam would start to respect human rights, we might not have this problem.

Is the Minister of State aware that the Hong Kong Government deserve great credit for their humanitarian attitude towards the very large numbers of Vietnamese refugees with whom they have had to deal, but that it is intolerable that thousands of people who are partly our responsibility should still be incarcerated in what are effectively prison camps? Since very few of the refugeess who are now in those camps will be relocated unless the British Government take a lead, urgent action should be taken by the Government that will encourage other Governments to follow our lead. The Government have been warned during the past 18 months — long before the Select Committee took evidence—about this problem.

We have been generous to the Vietnamese. During the last five or six years nearly 20,000 Vietnamese refugees, which is a quite substantial number, have been taken into this country. Of course, the hon. Gentleman is right when he says that this country, in addition to Hong Kong, has a responsibility towards these people, and we are treating it as a matter of urgency.

Lebanon (Christian Community)


asked the Secretary of State for Foreign and Commonwealth Affairs what contact he has had with the Syrian and Lebanese Governments concernin the plight of the Christian community in the Lebanon.

We deplore the continuing violence in different areas of Lebanon. Her Majesty's embassies have been in touch with leaders of the Lebanese communities and the Lebanese, Syrian and Israeli Governments to express our concern about the recent fighting in the Sidon-Jezzine area between Moslem and Christian groups.

Will the Minister of State confirm that it is the Syrian-backed Druze, Shi'ite and Palestinian militias who have been responsible for the attacks upon Christian communities in the Lebanon? What is being done to aid the 50,000 Christian refugees?

It is a matter of the greatest urgency that the various communities in the Lebanon—both Christians and Moslems of all confessions—should find a way to live with each other again, otherwise, there will be continuing casualties and abuses of human rights.

Does my hon. Friend agree that the Christian community in the Lebanon is, sadly, as responsible as any other for the situation in the Lebanon today? Does he further agree that if the Lebanese factions do not think very soon about the Lebanon they will have no country to think about?

I do not think that it would be proper for me to apportion blame between communities for the present condition in the Lebanon, save to say that it is extremely serious and that if the Lebanon is to survive, which is in both the national interest and the interests of this country, it is essential for those communities to reconcile their differences.

Papua New Guinea


asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on his talks with the Foreign Minister of Papua New Guinea on 24 to 25 April.

On 24 April I held talks with the Foreign Minister on Papua New Guinea. Mr. Giheno and I were also present at the meeting between my right hon. Friend the Prime Minister and the Prime Minister of Papua New Guinea. The subjects covered included matters of concern in the south Pacific and East-West relations.

Apart from the pleasure given to this country by the visit of the Foreign Secretary and the Prime Minister of Papua New Guinea, did my right hon. and learned Friend have the opportunity to consider the remarkable economic development of that country, much of it with British participation, both private and official, and does he envisage further opportunities for participation in that laudable objective?

I agree with my hon. Friend about the success of economic development in Papua New Guinea and its importance, because total British investment now approaches £250 million. We are also backing, through the Export Credits Guarantee Department, the finance for the first stage of a new project at OK Tedi Mining Ltd. and have also made a renewed offer of aid and trade provision funds to cover a feasibility study for the further development of Jackson airport. All those represent opportunities for Papua New Guinea and for ourselves, of which both sides are taking advantage.

During these discussions, did the Foreign Minister of Papua New Guinea express his concern about Indonesia's external policies—those that involve East Timor that might have consequences for Papua New Guinea?

There was no specific discussion about that. We welcome the steps taken by Papua New Guinea and the Indonesian Government to resolve their border problems.

Middle East


asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress towards a middle east peace settlement.

We and our European partners have welcomed recent moves in the search for a peaceful, negotiated solution to the Arab-Israeli conflict. It is up to the parties concerned to take the lead in working for a just and lasting solution. For our part, we are in regular contact with the United States Administration and with King Hussein, and look forward to discussing the next steps during the visit to Britain of the Israeli Foreign Minister.

Mr. Murphy and Mr. Shultz have recently visited the middle east. Does my hon. Friend feel that the visits have brought a relaunching of the Reagan initiative any nearer? In the context of progress towards peace, will he comment on the reported testing of Israeli nuclear weapons?

We welcome the fact that Mr. Shultz has recently undertaken a tour of the area and that Mr. Murphy is keeping up a regular contact with the middle eastern countries. As my hon. Friend knows, we believe that the agreement between the Jordanians and the Palestinians of 11 February is a basis for making progress. We are keeping in close touch with the parties. My right hon. and learned Friend and I will be seeing King Hussein tomorrow morning, and he will be coming through this country again following his visit to the United States.

Does my hon. Friend accept that the courageous initiative of King Hussein has made the prospect of peace on the west bank and between Jordan and Israel very much closer? Will he give an undertaking to use his best endeavours not only on behalf of the United Kingdom Government but within the Council of Ministers meeting in political co-operation to bring a European element into this discussion, which is vital?

I agree entirely with my hon. Friend, who has recently undertaken a tour of the middle east and met many leaders. King Hussein is showing great courage in his efforts to try to make progress on this intractable problem—one on which there is an urgent need to make progress. That is why it is important for us, as we wish to give King Hussein every encouragement and support, to keep in the closest touch and to see him this week.

On the European Community, the Prime Minister recently issued a strong statement in support of the Jordanian-Palestinian proposals of 11 February.

Would it not, perhaps, be advantageous if the Government had less frequent contact with the United States Government, as it is quite clear that that Government are not prepared to put pressure on Israel—which has been the aggressor and which is not prepared to enter meaningful talks towards a resolution of these problems?

I do not agree with that. I think that it is important that we should keep in regular touch. Indeed, my right hon. Friend the Prime Minister has had two discussions with President Reagan recently and my tight hon. and learned Friend the Foreign Secretary has regular discussions with Mr. Shultz. The Americans have an extremely important role to play in the middle east if there is to be progress, and I think it is right that we should keep in close touch with them.

In the light of the deplorable events in the Lebanon to which we referred earlier, are not the Government of Israel entirely right in being concerned about the security and safety of Israel's northern border. and will my hon. Friend reaffirm the commitment of the Government that that must be an integral part of any eventual peace settlement?

I certainly agree with my hon. Friend that in the withdrawal of the Israeli forces which is taking pace now, and which we welcome, it is very important that there should be security arrangements between Israel and the Lebanon. That is why I think it is regrettable that the two Governments are not at the moment prepared to talk about these arrangements.

Will the Minister commend the increasing signs of realism in Israel in respect of the need to involve the PLO in discussions, even within the columns of the Jerusalem Post, and urge on the Israeli Government the need to deal with the PLO before the PLO is undermined by the failure to achieve progress in the middle east?

We shall be able to discuss these matters with the Israeli Foreign Minister when he comes to London the week after next, and we welcome the fact that Prime Minister Pares has made some positive remarks about a direct dialogue between the Arabs, the Palestinians and the Israelis.

Has my hon. Friend managed to establish whether it really is the PLO's view, as expressed by Hani Al-Hassan on 26 April, that it is prepared to agree to a deputation with the Jordanians which does not include prominent members of the PLO?

If my hon. Friend is talking about the delegation that is being proposed to visit the United States, these are matters for the United States and for the parties concerned to work out. We are concerned with focusing our attention upon supporting the proposals that have been produced by King Hussein and the Palestinians, which we think are a basis for progress.

Will the Minister answer the question asked by his hon. Friend the Member for Westbury (Mr. Walters) about the testing of a nuclear device by the Israelis?

Yes, Sir. I must apologise to my hon. Friend the Member for Westbury (Mr. Walters) that I lost sight of the question. I think that it concerned trigger weapons, on which we have seen reports of their export from the United States to Israel. We have seen these reports, we are concerned by them, but we have no knowledge about this. The House will be aware that Israel is not a signatory to or a member of the non-proliferation treaty. We believe that it would be in her interests and in international interests if she were now to sign the treaty.

I think that the issue concerning us mostly now is the report from the United States that the American Navy Department, after examining the results of an explosion in the south Atlantic, came to the conclusion that it was the explosion of a nuclear weapon and might well have been an Israeli weapon tested by the South Africans. Have the British Government any information of this?

The Minister may answer, but I thought that the south Atlantic was not in the middle east. [HON MEMBERS: "Israeli weapons".]

I do not know that it is for the right hon. Member for Leeds, East (Mr. Healey) to interpret the question put by my hon. Friend the Member for Westbury, but I understood him to be talking about the trigger mechanism. With regard to Israel, all I would say is that it would be very much in the international interest if Israel were to sign the non-proliferation treaty. I think that that is the most important thing.

Spinelli Report


asked the Secretary of State for Foreign and Commonwealth Affairs what consultations he proposes to have with other EEC Foreign Ministers concerning the Spinelli report; and if he will make a statement.

We are in regular consultation with our Community partners in preparation for the European Council in June at which the question of possible institutional reforms of the European Community will be discussed. We do not believe that the Spinelli report, which would radically change the balance between Community institutions, is the right way to make progress.

Will my hon. Friend give the House an assurance that Her Majesty's Government will not bring forward proposals to the House based on the Spinelli report and also that we will not countenance any transfer of any more sovereignty from the House to the EEC?

I can say to my hon. Friend that not only will Her Majesty's Government not commend proposals based on the Spinelli report to the House, but it is very unlikely that any other Government will wish to do so either, so far as we can tell. Most of the discussion taking place within the Community takes into account the report of Mr. Spinelli and his colleagues, but is essentially based on other proposals that have been discussed in the Dooge report and in other fora.

How can the European Assembly be given a greater role in Community affairs without, in effect, giving it greater power?

The question whether the European Parliament should have greater powers is an issue that will be discussed. Her Majesty's Government take the view that the existing powers of the European Parliament are already considerable and substantial, and we are not convinced that there is a satisfactory argument for increasing the powers of the European Parliament. We would, however, wish to see the European Parliament more intimately involved in the early consideration of proposals that will subsequently go to the Council of Ministers, so that the Parliament's views can be more fully taken into account by the Council of Ministers when it deliberates on these matters.

What advice will my hon. Friend be giving to the Prime Minister when the subject of the recommendations of the Dooge report come before the meeting in Milan? Will he, in particular, be warning the Prime Minister not to accept the terms of reference suggested in the Dooge report, which would pre-commit any conference to the concept of further European unity and the principles of Spinelli?

I fear that my hon. Friend has not properly read the Dooge report to which he refers — [Interruption.] — because there is no commitment in it, either by the majority or minority, to incorporate the proposals of the Spinelli report. There is one passing reference to that report, but no commitment or support for the fundamental recommendations of Mr. Spinelli and his colleagues. Her Majesty's Government believe that there is a good prospect of reaching agreement at the European Council on a package of proposals that will help decision-making in the Community and will help to make progress on the internal market, on political co-operation and on other matters which the vast majority of hon. Members believe are important and desirable in the interests of this country and the Community.

Is it true that the Prime Minister welcomed the use by the German Agriculture Minister of the veto and encouraged Chancellor Kohl in the continuation of that policy?

We were happy to support the proposals of the Commission on cereal prices. We attach importance also to the right of any member state to indicate when it believes that its important national interests are at stake, and therefore we abstained when the essential question was considered by the Council, to show that we believed that the Federal Republic was entitled to use that procedure if it thought it appropriate.

Will my hon. Friend reassure the House that Altiero Spinelli is neither more nor less than the Father Christmas of Italian politics and that his report is neither more nor less than the futuristic fancy of a man old enough to have been imprisoned by Mussolini but not, it seems, too old to daydream?

The report to which his name has been given covers a wide range of issues. The basic institutional reforms proposed by the report are not seen by Her Majesty's Government as providing an acceptable basis for the future of the Community.

During the discussions, will the Minister raise the crucial issue of the veto and highlight the cloud of hypocritical humbug that is now being raised on this issue? When we note the actions of the two Governments most in favour of abolishing the veto — first, France vetoes the idea of trade talks and then the Federal Republic of Germany vetoes the farm price review — we have amply illustrated the gap between rhetoric and reality on this issue.

While I do not believe that the example of the trade talks is relevant to this question, I agree that the French Foreign Minister has made it clear that France believes in the continued indispensability of the right of veto, and the recent action by the Federal German Republic demonstrated the position of that country in the matter. The vast majority of Governments in the Community accept that it is unthinkable that on any vitally important matter any country should be overruled. Therefore, the consideration of the Heads of Government will not concentrate on replacing or removing the right of veto, but rather on ways of ensuring that it should be used only when important national interests are at stake and not to hold up progress on other matters.

Is it not our task to enforce the existing treaty obligations of the Community rather than take a leap into the unknown with Mr. Spinelli and his report? In particular, will my hon. Friend insist on a freer market in financial services, where Britain is comparatively strong? Will this be top of the agenda at the Milan summit?

My hon. Friend is right to comment on the fact that the completion of the internal market is required under the original treaty and is not yet fully implemented. It has not only been a unanimous recommendation of the Dooge report but features in the list of priorities of the President of the Commission. The completion of the internal market should be the first priority of the Community. It will be the policy of Her Majesty's Government to emphasise the essential importance of the subject at the European Council.

Stockholm Conference


asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on recent developments at the Stockholm conference on confidence-building measures.

We are working with our allies to get more discussion on the details of our proposals for confidence-building measures. We will work hard for progress during the current, sixth, session which began last week.

While it is very welcome that discussions are taking place, must we not judge the talks by their practical results? Can my hon. Friend confirm that confidence depends ultimately on carrying out a number of commitments that have political and humanitarian aspects, as well as military ones?

I agree entirely with what my hon. Friend has said. Of course, we must remember that this conference is not, strictly speeaking, an arms control conference but stems, as he suggests, from the CSCE process, which goes wider than arms control. The objective of Britain and our allies, on which we put forward proposals, is to get practical confidence-building measures that will lead to greater harmony between both sides and might lead to a better climate for arms control negotiations.

What is the Minister doing to try to increase public interest in these talks which have been going on for a long time and which are to continue for some time yet? Should not the Government increase the amount of information that is available to the public instead of relying on an occasional question at Question Time in the House, with very little information in the newspapers, so that the public can support — or otherwise—the policies which we are pursuing at these important talks?

I note what the hon. Gentleman has said. Certainly the British Government are most anxious to get across information about what is taking place in various arms control and other talks. The Foreign and Commonwealth Office and the Ministry of Defence produce a great deal of information about arms control talks. That information is available to the public, and is made available.

Does my hon. Friend agree that, with the whole mechanics of arms control creaking dangerously at the seams, the talks need to be given added and more important impetus?

If my hon. Friend is referring to the Stockholm talks, he must be assured that we are giving them the greatest possible support. That is why it is good that the procedure for the new session has been improved so that there will be two working committees and we can focus attention on the practical proposals which the British Government and our allies in the Western worn: have produced, so as to get down to the nuts and bolts of confidence-building.

Federal Republic Of Germany


asked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet the Chancellor of the Federal Republic of Germany.

I met Chancellor Kohl at Chequers on 18 May. I next expect to meet him at the Milan European Council on 28 June.

Will the Foreign Secretary give an assurance that, when he next meets Chancellor Kohl, he will discuss with him the serious position between America and Nicaragua? Will he consider a joint approach to bring sanity to American policy on that country'

There are questions on Nicaragua further down on the Order Paper. I can only confirm that at the meeting that took place between the Heads of State and Foreign Ministers at the Bonn economic summit Nicaragua was one of the questions that was discussed.

When my right hon. and learned Friend next meets Chancellor Kohl, will he explain to him how sad it would be if Germany, which has as much interest as the United Kingdom in making a success of the European Community, were, by wanton resort to the use of the veto, to make the process of necessary reform quite impossible?

My hon. Friend raises an important matter about which I know he has thought a great deal. The recourse by the Federal German Republic at this month's Agriculture Council to the Luxembourg compromise confirms a political reality, which is that no member state is ready to be voted down when an important national interest is at stake. It is our view that, to prevent that right being abused, a member of the Council insisting upon the veto should, through a special procedure of the Council, explain fully and more formally why his Government consider that a vital interest is at stake. It is important to reach a practical balance which recognises national interests while enabling the Community to proceed apace.

If the German Chancellor is, rightly, to continue championing the cause of European unity and more majority voting, would it not be better if he stated unequivocally that he believes that the Luxembourg compromise is necessary for the development of the Community and that, if there is to be a treaty amendment to allow majority voting, the new treaty must incorporate the Luxembourg compromise?

The important feature is that the Federal German Government have practically exercised and recognised the Luxembourg compromise. The other important feature is to ensure that we are capable of achieving majority voting more effectively and more frequently, as that will enable us to make progress.

Will my right hon. and learned Friend tell Chancellor Kohl that it is now clear from Germany's attitude towards the price of cereals that there will be no fundamental reform of the common agricultural policy until national parliaments say that they will give no more money to the EEC? Further, does he agree that it would be a good thing if the British Parliament started the process?

No. I shall leave my hon. Friend to transmit his own message for himself. The result of decisions taken in 1984 and subsequently is that substantial steps are being taken towards reform of the CAP. Price cuts and freezes have been applied in a number of areas. The milk quota has been established and reinforced. It is important that the same discipline should apply to cereal prices.

El Salvador


asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current human rights situation in El Salvador and the implications for relations with the United Kingdom.

We support the Salvadorean Government's efforts to improve the human rights situation in El Salvador. On 13 March the United Nations Human Rights Commission passed. with our support, a resolution which took account of the improvements in this field.

Are resolutions sufficient? Since January, 501 civilians have met their death at the hands of the death squads. Bombings in the north of El Salvador are increasing apace and bombing by helicopter in the west has been introduced. Is the Foreign Office doing all that it can to exert British influence in this sensitive area?

I have listened with care to the hon. Gentleman's supplementary question. He should take cognisance of the fact that the United Nations resolution on human rights, to which I have referred, shows an awareness of the need for further improvement in human rights in El Salvador. It takes account of the dramatic fall in the number of murders by death squads in recent months. It is clear that further improvements are necessary, but, as the resolution has recognised, there have been substantial improvements.

The Government have offered to train officers from El Salvador. As it is highly likely that any such officers will have been involved in the death squads, will the Government reconsider their unfortunate decision?

No, Sir. We have offered the Government of El Salvador the provision of one or two places for suitably qualified El Salvadorean officers to attend staff college courses in the United Kingdom. The offer is compatible with similar offers that we have made to a wide range of developing countries. The hon. Gentleman likes to see the issue in a black light, but when the officers return to El Salvador they will have the opportunity to consolidate democratic rule in El Salvador in the face of, should it occur, a destructive insurgent war.

Gulf War


asked the Secretary of State for Foreign and Commonwealth Affairs what initiatives he is considering to assist the United Nations in bringing an end to the fighting in the Gulf war.

We wish to see the earliest possible end to the conflict between Iran and Iraq. We shall, therefore, continue to support any realistic initiatives, especially through the good offices of the United Nations Secretary General. My right hon. Friend the Prime Minister and my right hon. and learned Friend and I were glad to be able to discuss these questions with the Arab League delegation which visited London last week.

Why do the Government not press the United Nations to institute a ban on the supply of all arms, including chemical weapons, to both sides in this horrific dispute?

As the hon. Gentleman knows, we, along with other Governments, have strongly condemned the evidence of the use of chemical weapons. The Secretary General of the United Nations has produced eight points, which are the best basis for making progress towards a comprehensive solution to the Iran-Iraq war, as opposed to other initiatives. We shall give all our support to them.

Will my hon. Friend confirm that Britain recently gave permission for the dispatch of two logistic ships to Iran? Is he aware of the allegations that one of them was instantly equipped with anti-aircraft machine guns? Can he confirm that it is still the British Government's position to maintain neutrality in this?

I can confirm that it remains firmly our position that we shall not sell defence equipment that can in any way prolong or exacerbate that war. It is true that two ships from Yarrow have been released. They cannot he used in the war between Iran and Iraq, and are principally for disaster relief. I have seen the reports to which my hon. Friend refers, but there is no evidence available to me to support them.

Anglo-Zairean Relations


asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Anglo-Zairean relations.

Anglo-Zairean relations are good. I visited Zaire during 6 to 8 May, and had discussions with Zairean Ministers on matters of mutual interest.

When my hon. Friend met the Prime Minister of Zaire. did he raise the issues of human rights there and the expropriation of the assets of British people in the 1960s and 1970s?

I can confirm that the expropriation of British assets was raised with the Zairean authorities. We emphasised the importance that we attach to this matter, and the Zairean authorities implied their willingness to introduce an investment promotion and protection agreement for all future British investment. As to human rights in Zaire, this was considered at the last session of the United Nations commission on human rights under the confidential procedure, and our views on this matter are well known to the Zairean Government.

Departmental Staff


asked the Secretary of State for Foreign and Commonwealth Affairs what are the latest estimates for numbers employed in his Department during 1985–86.

The average estimated provision for staff employed by the Foreign and Commonwealth Office, including the Overseas Development Administration, in 1985–86 is 9,885.

Does my right hon. and learned Friend expect to make any further reductions beyond those projected in the Government's expenditure plans for the next three years?

No, Sir. Staffing levels in my Department have already been substantially cut. Since 1969, the diplomatic staff has been cut by more than 17 per cent., and the overall reduction since 1979 is over 14 per cent. We are working towards the manpower targets for 1988 that are set out in the Command Paper to which my hon. Friend refers.

Is the right hon. and learned Gentleman satisfied with the human and industrial relations between his Department and the staff of GCHQ Cheltenham? Specifically, will he look in detail at the case of the distinguished cryptoanalyst, Mr. Hamilton, who is no longer working in Cheltenham?

If I am asked a question about that specifically, I shall try to answer it.

Is my right hon. and learned Friend aware that there are already too few diplomats, especially diplomats of the second grade—implying that the posts are too small—and that ambassadors have to spend most of their time cleaning cars and doing washing up, which is not efficacious for diplomacy?

I am grateful for my hon. Friend's graphic illustration of the effectiveness of our economy campaigns, which need to be maintained, but within the bounds of reason.

Geneva Disarmament Talks


asked the Secretary of State for Foreign and Commonwealth Affairs what consultations he has held with his North Atlantic Treaty Organisation opposite numbers about arms control following the end of the opening round of the latest Geneva disarmament negotiations.

My right hon. and learned Friend has had the opportunity to discuss arms control issues with North Atlantic Treaty Organisation colleagues on a number of recent occasions; at the ministerial meeting of the Council of Western European Union in April; during the economic summit in Bonn; during the celebration of the 30th anniversary of the Austrian state treaty in Vienna: and at a number of bilateral meetings.

Does my hon. Friend agree that, given the Russian propensity to seek to drive a wedge between th United States and its NATO allies, such consultations should continue as a matter of urgency? Does my hon. Friend accept that the strategic defence initiative is one area within NATO where we should seek to find common ground?

I agree entirely with my hon. Friend that it is of the utmost importance that we continue this intensive consultation—not only with the United States but within the NATO Alliance — on these important issues, including SDI. This is something to which we attach the highest importance, and we shall certainly continue in that direction. There is no doubt that the Soviet Union is still indulging in wedge-driving between Europe and the United States.

Is it not the case that the real wedge was driven by the unilateral decision, within the Alliance. of the United States to pursue SDI and then to revise its position on SDI repeatedly since the meeting last December with the Prime Minister? In view of the serious deadlock during the first series of meetings in Geneva, has not the time come — the Foreign Secretary having expressed some wise reservations about SDI in a recent well-known speech to which we have all given our assent —for the Government to take the initiative in organising European action to break the deadlock by combining action to prevent experiments in space-related weapons with a massive reduction in offensive weapons? This is the only way forward. Only Britain can lead an initiative within NATO in this direction.

The right hon. Gentleman knows that the objective agreed for these talks between the United States and the Soviet Union was to prevent unconstrained military competition in space and to limit and reduce nuclear arms on earth. The two surely complement each other, as, indeed, the United States Administration made plain. My right hon. and learned Friend said earlier that we stick rigidly, as does the United States, to the four-point agreement reached between President Reagan and my right hon. Friend the Prime Minister. This includes the fact that there must be negotiation before there is any deployment of weapons.

Bates Colliery (Closure)

Before I call the hon. Member for Blyth Valley (Mr. Ryman) to ask leave to move the Adjournment of the House under Standing Order No. 10, I draw his attention to the fact that he sought similar leave on 8 May for the purpose of discussing a specific and important matter that should have urgent consideration, namely,

"the peremptory announcement of the closure of Bates colliery in Blyth yesterday by the National Coal Board."
Today, the hon. Member will have to make out a different case. It would be an abuse to raise the same subject twice.

3.33 pm

This is a different case, Sir, because there has been a fundamental change of circumstances since 8 May.

I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the unlawful action and the breach of the colliery review procedure by the National Coal Board on 21 May 1985 in the purported formal closure of Bates colliery in Blyth, thereby making 1,400 men redundant."
There has been a change since 8 May. On 8 May, the NCB discussed the matter, but the formal closure did not occur until yesterday afternoon. I ask you, Mr. Speaker, to consider seriously the urgency of the matter and to recognise that the criterion which I must satisfy is that the matter is so urgent that it should take priority over the business that is already arranged.

I address you, Mr. Speaker, with such a degree of urgency because, if this pit is closed, as purported yesterday, 29 million tonnes of coal, which engineers representing the NCB and the NUM acknowledge to be workable reserves, will be lost for ever.

The NCB area director in the north-east — Mr. Archibald—has been thoroughly dishonest in revoking guarantees made to the work force as recently as January 1984. The Secretary of State for Energy and his junior Minster have completely shirked their responsibilities. The Minister visited the north-east last Friday and pretended that he would consider proposals for the pit, yet yesterday, when there had not been time to consider those proposals in any detail, it emerged that they had been rejected outright.

I do not want to exaggerate anything associated with these matters, because this is a highly emotional issue, but it is no exaggeration to say that the Secretary of State and his junior Minister have acted thoroughly dishonestly in misleading the work force at that pit, and me, into believing that they would consider alternative proposals for the viability of that pit. The document was handed to the Minister only last Friday. He has not had time to read it yet, even less to consider it. Nevertheless, yesterday afternoon, after pretending that the matter had been considered, a peremptory order for closure was made.

I am asking you for a debate on this subject, Mr. Speaker, because 1,400 of my constituents will lose their jobs for ever and 29 million tonnes of workable coal reserves will be lost for ever. The coal is of high quality and the pit has a record of good productivity and industrial relations. This is a most serious matter and I ask you to consider it earnestly. This is not a token application, as sometimes happens, and it is not a matter that can be considered lightly.

Although today's business is important, it should not be allowed to jeopardise the jobs of 1,400 of my constituents who have been thoroughly misled by the dishonest behaviour of the Government—[HON. MEMBERS: "Oh!"] —the National Coal Board and the area director. I ask for an opportunity to make this application without interruptions or catcalls from a party which is not interested in employment in the north-east or anywhere else in the country.

Order. I think that the reason for the interruption was the hon. Gentleman's allegation that Ministers had been dishonest. I did not hear the hon. Gentleman very clearly, but, if he said that, I hope that he will withdraw the allegation.

To say something which is known to be not true must on any reasonable interpretation of the English language, if the language means anything, be considered dishonest. The junior Minister was at Ellington colliery in the north-east when he said that he would seriously consider the proposals submitted for the viability of Bates colliery. He has not done that. He has not had time to do that, because the closure was announced yesterday afternoon. [HON. MEMBERS: "Withdraw."] That is why I am suggesting that the Government have been thoroughly dishonest—[HON. MEMBERS: "No."]—so has Mr. MacGregor, the chairman of the NCB — [HON. MEMBERS: "Withdraw."]—and so has the area director. It is no use Conservative Members protesting, throwing up their hands in horror and shrieking. I am not insulting the NCB or the Government, I am describing them. Their conduct has been thoroughly dishonest. Because of that dishonesty, 1,400 of my constituents are to lose their jobs.

I ask you, Mr. Speaker, in fairness to me as a representative of those people and in fairness to the coal industry in the north-east of England, to give us an opportunity to discuss these matters today. They are extremely urgent. Before you peremptorily refuse my application, I ask you to consider the matter most carefully.

As, under Standing Order No. 10, the Minister has no right of reply, should not the hon. Member for Blyth Valley (Mr. Ryman) be asked to withdraw the charge of dishonesty or give the Minister a chance to answer?

The Minister cannot, under Standing Order No. 10, have the right of reply. I listened carefully to what the hon. Member said. If he was implying that the Minister was dishonest, that is a personal accusation and I ask him to withdraw it. I do not think that he was saying that as such.

May I reply to that? It is difficult for me to decide whether Ministers are being dishonest, incompetent or both.

Order. Whether Ministers have been incompetent is another matter, but the Minister himself is not dishonest, and that is the word that I want the hon. Gentleman to withdraw.

May I have an opportunity to explain what I have just said? [HON. MEMBERS: "No."] In fairness, perhaps I can be given an opportunity to explain. The Government act through Ministers, and have acted dishonestly, and the Ministers were carrying out the wishes of the Government.

I take that as a withdrawal.

The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter, which should have urgent consideration, namely,
"the unlawful action and the breach of the colliery review procedure by the National Coal Board on 21 May 1985 in the purported formal closure of Bates colliery in Blyth, thereby making 1,400 men redundant."
I in no way underestimate the hon. Gentleman's anxiety for his constituents in this matter, but he has stated the criteria that I must follow. I have listened to what he has said, but regret that I do not consider that the matter which he raised is appropriate for discussion under Standing Order No. 10. I cannot, therefore, submit his application to the House. I am sure that he will find other ways of drawing attention to it.

Ballot For Notices Of Motions For Friday 7 June

Members successful in the ballot were:

Mr. Andrew Bowden

Mr. Martin Stevens

Ms. Jo Richardson

Law Reform (Parent And Child) (Scotland)

3.42 pm

I beg to move,

That leave be given to bring in a Bill to make fresh provision in the law of Scotland with respect to the consequences of birth out of wedlock, the rights and duties of parents, the determination of parentage and the taking of blood samples in relation to the determination of parentage; to amend the law as to guardianship; and for connected purposes.
In moving the motion this afternoon I should mention a potential interest as a Scots advocate. Last year, with the support of colleagues I put through the Law Reform (Husband and Wife) (Scotland) Bill, which is now an Act. The Law Reform (Parent and Child) (Scotland) Bill involves a bigger issue. If I may rephrase that, the issue of the liaison may start small, but the implications are considerable.

The Bill relates to children of unmarried parents and is based on the recommendations of the Scottish Law Committee, after widespread consultations. It has the support of both the Scottish Council for Single Parents and the National Council for One Parent Families. There are now an increasing number of people for whom this Bill is relevant. In 1965 in Scotland the average percentage of live births of children whose parents were not married was 5·84 per cent. Last year, the average percentage had increased to 16·34 per cent. That is a considerable increase.

The Bill's main aim is to remove legal differences between children of married parents and children of unmarried parents without conferring parental rights automatically on the unmarried father of children. In extreme circumstances, for example, when a man rapes a woman and she has a baby, it would be unsuitable for the father to become a guardian. Apart from limited acceptance, the Bill replaces existing guardianship legislation with provisions based on the principle of legal equality for all children. There are four principal reforms in the Bill.

First, full parental rights of custody and guardianship are conferred on the mother of a child of unmarried parents. The father may acquire parental rights by court order, and in determining an application for parental rights, the court is correctly directed to regard the child's welfare as the paramount consideration.

Secondly, and most importantly, the Bill introduces further rights for inheritance. The rights to inheritance will no longer depend upon whether a child's parents were married. In 1968, the Law Reform (Miscellaneous Provisions) (Scotland) Act gave the child of unmarried parents full rights of succession to his or her father's estate. There have been almost no problems since then. The anomaly in the present law is that, although children or unmarried parents and their fathers can succeed to each other's property, the rule does not apply to more remote relatives. The provisions in this Bill will mean that a child of unmarried parents will be considered on an equal footing to children whose parents are married, when their relatives die without a will. It will involve considerable benefits to many.

Thirdly, the Bill improves and clarifies court proceedings for determining the paternity of a child. Provision is made to facilitate the use of blood-test evidence to determine paternity in civil proceedings, and the court is empowered in limited circumstances to consent to the taking of a blood sample from a child for that purpose.

Fourthly, provision is made in the Bill to facilitate the registration of the birth of a child of unmarried parents and the recording of the father's name after registration of birth. A man registered as the father of a child of unmarried parents will be presumed to be the father.

However, there is a further dimension to the Bill. The Scottish Law Commission stated:
"We have no doubt from comments received on our consultation memorandum, that the word 'illegitimate' is found offensive by many of those to whom or to whose children it is applied."
The commission suggests that the implication is that the person is unlawful. The report also stated:
"We would endorse the view of the Law Commission for England and Wales that the terms 'legitimate' and 'illegitimate' should, wherever possible, cease to be used as legal terms."
The English Law Commission suggested that those words should be replaced by "marital" and "non-marital". The Scottish Law Commission believes that the Bill, which it prepared, would pave the way for the gradual disappearance from the statute book of adjectives such as "legitimate" and "illegitimate".

In many European and Commonwealth countries, the legal position of children whose parents are unmarried has been improved. The preamble to the European convention on the legal status of children born out of wedlock states:
"In a great number of Member states of the Council of Europe, efforts have been made to improve the legal status of children whose parents are unmarried."
I have tried to discover the roots of prejudice, and I came across a revealing comment in a 1984 report from the South African Law Commission. It stated:
"The illegitimate child's legal position is historically ascribable … to the fact that parents were punished for their immoral behaviour by penalising the child in an attempt to persuade the parents to marry."
What could be more monstrously unfair to any child than that? Apart from the fact that it is cowardly and contemptible to try to pressurise parents by penalising the child, as the South African Law Commission admitted, such a policy does not succeed.

Some years ago I was instructed as an advocate to take a case of affiliation and aliment through the sheriff court in Glasgow. The circumstances were straightforward. The father of the child had not paid a penny towards the child's keep. Not only that, but he refused to acknowledge that he was the father. It was my job to establish the facts, which I did. But when I left the sheriff court I could not help feeling sympathy for a child in those circumstances, and I was left with the conviction that the law should not be unsympathetic to such a child.

In my view, no child should be referred to as unlawful, directly or indirectly, because of a lack of marital status of the parents. A child of unmarried parents is a person in his or her own right, and what matters most is the child. The Bill strengthens the position of the child whose parents are not married. I commend it to the House.
Question put and agreed to.
Bill ordered to be brought in by Lord James Douglas-Hamilton, Mr. Hugh Brown, Mr. Alexander Eaclie, Mr. Nicholas Fairbairn, Mr. Michael Forsyth, Mr. Michael Hirst, Mr. Gerald Malone, Mr. John Maxton, Mrs. Anna McCurley, Mr. Albert McQuarrie, Sir Hector Monro and Mr. Bill Walker.

Law Reform (Parent And Child) (Scotland)

Lord James Douglas-Hamilton accordingly presented a Bill to make fresh provision in the law of Scotland with respect to the consequences of birth out of wedlock, the rights and duties of parents, the determination of parentage and the taking of blood samples in relation to the determination of parentage; to amend the law as to guardianship; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 7 June and to be printed. [Bill 150.]

Orders Of The Day

Transport Bill


As amended (in the Standing Committee), further considered.

Clause 45

Transfer Of Operations Of The Bus Company To The Private Sector

3.50 pm

I beg to move amendment No. 62, in page 39, line 38 after `undertaking', insert

`with not more than 49 per cent, thereof being transferred to any party'.
If one has a complaint about the Standing Committee procedure that we adopt in the House, it is that we tend to alternate between questions of the broadest principle and legal questions of the minutest detail without sometimes giving proper attention to the middle ground —those important aspects of the Bill where it may be made to work better or not to work at all. For reasons of the striking of political attitudes, questions of broad principle tend to be dwelt upon, and for reasons of delaying the progress of the Bill, questions of the minutest detail tend to be dwelt upon. Sometimes both sides of the Committee do not look at the Bill itself and how it might best be made to work.

The motivating force behind the Bill is competition policy. Central to that policy is the proposition that the Government should divest themselves of the National Bus Company. The form in which the NBC is privatised and the timing of that privatisation could be absolutely essential to whether competition policy is effectively stimulated or inhibited by the Bil.

My amendment, if taken literally—it is not intended to be—would oblige my right hon. Friend the Secretary of State to divest the state of the NBC in at least three separate companies. I have discussed the matter with the National Consumer Council, and the purpose of my amendment is to introduce a short debate on the form of privatisation. I invite the House to recommend my right hon. Friend, when deciding how many companies to break the NBC up into, to favour a large number of small companies rather than a small number of large companies.

My hon. Friend the Member for Hereford (Mr. Shepherd) knows better than I, but I know too, that it was the monopoly, the monolithic power, of the Midland Red West Company, that all but jeopardised the experiment undertaken in Hereford and Worcester, although in the end competition won through. Should we divest ourselves of the NBC as one large monopoly organisation, the competitive threat that that would present to other bus companies, existing and putative, throughout the country, would be so great that the conditions of free competition for the customer-passengers that we hope to establish through the introduction of the Bill might never be successfully set up.

In deciding how to privatise NBC, my right hon. Friend the Secretary of State will have taken and will take advice from many different sources. He will have spoken to representatives of the NBC itself. Naturally, they will have told him that the more closely that the form in which the company is privatised resembles its present form, the more that will suit them and the easier it will be. I imagine that the last thing the present management wants is that the company should be fragmented before sale into many small and unfamiliar companies.

My right hon. Friend the Secretary of State will also have spoken to the trade unions involved. I am sure that they too would prefer to deal with one large organisation or a small number of large organisations than with a large number of small organisations.

My right hon. Friend will also have spoken to the local authorities. No doubt they too would prefer to carry on working with companies of more or less the same size and type of management as those with which they are familiar, so I imagine that they would also not wish the NBC to be broken up into a large number of small, unfamiliar units.

Does my hon. Friend agree that breaking the NBC up into companies of similar size to the present main constituent companies — for instance, Trent Motor Traction in my area—would allow the possibility of management buy-out and employees having a stake in the company employing them, thus providing the same opportunities to advance as in the case of the National Freight Consortium? Does my hon. Friend agree that it might be better to proceed in that way rather than by having very large companies which could not possibly offer opportunities for managment buy-out?

Yes, I entirely agree with my hon. Friend. If my right hon. Friend the Secretary of State were minded to break up the NBC into something approximating to the current pattern of constituent sub-companies I believe that that would be the right decision. I am familiar with the operations of Trent Motor Traction and I believe that a company of that size and form could operate effectively and properly, but it is not for me to say that every one of the constituent companies now under the NBC umbrella is in the same position. Certainly, anything larger than that would be too large, although anything very much smaller might be too small provide the management structure, the number of buses or the facilities to stand alone in the market place. Nevertheless, in my view it stands to reason that the NBC should be broken up into a number of much smaller companies. That is the purpose of my amendment, and I commend it to the House.

Finally, my right hon. Friend the Secretary of State has no doubt also spoken to my right hon. Friend the Chancellor of the Exchequer, who, I imagine, will have concluded that, the larger the company to be sold, the better the immediate proceeds to the Treasury. In the short term, that is true. In the long term, however, I believe that the establishment of a proper competition policy will benefit future Chancellors, as it will be possible to reduce subsidy because the companies will be able to provide a good service without it. I am sure, too, that the draftsmen and accountants at the Department of Transport will have told my right hon. Friend the Secretary of State that it is much easier to sell one large company or a small number of large companies than to sell a large number of small companies.

All those considerations are important, concrete aspects which bear heavily in the immediate term. Competition policy is an abstract, long-term matter which does not bear heavily in the immediate term, but it is the motive behind the entire Bill and I hope that my right hon. Friend and the House will not lose sight of it in considering the form in which the NBC should be privatised.

As we are now reaching the stage when the Bill is likely to become law whether we like it or not, although its shape may be changed in another place, the amendment moved by the hon. Member for Derbyshire, West (Mr. Parris) is clearly worthy of consideration. I was somewhat concerned at the outset in case he was encouraging fragmentation down to totally anarchic proportions, and I was glad to hear that that was not his intention. If the companies are too small, that is clearly undesirable, but if privatisation is to take place as proposed it seems sensible that the operating companies should be the main constituent components. To the extent that the amendment seeks to achieve that, it has something to commend it.

There is considerable concern that, if the NBC is to be broken up, in view of the experience in Hereford it should not be broken up in such a way as to create a series of local monopolies instead of one national monopoly. The Minister, I know, would agree with that. However, we have to secure circumstances in which competition is fair and equal.

If I may make an oblique reference to circumstances north of the border, what causes me concern is that the Scottish Bus Group, which is to be retained as 100 per cent. Government-owned, will seek to gobble up the services of the passenger transport executive and create, effectively, a national monopoly in Scotland. I regret that the Government tend to regard Scotland as a region of the United Kingdom, whereas it is a distinct national entity. If a monopoly is created, there will be less competition in Scotland. If the consequence of what is likely to happen in England is a series of regional monopolies, real competition will not be improved. I should like the Minister to consider that point.

4 pm

There is genuine and serious concern that the National Bus Company may be broken up in such a way as to create a series of regional monpolies instead of the competition that the Secretary of State for Transport seeks. My hon. Friends and I have expressed reservations about the thrust of the Bill, but I intervene at this point in a spirit of realism, recognising that the Bill will be passed. I urge the Secretary of State for Transport to take account of the genuine concern about the implications of breaking up the National Bus Company. The amendment takes some account of the need to implement the Bill's provisions in a balanced and sensible manner.

Before the hon. Member sits down, will he explain what kind of size, if the National Bus Company is broken up, the Liberal party thinks it is reasonable for these companies to be, bearing in mind that the smallest of the NBC companies operates 134 vehicles and the largest 1,105? Will he also say a few words about. management buy-outs and employee participation?

I am surprised that the hon. Gentleman does not realise that the Liberal party believes that local authorities and local passenger transport authorities should be making the decisions. That is why we oppose the Bill. They would be able to determine what is the right balance. Given that the Secretary of State for Transport intends to implement the Bill, I am suggesting that he should ensure that local circumstances in each region should be taken properly into account. That is the point of the amendment, and that is why it deserves consideration.

Although this amendment appeals to hon. Members, one has to remember that clause 45(8) makes it abundantly clear that the Secretary of State has reserve powers. Therefore, if he discovers that defective proposals are put to him, or if he does not approve them, he will be empowered to draw up his own. In Committee, it became clear to me that. the attitude of the Government borders upon obduracy and that hon. Members have therefore formed the view that the only salvation, minor though it may be, will be found in the House of Lords. Therefore, the hon. Member for Derbyshire, West (Mr. Parris), whose amendment appeals to the House, should consider the attitude of the Secretary of State for Transport. Even if the House agrees to the amendment, the Secretary of State will quickly find a means by which to have his own way.

I wish to underline the point made by my hon. Friend the Member for Derbyshire, West (Mr. Parris). The National Bus Company has learned from the Herefordshire trial area that the effectiveness of Midland Red West as an operating company was immensely improved by direct communica-tion between management and garages and drivers. The management of Midland Red West would, I believe, endorse that point, because it has made it to me.

It leads me to believe that more and smaller operating companies, with no more than 200 buses at most, would be most responsive to the market. It would also meet the point made by my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo). Management or worker buy-outs would become even more possible, which could only be to the good. When those who are employed in the great state monoliths have a direct interest in their companies, their attitude changes. I want the attitude of these workers to change. I want them to be responsive.

In particular, I wish the label "the friendly bus service" to be returned to Midland Red. It used to be a friendly bus service before it was nationalised in 1968. Since then, the friendly bus service has been lost sight of. Those of my constituents who have spoken to me believe that Midland Red has become a distinctly unfriendly bus service.

It must have been a very selective cross-section of the hon. Gentleman's constituents.

The hon. Lady, as ever, makes a derogatory remark. My constituents have volunteered this information when I have asked for comments. That view has been expressed too often to be ignored. I want the label "the friendly bus service" restored. It will be restored by means of short lines of communication and small units with the maximum direct employee participation.

The timetable for the disposal of the assets of the National Bus Company could create great difficulties for the passenger transport executives when they are broken up. If the PTEs were to be broken up before the NBC and if tendering were to commence after the PTEs were broken up but before the NBC was broken up, the NBC assets could be over-valued and the NBC would be in a very good position over tendering. What will the timetable be? Also, how do the Government intend to deal with the problem of the PTE agreements with the NBC?

I shall deal first with the point raised by the hon. Member for Sheffield, Central (Mr. Caborn), although it is somewhat outwith the rest of the debate. The National Bus Company will, by D-day, be broken up into operating companies. There is no such pressure upon the PTE. He need not, therefore, be concerned about the PTE. If there is any cause for concern, it is that the PTE is not to be broken up so quickly as the National Bus Company.

My hon. Friend the Member for Derbyshire, West (Mr. Parris) has done a service to the House in moving this amendment and I am glad to have the opportunity to reassure him. I can well understand his concern. He does not want the National Bus Company to be transferred to the private sector in a form which will enable it to dominate the competition and thereby undermine our policy. It is for that reason that clause 46(1) says that the main objective of the NBC in preparing its disposal programme and in running its business until the programme is completed shall be to promote sustained and fair competition. That will be competition between the NBC subsidiaries and former subsidiaries and other operators. The NBC will have to dispose of its operations into a number of units. The objective of promoting competition clearly could not be met if the NBC was privatised as a whole.

My hon. Friend the Member for Derbyshire, West referred to the central purpose of the Bill, which is to introduce competition. Many of our debates have, wrongly, been overshadowed by the failure to recognise that the key point of the Bill is competition, which brings with it the opportunity for efficiency of management, more businesslike organisation and a position in which the consumer comes first.

We are trying to obtain some notion of the Government's thinking, if there is any. The Minister referred to competition and said that if we privatised the NBC as a whole, we would not have competition. Yet only a week or so ago, the Government decided to privatise the gas industry as a whole to promote competition. Where is the logic in the Government's thinking?

The hon. Gentleman knows that one can relatively inexpensively promote a competitive bus service alongside another bus service, but cannot, for the same relatively low cost, provide a gas pipeline into each household alongside the established pipeline. The hon. Gentleman's point has no validity.

I am delighted that my hon. Friend the Member for Hereford (Mr. Shepherd) is present because the Hereford experiment was enlightening. We made it clear that it was a trial and that we had many lessons to learn from it. One lesson we learned was the way in which Midland Red used its clout in the form of predatory pricing that was anti-competitive—

Should we therefore conclude that the Minister believes that, if two or three companies compete in the same area for the same routes, there will be no attempt at predatory pricing? Has he not heard of one company seeking to use its economic muscle to drive out other companies? It does not need to be Midland Red; it will be typical practice throughout the country.

The hon. Lady knows that Midland Red, which has a large operating area, was faced with competition on a narrow front. It concentrated its resources on seeking to smash that competition. When the Bill is on the statute book and there is competition throughout the country, such companies will face competition on every flank and will not be able to concentrate their resources in that way. I hope that the Liberal party will now return to its traditional belief in opposition to monopoly and support what I am saying.

I am concerned that the Bill may inadvertently create local monopolies. Is the Minister aware that the former manager of Grampian Passenger Transport has recently transferred to become the general manager of Alexander's Northern and the Scottish Bus Group on the clear indication that he sees the expansion of the Scottish Bus Group to replace existing local authority services and, therefore, create a monopoly that will provide him with his career prospects?

4.15 pm

Is my hon. Friend aware of the significance of the local election results? For example, in Lancashire the local Labour group spent more than £130,000 to scare people with a misinterpretation of our bus policy, but lost control of the county, while there was a magnificent result in Hereford and Worcester—the Conservatives retained control—where the experiment took place that has been much maligned by the Opposition? Does my hon. Friend draw the obvious conclusion from that?

I am sure that the whole House will draw the obvious conclusion from that. If the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) fears that she will lose the company of my hon. Friend the Member for Mid-Worcestershire (Mr. Forth) in the next election, I assure her that, once the Bill is in operation and there are improved bus services in his area, he will be re-elected with an even larger majority.

My hon. Friend the Member for Derbyshire, West referred to competition as being more important than the maximum short-term yield to the Treasury, and I carefully noted his point. He also said that the units should not be so small that they were unviable or inadequate in management structure. An important point was made by my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) who said that the size was such that a management buy-out would be possible. We have good reason for studying some of the other places where management buy-outs are taking place. Huge advantages have flowed from that, especially in the change in worker attitude — for example, in the National Freight Corporation.

If companies are split into too small units, there is a danger that some of them will not be subject to management buy-outs. Why should anyone bid money for weaker companies? Why not wait until they go out of business and buy their buses at cheap, second-hand values and refuse to do anything about future pension requirements? Is there not a need to retain a balance to ensure that the scenario I have outlined—which in some areas is as likely to happen as the scenario outlined by my hon. Friend—does not happen? Should not the Government be aware of that danger when considering the amendment?

My hon. Friend is well known for his interest in this area, but he may not have been in the Chamber when I spoke about the purpose entrenched in the Bill—the promotion of sustained and fair competition. Sustained and fair competition will not be promoted, with units of the size that my hon. Friend says nobody will want —units which would therefore go bust. That is not the promotion of sustained competition. Therefore, my hon. Friend's point is fully met.

Will my hon. Friend bear in mind the danger that large municipal operators — for example, Manchester, with more than 3,000 vehicles—can make mincemeat of any private operator unless the Government are careful to ensure that they are scaled down at the same time?

I take my hon. Friend's point, which has some substance. However, in the bus industry there are diseconomies of scale above a certain level and there is no reason to believe that some of the PTEs will not want to break down into smaller units to make management more economic and efficient.

The hon. Member for Gordon (Mr. Bruce) said that he feared an inadvertent creation of monopolies. I am delighted to welcome him back to the traditional Liberal view that a monopoly is not desirable. I only hope that he will address his remarks to his hon. Friend the Member for Isle of Wight (Mr. Ross) and look at the way in which the Liberal party has approached this Bill throughout its passage. It has sustained the view that local authorities should have the right to decide, which—in the pattern of the knowledge of what many local authorities will do —is to create local monopolies. We believe that that is against the interests of the customer and of the industry as a whole.

It is too early, however, to say exactly what will follow in connection with the break-up of the National Bus Company. We have asked the board to draw up options for privatisation of the company. The company has appointed a merchant bank to advise it, and my Department last week appointed consultant accountants. Until we have seen later in the year the options for privatisation and discussed them in detail with the company, I cannot say in how many units the National Bus Company will be transferred to the private sector. However, I can give my hon. Friend an assurance that I would not agree to any programme for the disposal of the National Bus Company's operations unless I was clear that it would indeed promote the competition which is the cornerstone of our policy.

The Minister will accept that the formula that he has proposed is very complicated. He is saying that the units on the one hand must be large enough to be viable but on the other hand must be small enough for anybody considering a management buy-out to take them over. Will he give an undertaking that he will come back to Parliament when he finally reaches some decisions about the matter, which is fundamental to the future of the transport system, so that we may have the opportunity to discuss the decisions that he takes? If not, will he accept that we are having to take his word that he has no idea at present what he intends to do, but that at some time we can rely upon him to do the best possible thing for the best of all worlds? He will accept that that is a trifle vague, even for him.

The hon. Lady produces, as if it is some strange new idea which suddenly worries her, the fact that at this stage the negotiations between the representatives of the merchant bank on the side of the National Bus Company and the Department's representatives have not reached a stage at which any conclusion can be brought forward. That is correct. The hon. Lady knows that, and she has known it all along.

We have said that we are setting down the broad criterion upon which those decisions will be taken. That criterion is promoting sustained and fair competition. That does not mean that the patterns will be the same size in every part of the country. Indeed, as some of my hon. Friends have argued, in some areas, larger units may be appropriate because larger units will be opposing them. In other parts of the country there may be more demand for a management buy-out, and the resources available for the management buy-out and the amount that management and workers want to take over may themselves have a profound effect upon the decisions taken. It would be wrong for us to set down now, before advice has been taken on these matters, the precise pattern in the way that the hon. Lady has requested.

She now asks me—it is an unusual concept—that we should come back to Parliament and give it the opportunity to discuss the proposals when the negotiations between the two parties have been completed. There will be nothing hole-in-the-corner about this. The hon. Lady will have public knowledge of what is being done and, if she does not like it, the opportunity of a Supply day will of course be available to her.

The Minister is as much seized of the issue as any other hon. Member, but in fact he is asking the House to give him a blank cheque. After many weeks considering the Transport Bill, he cannot yet tell Parliament what the apportionment shall be. All he says is that he can assure Parliament that, whatever the apportionment and whatever the break-up, it will comply with the central point of Government policy, competition. The words sound very inviting, but in practical terms I ask the Minister to try to respond to my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) and say whether at some point he will let Parliament know what will arise from the blank cheque for which he now asks.

It is not a blank cheque. If the hon. Gentleman had been in business, he would know that a decision is often taken that an expenditure between X and Y will be permitted. We have set down parameters within which such decisions will be taken. The parameters are that we seek a break-up of the National Bus Company which will promote sustained and fair competition. The criterion is established, and we shall do our best to ensure that it is fairly and properly carried out. On that, the hon. Gentleman can have my assurance. It is impossible to go further at present, when we do not know which group of management and workers will come forward, what its resources are and how much it wants to take over. Nor do we know the advice of the National Bus Company and its merchant bankers or the advice of our own consultant accountants. I have given the hon. Gentleman a reasonable criterion against which he can judge the success or otherwise of our policies in this matter, and I hope that he will accept that.

I hope, therefore, that my hon. Friend the Member for Derbyshire, West, having drawn attention to a useful point and having had the advantage of a useful debate, will find it appropriate to withdraw the amendment.

I apologise to the hon. Member for Derbyshire, West (Mr. Parris) for not having heard the beginning of his opening remarks.

I wish to speak briefly against the amendment and to bring to the attention of the House the example of Mid-Wales. The company that operates in Mid-Wales is Crosville. Indeed, it operates in the whole of north and Mid-Wales with buses going down as far as Cardigan and Carmarthen in the south and covering the Aberystwyth, Newtown and Dolgellau area of Mid-Wales. I am told that only one bus service in that area makes a profit. If the Bill is enacted, severe problems will arise in the area. Nobody will wish to undertake a management buy-out or to compete because it is not possible to make a profit in the area. Any buses that are run in the area will be run only because the county councils are providing the necessary funds and subsidies. I do not believe that any company wants to run a service that will be wholly dependent upon subsidies.

The area of Mid-Wales has to be tied to a much larger company such as Crosville. It could be contrary to the intention of the Bill to require Crosville to produce plans for the break-up of the company. If a break-up of the company is to be produced, the units must be as large as possible. This means that it is unlikely that any management buy-out would be undertaken in the area. I think that the Minister needs to have as much freedom as possible in order to be able to provide for services in such an area.

With regard to selling off any part of the company, the provision
"with not more than 49 per cent. thereof being transferred to any party"
puts additional restrictions on the Minister. In my view, the Minister will have enough trouble trying to privatise the bus service in Mid-Wales. I do not wish him to be hampered further. For that reason, I am not happy with the amendment.

It is not for us to dictate what should or should not happen in Mid-Wales. The House is at its least effective when it attempts to dictate the detailed structure into which companies such as NBC should be broken up.

4.30 pm

Before my hon. Friend proceeds, may I draw his attention to the nonsense spoken by the hon. Member for Wrexham (Dr. Marek)? He claimed that nobody wanted to run a service that was dependent on subsidy. There are thousands of businesses in Britain which run on the basis of contracting, and a contractor is delighted to contract to a public body, such as a local authority because he knows that in the end he will get his money. It is, therefore, nonsense to suggest that what we propose is unattractive.

I am sure that many bus companies will have to depend to a greater or lesser extent on subsidy, and what happens with Crosville and in Mid-Wales will have to be for determination outside this Chamber. It is for us to lay down the broad guidelines according to which executive decisions will be taken. It was with that in mind that I initiated this short debate. The Minister, in responding, has gone further even than my amendment sought to go and, in the light of that, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment No. 176, in page 41, line 8, at end insert—

'(5A) The Company's disposal programme shall also—
  • (a) specify the parts of their undertaking the provision of which has been financed wholly or partly by any one or more Passenger Transport Executives or local authorities and in respect of which sums are repayable to the Executives or local authorities; and
  • (b) describe the manner in which such sums are to be assessed.'.
  • It will be convenient for the House to discuss at the same time amendment No. 175, in clause 47, page 43, line 2, at end insert

    'and on the disposal of any part of their undertaking shall make repayment of such sums as are repayable, as mentioned in section 45(5A) of this Act, in respect of that part of the undertaking.'.

    We are here attempting to achieve an orderly disposal of assets. Over the years, PTEs have been contributing not just to revenue costs but have put considerable sums — remember, we are talking about ratepayers' money — into the creation of assets for a number of companies. That expenditure has covered, for example, vehicles, garages, bus stations and interchanges.

    As the Minister admitted when replying to the last amendment, he is not certain how the companies will be broken up or even about the size of the units that will then be created. It seems wrong, therefore, that the ratepayers, who have contributed for years, should not be told clearly what will happen to those assets. We are, therefore, asking in the amendment that
    "The Company's disposal programme shall also—
    (a) specify the parts of their undertaking the provision of which has been financed wholly or partly by any one or more Passenger Transport Executives or local authorities and in respect of which sums are repayable".
    We debated this matter at length in Committee. It remains an important and outstanding issue because we are talking of large sums of money. The report on transport aspects of the 1984 public expenditure White Paper said:
    "the fact that the NBC was able … to reduce its capital liabilities to the Secretary of State by £17·7 million in 1983 indicates that the Company is generating substantial cash surpluses after taking account of both interest charges and capital investment requirements. The revenue support payments made by local authorities to the NBC are, therefore, in effect, being used to repay the Company's long-term loans rather than to improve service standards, a situation that we find rather surprising."
    The Minister will also be aware that the Grieveson Grant report pointed out that a further £23 million of NBC debt had been repaid and had not been replaced by further loans. We are considering extremely large sums. That money has been paid to NBC and we have no idea of what attempts will be made to repay it and what will happen about the disposal of the assets in relation to PTEs.

    I am not certain what the hon. Lady is after. She said that the NBC made a profit. Any successful, well-run business is likely to make a profit. In this case, out of its profit it has repaid part of its debt to the Government. That has been a proper course for it to take and many businesses do that to their bankers in the course of successful trading periods. She went on to refer to revenue support being given by local authorities to the NBC. That is support to provide services which would otherwise operate at a loss and it is likely to include an element of the cost of depreciation on NBC's vehicles. Over and above that, she may have in mind contributions from ratepayers towards major capital assets such as depots and bus stations. If the hon. Lady will spell out the precise area of her misgivings, I will explain the position.

    I am endeavouring not to delay the House unduly. I specified the items which I had in mind and mentioned garages, bus stations and interchanges—property of various kinds — on some of which large investments have been made. I pointed out to the Minister more than once in Committee the size of the sums involved.

    The Minister says that businesses are in business to make profit. That is not the point at issue in debating this amendment. Local authorities are contributing ratepayers' money to the NBC, not to enable the NBC to repay much larger sums but to enable good services to be provided in their areas.

    In its report on the privatisation of NBC, Grieveson Grant said:
    "Since the December 1983 year end, a further £23 million (of the NBC debt) has been repaid and not replaced by further loans."
    In other words, there is no question of money continuing to be spent on the replacement or building of assets of the type to which I referred. Indeed, the Minister pointed out that Midland Red used its older buses, in the Hereford trial area, to run the competition into the ground. The report continued:
    "The repayment of these liabilities in 1983, while maintaining a strong balance sheet, emphasises the company's ability to generate cash … a consistent feature."
    That cash has come largely from the considerable sums that have been contributed over the years by local authorities. It is not true to say that revenue support grant has recently been given in respect of those contributions. In many instances, the money has been used to create capital assets of the type I mentioned, and in Committee I gave the Minister the figures.

    Because it is important for us to deal with other aspects of the Bill today, I will not detain the House on this issue, even though it is important. But answers are required. Local authorities have contributed large sums of money, yet no attempt will be made to repay them for creating those assets when they are sold, and we have no idea who will take over those assets or what will be the profits that such companies make in the future.

    Why should local authorities, many of which will be rate-capped, be expected to find large sums of money to make up the difference, for example, on concessionary fares, from contributions from their ratepayers? They should be told in clear terms what will happen to NBC's assets that have been created by their money.

    The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) has made the position clearer, and it may be helpful if I divide the issues that she raised. There is, first, the issue of revenue support and the repayment of money to the Government. Secondly, there is the issue of the grants that have been made for capital expenditure on garages, bus stations and other property.

    As for the profits that have been made and the use to which the board has put those in repaying debt to the Government, that is a normal procedure for a successful business, and the NBC is successful. In other words, it is proper for a successful business to use the profits from its operations to repay debt. There is nothing strange about that.

    The hon. Lady went on to raise the different question of substantial grants — she was right to say that sometimes a great deal of money has been involved—in garages, bus stations, property and so on. Some of my hon. Friends will be interested if the hon. Lady is saying to the House that the representatives of the ratepayers, in the form of the metropolitan county councils, have parted with public money to the National Bus Company without any contractual arrangements about what is to happen—[Interruption.] The hon. Lady knows perfectly well that the National Bus Company has always had power to sell subsidiaries if it wished. Is she suggesting that ratepayers' money has been put into companies that could be sold without contractual arrangements to cover what was to happen to that money if the subsidiaries were sold?

    Is the Minister of State not aware that he is telling the company—not asking it—to sell its subsidiaries? Does he seriously think that local authorities would have entered into an agreement to put up money over many years if they had thought that at the end of the time all of the assets were to be disposed of with no consultation with the people who had put up the cash? He must think that local authorities are more stupid than anyone else.

    The astonishing thing that the hon. Lady is trying to reveal to the House is just that. She is trying to say that local authorities have parted with large sums of money to the subsidiaries of the National Bus Company, although she knows that the National Bus company has always had the right — not the compulsion of Government — to sell any subsidiaries it wanted. [Interruption.] No. It has always had that power under existing law. At any time the NBC could have put any one of its subsidiary companies on the market if it judged that to be a profitable and viable way of using its resources. Is the hon. Lady saying seriously to the House that ratepayers have been looked after so badly that their representatives have parted with large sums of public money without any contractual arrangements about what was to happen if the subsidiary company was sold?

    It would be a different matter if the National Bus Company was being made to dispose of assets. The hon. Lady and I are talking about money that has already been paid over under existing legislation. The National Bus Company has an absolute right to sell those subsidiaries. Is she saying to the House that the representatives of the ratepayers have been so incompetent and so unable to protect the interests of the ratepayers that no contractual arrangements were made about what was to happen in the case of the disposal of a National Bus Company subsidiary into which the local authority has put money? If there are contractual arrangements, they will be carried out. If there are no contractual arrangements, it is a disgrace.

    The Minister is not concerning himself seriously with the problem. He is so naive that he cannot see the difference between the National Bus Company coming to some kind of agreement with the people from whom it is to get its funding and being forced to flog off any saleable asset, including all of its buses and other assets, because the Government have insisted. If he cannot see the difference, he must be more naive than I believed. He and his Secretary of State are forcing the National Bus Company to sell off its assets and to divide itself into tiny units. He is not even sure what size the units should be. He should accept the amendment so that an attempt can be made to protect the investment of many ratepayers over many years.

    I do not think we need detain the House much longer on this amendment. The point I have made is clear and simple. Revenue support has been for the operating expenses of the National Bus Company, including depreciation; profits on its operations have enabled it to repay the debt to the Government. In regard to grants of large sums of money for garages, bus stations and the like, I doubt very much whether the representatives of the local ratepayers have been so remiss as to part with that money without contractual arrangements about what was to happen in the event of the National Bus Company deciding to sell the subsidiary company into which the money was put. If that were the case, as I said, it would be a disgrace. Therefore, I hope that the House will feel it right to reject the amendment.

    The issue has become unnecessarily heated. To come back to the amendment, what does it seek? It does not matter a tinker's cuss whether the Minister is right. Money has been put into the National Bus Company for certain capital projects. Whether the contractual arrangement did not foresee what the company would be forced to do as a result of the Bill or whether the possibility was foreseen is of no consequence. The amendment does not argue the point. It says that the disposal programme under clause 45 shall

    "specify the parts of their undertaking the provision of which has been financed wholly or partly by any one or more Passenger Transport Executives or local authorities".
    Why does the Minister not accept the amendment?

    4.45 pm

    In the cold light of tomorrow the hon. Member should consider the debate carefully against the background that the Audit Commission will be examining the accounts of local authorities to see whether they have disposed of money without making contractual arrange-ments as to its repayment. Either there is a contractual arrangement for what is to happen in the event of a subsidiary of the National Bus Company being wound up or being sold, or there should be. I have no doubt that the Audit Commission will consider with great interest what the hon. Gentleman has said.

    Order. I remind the hon. Gentleman that this is Report stage. He must not keep making speeches.

    I want just to tidy up one point, Mr. Deputy Speaker. I think the House would agree that it would be better to clear it up. I agree with the Minister thus far. I agree also with my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). What we are asking for is an account in the disposal programme. That is what the amendment seeks. It does not argue the point.

    Two questions were raised time and time again in Committee. We brought clearly to the Minister's attention the agreement in the Transport Act 1968 on the financial arrangements between passenger transport executives and the National Bus Company. What the Under-Secretary has said in the House this afternoon is misleading. He knows that there is a clear relationship between PTEs and the NBC and that there are financial agreements between them.

    No one in the United Kingdom would think that we could have such a stupid Secretary of State for Transport who would bring in such a stupid Bill to take us back 50 years. It is like asking people to make financial agreements to put men on the moon. That is how the Secretary of State is seen in the transport industry.

    May we have an answer to the question about the relationship between the NBC and the PTEs under the 1968 Act? Can we be told what the Secretary of State will do about the £40 to £45 million of ratepayers' money that has gone to the NBC? If he is shedding crocodile tears about ratepayers' money, will he return that £45 million to the ratepayers, where it rightly belongs?

    I refer the hon. Member for Sheffield, Central (Mr. Caborn) to clause 57(3) under which termination arrangements for section 24 agreements can be made by order.

    In regard to the point made by the hon. Member for Hartlepool (Mr. Leadbitter), it is not for the Government or for the House to interfere in the contractual arrangements that have been entered into between the National Bus Company and local authorities. The parties to the agreements should have drawn them up properly to provide for what is to happen.

    I did not say that it was for the Government to interfere. We have had too much of that already. I am saying as a matter of record that the amounts are known. We are asking in the amendment for them to be included in the disposal programme for information —not to interfere.

    The National Bus Company will have entered into hundreds of contracts and agreements in varying forms in the course of running its business. Included in those arrangements will be the financial memoranda and financial terms of agreements under which money has been put into NBC subsidiaries. Even before the company had power to dispose of its subsidiaries, which was long before the Bill was introduced, it has had the power to sell assets that were not required for the purposes of its business. Having acquired money from a local authority, there could well come a time when the company would dispose of the asset that had been bought with the money so provided. Unless the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) is right, local authorities will have made proper contractual arrangements for the money arising from such a disposal and I see no reason why we should seek to interfere. If the hon. Lady is right in the rumour that she has started this afternoon and there are no contractual arrangements, the Audit Commission should take a close interest.

    The Minister has treated the House with his normal contempt. He knows what is behind the amendment and he understands its importance. He has chosen not to answer any of our questions and the appropriate responsibility will be his. Amendment negatived.

    Clause 46

    General Duties Of The Bus Company

    I beg to move amendment No. 63, in page 42, line 26, after 'shall' insert—

  • ' (a) take such steps as may be necessary fully to secure the payment of the benefits that, but for the operation of this Part, would have been payable under any pension scheme or in accordance with customary practice in respect of the employment, before the coming into operation of this section, of persons employed or formerly employed by the Bus Company or in any undertaking or part of an undertaking which is to be the subject of a disposal under the programme, and to secure the due performance of the employer's obligations in respect of those benefits; and
  • (b).'.
  • With this it will be convenient to discuss the following amendments: No. 64, in page 42, line 27, leave out from 'any' to 'are' in line 29 and insert `such undertaking or part'.

    No. 65, in line 37, after '(4)', insert ' (a) or (b) '.

    No. 66, clause 48, in page 43, line 38, at end insert
    'and where the scheme contains provision for the transfer of anything which constitutes an undertaking within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 1981, as having effect on the day on which the scheme comes into force, the said regulations shall have effect as if regulation 7 (exclusive of occupational pension schemes) were omitted'.
    No. 67, clause 52, in page 47, line 10, at end insert
    ', including the payment of such sums as he may, with the approval of the Treasury, determine to the trustees of the Bus Employees Superannuation Trust and the trustees of the National Bus Pension Fund or either of them for the purpose of meeting the whole or part of any shortfall in the assets of the funds referable to the benefits and gratuities payable in respect of persons employed or formerly employed by the Bus Company or in any undertaking or part of an undertaking which is subject to a disposal under this Part.'.

    In a long working life, one of the most important investments that anyone can make is in his or her pension entitlement. Those who have been working for the NBC or passenger transport authorities have not been among the highest paid and they have not been the best protected members of our society. They have not enjoyed the brilliantly framed contracts of the company director with the sharp lawyer who insists that, no matter why his services are dispensed with, he will leave with a large golden handshake. They have not received any overpayment for working long hours in a dirty and increasingly dangerous job. They have worked for authorities in the belief that their time as busmen and women would be rewarded at the end of their service with a proper retirement pension.

    The Secretary of State has decided in the most arbitrary and insensitive way that the transport system shall be thrown into chaos and disaster. Those who have been least considered during the Bill's passage are those who are employed in the transport industry. Since the Bill was presented to us, we have been talking about the disposal of state assets and the destruction of a transport system that has operated since the early 1930s. At best it will be replaced by a number of smaller companies. It is probable that transport systems in many areas will decline—with, undoubtedly, the loss of many jobs.

    Against that background, one would have expected to find somewhere in the Bill a pension entitlement guarantee. That would have reflected the recognition of a moral duty towards those who have worked for many years in the transport industry. Clause 50 refers to the NBC's staff pensions. Unlike other privatisation measures, the Bill ends the "no worsening" principle for staff pensions. Up to 65,000 employees could be affected, and it is clear that the Treasury is demanding that money should be raised in every possible way so that it can be given in tax concessions to those at the top end of the income scale. It is more interested in doing that than in making suitable provisions for those who are employed in the transport system.

    Clause 50 sets out the transfer of pensions after the break-up of the NBC. It mentions briefly the involvement of its employees but it does not mention what will happen to the employees of the passenger transport executives. Their future has not been referred to by the Under-Secretary of State or by the Secretary of State. There is no reference to the pension rights of those who are most at risk.

    There are a number of ways in which the Bill could have provided for transferred employees to retain their present entitlement to benefits, and we endeavoured to discuss them in Committee. We asked for simple guarantees to be written into the Bill. We observed that state assets had never been disposed of without a guarantee being written into the relevant Bill to cover the pension entitlement of those who had worked in the industry. We were told that employees' interests would be protected at the point of transfer and that we need not worry about the future as it would be in the interests of the companies taking over the assets to look after the employees that they took on. If that is genuinely the opinion of the Secretary of State and his ministerial colleagues, it is indescribably naive. If they have taken a cynical approach and do not believe that there is any guarantee for employees after the dissolution of the NBC, that is outrageous.

    Whenever we endeavoured to extract answers from Ministers in Committee, we were told that they did not consider it necessary to insert a guarantee covering the NBC's pension funds. It is clear that there must be a proper arrangement. Surely Ministers understand that smaller companies will not be able to meet current pension commitments and may find themselves unable even to cover existing payments to pensioners.

    We have been told that the NBC pension scheme is well funded and can meet all its liabilities. Ministers sought to stress that there will be no risks, but under this Government no one can foretell what will happen. It is relevant to observe that we have a higher rate of bankruptcy under the Government than we have had for many a long year. If there is no risk, a guarantee would cost the Government nothing and would be at least a demonstration of their good will.

    We were told in Committee that we were raising unnecessary scares and that the problems we were outlining would not occur. I can assure the Secretary of State that many employees are deeply concerned about their future pensions. The very least that Ministers can do is treat those fears seriously. Subsection (3) contains a guarantee that individual companies will not be put in a worse position by Government order. That implies that, if there is a cash shortfall, pensioners will suffer. The only protection against that is to be found in section 74 of the Transport Act 1962, which provides a "no worsening" guarantee. However, if the money is not there to meet the pension entitlement, pensioners will suffer.

    The two approaches which could have been taken to pension funds following privatisation would both have maintained some version of the "no worsening" undertaking. When British Telecom was taken over, the entire pension fund was transferred in one block. When Sealink was sold off—a section of a state organisation —the staff remained in the British Rail pension scheme. When the NBC is privatised, we shall not be left with a large company. The company is to be broken into small companies, in line with the Government's competition theory. There will be no large company with the resources to underwrite pension funds.

    What was the Government's answer when we raised the issue time and again? It was that, as long as the Government predictions of inflation and investment are exactly correct for the next 40 years, the Government are convinced that there will not be a problem. However, if there is any shortfall, pensions will have to be topped up from some other source. One would be new NBC staff paying into the fund. However, that will end when the NBC is dissolved, which will make closed funds of both the National Bus pension fund and the Bus Employees Superannuation Trust.

    5 pm

    The other guarantee would be a straight payment from the NBC. We have been told today that companies must be small enough to ensure that there is no unfair competition. The Secretary of State appeared to be saying that there might be instances of some municipal companies with 3,000 buses, which he presumably thinks is fair competition. If there are only small companies and there is a shortfall, who will find the money to pay these people who, in good faith, entered into superannuation payments that will now not come to fruition? Is it seriously suggested that what is in effect a contract with the people working in the bus industry, a contract that they have honoured through their working lives, is to be discontinued without any undertakings or any attempt to give them a guarantee that the Government will underwrite any future problems?

    If that is the case, I have to point out one or two things to the Secretary of State. The people who are to have their pension funds put at risk, and the existing pensioners who are wholly reliant on the arrangements into which they have entered, are not suddenly seeking to dissolve the arrangements in their superannuation fund. They are being told that the arrangements into which they have entered over the years are at risk and they have not been consulted. This has happened because the Secretary of State, in a great blaze of light, wants to throw us all back to the Victorian ages and recreate the horse bus system.

    What kind of responsible Government is that? What kind of commitment to ordinary working men and women does that show? Where are the Government who care so much for the individual? If an individual earns more than £40,000 a year, the Government care for him, but if he is working in the bus industry and has made the grave mistake of trusting those with whom he has been in a contract for all his working life, the Government's answer is, "Hard luck." That is the answer of a Government who are uninterested in carrying out their responsibilities to the people working in the bus industry.

    In the Committee on the Transport Act 1982, the hon. Member for Wallasey (Mrs. Chalker), the Minister of State, Department of Transport, claimed that staff pensions would not be worsened by that Act, and that it would be wrong if they were. True, pensions were not worsened by that Act — it took the Government two more years to come up with a brilliant bit of planning to destroy the base on which pension schemes had been worked out.

    The Minister's pledge that it would be wrong to worsen the conditions of anybody in the staff pension funds is being broken with utter cynicism. Saving money is the basis of this Bill and saving money at the expense of the pensioners and people working in the bus industry is about the lowest way of taking advantage of those least able to fight for themselves.

    There is no evidence that the Government intend to carry out their responsibilities. Are we to assume that the argument between the Treasury and the Secretary of State is so important that he regards the sale of the NBC's assets as taking precedence over everything else? It does not matter if, in so doing, he damages the interests of the people working in the industry or the interests of the passengers, or if he destroys the transport industry that has grown up over many years. All that matters to him is flogging off anything that is not actually nailed down to anybody who wants to take whatever assets he wants that used to belong to the state through the NBC.

    Let us be clear what is happening to pensioners. They will be told that at the moment of transfer they need have no worries and their pension rights will be the same with the incoming company. That is nonsense, because the companies that will come into being will be much smaller and less viable and will have far fewer assets, by definition. The only people who will benefit from these changes are those who will be able to ignore all the commitments that were entered into by the NBC and the PTEs with their employees. It is a disgrace. It is one of the nastiest, most unacceptable and most rotten parts of the Bill.

    I hope that the Secretary of State can sleep at night, because what he is doing both to the pensioners of, and those working in, the bus industry is disgraceful. [Laughter.] I am glad that the Secretary of State finds this amusing. Many of those who are now employed will ask one question of him and one question alone: how can he sit there calmly, knowing that his future is protected, while he cheats the bus industry and those who work in it out of their just entitlement? At the very least, the Secretary of State can accept the amendment. If he does not, we shall know clearly how much commitment he has to the interests of people who are now working in the bus industry.

    I have added my name to the Opposition's amendment both in sorrow and in anger. I wrote to my right hon. Friend the Secretary of State some months ago expressing concern about the future of pensioners. Following a meeting with my hon. Friend the Under-Secretary of State, who invited me to write to him expressing my concern about the Bill, I wrote to him about my concern about the pension settlements. I am still awaiting a reply from both my right hon. Friend and my hon. Friend. It is a pity that my hon. Friend the Under-Secretary is not here.

    I make it clear that I am speaking on behalf of the people who work in the bus industry, in my constituency or any other constituency, and who are worried about their pensions. I speak particularly on behalf of the Association of Management and Professional Staffs, which I know has written and is concerned about this matter.

    As we consider these amendments, we might at least try to understand what the Government are up to and what they have done in similar circumstances. Accordingly, I put down for answer last week a question to my right hon. Friend the Chancellor of the Exchequer about certain other pension funds. The first related to the National Freight Consortium, and the figures will come as a shock to many Conservative Members and many in the Conservative party. Although the Government raised £53·5 million in gross proceeds from the sale of the consortium, they had to make up £48·7 million in the deficit under its pension funds. Therefore, the taxpayer did not make an enormous profit out of privatising the National Freight Consortium. We still have to make an annual payment of million to the fund. That is not a good deal for the taxpayer and those figures throw a lot of light on the Treasury's attitude to pension funds in the Bill.

    It is clear in agreements that the Government have made with the industrial training boards that the Government set out to give those employees the type of guarantee that is requested in the amendment. The memorandum of agreement of 21 March 1983 between the Secretary of State for Employment, the Minister of Agriculture, Fisheries and Food and others refers to
    "the arrangements agreed to be made to fund the whole or part of any deficiency in the 'closed' part of The ITB Combined Pension Fund".
    That was a clear commitment by the Government to do exactly what is requested in the amendment.

    I mention those two items because they show the danger as it appeared to the Treasury and show that those who want the guarantee are not asking for something that the Government were not prepared to give in another respect.

    It is unfortunate that my hon. Friend the Parliamentary Under-Secretary of State — the hon. Member for Hampshire, North-West (Mr. Mitchell) — is not in his place. When this matter was dealt with in the Standing Committee, of which I was not a member, several of my colleagues raised with the Under-Secretary of State a number of questions about pensions. It is interesting to read the details of that debate and note some of my hon. Friend's statements. He reassured my colleagues and, no doubt, persuaded them not to press their amendments. Having been approached about guaranteeing pensions, he said:
    "other employees and former employees are already covered by section 74 of the 1962 Act."
    That is not so. Other employees and former British Electric Traction employees will not be covered by section 74, since that provides only that appropriate orders may be made. The orders which have been made so far—2,011 in 1958 and 1,824 in 1969—will lapse when the NBC is dissolved because they impose obligations on a company that will have ceased to exist. So much for that first statement.

    My hon. Friend the Under-Secretary of State made a further reassuring gesture when referring to what would happen after the NBC had been disposed of. He said:
    "Once the Secretary of State had approved the disposal programme the NBC would have a duty to implement it."
    How can the NBC implement protection against a future deterioration in funds after it has gone out of existence? That, too, was a misleading comment. My hon. Friend went on to say:
    "The National Bus Company itself does not formally guarantee"
    the pension funds. I believe that most people would agree that it is accepted that the NBC's covenant to make up contributions to the amounts required to maintain those funds is effectively a guarantee of a continuing employer. My hon. Friend the Under-Secretary of State said:
    "a statutory guarantee would provide NBC pensioners and employees with more security than comparable groups."
    I have already referred to the pensions given to employees of the industrial training boards. It is clear that the guarantee to which my hon. Friend referred is on all fours with the guarantee given to employees of industrial training boards.

    That was not the end of what I can only describe as a most misleading speech. Answering a suggestion by my hon. Friend the Member for Hertfordshire, West (Mr. Jones) about a common pension fund for the bus industry, my hon. Friend the Under-Secretary of State said:
    "if the NBC wished to pursue it the Government would be happy to explore the possibility."
    In relation to the alternative suggestion that the 1:wo existing schemes should be closed to new entrants and that there should be a negotiation with a major insurance company to take over the funds, my hon. Friend said:
    "The NBC has not yet put that proposal to us"—[Official Report, Standing Committee A, 18 April 1985; c. 1287$90.
    It is puzzling that my hon. Friend implied that the idea of a common fund and using an insurance company had not been considered. Both possibilities were discussed by the NBC with the Department of Transport well before that speech. In fact, the particular point about creating a separate fund with a new insurance company was discussed in the December 1984 paper which was submitted to the Department of Transport. In the light of that speech, three or four of my colleagues decided to withdraw their objections. They were right to be concerned. If I had listened to that speech, I might have been encouraged to withdraw my objection.

    5.15 pm

    If I had discovered that I had been misled—I use that word advisedly—by the Minister, either intentionally or unintentionally, I would have been very angry. I do not accuse him of making an intentionally misleading speech. I would have said, "I believe that the pensioners are entitled to some type of guarantee."

    The real issue is whether the Government will follow up the type of obligation that any right-thinking Government should and would undertake—obligations towards employees when a concern is nationalised or denationalised. We are talking about people who were in a private fund, were brought into the public sector and will now be taken out of the public sector again. It is clear from earlier debates this afternoon that there can be no guarantee whatsoever for the future for many people. Even if there is a management buy-out, many of these companies will not be able to retain the same number of staff. They are asking only that the work which they have done and their pension entitlements should be given some form of guarantee.

    I shall not join in the personal strictures of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), but I believe that the credibility of my hon. Friend the Under-Secretary of State and of the Government depends upon the answer my hon. Friend gives to these amendments. This is a Government who, whatever their failings, try to stick to their word and obligations. I sincerely hope that my hon. Friend the Under-Secretary of State will reconsider the decision which has already been made. I make this point on purely practical grounds: if my hon. Friend the Under-Secretary of State was correct and a guarantee is not needed because the fund will be adequate, what on earth are we arguing about? By giving that guarantee my hon. Friend will be showing an earnest of faith with the many thousands of workers who have given loyal service in the private and public sectors. I could never vote for the Third Reading of this Bill if my hon. Friend cannot give a satisfactory reply to the points made in the amendment.

    The hon. Member for Wellingborough (Mr. Fry) has made a powerful case to which the Under-Secretary of State must seriously address himself. The risk to which the Minister referred has been created, or not created, as a direct result of Government action. As the hon. Member for Wellingborough correctly pointed out, it seems reasonable that the people who have been in and out of the public sector should be given an assurance—first, that those who already benefit from the pension funds may securely expect that benefit to continue and, secondly, that all accrued benefits at the point of privatisation will be met by the funds.

    I am fascinated by the somewhat distracting private conversation between the Parliamentary Under-Secretary of State and the hon. Member for Wellingborough, but if it produces the right result, it will have been worth while. Employees of NBC had every reason to expect that they would be treated similarly to others who have been subjected to developments such as this as a result of Government action. It is clear from correspondence that hon. Members have received that employees are shocked that the Government could proceed with a Bill with such a strong ideological thrust in which they are the pawns and not be prepared to guarantee them a fundamental right.

    Perhaps the hon. Gentleman would like to stress that, whereas the Government are over-anxious to provide future employers with fundamental rights to set up new companies, they are reticent about affording employees equally fundamental rights.

    The hon. Member for Wellingborough mentioned the cost that might be involved, which would wipe out a substantial part of the benefit. If there is no potential cost, we may as well have a guarantee and demonstrate good faith.

    There are three categories of employee—those who are in receipt of pension and who must be protected, those who have accumulated pension rights up to the point of privatisation whose contributions and benefits should be guaranteed, and those who are employed after privatisa-tion and who will find that the companies for which they work might not be able to sustain previous levels of pension funding. The Government have an absolute obligation to the first two categories and some obligation to the third. It is a disgrace that the Government have got this far with the Bill without giving the first two categories such a guarantee.