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Commons Chamber
09 March 1988
Volume 129

House Of Commons

Wednesday 9 March 1988

The House met at half-past Two o'clock

Prayers

[MR. SPEAKER in the Chair]

Private Business

British Railways (London) Bill Lords

(By Order)

Order for Third Reading read.

To be read the Third time tomorrow.

Oral Answers To Questions

Trade And Industry

Ec (Internal Market)

1.

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To ask the Chancellor of the Duchy of Lancaster what representations he has received regarding preparations for the realisation of the Economic Community internal market in 1992.

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Since we announced our awareness campaign we have received an encouragingly large number of representations from all sectors of British business. All have warmly welcomed the high priority that the Government are giving to completing the single market in Europe and the steps that we are taking to make British business aware of the challenge.

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Has the Minister not read the comments made by the director general of the Confederation of British Industry, Mr. Banham, to the effect that he thinks that the Government are not taking the negotiations on standards seriously and are not spending enough resources or time on the problem? Surely this requires a rather wider answer than the Minister has given today, or was given to me by the Minister of State on 2 March, when I was told that the interests of the CBI were not necessarily those of the British nation. It is in our interest to be able to respond properly to the new training environment in 1992.

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With regard to the hon. Gentleman's specific point about standards, we hold the chair of no less than a quarter of all the standards committees in Brussels. It is important that we should take an active role in setting European standards, and we do that. I assure the hon. Gentleman that that is a very high priority for us, and we are doing a great deal more now than we have done in the past.

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I am very glad to hear what my hon. Friend said about the importance of our preparing people and making them aware of what is involved between now and 1992 and the steps that we must take to take advantage of that, but does he agree that it is important that the EC should not distract us in any way by such time-wasting foolishness as trying to introduce a common European car number plate?

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I note what my right hon. Friend has said. In asserting progress towards 1992, we must decide on priorities, and the kind of thing to which my right hon. Friend has referred is plainly not a high priority.

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Will the Minister assure us that the Government will not permit VAT on newspapers and books?

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That is plainly not a matter for me to comment on here and now. It is a matter for my right hon. Friend the Chancellor of the Exchequer in due time. The hon. Gentleman is well aware of the remarks made by my right hon. Friend the Prime Minister about our right to impose our own VAT rates on our own products.

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Does my hon. Friend accept that it is good news that the awareness campaign is going well? Is he aware of the fantastic efforts being made by all the chambers of commerce and business organisations in other European countries to get their businesses off the ground and their noses in ahead of us? Does he believe that smaller businesses in this country realise the immense opportunities that will be available for them as well?

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No, we do not believe that smaller businesses are fully aware of the opportunities, and that is why we are launching a major awareness campaign. That campaign has not actually started yet, but, because the issue is being discussed far more widely than before, awareness is steadily growing. The opportunities available to competitive British businesses for opening up Europe to the free exchange of goods and services are enormous. However, there is a threat for uncompetitive businesses because opportunities for competitive British businesses are also open to competitive businesses elsewhere.

Information (Sale And Access)

2.

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To ask the Chancellor of the Duchy of Lancaster if he will introduce legislation to regulate the sale of or access to information held on magnetic tape by the telecommunications industry.

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I have no plans to do so. The Director General of Telecommunications would consider representations on this issue in the light of his general duty to consider these where they relate to telecommunications services or apparatus.

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Does the Minister realise that those magnetic tapes hold far more information than is available on telephone directories and that British Telecom in particular holds a substantial body of information on each and every one of us? My information is that that may be against the guidelines on the data protection principles. Does he realise that unless he acts now we may face a national scandal in two years' time if fanatics or purveyors of junk mail manage to get hold of that information?

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The hon. Gentleman's question raises a number of issues, some of which are a matter for the Director General of Oftel. I hope the hon. Gentleman agrees, because he and I have pursued the matter with the Director General, that he can act vigorously and is a fast-moving regulator.

The other aspect of the hon. Gentleman's question relates to data protection. Clear guidelines and requirements are placed on the holders of data to preserve the interests of data subjects. I shall examine very carefully what the hon. Gentleman has said, but in the first instance I feel that I should refer it to the Data Protection Registrar to see that nothing untoward is at risk.

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As I understand it, my hon. Friend the Member for Edinburgh, Central (Mr. Darling) has contacted the Director General of Oftel, who, I understand, feels that he has no power in this regard.

This is a serious matter. British Telecom is not merely selling a telephone directory. What is contained on the magnetic tapes could be used for credit reference agencies, debt collecting and tracing agencies and other agencies wishing to examine the socio-economic groupings of certain individuals. There is much more on the tapes than is contained in the telephone directory, and, if it got into the wrong hands, it could cause distress and concern to many people. If, having looked at the matter, the Minister feels that the Director General can do nothing about the problem, will he consider bringing in legislation to protect these people?

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The Government discharged a major part of their duties during the passage of the Telecommunications Act 1984. The hon. Gentleman, who was a member of the Standing Committee, will remember the long debates on whether we should have a statutory body, which might be rigid and might constantly require updating through legislation, or a fast-moving freer body with appropriate powers, like the Director General of Oftel.

When matters have arisen that are legitimately for him, he has moved fast. He has not said that he has no remit to intervene. My understanding of his communication to the hon. Member for Edinburgh, Central (Mr. Darling) is that he accepts that two or three live issues have been raised which deserve consideration. However, I shall not second guess today precisely which body may take action to deal with the complaints that the hon. Gentleman has made.

Company Liquidations

3.

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To ask the Chancellor of the Duchy of Lancaster how many company liquidations there were in Derbyshire in the years 1983 to date.

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Company liquidations are not analysed by county, but Derbyshire is part of the area administered by the Official Receiver's office in Leicester, which processed an estimated 415 compulsory liquidations in the years 1983 to 1987. During this period compulsory company insolvencies fell by 27 per cent. No regional analysis is available of creditors' voluntary liquidations.

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Has there not been a substantial net increase in business activity in the area over the past five years? Has not that increase, which is very welcome, also gone hand in hand with a fall in unemployment, and has that not occurred despite the lack of regional assistance in the county of Derbyshire and the fact that many jobs have been lost in the coal industry, not just over the past few years but over the past 20 or 30 years? What conclusions does my hon. Friend draw from those facts?

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I suspect that I draw the same conclusion as my hon. Friend—that industry in Derbyshire is very buoyant—and the fall in unemployment to which he refers is mirrored throughout the country. It is worth pointing out that between 1983 and the last year for which figures are available the number of new company registrations in Derbyshire rose by no less than 81 per cent.

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Is it not true that, in Derbyshire, company liquidations from 1983 until the year of the election—when some special measures were introduced by the Government for electoral reasons—were at an all-time record, along with company bankruptcies; that half the north Derbyshire coalfield has been closed; and that, if the Government remain in office, there will be not 4 million people unemployed, as was the case a couple of years ago, but top side of 5 million? Derbyshire will suffer, and the hon. Member for Amber Valley (Mr. Oppenheim) will be part and parcel of it.

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The short answer to that is no, Sir.

Telecommunications Supervision

4.

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To ask the Chancellor of the Duchy of Lancaster what discussions he has had with the Director General of Oftel on the implications for the system of telecommunications supervision of British Telecom's decision to ban its Talkabout telephone service.

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Since British Telecom's decision to suspend Talkabout no further discussions have taken place, although the Director General of Telecommunications has kept my hon. and noble Friend in touch with developments. The matters involved are for the Director General who has demonstrated that he can and does act effectively.

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I am grateful to my hon. Friend for that answer. Does he agree that that shows the effect that Oftel can have? The decision temporarily to ban Talkabout is welcome, and one hopes that Talkabout will never be reproduced.

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It has demonstrated just that. A growing number of people now recognise the value of Oftel and the conspicuous and important role played by its current director general, who I think now has the respect of most sections of the telecommunications community, including Members of the House.

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Mr. Terry Lewis.

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Hear, hear.

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It is clear that my presence has been noted, Mr. Speaker.

May I be one of the first to add my support to the Director General of Oftel, particularly for his role in banning Talkabout? However, I warn the Minister against complacency. I do that specifically because of the chat lines which exist over the telephone. Such lines are still in operation today under licence from the Department of Trade and Industry. The Director General of Oftel has referred those lines in the same way as he referred British Telecom's Talkabout. I expect the Minister and the DTI to exert all the influence possible in this matter in order to ban those private chat lines as well.

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The hon. Gentleman's presence on this whole issue has been significant and I congratulate him on the way in which he has pursued his campaign.

The question is whether the chat line services that are not sponsored by BT should equally be held up to examination. This is an important issue. It is open to the Director General, if he so wishes, to seek modifications to the licences of the public telecommunications operators, including BT, or—this goes some way towards meeting the point of the hon. Member for Worsley (Mr. Lewis)—he can seek changes to the class licences under which many of those services are provided.

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When my hon. Friend next meets the Director General of Oftel will he discuss with him Sunday Sport magazine, which portrays itself as Britain's fastest growing family newspaper? It is full of hundreds of advertisements for telephone lines giving pornographic messages, which bring discredit on the telephone service.

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Under section 43 of the Telecommunications Act 1984 we have already made it a criminal offence to send messages which are grossly offensive, indecent, obscene or menacing. I assume that under that section and under other aspects of the law my hon. Friend's point could be examined. I take seriously what has been said and I will see that my hon. Friend's message finds the appropriate home.

Rover Group

5.

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To ask the Chancellor of the Duchy of Lancaster when he next plans to meet the chief executive of Rover Group to discuss the company's future.

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At the moment I have nothing to add to my statement to the House on 1 March.

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Will the Minister tell the House what assurances the Government are seeking on future model developments in the British Aerospace talks? I am referring particularly to the update of the Rover 800 by 1992, the future of the R9, the Montego replacement, and other models. What would the Government do to make such assurances stick? For example, would they deploy their golden share in British Aerospace to safeguard the long-term position of vehicle production in the interests of balance of payments and employment in the industry?

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Future model development is a matter for the management of the company. It is a commercial rather than a political decision. British Aerospace has told us that it is interested in continuing the development of the Rover Group, and obviously it is seeking to acquire it as a going concern. If the negotiations result in a merger between the two companies, the new management will have to address itself to the question of model development in order to protect its role in the market in future. We would not use the British Aerospace golden share in any way, because it would not apply to new acquisitions. In the course of the negotiations we are considering what view, if any, we will take about the Rover shares when we sell them.

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Will my right hon. and learned Friend, in discussions with the chairman of the Rover Group, ensure that any conditions relating to the deal with British Aerospace for the period prior to any final agreement will not exclude any offer that may be superior in terms of security to the work force or return to the taxpayer and that, in the period after such an agreement, they will not exclude future participation or joint venture by other motor companies?

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As I explained to my hon. Friend when I made my statement, we agreed that at present the negotiations between British Aerospace and the Rover Group should proceed on an exclusive basis. We shall have to await the outcome of those negotiations, but, if they were to be successful, and if we were considering a final offer, we would have to consider what other offers have been forthcoming from other interested companies.

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Having read about all the buying and selling that is going on between the Rover Group and British Aerospace, I should like to underline to the Minister the fact that the livelihoods and jobs of thousands of workers are involved. Does the Minister accept that there should be full consultation with the trade unions, and will he bear in mind the livelihoods of those thousands of workers, irrespective of who owns the undertaking?

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There is no pie in the sky involved. These are all serious negotiations. The hon. Gentleman is right that the negotiations concern important businesses and that the well-being of thousands of people depends on British Aerospace and the Rover Group continuing to be a commercial success. We believe that the Rover Group will be best placed in the private sector. The present negotiations are worth encouraging and we are awaiting the outcome of them. In the end, we shall make our decision about the holding in the Rover Group based on our best judgment of the interests of the taxpayer, the company and the work force.

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When my right hon. and learned Friend meets the chief executive of the Rover Group, will he discuss the amount of capital that is needed to update the Land Rover and Range Rover line, the van lines and the various new model developments? Will those costs be reflected in the price that is charged for the Rover Group to whoever may be buying it?

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Anybody contemplating purchasing a company of this size must address himself to exactly the kind of issues to which my hon. Friend refers. In deciding on the final price, and when we judge any offer that may be made, we must take an overall view of the value of the company to the taxpayer and the balance sheet that the new company will require. We shall bear in mind all the relevant considerations, including the ones that my hon. Friend has given.

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What is the DTI's attitude to the disposal of the Bathgate site?

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My understanding is that there is a prospect of development on the Bathgate site, and I trust that there will be some new development on that derelict site. It is now a matter for planning law in Scotland; it is not the responsibility of myself or of my hon. Friends at the DTI.

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Is it not important that the Government should now stand completely aside until negotiations between the two companies are concluded? Should not both companies be seeking to convince City investment institutions of the merits of their case, without the Government being involved?

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At present, the two companies are negotiating. Obviously, as the owner of 99·8 per cent. of the shares, we shall be closely involved. If the negotiations are successful a bid will be forthcoming for our shares, which we shall judge.

There is only one other way in which we are involved. My right hon. and noble Friend the Secretary of State is in Japan, or is about to land there, and no doubt he will repeat what we have been saying about our wish for Honda to continue to be involved in co-operation with the Rover Group, which has been welcomed by Honda and the Rover Group so far.

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If the Minister has thought about the Rover Group and its future in any sense other than how quickly he can wash his hands of it, and if he has thought about British Aerospace—the proposed partner in this illogical and silly union—will he say what effect the rising pound, which is now up 14 per cent. in real terms compared with the end of 1986, will have on the business of both those groups? Does he agree with the Prime Minister and The Sun newspaper that the rising pound is good for Britain? Is it good for Britain's manufacturing industry?

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I do not know whether the hon. Gentleman's only interest is to try to ensure that the Rover Group remains nationalised for as long as possible, or whether he is contemplating the renationalisation of British Aerospace. Such matters are best determined by making the best judgment of the commercial future of the companies in the private sector, and that benefits the work force as well. The rising pound certainly damages some industries and helps others, but the rising pound is a sign of the strength of the British economy. More stability in exchange rates is desirable, and my right hon. Friend the Chancellor of the Exchequer obviously welcomes the extent to which a strong pound keeps down inflationary pressures in Britain.

Link Programme Collaboration

6.

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To ask the Chancellor of the Duchy of Lancaster how much the Government expect to spend on Link collaborations over the next five years.

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The Government expect to contribute about £210 million to Link over the next five years, provided industry matches Government funding.

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Do not both partners benefit from such arrangements — the researchers, who see their projects come to fruition, and industry, which benefits from the research of universities and colleges? If that is the case, why are some universities and colleges not taking advantage of such opportunities, or not taking advantage of them in such a big way? What does my hon. Friend intend to do to encourage them?

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We should like to see far more use of the research base currently inside our higher education institutions. If one compares our experience with that of the United States, one finds that we have an under-utilised national asset. If the Link programme can help to build more bridges between industrial and commercial research-based companies and the higher education sector, we would welcome it. To a certain extent the programmes are demand-led and on their merits. Five have come forward which are worthy of support. If some universities are not tuned into this yet, it is their own fault. The resource is there. It is demand-led and it is up to them to bid for it.

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Does this not represent a restriction on the way that already committed money is to be spent? It is in no sense an addition to research and development spending in Britain. Will the Minister acknowledge that a large number of industrial research directors are already warning that the attrition of the science base is threatening the viability of Britain as a base for applied industrial research? Finally, does he agree that the real need is for a proper incentive to industry to increase its support for research and development?

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The DTI's role is to encourage partnerships between the public and the private sector and to see that the critical mass of research is enhanced and applied with relevance to the market at large. The hon. Gentleman has been an observer, commentator and practitioner in this area for a long time and I should have thought that he would welcome the fact that our budget for the totality of research, development and innovation effort is now running at about £500 million. That represents a major shift over the past five or six years, and we are beginning to see the benefit of it. Perhaps I may write to the hon. Gentleman about the industrial research directors' point. As he knows, there has been a complex build-up to this in terms of how it will apply. We are now through that and some of the sources of confusion and alleged over-complexity may now have been eliminated.

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Does my hon. Friend agree that the investment of private industry in projects such as Link is a vital ingredient to their success? Is it not the case that unless one ensures that, for example, pharmaceutical companies, such as those involved in the eukaryotic project, find that research is encouraged by the repeal of the full licences of right, they may feel that it is not in their interests to proceed with such research?

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I admire my hon. Friend's ingenuity in bringing the licence of right issue into this question. As he knows, we shall be addressing this matter at great length in Committee on the Bill that will come before the House after Easter. There is a eukaryotic genetic engineering programme within the five programmes that have been approved, and I hope that the pharmaceutical industry in particular will derive great benefit from that.

Inner Cities

7.

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To ask the Chancellor of the Duchy of Lancaster if he will make it his policy to ensure that the inner cities are given priority in departmental decentralisation plans.

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Yes, Sir. The Government's policy is that Civil Service work should be located where there is best value for money and best service to the public. However, when such locations are in areas which are the focus of the Government's urban and regional policies, they will be considered particularly seriously.

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While it is widely recognised that civil servants will do everything possible to resist moving out of cushy London, will my right hon. and learned Friend assure the House that the decentralisation plans will move forward apace? As he and his right hon. and noble Friend, the Secretary of State for Trade and Industry, are making it clear that the private sector must play a major part in this rejuvenation, surely we must also play our part by moving as much as possible of the Department to inner cities in the regions?

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I do not think that the reluctance of civil servants is quite as bad as my hon. Friend says it is. One way or another, about 5,500 jobs have been transferred out of London since the Government came to power in 1979. The DTI recently announced the transfer of most of the Patent Office to Newport and part of the insolvency service to Birmingham. I am carrying out a review to look for further candidates for cost saving, while maintaining the quality of service in my Department.

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May we assume from the Minister's reply that Bradford will be carefully considered for the relocation of any Government Departments? Can the Minister say in specific terms what benefits will flow to Bradford from the city action team being located in Leeds?

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As I said in my previous answer, whenever we look for alternative locations for Government offices we pay particular attention to places that are the target of the Government's urban and regional policies. I think that great benefits will flow to Bradford from the work of the city action team. Its headquarters are in neighbouring Leeds, but its activities are particularly directed to the urban problems of Leeds and Bradford. It has all the resources and competence to tackle the problems of both.

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The Government will be successful with their macro-economic policy of inner-city regeneration, but will my right hon. and learned Friend say something about the neighbourhood regeneration, on which he has been concentrating? Surely the success of the strategy lies in encouraging local people to be involved in the regeneration of their neighbourhoods and streets.

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Civil servants have been posted to task force offices in 16 deprived neighbourhoods up and down the country. That approach has been particularly successful, not least because it has enabled those civil servants to get into close contact with local residents, and because it has targeted the Government's national programmes and additional money on projects where they are most needed in those districts.

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I am intrigued by the decentralised free breakfasts that the Minister will be offering as part of his inner-city initiative. How many breakfasts will there be, which Ministers will be involved, and how much will the free breakfasts cost the taxpayer? If the right hon. and learned Gentleman is looking around for a menu, in view of the damage that the Government's policies have done to the inner cities, may I suggest thin gruel, hard cheese, and poached bullshit?

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Order. That is a very unparliamentary word. Will the hon. Gentleman withdraw it and use another?

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Tell us the menu, then.

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Breakfast is my least favourite meal; normally I do not eat it. The only reason why we are having these meetings at breakfast time is that that is the one time when all the leading citizens of a city tend to have their diaries clear, until they receive our invitation. We found that with "Action For Jobs" presentations—one gets a much better attendance if one turns up at breakfast time.

I can tell the hon. Gentleman that the menu is quite immaterial and entirely undistinguished on these occasions. What matters is the serious discussion that takes place, which I hope will lead in this case to follow-up action after the breakfasts bringing together leading industrial citizens of each city to help to steer the private sector contribution towards the Government's and the country's efforts.

Business Regulation

8.

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To ask the Chancellor of the Duchy of Lancaster what further plans he has to lift the burden of regulation on business.

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Active efforts to reduce the burden of regulation on business continue in all areas of the Government's work. A White Paper on deregulation in the summer will give further details of our strategy and programme of action.

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I thank my hon. Friend for his reply and congratulate the Government on their deregulation policies to date. There is a great deal more to be done, and we look forward to the White Paper. However, will my hon. Friend carefully examine the possibility of abolishing the statutory audit for small businesses?

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We are certainly looking at that matter. A good deal of concern has been expressed to the effect that the statutory audit has placed an excessive burden on small businesses. I am grateful for my hon. Friend's remarks about the deregulatory programme. It is important. None of it is dramatic in itself, but the cumulative effect of lifting small burdens from business is dramatic.

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Will the Minister assure the House that the Government will in no way attempt to diminish standards of health and safety at work? As he knows, each year more days are lost through industrial injury than through strike action. It would be a savage attack on workers if there were any attempt in any businesses to lower the standard of health and safety at work.

Will the hon. Gentleman tell us about the curious situation whereby business organisations claim to want the Government off their backs, but invite retired civil servants on to their boards?

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The latter phenomenon demonstrates that public servants have a great deal to offer industry. One of the things that we are trying to develop is a greater flow of personnel to and from the public sector. It would be helpful for business if more people from the private sector were to be seconded into the public sector, and vice versa. The public and private sectors have a great deal to learn from each other.

We continue to attach high priority to health and safety at work. There are advances to be made by simplifying the burden of regulations so that users find it easier to comply with them.

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Will my hon. Friend take encouragment from the deregulation programme so far? Does he accept that real obstacles and burdens make it difficult for firms to expand and grow, and that it is important to cut red tape? Will he consider placing before Parliament an annual report on progress made in all Government Departments, so that Parliament can see how far the deregulation programme has gone?

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I am grateful for my hon. Friend's remarks. The White Paper that we propose to publish in the summer will effectively amount to that. Since the deregulation initiative started three or so years ago we have published two formal White Papers and a further paper. These papers outlined the progress that has been made right across the board. We shall continue to do that.

Shipbuilding

9.

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To ask the Chancellor of the Duchy of Lancaster if he will make a statement on progress made in discussions of the European Commission's proposals entitled "Shipbuilding—Industrial, Social and Regional Aspects".

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Our discussions in the relevant European Council of Ministers on regional measures within the programme known as RENAVAL are well advanced. I have stressed to the Council how important I believe it to be that we should make rapid progress. The Commission's proposals on other aspects of its programme have yet to come to Council. The Commission seeks to assure me that work within the Commission is well in hand.

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Although help to enable new businesses to go to shipbuilding areas is to be welcomed, will the Minister assure us that it will in no way be a sop to allow a further rundown in British shipbuilding? May we be assured that the money will not be a substitute for the financial support that the industry needs if it is to survive and play an essential role in Britain's industrial future?

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I am anxious to get support from the Community for shipbuilding areas as quickly as possible. Obviously, we need the encouragement of other businesses in such areas. Looking back, no one can doubt the extent of the Government's financial commitment to British Shipbuilders. At the moment, its external financing limit is £180 million, which is about £20,000 for each employee working in the yards. As I told the House when I announced that figure last year, it is a heavy figure, and the outlook for British Shipbuilders is still difficult.

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Will the discussions include the inducements offered by many European companies to attract custom and orders away from British shipbuilding and repair yards?

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We have agreed on a European sixth directive, which is meant to impose limits on the extent to which any Government within the European Community can give inducements to win orders. It is the British Government's view that the sixth directive should be adhered to, to stop pointless and wasteful competition, with taxpayers in each country pouring money into loss-making orders.

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Will the Minister take this opportunity to repudiate the report that appeared in The Guardian a few days ago to the effect that the Government are contemplating removing all help to British shipbuilding? That would mean reneging on the sixth directive. It would also cause utter devastation in shipbuilding areas such as the one that I represent.

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Obviously, I have to keep in close touch with the trading position of British Shipbuilders because of the very large sums of money that are involved, as I explained to the hon. Member for Gateshead, East (Ms. Quin). We have taken no new decisions about the future of British Shipbuilders, but the position of the business has to be kept under review while it is in such a difficult state.

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Will my right hon. and learned Friend confirm, first, that the worldwide shipbuilding industry is in a state of extreme recesssion? Secondly, while I welcome his answer to an earlier supplementary question, will the Government strive to make certian that all the EEC countries conform to that directive once it has been signed and agreed and that there are no hidden subsidies from our EEC partners?

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The shipbuilding industry throughout the world is in a pretty parlous state, with major lay-offs and closures taking place in Japan and in Western Europe. Although there is some prospect of the market improving, there is a general lack of orders to match the present world capacity of shipbuilding. I agree with my hon. Friend that we must stop unfair competition breaking out within Western Europe. We seek to adhere to the sixth directive and the Commission seeks to endorse it. The last complaint received was against ourselves and the French.

Financial Advice Services

10.

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To ask the Chancellor of the Duchy of Lancaster what is his policy towards providing advice services for the growing number of people with financial and debt problems; how he intends to finance such services in the future; and if he will make a statement.

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A great deal of advice and help on debt problems is already provided free of charge by citizens advice bureaux. The National and Scottish Associations of Citizens Advice Bureaux are funded by my Department to the extent of £8·9 million in the current financial year. They have been encouraged to seek additional funding for money advice services from the finance industry, and two money advice support projects, one in the south-east and one in the north-west, are already under way as a result of private sector funding. I understand that agreement has also been reached on two more major schemes, which will be announced soon. I believe that this will be widely welcomed.

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Does the Minister appreciate that there are vast increases in the numbers of people experiencing debt problems, and that there is an increase in the complexity of those debt problems? Does he accept that a large number of Government decisions, particularly the recent social security decisions and the way in which the Government are implementing them are placing increasing pressure on people and increasing the likelihood of their getting further into debt, particularly those on the lowest incomes? Does he accept that the finance that he provides is to associations that give national back-up, and not direct to the services? The Minister should accept responsibility for providing proper funding for advice services in view of the way in which the problem is likely to accelerate under present Government policy.

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The funding of local citizens advice bureaux has always been a matter for local authorities. They know about local needs and it is for them to decide how to allocate money within their budgets.

As for debt increasing, of course there are people who get into trouble with debt, but there are far more people whose problems have been alleviated by having access to credit. The fact remains that the principal protection against getting into debt is for people to think carefully before doing so, and to look around carefully for the best terms. There are widely differing ranges of interest rates available, and if people were to look around more carefully the problem of getting into debt would be reduced.

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Is the Minister satisfied that the Government are doing enough to control extortionate credit demands?

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The courts have the right to re-open a credit bargain if the case is made to them that the terms on which the bargain was made are extortionate. That power lies with the courts, and we are looking to see whether it could be extended to give the courts the right to re-open a bargain on their own motion without a plea being made by the plaintiff. We have yet to see whether that is practicable. I believe that the Government are doing enough. Our system of consumer credit regulation is based on making the maximum information that is sensible available to the potential debtors so that they can work out whether the commitments into which they are entering are within their capabilities. That is the best protection we can provide.

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Does the Minister accept the view of the citizens advice bureaux and of every reputable consumer organisation that there is an element in the loans market that behaves in a totally unacceptable way and peddles its loans to those who are desperate or ignorant? Does he also accept that many people are simply unaware of the powers of the courts to set aside high levels of interest demanded by some of these loans sharks? Why will he not take on board the representations of those bodies and introduce tough new legislation to protect the consumers and the public interest?

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I have announced today some improvements to the advertisement regulations to make more, clearer and simpler information available to people seeking credit. As for making further advice available, I believe that it is helpful for advice bureaux to seek funding from the finance industry. There is much to be said for the finance industry making that money available, because if more people are helped to pay off their debts, obviously that is in the commercial interests of the industry.

Action For Cities Campaign

11.

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To ask the Chancellor of the Duchy of Lancaster what response there has been from the private sector to the Government's action for cities campaign.

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The Government have been working very closely with many private companies and private sector and voluntary organisations for many years. There has been an encouraging response from the private sector to the action for cities campaign launched on 7 March. Business organisations, including the CBI, Business in the Community, the Industrial Society and Investors in Industry as well as individual companies and business leaders have reaffirmed their commitment to work with the Government to make inner cities prosperous. With ministerial colleagues I will be taking our proposals further with business leaders in a series of regional meetings, starting on 13 April in Newcastle upon Tyne.

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To get the wheels of commerce turning, will my right hon. and learned Friend ensure that firms that are willing to invest in those areas, in the way that he has just described, have access to information about the extent and ownership of derelict land? If it is found that public bodies or Government Departments own any derelict land, will he ensure that it is auctioned off at an early date?

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It is certainly true that we still have far too much derelict land in our inner-city areas which, on examination, turns out to be in the ownership of some public body or other. It is for that reason that we started the register of land and, as I announced a few days ago, my right hon. Friend the Secretary of State for the Environment is taking steps to make sure that more public use is made of the information contained in the register and to ensure that the land is shaken out into development.

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Does the Minister recognise that it was the private sector and private entrepreneurs in the past that failed, especially in the north-west and in other manufacturing areas? People are not fools, and they will not fall for glossy packaging and the Prime Minister's own brand of clap-trap, because they know full well that that will not provide jobs, homes or the medical needs of the inner-city areas.

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The industrial prosperity of Manchester was based on the success of its entrepreneurs, industrial leaders and private sector industry. It is true that Manchester's economy has undergone considerable change and that it has gone through great difficulty in the upheavals of recent years, but, in my opinion, Manchester is now coming back strongly. It must be in the interests of the people of Manchester to attract leaders of industry, investors in new business and private sector activity back into the city. I hope that the hon. Gentleman will not react in the same way as his city council does from time to time, by being positively hostile to private sector investment in that city.

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While the Government's initiatives on the inner cities are welcome, will my right hon. and learned Friend bear in mind that certain local authorities obstruct the private sector through their use of planning powers? Will he take to himself powers to ensure that that obstructionism does not succeed?

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I agree with my hon. Friend. We are often pressed on the contribution that local government should make. Indeed, it needs to make a contribution, and the best contribution that it could make would be to be business friendly and to seek to attract to the cities the private sector investment that is needed by the residents if they are to have the hope of new jobs. I deplore any obstruction—through the planning process or in any other way—on the part of just a few councils to the idea of fresh private investment corning to their areas.

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Is the Minister aware that after the hype of the launch on the inner-city initiatives and all the gloss that went out, two sobering statements were made, by the Confederation of British Industry and by the Association of British Chambers of Commerce? The CBI stated:

"Firms will have to be able to justify their contribution to shareholders."
It was stated of the Association of British Chambers of Commerce, which represents 65,000 companies:
"The association was scathing about the lack of recognition of the chamber's key role in a range of business and social issues."
The Minister is asking local authorities to be business friendly but, quite honestly, when one considers the declaration of UDC status such as took place in Sheffield, when even the chamber of commerce was not invited to the launch, which it had to gatecrash, that type of co-operation does not appear to have been taken on board by the Government.

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I do not know what the opposite of hype is, but the Labour party has certainly been guilty of it in recent years with regard to just about every new idea for inner cities that has come forward.

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They whinge.

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I agree with my hon. Friend that the Opposition whinge about absolutely every measure that anyone proposes and they take the general view that it is all a waste of time.

Our major aim over the summer is to try to attract private companies to take part in inner-city activity. I agree that we have to get the message across to those companies that it is in their commercial interest to do so. It is sensible, commercial practice for a large company that wants, at the same time, to be a responsible corporate citizen, to take part in such activity. That is the American experience, and we and the CBI agree. That is the message that we shall be giving.

I am sorry if we did not acknowledge the valuable work of many chambers of commerce. I have worked extremely closely with chambers of commerce and their members in many parts of the country, and they have been actively involved in our work.

I must remind the hon. Gentleman that the announcement of an urban development corporation for the Don Valley is one of the best bits of news that Sheffield has had in recent years. It will bring that derelict land back into use because the decision-making processes of UDCs have proved, in practice, to be extremely quick and effective. There is, of course, a substantial commitment of Government money behind the UDCs.

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Will my right hon. and learned Friend take this opportunity to praise the work of the private sector, especially in Nottingham, and in particular the work of David White and his colleagues on the Nottingham development enterprise hoard? That board has done much to ensure that the private sector responds to the need to renew those areas of Nottingham that require such renewal.

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I agree with my hon. Friend. David White chairs the Nottingham development enterprise board. He has got together a group of the leading business men of the city, who are financing their own secretariat, commissioning reports, as well as setting out a policy on how different parts of the city will be revived. They have the active co-operation of the Conservative-controlled city council and the Labour-controlled county council. I am glad to say that the completely negative attitude of the Opposition Front Bench has made no impact in the inner-city area of Nottingham.

Inner Cities

12.

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To ask the Chancellor of the Duchy of Lancaster what representations he has received on the future of inner-city policy.

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I have the benefit of a great deal of advice, solicited and unsolicited, on inner-city issues, some of which is reflected in the document "Action for Cities", published on 7 March, which has been very well received.

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In view of the praise that has been heaped on Glasgow in recent months by the Minister, the Secretary of State for Trade and Industry and the Prime Minister regarding the GEAR project and inner-city improvement, will the Chancellor take the opportunity to pay due credit to my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), who instituted the scheme for GEAR when he was Secretary of State, the Labour-controlled Glasgow district council and the Labour-controlled Strathclyde region? Is not the lesson of Glasgow and the improvements that have been carried out there that the Government should give the resources and the powers to locally elected Labour-controlled authorities to get on with the job?

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I agree with most of what the hon. Gentleman has said. I gladly pay tribute to his right hon. Friend and to the local authorities. I trust that he will also pay tribute to the Government, the Scottish Development Agency, my right hon. and noble Friend for his major contribution, and to the private sector. The private sector has been the vehicle by which most of the investment has gone into GEAR. If we can maintain the sort of policy that has, in recent years, flourished in Glasgow we will make progress. I only wish that the hon. Gentleman would have words with some of his hon. Friends in cities such as Manchester and elsewhere who do not appear to have picked up the basic message of co-operation.

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Does my right hon. and learned Friend's inner-city initiative include the ability to help finance the start-up costs of business incubators or business technology centres, which will help small businesses to establish themselves?

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It certainly does. The Government have a multiplicity of ways in which they can support business start-up premises, managed workshops and technology centres of the type described by my hon. Friend. Various Departments of state have their different agencies and funds and any projects that come forward will be looked at eagerly by all my right hon. and hon. Friends.

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How does the Minister expect local authorities to be business friendly in the inner cities, and how does he expect them to finance debt services, when, after the introduction of the poll tax, central Government will control 75 per cent. of what was peviously local authority funding? Is it not time that the Minister became local authority friendly?

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But central Government and private business between them have always paid for the majority of local government expenditure. That is true under the present system and it will be true under the new system. Domestic rates and the community charge provide only for the minority of local government expenditure in any event.

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As my right hon. and learned Friend is aware, the serious problems affecting our inner cities also affect the centres of many smaller towns. Will he assure the House that the initiatives announced in the Government's "Action for Cities" campaign will apply to those smaller communities?

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The urban programme and urban priority areas can cover a wide range of communities. I agree with my hon. Friend that many of the problems affecting inner cities—lack of economic activity, high unemployment and so on—are found in other parts of the country as well. I hope that in England all those in urban priority areas are benefiting from our proposals, and I trust that my hon. Friend will find that my right hon. Friend the Secretary of State for Wales tackles the problems in his constituency vigorously.

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The Prime Minister has told us that there is not a single new policy for the inner cities, and the Minister has been unable to tell us whether any substantial new resources will go into the inner cities, at least to compensate for the massive reductions in rate support grant. Why does the right hon. and learned Gentleman expect the same package of measures with virtually the same resources to succeed in the future when it has failed in the past?

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The hon. Gentleman is not the first to pick up a phrase used by my right hon. Friend the Prime Minister and use it somewhat incorrectly. As he knows, there were no fewer than 12 new announcements at the conference that we held on Monday. Although all the money came from the existing PESC provision, £250 million or thereabouts was directed to new policies in the inner cities to which it had not been directed before. The hon. Gentleman's wholly false analogy with arguments with local government over rate support grant represents another failed attempt to denigrate a very substantial policy.

Steel Industry

13.

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To ask the Chancellor of the Duchy of Lancaster what was (a) the number of employees in and (b) the output of the steel industry (i) when last nationalised and (ii) for the latest year for which figures are available.

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The British Steel Corporation employed 251,000 people in 1968. At the end of 1987 it employed 51,500 people. Its liquid steel output in the first full year after nationalisation was 23·6 million tonnes. In 1986–87 its output was 11·3 million tonnes, although it will be higher this year. The reductions in part reflect the privatisation of certain BSC activities in recent years.

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I thank my hon. Friend for that reply. Now that quota arrangements in the EEC have failed to bring down output in certain countries that agreed to bring their output down, and now that our productivity in the steel industry is so good, is it not time that we pressed for quotas to be abolished and allowed a privatised steel industry to go in and clean up the market in Europe?

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I am grateful to my hon. Friend, who will know that my right hon. and learned Friend the Chancellor of the Duchy of Lancaster has been leading the way in doing just what he asks in Europe, and we shall endeavour to keep up that campaign.

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Has the Minister considered the fact that, had the industry not been taken into public ownership—with all the investment that stemmed from it—it is unlikely that we would have a steel industry left today?

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Let me make it clear that most of the money that the Government have put in over the years has been to support uneconomic operations and maintain capacity that the market did not need. It is not, I emphasise, a debt; it is an accumulated deficit and it has gone for good.

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Would my hon. Friend care to note that the excellent figures that he announced include those for Teesside steelworks, which has shown the best improvement in productivity of all and has become the most competitive steelworks in the country? The improvement would have been even greater if the Cleveland county council rate had not increased by 30p this year to cover the cost of an additional 2,000 employees engaged by Cleveland county council in the past two years, none of whom produces anything.

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My hon. Friend makes his point in his usual cogent way. I would point out that productivity has increased from 13·2 man-hours to 6·2 man-hours since 1979–80. That is an indication of the vast improvement in productivity in British Steel in recent years.

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Does the Minister agree that those figures represent a profound disturbance in the lives of tens of thousands of steelworkers and that we lack any authoritative survey of the social costs of the changes? Will he agree to consider initiating a scientific, objective study of the effects of those changes? A few people's lives were transformed for the better, but there have been enormous changes, including an increase in mental and physical ill-health and other problems among steelworkers' families. Will the Minister tell us that the social factors will be examined and included in the equation?

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The hon. Gentleman makes a fair point about the numbers of people who have left the steel industry as a result of the slimming down of the industry, improvements in productivity and a variety of other factors. I pay tribute to those within the work force, led by the trade unions, who negotiated and understood that productivity agreements and the slimming down that took place were necessary. Health and worries about unemployment are not matters for me.

European Regional Development Fund

14.

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To ask the Chancellor of the Duchy of Lancaster what is the value of grants allocated to England from the European regional development fund since its inception.

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The value of the grants is £1,482 million.

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Is my hon. Friend satisfied that the size and extent of the grants, which are impressive, have been sufficiently well publicised? If not, what does he intend to do?

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I am satisfied that publicity arrangements for ERDF grants are satisfactory. As my hon. Friend will know, the grants are announced in batches at various times throughout the year by the Commission through press notices. At the same time, interested Government Departments issue press notices, and where appropriate local notices are issued as well. There is always room for improvement, and I am grateful to my hon. Friend for the opportunity that he has given me to re-emphasise the importance that we attach to the grants.

Local Authorities (Rating And Capital Expenditure)

3.31 pm

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With permission, Mr. Speaker, I should like to make a statement about three issues which will require amendments to be introduced to the Local Government Finance Bill. Two relate to recent court decisions affecting rating, and one relates to the control of local authority capital expenditure in England and Wales.

First, it is central to the rating system that the value of a hereditament should reflect the physical condition of the property and the "state of the locality" at any particular time. But the basis for the valuation should be the property market conditions as they were at the date of the last revaluation.

For many years now the view has been that the expression "state of the locality" related to its physical state and its amenities, and that in order to make a case for a change in rateable value appellants had to show that there had been physical changes to the property or its locality.

This view was recently tested in the case of Addis v. Clement, which turned on whether a factory on the borders of the Lower Swansea Valley enterprise zone could rely on the introduction of the EZ to seek a reduction in rateable value. The Court of Appeal upheld the traditional view by holding that the establishment of an EZ was not a change affecting the state of the locality. The House of Lords, however, took the opposite view.

Following that judgment, it appears that ratepayers may obtain changes in rateable value to reflect changes in market conditions since 1973. Many thousands of new proposals may result. In my view, changes in economic circumstances should be taken into account at the general revaluation in 1990.

I therefore propose to bring forward amendments to the Local Government Finance Bill so that, with effect from midnight tonight, proposals to amend current rateable values will be determined according to the law as it was understood to be prior to the decision in the Addis case. This means that changes will be taken into account only in so far as they relate to the physical state of the hereditament and its locality. Changes in economic factors will be taken into account in the 1990 and subsequent revaluations.

Proposals already made will be decided, where relevant, in the light of the law as decided by the House of Lords in the Addis case.

The second issue affects the rating of water hereditaments. Most such hereditaments are currently rated by statutory formula. Others, particularly sewage treatment works, have, however, always been treated as excluded from the formula and rated conventionally. The Court of Appeal has now held, in the case of Severn Trent Water Authority v. Cakebread, that the Water Act 1973 changed the statutory definition of a water hereditament so that those hereditaments previously excluded from the formula are covered by it, even though the formula did not make allowance for that.

This decision would give a continuing windfall benefit to water authorities. We have therefore decided to restore the law to the position previously accepted for many years, also with effect from midnight tonight.

These two decisions will affect the revenue of the local authorities concerned. Rateable values are of course constantly changing as a result of the appeals process and net additions to the rateable stock. Ordinarily, and by agreement with the local authority associations, rateable values, once set for a year, are not changed for rate support grant purposes, for that year or earlier ones. Exceptionally there is provision in section 67 of the Local Government, Planning and Land Act 1980 for authorities to be compensated if they suffer a reduction of more than a prescribed proportion of their rateable value in any year. This proportion is presently set at 2·5 per cent. It is not yet clear whether, as a result of these decisions, any authority will lose rateable value in excess of that level and, therefore, whether the existing arrangements will be triggered. While my right hon. Friend the Secretary of State for Wales and I are prepared to listen to representations on this, we see no need to extend the existing arrangements for compensation. We intend, by making our proposals effective from today, to limit the losses which might otherwise arise.

Thirdly, I have to inform the House that, once again, a minority of local authorities are employing artificial devices to incur capital expenditure and to undertake borrowing over and above the levels permitted to them under the existing capital control system.

Only a minority of authorities are involved, but the sums involved are large. Individual deals can give rise to future expenditure of several hundred million pounds. If all options granted under agreements recently entered into are taken up, several billion pounds of capital expenditure may be incurred. No Government could ignore evasion of their expenditure controls on this scale.

A number of different devices are being used. They fall into two classes. First, there are schemes under which local authorities are acquiring capital assets on terms which are outside the letter of existing capital controls — for instance, by the taking of medium term leases or by barter. Secondly, there are schemes under which local authorities are raising money by lease and leaseback or sale and leaseback of their operational assets. This is borrowing in fact, although it may not be borrowing in law. In effect, money is being borrowed by disposal of capital assets in order to finance deficits on revenue account.

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That is exactly what the Government are doing.

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Amendments have been made to the prescribed expenditure regulations for England and Wales. These will take effect from midnight tonight. But the amending regulations will be temporary in the first instance. My right hon. Friend the Secretary of State for Wales and I will consult local government and other interested parties about whether any changes or clarification are required before the amendments are made permanent. We have adopted this procedure to avoid any repetition of the events of 1986–87, when consultation preceded a change in the regulations and when nearly £2 billion worth of deals were rushed through in the interim.

The main changes made by the regulations are that, with some exceptions, acquisition of a leasehold interest in land for a term of more than three years will score as prescribed expenditure. The present limit is 20 years. And, regardless of term, prescribed expenditure will be scored on acquisition of a lease of property in which the authority holds a superior interest or which has during the previous five years been the subject of a development agreement to which the authority was a party. There are also some changes in the provisions about capital receipts where acquisition of the assets concerned did not involve prescribed expenditure.

Some authorities may as a result of the new regulations incur prescribed expenditure as a result of the exercise of options provided for in agreements already entered into. I and my right hon. Friends will consider issuing additional capital allocations where we are satisfied that the agreements were not entered into for the purpose of evading capital expenditure or borrowing controls.

Subject to the approval of Parliament to the necessary provisions, we propose to supplement the changes in the regulations with certain changes in the primary legislation. Those changes are as follows: to clarify that, when a local authority acquires land in terms other than freehold for cash, the amount of prescribed expenditure scored is the value of the interest acquired on the assumption that it was acquired freehold and for cash. That was the intention of the Local Government, Planning and Land Act 1980; to provide that where a local authority acquires property, or where works are carried out on a property which the authority owns, and valuable consideration for the acquisition of the works is given but not in money, then prescribed expenditure will be scored; to clarify that, where a local authority acquires an interest in or right over land and the interest or right does not confer a right of occupation, nil prescribed expenditure is scored only if the interest is neither a freehold nor a leasehold.

In addition, we intend to widen the statutory definition of prescribed expenditure to include the acquisition of share or loan capital in a body corporate and expenditure incurred in the discharge of obligations under a guarantee or indemnity relating to borrowing by a person other than the local authority.

All the legislative changes that I have outlined will be included in the Local Government Finance Bill. They will, however, be made effective from midnight tonight.

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Is the Secretary of State aware that the effect of enterprise zones, which he now complains of and which he seeks to change by changing the law from midnight tonight, was always predictable and was forecast by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) speaking for the Labour party in 1980 when the Local Government, Planning and Land Bill became an Act? After eight years, the enterprise zone problems in that regard are now coming home to roost. They have resulted in increased rental values inside the zones, decreased rental values outside the zones and a consequent very large and continuing loss of income to local authorities as a result of rateable values being depressed.

Is the Secretary of State aware—I am sure he is—that the city treasurer in Swansea has calculated that the loss to the city's finances could be in excess of £1 million? Is the Secretary of State also aware that in Salford—another enterprise zone — the local authority has calculated that the Secretary of State's decision is likely to result in very large rate increases or a continuing loss of income to the city's finances?

There are 19 enterprise zones at the moment. In all those areas, local authorities and ratepayers have sustained and continue to sustain very large losses in income and therefore sustain extra penalties as citizens of those communities. In addition, is the Secretary of State aware that enterprise zones continue to attract the transfer of firms and companies across the boundaries, simply relocating companies from one area to another without necessarily or very often creating new jobs?

Why will the Government not recognise that attempts to ring-fence the economic effects of enterprise zones have failed and will continue to fail? Apparently the Government recognise that—at least privately—because in Monday's glossy press release document on policies for the inner cities enterprise zones are relegated to a single sentence in 32 pages. The Government have abandoned their attempts to monitor the impact and effect of enterprise zones.

Will the Secretary of State make clear what redress will be available to local authorities and ratepayers in those areas? Although I welcome his commitment to listen to representations from the local authorities — that is certainly the right thing for him to do—it seems clear that in most cases the provisions in section 67 of the 1980 Act will not be adequate to allow him to compensate them. I ask him to reconsider the provisions to ensure, through legislation if necessary, that the local authorities and their ratepayers can be properly compensated.

The Secretary of State has also decided not to accept the decision of the courts. That means that, unless he makes arrangements for adequate compensation, the people involved will not be able to benefit from the court judgment. That is his intention, but if he does not intend them to benefit from the decision it is surely incumbent on him to arrange for them to be properly compensated in some other way.

The Secretary of State has made an important and complicated series of technical financial announcements about local authority finance. Will he confirm—

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What about Westminster and the cemeteries, then?

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Will the Secretary of State confirm that the local authorities to which he refers have been acting within the law? Is it not strange that he has uncomplimentary things to say about them, but nothing to say about the banks in the City which are falling over themselves to facilitate these deals?

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That is because they are their friends.

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Order. Let us have an end of this chat across the Chamber.

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Why not speak to the bookie's runner?

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Order. I am referring to hon. Members on both sides of the House.

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Why is it that yet again the Secretary of State has made a statement without mentioning the range of effects that are likely to follow? Will he confirm, for example, that his proposals will affect large and small local authorities right across the country, under Tory as well as Labour control? Will he confirm that the proposals will affect the capital programmes of many of those authorities, including house-building programmes, redevelopment programmes and capital expenditure on leisure centres and other such facilities? Will he also confirm that the statement has implications for budgets that have already been fixed, and rates that may already have been announced for the coming financial year? Will that not cause severe problems in some local authority areas?

I welcome the Secretary of State's proposal that these matters should be the subject of amendments to the Local Government Finance Bill. But what are the Government's intentions with respect to the tabling of those amendments? Will he assure us that they will be tabled in the House of Commons, so that we have the proper time and facilities to debate them in Committee, rather than being pushed into the Bill in the House of Lords at the last moment, as the auditors' powers have in the Local Government Bill which will be before us later today?

May I also have an assurance that the Committee will have additional time to consider these important proposals? Will the Secretary of State guarantee that his amendments are tabled in good time for us to consider all their implications before they are debated in Committee? We are fed up with important decisions on local government finance and powers being bounced through the House without our having adequate time to discuss them.

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rose

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On a point of order, Mr. Speaker. On documentation, the Secretary of State's bag-wallah has been moving around passing out copies of the statement. Why—

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Order. I do not know what the term means.

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The hon. Member for Copeland (Dr. Cunningham) made some comments about the merits or demerits of enterprise zones, which do not arise on the statement. His comments may or may not be true. The point is whether the state of the locality should be taken into account when considering a revaluation proposal or whether only the physical state of the land or property should be the subject of a revaluation. It is that legal point that has caused me to make this statement. The Court of Appeal thought that the law was as we all thought it was, but the House of Lords has decided otherwise. Therefore, it is necessary to put it right.

I welcome the hon. Gentleman's implied support for putting this right through an amendment to the Bill. It was clear that he was concerned about the local authorities whose revenue would be affected if we did not put it right in the future. That is what we want to do, and we look forward to his support.

In relation to compensation, as I said in my statement, there are precedents for dealing with the matter. I have nothing further to add to that.

The hon. Gentleman asked about the court judgment. Yes, I am accepting the court judgment; that is why it is necessary to legislate. [Laughter.] Those who have benefited in the past will be able to enjoy their lower rateable values; those decisions are not being upset.

The hon. Gentleman asked me about sale and leaseback and lease and leaseback. The transactions we have all read about, including the question of Brent town hall, appear to be legal at present, although they will not be legal from midnight tonight. That is all we are seeking to do.

I join the hon. Member for Copeland in condemning those who have felt it to be a good investment to make major loans to local authorities because they must realise that they are at risk, partly because the Government do not stand behind local authorities and partly because some of the deals are based on options, which it might be more difficult to exercise in future. Of course, the regulations and the new legislation will apply to all councils. However, only a small number have been abusing the system, and I think that they are all under the control of the Labour party.

The amendments will be produced as soon as possible and I am hopeful that they will be available for the Report stage. Since the Committee has not been able to fill the time allotted to it, I can hardly believe that the hon. Gentleman is asking for more time.

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rose

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Order. I draw the House's attention to the fact that we have a full day ahead of us. I ask for brief, and single, questions on this matter.

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Is my right hon. Friend aware that ratepayers in Ealing will warmly welcome the third of his announcements this afternoon. A £100 million deferred purchase loan has recently been taken out by the Labour council, the repayments of which will total £20 million a year but not until after the lifetime of the present council. Can my right hon. Friend confirm that existing negotiations, details of which have been sent to his Department, cannot now proceed without his consent?

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I am grateful to my hon. Friend. In the case of Ealing, the deal has been done; therefore, it is legal and stands. However, the deal contains options that are not of a legal nature until they are exercised. It may be more difficult for the council to exercise those options after the statement I have made today.

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Does the Secretary of State accept that many local authorities are forced to engage in leaseback and barter deals not because of outrageous overspending but because they simply cannot provide even the minimum level of service demanded by the Government? Moreover, is he aware that many of those councils are in that stale because they are historic low spenders, not because they are overspenders? Will the Secretary of State give the House time to debate these important new principles on the Floor of the House?

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I do not quite understand the hon. Gentleman's point of view. In the main, councils that engage in these massive borrowing exercises—which is what they are — are, at the same time, councils that massively overspend; they are borrowing to finance their overspending. I have listened with patience to the hon. Gentleman for many hours already, and no doubt I will have to listen to him again on the subject of these clauses.

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Does my right hon. Friend accept that today's announcement will be welcomed not only by the ratepayers of Ealing but by all honest local authorities throughout the country? Does he agree that creative accounting amounts to municipal deception, and will he confirm that appropriate steps are being taken in the Committee on the Housing Bill to ensure that local authorities are not able to transfer their council estates to other side-by-side companies to evade the provisions of that Bill and the rights of tenants?

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I am grateful to my hon. Friend. These practices represent massive borrowing of capital moneys to finance revenue expenditure, which will then have to be paid back in later years by councillors who may not have been elected and by ratepayers who may not be ratepayers at present, and that would be to mortgage the future in an unacceptable way.

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The first part of the Secretary of State's statement concerned the effect of a legal decision arising from the setting up of an enterprise zone in Swansea. We have now heard that there is to be a mini U D C in Leeds, with many of the results which flow from an enterprise zone. Do I deduce from that that the amendments—when they are revealed to us at a later stage — will affect the result of a mini U D C in Leeds?

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No, Sir, because urban development corporations do not have de-rating as part of their attractions. Firms in urban development corporation areas pay full rates, so there can be no conceivable valuation effect in the sense that there has been with the enterprise zones.

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My right hon. Friend has already referred, in answer to the hon. Member for Truro (Mr. Taylor), to the coincidence of a number of these authorities also being high-spending authorities. May I tease my right hon. Friend to add a little more? Will he confirm that a high proportion of those authorities have been identified by the Audit Commission as delivering an inefficient and incompetent service? If they were simply to deliver the services that most authorities do, they would not need these arrangements.

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My hon. Friend, as always, is absolutely right. Those authorities are not only incompetent in providing current account services but, as the Audit Commission has recently pronounced, extremely inef-ficient at managing their capital assets and have not been able to manage their portfolios of land and buildings in such a way as to produce maximum advantage to the councils.

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Is the Secretary of State aware that the budget and rate of Brent council, which he has just rendered illegal, were agreed under the law that he brought before the House and that was agreed by the House, and that they were taken out on legal advice, which pointed out that the budget was lawful? Is he aware that the budget includes cuts of 19 per cent. in services? Those cuts will lead to the loss of teachers' jobs and social service provision being slashed and are at the margin of what is tolerable. They were kept below 20 per cent. only by the leaseback arrangement, which was organised by the lead banker, Guinness Mahon. In condemning that, will he talk to his colleagues who have a financial interest in that firm?

Is the right hon. Gentleman aware that if the budget is ruled illegal it will mean that those cuts will increase from 19 per cent. to 38 per cent.? I remind the Secretary of State that Brent has managed to avoid, by the efforts of Labour and Conservative councillors, all the upheavals and riots in London during the past decade. What does he think the response on the streets will be when those cuts of about 38 per cent. hit to the bone of people's lives, and will he take responsibility for it?

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The hon. Gentleman should listen to what is said. I said that the deal that Brent had carried out is legal. I regret that it is legal. I have to admit that it is, but it will not be legal for others to do the same in future. However, there is no question of upsetting that deal or of Brent's budget being illegal as a result of anything that I have said today.

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Does my right hon. Friend accept that many of us welcome an end to devices for avoiding financial discipline and will he say now that, if any Japanese banks get into difficulty as a result of municipal default, they will be on their own?

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Yes, I look forward to seeing any merchant bank, be it British or Japanese, or from Leeds, taking over the council house toilet fixtures, the town hall or whatever has been mortgaged for the loans. I look forward to seeing them making a physical repossession of those factors if they ever need to secure their security.

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The Secretary of State has been quick to rush to the House to condemn Brent council for attempting to preserve its services. Why has he been so tardy in failing to come to the House to condemn Westminster city council for selling off its assets? Why is it that those who seek to preserve life through the provision of nurses, discretionary grants for schools and decent houses and services for all the people are condemned, while those who sell off the dead are applauded?

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No, far from being quick to come to the House, I have been tardy. I am afraid that Brent has got away with it.

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Is it not true that when the enterprise zones were set up they were, in many cases, eagerly bid for by local authorities, including many Labour local authorities? Is it not also true that they were not forced on local authorities? Indeed, Derbyshire county council refused to have one. Therefore, why do we suddenly have this display of whingeing self-righteousness by Labour Members?

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My hon. Friend is quite right. However, the statement is not about enterprise zones; it is about a technical point on rating and valuation law. It is extraordinary to hear the Opposition railing about enterprise zones at this time when they have provided many thousands of jobs in their areas.

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Is not the Secretary of State in effect using the budget mechanism effectively to draft a national leasing agreement which will tightly define all local leasing and freehold arrangements? Where is his concern for local conditions and local discretion? Is not this, in detail, another prime example of dictatorship from the centre for local government?

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The 1980 Act and the Act that went before it controlling local authority capital expenditure were all attempts to define exactly what functions local authorities had in raising and investing capital. The point is that they have been evaded. Labour Members are keen to condemn those who evade the tax laws, but they seem to have a rather different view on those who get round the laws on capital spending.

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Does my right hon. Friend agree that the banks' behaviour in lending money to irresponsible local authorities is a disgrace and that ratepayers and residents will have to live with the consequences for many years to come? Will he have no sympathy whatever with any of those banks if they get their fingers burned?

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My hon. Friend is right. I cannot condemn people who do things that are perfectly legal, but I do wonder whether some of the banks have understood the great risks they face and the great difficulties that they would have if it came to repossession.

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Since the changes stem from court cases in Wales and England and a House of Lords' decision is involved, will the proposals also apply to Scotland? Given that the Minister is waiting until 1990 to introduce changes in economic factors as part of the procedure, is he aware that Scotland has regularly devalued every five years? Therefore, in fairness, should not the ability to have lower rateable value apply to Scottish businesses right now? Will they lose if his proposals are applied to Scotland?

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This statement does not apply to Scotland. Scottish law is quite different and the judgment does not apply to Scotland. In no sense does anything that I have said today have any Scottish implications.

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Is my right hon. Friend convinced that he has closed all the leaseback loopholes so improperly and callously misused and exploited by Left-wing councils to the long-term detriment of the ratepayer? If he cannot give that assurance, will he consider tabling enabling legislation in a local government Bill to allow him to deal with future fiddles by Left-wing councils?

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The measure that I have announced today will deal with all known abuses of the capital control system, but my hon. Friend will know that, if time permits, we intend to legislate in the autumn for a total reform of the capital control system. It may well be a good idea to take powers in that legislation to stop up some of the abuses, but that is a matter that has not yet been decided upon.

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Will the Minister take it from me that the ratepayers of Salford will see his announcement today as an unnecessary penalty upon their local authority and that they will now question whether it was sensible to have co-operated all the way down the line with the Government?

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No, Sir. Today's announcement comes to the relief of the ratepayers of Salford and everywhere else who otherwise would have continued to lose rateable income if we had not stopped up the loophole.

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Does my right hon. Friend agree that the legislation has been a long time in coming and that the actions of councils, such as Sheffield city council, which placed the city in hock several years ago to the Bank Paribas, should have led to legislation being brought in before this?

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I never knew that the hon. Member for Perry Barr (Mr. Rooker) had a bank. I congratulate him. I hope that he will not go on lending to Sheffield.

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When will the Secretary of State's campaign of hatred against Labour local authorities end? Is he aware that local authorities have become involved in various financial arrangements in order to try to defend jobs and services in areas that are desperately being deprived of them by the Government? Since he is so quick to condemn those local authorities, why does he not answer the question put to him by my hon. Friend the Member for Brent, South (Mr. Boateng) on the actions of Westminster city council, which sold off the cemetaries for 5p and is now trying to buy them back? Will he be ordering an inquiry into that piece of financial chicanery?

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Far from my hating Labour local authorities, when will the hon. Gentleman stop hating ratepayers?

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Westminster!

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As a councillor in the London borough of Brent from its inception in 1963 until 1974—a borough which, during the whole of that time under both Labour and Conservative administrations, never entered into the sort of chicanery that we are debating today—may I tell my right hon. Friend that the people of Brent will be most grateful, not least my mother and the other elderly people who live there, for his statement today? The only criticism that I have is that it is far too late and should have been made years ago.

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With my usual humility, I plead guilty to the charge that my hon. Friend lays against me.

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Is it not significant that it is the Secretary of State who, during the course of his tenure in office in the Department of Transport and now in the Department of the Environment, has had to come to the Dispatch Box on at least six occasions because he has become involved with the courts, mainly because of the continual battle which is going on between local democracy and the Government who are taking away powers on every possible occasion? Is it not also ironic that the Government, who give £1 billion in tax relief to the banks that are rescheduling debts with countries that cannot pay them back, are now hammering Labour local authorities because they have taken part in a similar exercise? Surely there are double standards here.

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I have news for the hon. Gentleman. The major judgment with which we are dealing today—the Cakebread judgment—arises out of an error made in the Rating (Water Hereditaments) Order 1975, produced by the Labour party, signed by Mr. Anthony Crosland, which would cost all local authorities dear.

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Does not my right hon. Friend agree that the effect of the third part of his statement will be to protect people who do not now have the vote or enjoy the accountability of their local authorities? Does he agree that his announcement will have a great impact on people when they come to pay the community charge? That protection will save them from the perils of Socialism, which says that one can spend today and pay back later.

Will my right hon. Friend give the important assurance that the amendments will in no way block the implementation of the Local Government Finance Bill? The sooner it gets to the statute book the better.

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My hon. Friend raises a serious point. It is of great concern to me that some authorities are prepared to borrow massively in order to have to repay in later years, when the present councillors may no longer be in office, thus landing their successors and those who will pay the community charge in future with very large bills. I believe that this House owes it to future community charge payers to prevent that sort of thing.

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May I welcome my right hon. Friend's clarification of the position following the Addis v. Clement decision, which will be widely welcomed in my local authority, which contains an enterprise zone? But would he agree that the negative comments of the shadow Secretary of State, the hon. Member for Copeland (Dr. Cunningham), irrelevant though they may be, will cause dismay in areas where there are enterprise zones—particularly in my own? The Delyn enterprise zone has played a significant part in reducing unemployment by 42 per cent. in the past four years. Is Labour now against enterprise zones?

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I entirely agree with my hon. Friend. It does not matter what the hon. Member for Copeland (Dr. Cunningham) says, because he will never do anything except sit on the Opposition Benches.

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May I ask the Secretary of State to reconsider his announcement that these amendments will be presented to the House only on Report? As there are several more weeks of Committee proceedings, why is the Committee being denied the proper time in which to scrutinise his proposals and debate them properly in detail? If the right hon. Gentleman insists on bringing them to the House only on Report, I hope that he will arrange with his right hon. Friend the Leader of the House to provide more time.

What will the right hon. Gentleman say to the council leader from Surrey, who told me a few days ago that what the Secretary of State did on capital controls did not matter, because with bankers like his council's — Rothschild's—it would always be able to find a way to do what it wanted, and to finance deals anyway?

Is not the right hon. Gentleman's concern for the ratepayers in inner-London authorities a little partial? Why does he not show any concern for the ratepayers of Westminster? Why does he not intervene there, as he is so keen to intervene elsewhere? Why is he content to allow asset-stripping of cemeteries at a cost of millions of pounds to the ratepayers? Should he not be inquiring into those events, too?

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Since the hon. Gentleman appears to be going to support the new amendments that I have said will be tabled, I cannot think why he wants such a great deal of time in which to debate them—particularly as the Standing Committee has not found it possible to fill the time allotted to it. I can assure the hon. Gentleman that we shall do our utmost to get the drafting done and bring the amendments before the House as soon as possible, but I cannot promise precisely when that work will he completed. Of course, I must discuss matters of time with my right hon. Friend the Leader of the House.

The hon. Gentleman knows full well the limit of my powers in relation to the Westminster matter.

Gaming Machines (Prohibition On Use By Persons Under Sixteen)

4.15 pm

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I beg to move, That leave be given to bring in a Bill to prohibit the use of gaming machines in cafés, small shops, amusement arcades, snack bars, fairgrounds and other places by persons under the age of 16 years.

In this way I hope to tighten a loophole in the present law and so protect schoolchildren, at least, from what has become a form of hard gambling. Although the law restricts the availability of jackpot machines to adult licensed premises, schoolchildren have easy access to AWP fruit machines, for they readily find them in fairgrounds, amusement arcades, small shops, cafes, fish-and-chip shops and snack bars, which are established features of their everyday lives.

Schoolchildren are lured to gaming machines by their flashing lights and beckoning noises, but what begins as a game can all too often develop into a tragic addiction which ruins the lives of the young and innocent and puts unbearable strains on their families. Every study which has examined the problem among schoolchildren has shown that young people can get hooked on gaming machines as quickly as they can on drink or drugs, and the effects are no less devastating.

The addiction created by machine gambling has been compared to the compulsion experienced by animals used in reinforced learning experiments in psychology. Young machine gamblers, like the animals, will play with mindless repetition and furious speed in their determination to get it right. Modern technology encourages that, because the nudge and hold features delude the young person into believing that he or she can beat the system.

The addiction produces its own social problems. As children meet regularly in the same places to play machines, they can easily become pick-up targets for the unsavoury and run the risk of gang formation. Many are tempted into lives of crime when they realise that this sort of craving cannot be satisfied from pocket money funds. School-age machine gamblers are children at risk. It is on that risk that recent media campaigns, such as the one launched in Glasgow by the Evening Times, have focused. The media are right to alert public opinion to the need for a moral crusade to change the law before even more young lives are caught in the net of hard gambling.

The urgency of the need to end this form of child exploitation is also stressed in the evidence of the many surveys that have examined the nature and scope of the problem. I refer to the National Council on Gambling's survey of state schools in four London boroughs, to the survey conducted by the Spectrum Children's Trust among 2,500 schoolchildren in the south-west, and to the study of 10,000 schoolchildren that was recently carried out in various parts of the country by the National Housing and Town Planning Council.

The evidence of these and other studies is frightening and demands that we take immediate action to end this growing social menace. Machine gambling is shown to be the major gambling problem in every age group from 11 to 16. Evidence also shows that these young schoolchildren gamble not only in amusement arcades and funfairs but congregate every day in small shops, snack bars, fish-and-chip shops and cafes to spend their lunch money feeding not themselves but the insatiable appetite of the machines.

Schoolchildren who gamble share common problems—poor work, aggressive behaviour, truancy, emotional disturbance and stealing. It is sad to note that all the evidence confirms that those who become addicted to machine gambling were introduced to the machines before they were 13 years old and, in some cases, when they were even younger. The addiction also leads to lying, deceit, shame and mistrust, which are commonly found in the homes of young gamblers. Those problems have become so acute that a support group, Parents of Young Gamblers, has had to be formed.

Addicted children do not suddenly kick the habit when they leave school. Many progress to the betting shops and gambling casinos, while desperation for the money that their addiction consumes drives others to commit serious crimes of violence. The law is lax on this matter, not through any deliberate attempt to exploit but merely because no one foresaw the scale of the potential danger when the machines were first introduced. The problem of school-age gambling is the proverbial one of Topsy—it just grew. If it is not halted quickly, it will produce a gambling epidemic in the not too distant future.

A trade code of practice forbids schoolchildren to gamble on machines, but all the evidence proves that that code is not working. Machine gambling is every bit as common among children wearing school uniform as it is among those who are casually dressed.

The absence of an effective trade code of practice is aggravated by the nature of local planning laws. Although they can take account of factors such as noise and congestion when considering applications, they cannot pay attention to factors of morality. Thus, schoolchildren can become the easy prey of unscrupulous fairground owners, arcade managers or shopkeepers who choose to obey the dictates of their pockets rather than those of their consciences.

Let us not forget the huge profits that can be made from gaming machines. One example of profitability was noted in the recent statement by the chief executive of the Rank Organisation. Referring to bingo profits, he admitted:
"Only 30 per cent. of our profits actually come from bingo. We make most money from the AWP, or 'fruit machines', followed by food and drink."
We can be sure that gaming machines in fairgrounds, arcades and small shops are no less profitable for their owners.

It is easy to see how schoolchildren can be exploited, but it is the duty of the law to protect the young and immature from being led into harmful situations, especially those that can ruin their lives. Therefore, with the lives of schoolchildren in mind, I ask the House to preempt any long-term measures that might result from the current Home Office review. The weight of the evidence before us and the strength of public opinion in support dictate that we cannot afford to wait and see. By waiting, we shall put even more young lives a risk.

Therefore, I ask the House to act to prevent young persons under 16 years gaining access to gaming machines in fairgrounds and amusement arcades, and to remove such offending machines from snack bars, small shops, cafes and fish-and-chip shops, which are the regular haunts of schoolchildren. Again, I stress the urgency with which I ask the House to act. If even one more life is lured into the horrendous net of hard gambling as a result of our failure to give protection, it will be a tragedy, not only for the individual and his family but, now that we have been alerted to the scale and dangers of the problem, for the conscience of the House. I ask the House to support the Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Jimmy Dunnachie, Mr. Don Dixon, Mr. Alan Meale, Mr. John Hughes, Dr. John Reid, Mr. David Marshall, Mr. Allen Adams, Mr. Thomas McAvoy, Mr. Michael J. Martin, Mr. Bob McTaggart, Mr. Robert Litherland and Mr. Stanley Orme.

Gaming Machines (Prohibition On Use By Persons Under Sixteen)

Mr. Jimmy Dunnachie accordingly presented a Bill to prohibit the use of gaming machines in cafes, small shops, amusement arcades, snack bars, fairgrounds and other places by persons under the age of 16 years: And the same was read the First time; and ordered to be read a Second time upon Friday 22 April and to be printed. [Bill 116.]

Orders Of The Day

Local Government Bill

Lords amendments considered.

4.22 pm

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On a point of order, Mr. Speaker. I raise with you a matter of which you are already aware, the selection in relation to what was clause 28 when it left the House and will now be clause 29 of the Local Government Bill. You have given considerable thought to the amendments that I have tabled. For one last time, I shall briefly put to you the argument for taking one or both of the amendments that I propose.

May we be allowed to debate whether, instead of the word "promote" in clause 29, as it will now be, we should have an alternative word, "commend", as was suggested in another place? The dictionary makes it clear — perhaps I did not make this argument clear before—that, whereas "commend" has only one meaning, "promote" is open to a variety of meanings. The ambiguity of the word "promote" could render the legislation controversial and problematic in a way that "commend" could not. The "Oxford Dictionary" makes it clear that there are different types of meaning of "promote", but "commend" has only a positive, welcoming or recommending sense. That word would seem to restrict the ambit of the clause and, therefore, raise a different issue about its reach.

The other matter relates to the grouped pair of amendments that were tabled by me, amendments (b) and (d) to Lords amendment No. 10. The proposed amendment would delete the word "homosexuality" and replace it by
"sexual activity between persons of the same sex."
That matter, too, was debated in the other place. To paraphrase the argument in the other place, to promote or commend homosexuality is arguably scientifically impossible in the sense that, if homosexuality is a condition or an orientation, it cannot in any way be promoted or commended with any concrete effect. The alternative would be to make it clear—it would accord with the mischief with which the original proposer of the new clause sought to deal in Committee—that what was intended to be dealt with by the legislation was the promotion or commendation of sexual activity between people of the same sex. That clearly falls to be considered within the context of the legislation, and certainly—I do not think that there is any dispute—should not be promoted or commended by local authorities.

But there is a difference. In practice, it would be the difference between a local authority properly allowing a teacher, for example, to respond to a proper question, and the local authority going on with its present duties and responsibilities in commending specific activity and being seen to endorse it.

I am aware that you have given thought to the matter, Mr. Speaker, and I am grateful. But I ask you, particularly in respect of the first point, which I may not have put clearly enough before, to consider one more time whether we could have an opportunity to have what would be the only possible debate on the substance of the legal wording and interpretation of a controversial clause to a controversial Bill.

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As the hon. Gentleman knows, we have had discussions about the matter. In the light of what he has said to me, I have looked at the matter again. I am afraid I cannot change my selection.

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On a point of order, Mr. Speaker. My point of order arises out of the fact that we are discussing the business at all today. The Lords amendments were available to Members of the House of Commons only some time on Friday of last week. That meant that it was impossible for hon. Members, particularly Opposition Members, since the Government knew what the situation was, to table amendments until the sitting of the House on Monday. Clearly, the Clerks of the House had to judge whether the amendments were in order. Such decisions were, broadly speaking, communicated, at least to me, yesterday — I make no criticism of the Clerks in that respect—by which time, of course, it was impossible to table any further amendments and have them on the Order Paper to be accepted by you for debate. That cannot be a reasonable way for the House to deal with its business.

The problem was raised by my right hon. Friend the Leader of the Opposition with the Leader of the House during the business statement last Thursday. The Leader of the House said:
"The Bill will be available in the Vote Office first thing tomorrow".— [Official Report, 3 March 1988; Vol. 1440, c. 1156.]
I am not sure that it was available first thing, but it was certainly available during Friday. That is simply not good enough to enable all Opposition parties proper time to scrutinise the implications, to table amendments, to discuss them with the Clerks, to seek advice, and to secure debates on issues that we believe to be of importance to us and to our constituents.

Like the hon. Member for Southwark and Bermondsey (Mr. Hughes), I regret that some amendments standing in my name and in the names of my right hon. and hon. Friends have not been selected. Had the business not been concertinaed in such a way, the problems could have been avoided. It cannot be an acceptable or satisfactory way in which to proceed with important legislation affecting not only aspects of local government finance and contract compliance but people's civil rights and other matters of fundamental importance to us all in a democratic society. Although it is probably too late to do anything about today's proceedings, I hope that somehow these problems can be eliminated in future. The position of the House is weak and growing weaker vis-a-vis the executive — whichever party forms the executive. I cannot believe that Members of Parliament or the public want Parliament to grow weaker and weaker, especially with a mounting load of legislation from any Government. I raise this matter with you, Mr. Speaker, because it is important to put it on record and to seek ways of ensuring that these problems do not arise again in future.

4.30 pm

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I fully appreciate what the hon. Member has said about time. I think that it is important that the Opposition, and indeed the whole House, has time to table properly drafted amendments. I shall look again carefully at the starred amendments, but at first sight I do not think that I can change my selection.

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Further to that point of order, Mr. Speaker. No one is criticising your selection of amendments or the advice that the Clerks have put forward. What is causing great concern to Opposition Members is the deliberate efforts by the Government's business managers to make it difficult for Opposition Members to table amendments that are in order on difficult matters, and the totally slipshod approach by the Department of the Environment and the Office of the Leader of the House. Those are the only possible explanations as to why you, Mr. Speaker, and the Clerk have been put in some difficulty, as have Opposition Members.

We have heard today from the same Secretary of State on a different Bill. He made an announcement about three matters he wanted to introduce into the Local Government Finance Bill, but he cannot even promise that they will be brought forward in time to be considered in the already guillotined Committee. He is proposing, or at best promising, that they will be brought forward to be discussed in the already guillotined report stage of the Bill. That statement follows the problems that we have had with a major announcement of new policies which are to be incorporated into the Education Reform Bill so that we had to change guillotine motions and God knows what else.

The House is being treated with contempt by the Government's business managers, who are not one jot interested in giving the House the opportunity properly to scrutinise the legislation. They want simply to push through slipshod amendments as rapidly as possible. It is simply not good enough. If necessary, will you, Mr. Speaker, call a meeting of the usual channels so that we can avoid what is happening at the moment occurring again and again?

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Further to that point of order, Mr. Speaker. As amendments to Lords amendments are by nature the most difficult to draft satisfactorily because of the limited scope of what is before us, is it not the normal practice for the period between Lords amendments coming to the House and being debated by the House after Third Reading in the Lords to be two weekends and a full week in which we can, as the hon. Member for Copeland (Dr. Cunningham) argued, consider any amendments that we wish to table, see whether they are acceptable in drafting terms for consideration by you, Mr. Speaker and table further amendments if they are not? I seek your ruling about whether the timetable was complied with in this case and whether any course is open to us whereby we could proceed with this business for some time, see how far we get and resume it on another day while we deal with the remaining Orders of the Day.

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I fully appreciate the importance of time to the Opposition and to the whole House in tabling amendments, particularly to Lords amendments. Although the matters that have been raised have my sympathy, they are not matters for me. Perhaps they should be pursued with the Leader of the House when he is here tomorrow.

Clause 1

Defined Authorities

Lords amendment: No. 1, in page 2, leave out line 13.

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I beg to move, That this House doth agree with the Lords in the said amendment.

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With this it will be convenient to discuss also Lords amendments Nos. 6, 31 and 33.

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The Development Board for Rural Wales is established to operate as a development agency with economic and social functions in rural Wales. The DBRW is akin to the Highlands and Islands Development Board and the Development Commission in England, which are both precluded from the Bill's provisions.

My right hon. Friend the Secretary of State for Wales ensures that the board exposes its activities to competition and uses private contractors wherever it is possible and reasonable.

The opportunity has also been taken in amendments Nos. 31 and 33 to remove the board from the competitive tendering provisions of part III of the Local Government, Planning and Land Act 1980 governing building and maintenance by direct labour organisations. The part III provisions have little practical impact on the board as they apply to bodies with direct labour organisations of about 30 employees. The board has only 12 employees in its organisation.

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Will the Minister confirm that the board is seeking these amendments?

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That being so, can the Minister provide any enlightenment as to why the provision was included in the Bill in the first place?

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I believe that it was a slight oversight.

Question put and agreed to.

Clause 3

Other Definitions

Lords amendment: No. 2, in page 3, line 38, leave out "a parish or community council".

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I beg to move, That this House doth agree with the Lords in the said amendment.

When parish and community councils were added to the list of defined authorities in clause 1, it became necessary to delete the reference to them in clause 3 which implied that they were not defined authorities. This was only noticed after the Bill had left this House.

Question put and agreed to.

Clause 11

Report For Financial Year

Lords amendment: No. 3, in page 10, line 11, leave out "the first relevant date" and insert "30th September".

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I beg to move, That this House doth agree with the Lords in the said amendment.

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With this it will be convenient to discuss also Lords amendments Nos. 4, 5 and 28 to 30.

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These amendments bring the Scottish report dates into line with those applicable to England and Wales.

There was some discussion about this in Committee, and a plea was made by the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) for a consistent approach north and south of the border. Although the amendment was tabled by the hon. Member for Maryhill, the hon. Member for East Lothian (Mr. Home Robertson) also spoke about it. He said:
"The date of 31 December specified in the Bill could give rise to practical problems. The Bill does not say, 'By the last post on 31 December'—if there is a last post … Can the Scottish Office confirm that an official, or at least a Minister will be present in New St. Andrew's House and that the doors will he open to receive the hundreds of annual reports at one minute to midnight on hogmanay?"
I am glad that in response to that my hon. Friend said:
"throughout the year Scottish Office Ministers are available."
We did see the force of the argument of the hon. Member for East Lothian. It is no part of my desire to see the terms of the Bill impinge on the happiness of Scotsmen at hogmanay, hence the amendment.

However, a more weighty argument was made by the hon. Member for Maryhill who said that we should have consistency north and south of the border.

What was a practical proposal by the Accounts Commission has simply been rendered redundant by the introduction into the Bill of a further refinement of the audit process.

As previously drafted, reports by Scottish authorities were to be prepared by 30 November and submitted to the Secretary of State by 31 December. The Bill now requires reports by all authorities, including Scottish authorities, to be prepared by 30 September and sent both to the Secretary of State and to auditors by 31 October. The Commission for Local Authority Accounts in Scotland takes the view that it is no longer necessary to have different dates for preparation and submission of reports for Scotland. This is because the Bill now makes provision for auditors to check the statements of rate of return for those activities covered in the Local Government. Planning and Land Act 1980, as well as those covered by this Bill and to highlight any discrepancies in the report. This will ensure that the reports received in the Department are subject to scrutiny and based on audited figures. I am sure that the House will agree that that provides welcome consistency north and south of the border.

I hope that the House will agree that these are uncontentious points. Indeed, they are in response to the hon. Member for Maryhill who spoke, not only on behalf of herself, but the Opposition when she said:
"The Opposition believe that it is only fair that England, Scotland and Wales should keep to the same dates, whatever they may be." —[Official Report, Standing Committee A, 10 November 1987: c. 620–24.]
It is perhaps slightly ironic that I am responding to the representations of those hon. Members when they are absent today. However, I am sure that in due course the hon. Member for Glasgow, Springburn (Mr. Martin) will bear that news to his colleagues—[Interruption.] Yes, I realise that they are in Scotland at a conference. The amendment does precisely what they asked and I commend it to the House.

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In response to the Minister, although Labour Members are not present [Interruption.]—although the hon. Members who raised those points are not present—I am sure that they will appreciate what the Minister has said because it shows that the Government have at least some sense of humour. I am glad to note that Scottish custom, tradition and long usage has been taken into account in producing the changes.

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I wish that the Minister would convey to his colleagues the same willingness to make sure that the same rules apply north and south of the border and in Wales in other pieces of legislation. On the Housing Bill, for example, it has been strongly argued—but not yet accepted — that what is happening in Scotland should happen in England and Wales. Perhaps the Minister could use his best offices to secure similar provisions across the border in that Bill as he has now secured in this.

Question put and agreed to.

Lords amendments Nos. 4 to 6 agreed to.

Clause 17

Local And Other Public Authority Contracts: Exclusion Of Non-Commercial Considerations

Lords amendment: No. 7, in page 14, line 17, at beginning insert

"Subject to the provisions of sections 18 and (Questions relevant to code of Practice on Employment of Disabled),".

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With this it will be convenient to discuss Lords amendment No. 8.

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I beg to move, That this House doth disagree with the Lords in the said amendment.

Hon. Members will have noted that, apart from these two amendments, no substantive changes to the provisions of part II of the Bill were made in the other place. Their Lordships accepted the principle behind the provisions, as did this House, that local authorities should not be in the business of setting themselves up as extra-statutory enforcement agencies on matters which are already the subject of existing statute and which have, where appropriate, their own enforcement processes.

The position in relation to the Race Relations Act 1976 is quite different. In it, the local authorities are given a specific statutory role of enforcement, and this is acknowledged in the Bill in clause 18, where the local authorities may ask specific questions of contractors, and take into account the replies that they receive.

However, the statutes directly relating to the employment of the disabled are the Disabled Persons (Employment) Acts of 1944 and 1958 which do not include such a role for local authorities. I shall give reasons why that is correct later. Their Lordships accepted, as did this House, the principle that local authorities should not assume the role of enforcing the provisions of those Acts, a role which rightfully belongs to the employment service of the Department of Employment.

What we are all seeking—their Lordships, this House and certainly the Government — are the best possible opportunities for the disabled to be able to gain employment. I would like to emphasise our total commitment to the principle that disabled people should have every opportunity to obtain useful and gainful employment. Our record on positive measures to help disabled people gain those opportunities is strong.

For example, last month sections 5 and 6 of the Disabled Persons (Services, Consultation and Representation) Act 1986 came into force. Those measures include a requirement to assess the needs of disabled school leavers, taking account of a range of services including education, vocational training and employment. We have also recognised that disabled people on income support should be able to earn more money without it affecting their benefit. and next month that disregarded sum will be increased from £4 to £15 per week.

In 1986–87 nearly 84,000 disabled people were placed in work through MSC general programmes, and over 17,000 disabled people were in sheltered employment. In 1987–88 the MSC will spend some £133 million on programmes specifically for the disabled, of which some £87 million will have been spent on sheltered employment. £22 million on employment rehabilitation;£15 million on resettlement services; and almost £9 million on training at residential training colleges.

4.45 pm

Nevertheless, it is clear that the other place felt strongly that more should be done to help disabled people with employment. There was concern about this in this House too before the Bill left here. The Government accept that they should respond to this clear feeling of both Houses. My right hon. Friend the Secretary of State for Employment is announcing a review within his Department of the policies and programmes that he supports for disabled people in employment. The review will take account of the recently completed study by the National Advisory Council on Employment of Disabled People. It will also take account of the conclusions that the Public Accounts Committee reaches on the National Audit Office's examination of the quota arrangement and other arrangements made for the benefit of people with disabilities.

In the light of this, I hope that the House will be willing to accept that it would be appropriate for the amendments to be reversed.

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The Secretary of State may be coming on to this point. and I apologise for intervening if he is, but does he accept that what he has said so far relates only to national Government policy and to employment by central Government, whereas we are obviously concerned about local government employment policies and local government's ability to take on disabled people and employ then adequately?

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Yes, I am coming to that, but if I do not satisfy the hon. Gentleman when I do come to it, I shall happily give way to him again.

If the amendments agreed in the other place were to be accepted, it is our belief that they would do nothing to further the interests of disabled people, but would in fact provide a possible means whereby local authorities could discriminate against contractors that they did not like for other reasons. Amendment 7 merely paves the way for the new clause introduced by amendment 8. That new clause empowers authorities to ask questions of potential contractors about the non-commercial matters set out in clause 17(5)(a), in order to ensure that contractors have due regard to the Manpower Services Commission's code of good practice on the employment of disabled people.

When the amendments were debated in the other place, the argument in their defence was that there was no contract compliance requirement in the amendments; no extra-statutory enforcement rights; no compulsion for local authorities; and no interference with the efficiency of the companies concerned. Hon. Members will recognise that that is simply not the case. If the Bill was now to remain unamended as their Lordships have sent it to us, an authority could decide to refuse to do business with a particular company on the ground that, in the authority's view, the company did not have proper regard to this particular non-statutory advisory code. In our view, that is an open invitation to local authorities to exercise covert discrimination against contractors of whom they disapprove possibly for other reasons.

If all a local authority wishes to do—this was the expressed reason for the clause when moved in the other place — is bring the code of good practice to the attention of firms with which it is considering doing business, there is nothing in the Bill which prevents that. Indeed, that part of the new clause in amendment 8, which would allow authorities to refer prospective contractors to relevant agencies, is entirely superfluous. Nothing in the Bill stops authorities referring contractors to the employment service or the Manpower Services Commission — the relevant agencies — if they consider that contractors need advice or guidance on employment of disabled people.

Nor is there anything in the Bill to stop authorities calling together employers in their area to discuss ways in which the various recommendations and suggestions in the code of good practice can best be implemented. That sort of action seems far more relevant to local government, and indeed much more likely to have an effect on the local people whom local authorities exist to serve, than crude contract compliance measures applied to contractors in general. Many contractors will be supplying goods made in factories miles from the authority's area and some even overseas. No system of local enforcement regarding disabled employment is sensible when a national policy is essential, and that is what we have.

The amendments are not about local authorities dealing with employers in their area. They are not even concerned with authorities' own role as an employer of disabled people—in no sense affected by the amendments—or with the way in which the 1944 and 1958 Acts are observed. They are about giving local authorities the power to discriminate against certain firms by imposing their own views on how an advisory code of good practice should be observed, and refusing to do business with them if the authority does not agree with those firms' interpretation of the code. I do not believe that the amendments would result in any more jobs for disabled people. They would give the most intransigent of authorities a new weapon with which to discriminate against contractors in a subjective and non-commercial way.

It is at the heart of part II of the Bill to deny authorities the chance to do such things; and it would be very difficult to defend not extending the practice embodied in the amendments to other matters, such as sexual discrimination, nuclear-free zones, apartheid or anything else. We would have lost the logical distinction upon which the Bill is based.

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Can the Secretary of State explain the relevance of the amendments to the local authorities? If the amendments were accepted, they might not produce more employment for the disabled, but they certainly would not produce less. Indeed, they could result in more employment possibilities. The amendments would not have automatic consequences, but they would at least challenge local authorities and their contractors to consider whether they are doing enough. That is the great merit of the amendments and why they got all-party support in the other place.

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I believe that the amendments could easily result in fewer jobs. The harassment of firms could result in them being unprepared to tender for a local authority contract. Therefore, the result could be possible employment losses and even job losses for the disabled.

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Does my right hon. Friend agree that, although the amendments are well-meaning, they might risk undermining the whole basis of the Bill — to stop political discrimination — and generally weaken Government policies that have resulted in an 80 per cent. increase, in real terms, in spending on the long-term sick and disabled?

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My hon. Friend has summarised the case that I put at greater length. We have tried to recognise the concern felt by hon. Members and the Lords that more could be done for the disabled. Indeed, my right hon. Friend the Secretary of State for Employment has introduced a new intitiative to find ways to help the disabled nationally. I believe that such help is better given nationally rather than through patchy and sometimes unhelpful attempts to use contract compliance for that purpose.

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I support the Lords amendment. I was amazed by the Secretary of State's defence of the present position. First, he went through a long catalogue citing the so-called generosity of the Government towards disabled people. The disabled people in my constituency do not find the Government very generous.

The right hon. Gentleman has hinted that the Secretary of State for Employment will undertake a national review of disabled people's ability to get jobs. Why has the Secretary of State for Employment not done that before? Why has he waited all this time? I am sure that that question will not be lost on disabled people.

The Secretary of State for the Environment has suggested that the Lords amendment may allow local authorities to threaten contractors. What we are discussing is opening up opportunities for disabled people. If nothing else, the Lords amendment helps to raise the awareness of contractors, which is at the heart of the matter, to their obligations and to the common decency of allowing disabled people greater opportunities in the job market.

The Lords amendment is not strong. It merely allows local authorities to draw contractors' attention to the code of practice on the employment of disabled people, to consider their employment policies in the light of that code and to enable the authority to refer them to the local disablement advisory service. There is nothing earth-shattering about that. There is no provision in the amendment that would allow a local authority to refuse a contract if it considered that the contractor was not complying with the code.

Employment quotas, as set out in the Disabled Persons (Employment) Act 1944, are also excluded from the amendment. In short, the amendment is limited, but it is extremely important. It puts a marker down to ensure that local authorities and contractors who submit tenders should consider closely the needs of disabled people in the community. If we pass the amendment, it would provide an extra encouragement — not a statutory duty — to employers to employ disabled people and reduce discrimination against their employment.

It is unbelievable that the Government are contemplating the removal of the amendment, especially when we are aware that an increasing number of employers are failing to meet the disabled employment quotas, and therefore their legal obligations under the 1944 Act. In 1986, only 27 per cent. of employers carried out their legal obligations. Unemployment among disabled people is double the rate among their peers—for some disabled groups the difference is even greater.

In such circumstances, given the emotional implications for the disabled, their economic dignity and well-being, it is nothing less than a disgrace that the Government should seek to change the law not only to outlaw practices that are presently lawful, but also to seek to throw out an amendment that attempts to encourage employers to meet existing legal obligations and encourages compliance with a voluntary—I stress that word—code of practice. That code of practice was launched in 1984 with the support of the Prime Minister, the CBI, the TUC, the Institute of Personnel Management, Royal Association for Disability and Rehabilitation and the all-party disablement group of which my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) is joint chairman. That code of practice encouraged employers to establish a written policy for the employment of disabled people and the rehabilitation of those who had become disabled.

Throughout what has passed for a debate on this subject and on sex discrimination, the Government have monotonously repeated that they accepted, reluctantly, racial equality as part of contract compliance because, tinder section 71 of the Race Relations Act 1976, local councils already had an existing statutory duty to act thus. However, by the same token the Government would not accept that disabled people or women should be included in the Bill because there was no equivalent to section 71 that related to them.

Yesterday, the Equal Opportunities Commission published the report that it has sent to the Home Secretary regarding the urgent reforms that are needed to our sex equality legislation. It has recommended contract compliance. The report is addressed to the Home Secretary and I do not know whether the Secretary of State for the Environment has received a copy. I have a copy with me today. It was sent to me this morning and it makes very good reading. It pleads with the Government to introduce contract compliance as a statutory duty on all local authorities, health authorities and other public bodies.

I understand that the Government said that if the Equal Opportunities Commission recommended contract compliance, they would consider it. There could be no better time than now — during the week of international women's day—for the Minister to honour his assurances to the Equal Opportunities Commission and to the women of this country on this matter and to bring forward an amendment in line with what is proposed in "Equal Treatment for Men and Women — Strengthening the Acts."

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It is ironic that last week the Government announced their intention to bring forward a Bill later this year to introduce contract compliance—the very same policy — in Northern Ireland. The Government hardly bother any longer to deny that their actions in Northern Ireland are being prompted by strong pressure from the United States, where a campaign to boycott investment, or even to encourage disinvestment, has been gaining ground because of persistent discrimination against the Catholic minority. The introduction of contract compliance in Northern Ireland is meant to head off that pressure.

I appeal to the House to consider what message we shall be sending out to people with disabilities and to women if we reject the Lords amendment. It is invidious and highly divisive to appear to be elevating one form of discrimination above another. The Government have been shown today to be hiding behind empty formalism to cover their opposition to contract compliance — and even to voluntary codes of practice — to improve opportunities for disabled people and for women, and we shall never forget their actions on these issues.

Contract compliance has shown its tremendous value to women in the United States. It has been welcomed in this country by a great many people, including the Institute of Personnel Management, which sees it as a valuable mechanism for spreading good and more professional codes of practice.

Baroness Platt of Writtle, who chairs the Equal Opportunities Commission, is not, I may say, a supporter of the Labour party—far from it. She said of the Bill:
"Because local authorities will have the power to impose requirements and ask questions about issues of racial discrimination but not sex discrimination, their customers will inevitably concentrate on the former to the exclusion of the latter. This would be a most retrograde development, given the very serious problems of discrimination against women that still need to be tackled. It could seriously prejudice the position of women".
That comes not from a Labour peer but from Baroness Platt, who is a Conservative.

We commend the amendments to the House. We welcome the initiative on Northern Ireland, and we want the Government to act even-handedly. If they are introducing contract compliance in one form in Northern Ireland, they should introduce it in this other form on the mainland. We shall reserve judgment on the question of ethnic minorities until we see what comes of the Secretary of State's list of questions. We urge the Government to think again about the totally incomprehensible exclusion of people with disabilities and of women from the Bill. We shall oppose the Government and support the House of Lords. I know that my hon. Friends will join me in the Division Lobby, as, I hope, will those Conservative Members who believe that people with disabilities need the maximum encouragement and support and that those of us who do not share their problems should be constantly aware of them nevertheless. I hope that for once we might defeat the Government.

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rose

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Order. I remind the House that the amendments deal specifically with the disabled and not with women.

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As a long-time member of the all-party disablement group, I am naturally interested in the amendments. I was intrigued when my right hon. Friend the Secretary of State pointed out that these are the only two substantive amendments that their Lordships suggested to this part of the Bill. I should have thought that that would give added weight to them.

When I first read the amendments, they seemed likely to help disabled people who are seeking employment. All of us must know that disabled people, once employed, are diligent and valuable employees—probably the best on the payroll—but that it is far from easy from them to get the job in the first instance. It seemed to me that the amendments might help disabled people, and I therefore proposed positively to support them. However, I listened carefully to what my right hon. Friend said and was interested to hear that my right hon. Friend the Secretary of State for Employment is to bring forward a review of policies for the disabled. I cannot bring myself to vote with my right hon. Friend the Secretary of State, but I am seriously considering abstaining, because I feel that he gave a very good explanation of his reasons for opposing the amendments.

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The hon. Member for Lancaster (Dame E. Kellett-Bowman) was absolutely right in her initial decision fully to support the amendments. She is wrong to say now that she will abstain. She should have sufficient courage, as many of us have done over the years, to vote against the Government whom she supports if she thinks they are wrong. She accepts the assurance that the Government will bring forward proposals in the future, and perhaps they will. However, this is here and now and she should support the amendments on that basis. The amendments will do something positive at this moment, so why wait for proposals to emerge in the distant future which, knowing this Government, will get more and more distant? Why not give the benefit of the doubt to the amendment No. 7, which is extremely good?

I can understand the Government's being vindictive in relation to contract compliance when it comes to whether an employee should or should not be a trade unionist. I can understand it when they say, "You cannot seek contract compliance in relation to those who deal with regimes pursuing policies of apartheid." I can understand that, because that is the Government's nature, and such decisions are perfectly acceptable from their point of view. However, I find it difficult to understand why they should be vindictive to the disabled, which is what their attitude amounts to. I suppose that I know the real reason: their friends may find that their profit margins will be down a little if they have to employ some disabled people.

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That is an absolute insult to disabled people. Will the hon. Gentleman give way?

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No. If the hon. Lady will not join us in the Lobby, I am not giving way.

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But it is an insult.

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It is not an insult. It is my view of the Government's attitude, based on the bitter experience that we have had since they came to power nine years ago. They put profits before the interests of ordinary people and concern themselves only with their friends in the City of London and those who make profits at the expense of the mass of the people. That is what is behind the clause. It is disgraceful that the Government are not prepared to give the amendment their support. I welcome the fact that my hon. Friends on the Front Bench are prepared to do so.

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A number of us spend much of our time dealing with disabled people, including the hon. Members for Exeter (Mr. Hannam) and for Caernarfon (Mr. Wigley) and myself. We have discussed this issue at a meeting of the all-party disablement group and there is a difference of opinion between us that will probably emerge during the debate.

The Secretary of State was ill advised to speak of the Government's record of helping disabled people. He was on extremely weak ground. The right hon. Gentleman spoke of the Disabled Persons (Services, Consultation and Representation) Act 1986. He was not in the House yesterday when the Minister for Social Security and the Disabled was condemned for failing fully to implement that Act. That is a failure by the Government. The Secretary of State mentioned what the Government had done in terms of income support. Practically everyone who is involved with disablement is concerned about the Government's failure to provide adequately for disabled people under that head. The right hon. Gentleman referred to the jobs that have been found for disabled people under the general programme of the Manpower Services Commission. He did not mention the thousands who have not been helped through that programme. The right hon. Gentleman was wrong to speak of the Government's successes in this area.

I am amazed that the Secretary of State should be opposed to the amendment. It is incredible that he should object to it. The proposed clause would be helpful to disabled people and damaging to no one. It reflects badly on the Government that they have chosen to bring their full force against the amendment and to make clear their determination to oppose it.

What is it in the clause that is terrifying the Secretary of State? It provides that local authorities will be able to refer contractors which have not adopted the recommendations of the code of practice on the employment of disabled people to the disablement advisory service. It would allow — not force — local authorities to ask questions about a company's policy on the employment of disabled people. What is wrong with that? Surely it would be a great step forward. Companies that did not have a policy could be referred to the DAS, and it would then be for the DAS to decide how best to proceed.

This simple measure would help us to ensure that good practice is promoted, and it would advance the excellent work of the DAS. No one is opposed to the code of good practice. The Prime Minister has stated:
"employing disabled people makes good business sense."
I was present when the right hon. Lady launched the code of good practice. It was a happy occasion. We were all together, including the hon. Member for Exeter, who does so much for disabled people. Everyone supports the code, and I and others are seeking merely to draw attention to it.

If local authorities are willing to help with encouraging contractors to utilise disabled people's skills, and to retain staff who become disabled, they should be permitted to do so. No one would lose by contractors having the expert advice of the DAS brought to their attention. At the same time, disabled people would gain.

However fine the code may be, and however distinguished the members of the DAS may be, no one would claim that it is getting the support or the results that it deserves. A common attitude among far too many employers is, "The code is fine but it has nothing to do with me, thank you very much."

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Some companies adopt the code but far too many do not. What do we do about the companies which do not? The relative failure is effectively measured by the statistic that shows that many disabled people are unable to gain employment. The level of unemployment among the disabled is twice that of the unemployment among the able-bodied. That is the official figure, which we can take with a pinch of salt. Suffice to say that a far greater proportion of disabled than able-bodied people are unemployed.

A major cause of the unemployment of disabled people is prejudice. It is vicious, bitter, vindictive, unpleasant and unacceptable prejudice. The disabled are rejected by employers who do not want to know. I know many disabled people who apply for jobs. If they are honest enough or naive enough to mention their disability on the application form, they will not even be seen. I know some disabled people who have made over 100 applications for jobs. They are not even granted an interview when they mention their disability. More effort should be made in promoting the code of practice.

Local authorities are an important weapon in the armoury for promoting the code, and the proposed clause will enhance their effectiveness. The Government argue that the proposed clause is superfluous and that local authorities will be able without it to promote good employment practices in their own areas. I believe that the clause would provide an important instrument for local authorities to acquire information that would enable them to know which employers should be referred to the DAS. It would be an easy, cheap and cost-effective procedure.

The Minister in the other place said that this aspect of the clause was superfluous. He claimed that local authorities could refer companies to relevant agencies in any event. Unfortunately, he missed the point. It is crucial that we should know which companies to refer. If local authorities sought to obtain that knowledge through general surveys, the Government would be quick to condemn them for wasting resources. They would argue that that was not the job of local authorities. The Government cannot have it both ways.

The Government suggest that local authorities will be able to discriminate against contractors during the tendering process by using their response to questions to decide who receives a contract. That is not the intention of the proposed clause. The Secretary of State should take that on board. I spoke to Lord Basnett this morning—it is his amendment—and he confirmed that that is not the intention of the proposed clause. Instead, it would allow a basic question to be asked: "Have you adopted the recommendation of the code of practice on the employment of disabled people?" A negative response would mean that the contractor could be referred to the DAS. The amendment would not allow contracts to be withheld. It would not give local authorities extra statutory powers and duties.

I would favour an amendment that permitted discrimination against companies that did not play fair with disabled people. I am all in favour of that sort of discrimination. I would be prepared to hit contractors very hard if they discriminated against disabled people. It is discrimination that causes distress, anxiety, suffering, poverty and despair. I would deny contracts to such companies. I make no bones about that. If I could persuade local authorities to deny them contracts, I would do all in my power to ensure that that happened. The Secretary of State should recognise that the clause does not do that. It is very limited. All the clause proposes is to help to promote good practice. If the Secretary of State found that there were technical problems, he could easily change it.

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For the sake of fact, may I point out that local authorities are enabled to disallow a contractor if they are not satisfied with him? In other parts of the Bill there are powers for them to take that decision. If the new clause were in the Bill, it could be a defence against the district audit questioning why a local authority had not gone to the lowest tenderer. The hon. Gentleman is wrong. He does not realise the effect that the amendment would have.

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The Secretary of State is trying to say that, if this small amendment was agreed, as I hope it will be, local authorities, whom I thought he trusted as responsible people elected by the electorate, would use it as a trigger to do something illegal. That is a very poor interpretation of the responsibility of local authorities. I believe that they would interpret the clause in the spirit which Lord Basnett intended—that is, to draw the attention of employers to the code of practice. It would encourage them to do that. The Secretary of State does not understand the proposed new clause. He has misinterpreted it. He is misleading the House. He should accept that it would be in the interests of disabled people.

I have spoken long enough. If the Secretary of State insists on rejecting the clause, he will show that dogma is more important to the Government than helping disabled people. The clause has no drastic implications and would not alter Government policy towards local government. It would encourage efficiency and would help employers to develop good employment practices. It would help disabled people and would give them hope. It would lead to them getting more jobs. It is absurd for the Secretary of State to say that it would lead to disabled people getting fewer jobs. That is standing the truth on its head. I hope that the House will speak clearly tonight. I hope that Conservative Members will join us in the Lobby and give fresh hope to disabled people.

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My right hon. Friend will know that the Lords amendment which he is asking us to reject is supported by a wide range of voluntary organisations representing the disabled and by the all-party disablement group. Therefore, it is rather more of a cross-party issue than we are accustomed to.

The amendment represents a genuine attempt to advance the cause of disabled people in the vital employment sphere. Over the years I and colleagues on both sides of the House, working within the all-party disablement group, have secured the support of the Government for small but important amendments to diverse pieces of legislation. We have done this to remove discrimination or to remove obstacles which are placed in the path of disabled people trying to pursue normal lives.

We all know that the disabled desperately want to work and to live normal lives. They make very good employees, as other hon. Members have pointed out. In fact, my right hon. Friend the Prime Minister gave the best description in 1984 when she said:
"People who employ disabled workers know from experience that it makes good business sense to employ people who are loyal and hard-working and have skills and abilities to offer."
I could not find a better description for employers thinking of taking on disabled workers.

The sad thing is that, despite the quota system and all the other measures which have been adopted over recent years, the level of disabled unemployment is double the rate for able-bodied people. The Lords amendment, as I read it, is designed to draw the attention of contractors to the recommendations which are put forward in the Government's own code of good practice on the employment of disabled people. The amendment seeks to get local authorities to refer contractors who have not adopted the recommendations to the Disablement Advisory Service.

The question which we face is whether the Lords amendment gives local authorities a power of any sort to force contractors into contract compliance or to interfere in their efficiency, and whether that works against the principle of part II of the Bill. I am grateful to my hon. and learned Friend the Minister for writing to me about this. My right hon. Friend has explained the Department's view, which is that the amendment would in some way give powers to local authorities to interfere in normal business practice. I find that hard to believe, just as I find it hard to accept the other point which my right hon. Friend made, that we can leave things exactly as they are because local authorities can carry this out anyway. According to my right hon. Friend, they can advise firms which are putting forward tenders for contracts to get in touch with the Disablement Advisory Service or with any other body. I do not accept that that stands up to examination.

It is only a few years since we secured an amendment to the companies legislation to require a company in its annual report to make a direct statement about what it was doing for its disabled employees and for disabled people. One could adopt the same argument as my right hon. Friend and say that we did not need that because companies could always put something in their reports about what they were doing for disabled people. In fact, Parliament judged that it was necessary to do more than that.

Like my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman), I cannot go into the Division Lobby against the Lords amendment. I accept my right hon.

Friend's assurance that he has been working extremely hard, in conjunction with his right hon. Friend the Secretary of State for Employment, on bringing forward a new programme for disabled employment. I welcome that assurance deeply. I can only stress how vital it is to develop a new and more effective strategy for the employment of disabled people. The position is not good. The quota system is not being enforced and too many disabled people are out of work.

I look forward to the initiative which my right hon. Friend has promised, but today I must declare my support for this small voluntary step towards good practice. I cannot go into the Lobby to vote for the rejection of the Lords amendment.

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I too support the Lords amendment and thank Lord Basnett and his colleagues for the all-party support in the Lords for this important change to the Bill, which would help disabled people if it were enacted. Like other hon. Members I am disappointed at the attitude of the Government Front Bench. Some Government Departments have had an honourable and progressive approach towards disability. I am afraid that the attitude of the Secretary of State confirms that the Department of the Environment regrettably is at the back of the queue when it comes to making progress for disabled people. We have seen that before and we see it again today.

The reality is that discrimination against disabled people exists in employment. We had this argument three or four years ago when the hon. Member for Liverpool, West Derby (Mr. Wareing) introduced an antidiscrimination Bill. Mr. Donald Stewart, who then represented the Western Isles, also brought forward a Bill. We were assured that other steps were being taken, as we have been assured today that other steps are being taken. The right hon. Member for Stoke-on-Trent, South (Mr. Ashley) mentioned what we heard in the Chamber yesterday, that assurances given two years ago about the carrying out of the provisions of the Disabled Persons (Services, Consultation and Representation) Act 1986 are still subject to negotiation with local authorities.

Two years have gone by and we are still no nearer getting some of those provisions brought into force. I welcome any discussion which is taking place and any progress on improving the position under the quota scheme, to which the hon. Member for Exeter (Mr. Hannam) referred and which is completely inadequate. Some of the provisions have not been enacted. We have an opportunity with the Lords amendment to do something now. Although this is a very modest provision, we have the opportunity to do something which has already been done. All we have to do is to desist from undoing what has been done in another place. Goodness me, I cannot see the Government's justification for taking this line. If we disagree with the amendment, we shall be putting the interests of disabled people second to the interests of a totally unfettered, free market economy. There are times when a Government, even this Government, must strike a balance.

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Instances of discrimination still come to our attention. Only a few weeks ago in my constituency surgery I learned of a case of blatant discrimination. An employer said that disabled people need not apply for a vacancy. For that to happen in this day and age, and for the Government not to support even the modest provision in the Lords amendment, underlines the need for us to take more draconian powers. We should seek an anti-discrimination Bill which will deal with this question in the context of employment and in a number of other areas as well. People would then be aware that they cannot get away with the kind of stipulation that occurred in my constituency.

My colleagues and I have received representations from many bodies about Lords amendment No. 7. I am involved with disability matters in a number of ways. I am the president of the Spastics Society in Wales. The Spastics Society wrote to me from its headquarters in London about the amendment stating:
"Research by The Spastics Society shows that disabled people suffer unjustifiable discrimination in the labour market. The clause is a modest proposal to ensure that good practice is actively encouraged in this important area. We see it as entirely appropriate that the Government's policy should be promoted in an attempt to ensure disabled people have the same opportunities as their abled-bodied counterparts. It is difficult to understand why the Government would not want to see its own policy and the work of its Departments supported in this way. Disabled people trying to find work will also feel let down if this support is withdrawn from their attempts."
I put these views formally on the record on behalf of the Spastics Society.

Hon. Members will have received similar representations. Organisations making those representations understand the difficulties facing disabled people in work. We should heed those representations. I have also received representations from the Royal National Institute for the Blind. It states:
"The RNIB supports the clause, which would help the employment prospects of visually handicapped people seeking work. They have to compete on unequal terms in the labour market, in an era when the industrial base of the economy, the area in which the majority of visually handicapped people have historically found jobs, has contracted considerably. During the last decade there has been a dramatic fall in the number of visually handicapped people getting jobs in the blue collar sector, and sheltered employment has not taken up the slack … RNIB is concerned that the positive steps which local authorities have been able to make in encouraging companies to promote equal employment opportunities for people with disabilities should be allowed to continue. Lord Basnett's clause would achieve this."
Obviously, the RNIB feels as strongly as the Spastics Society on this matter.

The Royal Association for Disability and Rehabilitation, the umbrella organisation that pulls together on behalf of numerous disability organisations, has also made representations to all members of the all-party disablement group. This matter cuts across party lines. It states:
"The amendment will not prevent contracts being awarded, but allows local authorities to refer those companies who have not adopted the Code's recommendations to the Department of Employment's Disablement Advisory Service so that they may obtain information on how to improve their policies; nor will it allow contracts to be withheld, but will enable local authorities to ask for information which can be passed on to those responsible for promoting the Code of Good Practice. In this respect the amendment also complements existing Government policy which supports the Code. The CBI, TUC, RADAR and other voluntary organisations also support the Code of Good Practice."
I know that the Secretary of State has said that taken together with another part of the Bill the amendment could create an excuse for local authorities to discriminate against companies that are not willing to go along with the requirements. If local authorities discriminate unfairly against those companies, that could be actionable. If they discriminate on the basis of a policy against disabled people, that is completely justifiable discrimination and I would strongly uphold that. However, the benefits that could arise from having a checklist are more important than the occurrence of a handful or one or two difficult cases. A formal checklist would act as a formal requirement to nudge and remind companies of the need to take that matter into consideration.

I do not believe that the provision will put the world right overnight, but by having a checklist approach—which is not a straitjacket, but an enabling measure—we shall ensure that local authorities that are so minded will have powers to create a checklist and companies seeking tender contracts will be aware that they must take such consideration on board. The proposal is a gentle shove in the right direction. It could be of tremendous benefit to many disabled people. It could also possibly avoid much more fundamental legislation in future. If the Government oppose this modest proposal, I have no doubt that the House must press for something very much more radical.

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I rise to support Lords amendment No. 7. Unfortunately, I was unable to hear the comments made by my right hon. Friend the Secretary of State earlier. I had been given a very pressing green card from a delegation of Royal College of Nursing members from my constituency. I had to use my discretion and make a very difficult choice between listening to my right hon. Friend and seeing Mr. Tony Atkins and my constituents from Leicester who are members of the RCN. I had a very fruitful and rewarding discussion with Mr. Atkins. However, I am placed in a very difficult position because I did not hear my right hon. Friend. If I had heard him, I am sure that I would have found his comments fruitful and rewarding. However, because I did not hear him, I can only state that I have the gravest reservations about rejecting the Lords amendment.

I listened to the comments made by the right hon. Member for Stoke-on-Trent, South (Mr. Ashley). He made his comments with great emphasis, in his usual way. My hon. Friend the Member for Exeter (Mr. Hannam) elaborated the virtues of the new clause very well.

As I read the amendment, it will allow local authorities to continue to ask questions of prospective contractors, but it would not allow local authorities to refuse contracts on the grounds that a prospective contractor did not encourage the employment of disabled people. It would allow local authorities to promote the Manpower Services Commission's code of good practice on the employment of disabled people.

I do not believe that the new clause is very binding. It would not direct—"direct" is too strong a word—local authorities; rather it would guide them on a code of good behaviour towards their dealings with disabled people. Tributes have been paid to the right hon. Member for Stoke-on-Trent, South and my hon. Friend the Member for Exeter for their fine work for the parliamentary disablement group. I want to add to those tributes. Quite rightly, we must recognise that discrimination on grounds of sex or colour is properly banned by law. I am not in favour of banning discrimination of the disabled by law. However, I feel so strongly about it that I would like to see legislation enacted that would make discrimination act for the disabled.

A disabled person is a bargain in the labour market. He is conscientious, keen, unfailingly loyal and hardworking. Perhaps at some time in the future when we are discussing disablement we can introduce legislation requiring employers — the Crown, local authorities or private companies — to discriminate in favour of disabled people. It would be good for disabled people, and certainly for those lucky enough to employ them.

Although I shall listen carefully to what my right hon. Friend says to try to persuade me to support his case against the new clause, at the moment I am fully inclined to support it.

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In this relatively short debate, it appears that no one except the Secretary of State is to speak in favour of the Government's line. That, surely, should make the Secretary of State think again about whether he is right in deciding that the amendment should be rejected. Certainly, I shall not accept his advice.

Lord Basnett's amendment is a modest but important improvement to the Bill. No doubt Lord Basnett tabled it in this modest form because he knew that if he went too far he would not persuade the other place to accept it, and he wanted to go as far as he could while still standing a chance of success. I am also fairly certain that he was bearing in mind the vast experience that he had gained over many years in the trade union movement, representing workers not only in local government but in a wide range of industries. He recognised that at present, despite quota systems and other efforts to ensure that disabled people have fair opportunity of employment, they have no such opportunity. We too must face up to that fact.

My right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) made it clear that some disabled people, when applying for jobs, are tempted either to omit any reference to their disability on the application form, or to deny it. It is regrettable that they are forced to act in that way, but, as most hon. Members will know, it sometimes happens. Employers often disregard disabled applicants even when the disability has no reference to the job for which they are applying, which is very sad.

Both my right hon. Friend the Member for Stoke-on-Trent, South and the hon. Member for Harborough (Sir J. Farr) recommended more positive discrimination in favour of the disabled, and I see the case for that. It is regrettable that we should sometimes have to legislate to ensure discrimination in favour of the disabled, or any other category who might otherwise be discriminated against, but sometimes it is the only way to ensure that they receive the fair treatment to which they are entitled.

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As I have said, this is a modest amendment, and there is no reason why the Government should reject it. It in no way destroys the principle of the Bill. The Secretary of State knows that Opposition Members are strongly opposed to that principle, but the amendment will merely give disabled people a fair opportunity of consideration by employers.

I thought it outrageous of the Secretary of State to suggest in his opening speech — I assume that I understand him correctly—that some local authorities might not disbar contractors purely because they were not giving disabled people a proper opportunity of employment, but might use that as an excuse to disbar them for other reasons. That is entirely wrong, and shows how the Secretary of State misjudges local authorities on every possible occasion. He seems to feel that their motivation must always be questioned by him and by other Ministers.

The amendment is moving in the right direction, and I feel that the Secretary of State should reconsider his advice. Even if he is not prepared to do so, however, I hope that other Conservative Members will join us in the Aye Lobby.

When the amendment was approved in the other place, it was widely acclaimed in the national press as an improvement to the Bill. It has also been welcomed by many voluntary organisations closely connected with the disabled. Those are further reasons for the Government to think again, and to accept this improvement to the Bill.

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Before I came to the House, I had the good fortune to be a member of Glasgow district council, and a full-time union officer. From time to time, I had to represent disabled members.

The Secretary of State would be the first to condemn any local authority that did not pay due regard to the fact that disabled people must be employed. Surely, therefore, it is fitting that local authorities should establish what contractors are doing about employing them. The right hon. Gentleman knows that we are not talking about a window cleaner who may be contracted by the local authority to clean 20 or 30 windows. I was once a member of the finance committee of Glasgow district council. Prices have risen since I left, but we were then handing out contracts of over £1 million. In some instances the contracts awarded in one day exceeded £2 million. That is a lot of labour, and in many cases it is the big employers who are receiving the contracts.

It is only natural that local authorities should be entitled to ask contractors who are employing several hundred men and women what quotas they have for the employment of disabled people, and how those employees are being treated. I do not think that it is enough for an employer simply to say how many disabled people he employs; steps must be taken to ensure that they are not exploited. In many cases, they are exploited: there are no two ways about it.

The other local authority that covers my constituency is Strathclyde, which looks after the needs of 2·5 million people. It can give out contracts for water reservoirs, large civil engineering contracts and motorway contracts. I often hear the Secretary of State talk as if contractors were being bullied by local authorities which have all the power. That is nonsense. If the right hon. Gentleman knows anything about local authorities and contractors, he will know that there is often a dialogue going on on a weekly basis. Some of those companies are employing people—call them PR people, or whatever—whose job is simply to keep in touch with local councils. They have not been bullied; far from it. They know their way around the town halls, and they know who to talk to. If it is put into legislation that regard has to be given to the care of the disabled, I am sure that contractors will ensure that they inform their companies that the legislation has to be adhered to.

The Secretary of State said that his right hon. Friend the Secretary of State for Employment will be involved in a review. He said that everything is all right because the Government have a good record on looking after the disabled. Since becoming a Member of the House I have served on almost every Committee where the Government have sought to destroy the labour and trades union legislation introduced by the Labour Government. They have weakened the unfair dismissal tribunals and done away with schedule 11 to the Employment Protection Act 1975. One of their most recent acts was to abolish the wages councils. All of those actions have affected the disabled. It has meant that the disabled in our society and in the work force — those who have been fortunate enough to find a job—can be exploited.

I hope that the Secretary of State will tell his right hon. Friend the Secretary of State for Employment that it is not only within private industry that the disabled are not being too well looked after. As I have said, I was a full-time officer representing public employees and I often had to defend those employees against Government employers. For example, sometimes people in the Health Service were treated shamefully because those in charge did not pay due regard to legislation. I put it to the Secretary of State that he should look at what sometimes happens in some Government Departments and in agencies such as the Health Service, which work directly for the Government. I accept that 90 per cent. of the time those Departments and agencies are excellent employers. However, there is evidence to prove that disabled employees are not being looked after and that their rights under legislation are not being exercised properly.

In spite of what I have said about bad employers, there are many good employers in the private sector and the public sector. If any review is to be held, it is within the wit of the officials serving the Secretary of State to find those good employers and to discover how they can be good employers for the disabled. They should try to get them to give evidence to the review body so that we can ensure that people are looked after properly.

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It is clear that the hon. Member for Burnley (Mr. Pike) was correct. So far, the only supporter of the proposal to delete the Lords amendment has been the Secretary of State. Three Conservative Members, four Labour Members, one representative of Plaid Cymru and myself have all asked that he change his mind. It is a hit shameful that the only two proposals on the Amendment Paper in the name of the Secretary of State which suggest that we should not agree with the Lords are in relation to this proposal. The all-party view expressed in the other place, the view expressed by the all-party committee on the disabled in this place and the view expressed in all the contributions to this debate has had no effect. We have said to the Secretary of State, "Please think again. You are misjudging the mood of Parliament across the parties by seeking to amend what the other place has done." The more one looks at the Lords amendment, the more circumscribed one sees that it is. It simply says that nothing shall preclude a local authority from asking questions and from referring prospective contractors to relevant agencies if that information is necessary in order to ensure that the contractors have proper regard to the Manpower Services Commission's code of good practice in relation to the employment of the disabled.

The Secretary of State admitted that that does not mean that there has to be a duty on a local authority to employ a certain number of people. That does not follow. There is a duty to address the issue, to ask questions and to challenge what may he a failure to meet the needs of the disabled. That is the limit of the amendment. Presumably, that is why it was passed, against the wishes of the Government, in the other place.

The Secretary of State may hold the view that the amendment could prejudice the employment of disabled people. However, the advice of many agencies and charities is that the probability is that it will improve prospects for disabled people. The hon. Member for Glasgow, Springburn (Mr. Martin) and other hon. Members have said the same thing.

I had occasion last year to interview for a job somebody who was disabled by blindness. In the end, for various reasons, I selected somebody else. However, I then took up with the Officers of the House what we do as a corporate body to ensure that we employ adequate numbers of disabled people arid to see whether we do our duty. I was given a perfectly courteous reply through the good offices of the Serjeant at Arms and those responsible for the employment of staff. I was told that we seek to ensure that sufficient numbers of disabled people are employed. That prompting resulted in a specific meeting to consider whether we should be better able to employ blind people or other disabled people in the House. I do not pretend that that meeting would not have taken place in time. However, it was not billed to happen. By asking some questions about the employment of disabled people, particularly the blind, the officials of the House looked again at current practice. That is what this amendment is seeking to do. It is simply to encourage people to look again at their practice.

I should like to refer the Secretary of State to the fact that he and his colleagues conceded that principle during the passage of the Local Government Bill in relation to the Race Relations Act 1975. He will remember that when the Bill was originally presented to Parliament last summer, clause 18 did not exist in its present form. The title of clause 18 is "Race relations matters". We had a debate in Committee in which the hon. Member for Harrow, West (Mr. Hughes) argued that in the matter of race relations people should be allowed to ask approved questions. The Minister for Local Government, quite properly, accepted the principle in relation to the employment of individuals from ethnic minority communities and accepted the need to ensure that the practices in operation did not conflict with race relations legislation. The Bill came back on Report with an appropriate amendment. By the time the Bill went to the other place we had built in a provision so that people with non-white skins in Britain will be employed fairly and without discrimination.

The Secretary of State has accepted that there can be compromise on this issue and that is why I am not making a ranting or shouting speech. I am asking in a reasonable and, I hope, proper way for him to do for disabled people what he has done for people from ethnic minority communities. It is clear that there is universal support for what the other place did. I ask the Secretary of State to think again and to say that the Government are prepared to hear the argument and recognise the strength of feeling about this matter and change their minds at this late stage.

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With the leave of the House, I shall reply briefly to the points that have been made, although I made a lengthy speech earlier that contained the main arguments that the Government have advanced.

In case the hon. Member for Southwark and Bermondsey (Mr. Hughes) missed it, I shall repeat the point that I made earlier. There is a clause about race relations because a specific statutory duty is laid on local authorities by the parent statute, which is quite different from the case of disabled employment. Indeed, there was a clause on race relations in the Bill when it was first published. We have consistently said that where a local authority is already an enforcement agent that should be reflected in the Bill, but, where it is not, it should not.

I should like to pay tribute to my hon. Friends the Members for Lancaster (Dame E. Kellett-Bowman), for Exeter (Mr. Hannam) and for Harborough (Sir J. Farr) for their helpful and constructive speeches as well as for the work that they do for the all-party disablement group, which I very much admire. To have to make up their minds about this amendment puts them in a difficult position as they are normally supporters of the Government. Perhaps the fact that my hon. Friend the Member for Lancaster is prepared to abstain means that what I had to say earlier caused her to see that this is not the best way to achieve the results that the House wants. The initiative of my right hon. Friend the Secretary of State for Employment to review employment for disabled people will prove to be a better way forward.

6 pm

Having listened to the debate carefully, there appear to be two misconceptions about what the Lords amendments would achieve and what they mean. The hon. Member for Barking (Ms Richardson) went off on to the subject of women. I would be out of order if I were to discuss that matter under this amendment—[Interruption.] It would be perfectly in order to discuss disabled women, but not discrimination against women as such. However, I do not intend to discuss this whether it is in order or not.

The hon. Member for Barking said that if the clause remained in the Bill a local authority would not be able to refuse a contract simply on the ground of the disablement employment policies of a contractor. As I pointed out to the right hon. Member for Stoke-on-Trent, South (Mr. Ashley), that is not the case, because no local authority is bound to accept any tender. However, if it fails to accept what is clearly the lowest and best tender, it must give good reason for so doing publicly, first, to the district auditor and, secondly, to its ratepayers, who have every right to supervise its decisions in such matters. It would not be possible to refuse a contractor's tender because of his disablement employment record and at the same time get it past the district auditor. If this clause were in the Bill, that would be a perfectly valid reason for refusing a tender from such a contractor.

The hon. Member for Caernarfon (Mr. Wigley) gave the game away. He said that if authorities were to be subjective and not objective in interpreting a firm's use of the code and its compliance with it, it would be actionable if they made an ill-judged response. Yes, it would be, without the clause, but it would not be with the clause. The new clause says:
"Nothing ߪ shall preclude a local authority from—(a) asking questions or seeking information relating to work force matters and considering responses to them or ߪ consideration of the information is reasonably necessary to ensure".
The words "is reasonably necessary" will fall within the judgment of the local authority. If the local authority's judgment were that it should not award a contract because of the disablement employment policies of a contractor, the result would be that that decision would be proof against challenge. That is why the hon. Gentleman was wrong in his interpretation.

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Did not the Secretary of State rest his case on the slightly different premise that a local authority would be using this as an excuse and not as a reason and might have some other motivation at the back of its mind? If we accept that local authorities are working in a bonafide fashion, would the Secretary of State accept that it is not unreasonable for them to bear this in mind in deciding how a contract is determined?

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They may be wrong because they may have misjudged a contractor's compliance. He may be the best complier in the world, but if the local authority gets it wrong he will have no redress. Local authorities may use the disablement employment excuse when they have other reasons in mind. That is why I do not believe that the main result of the clause will be to help disabled people. It will give local authorities a subjective method of discriminating against contractors on spurious grounds.

The second theme of the debate was, "What is wrong with new clause 18(b)?" Clause 18 (b) relates to
"referring prospective contractors to relevant agencies."
As I said earlier, there is nothing wrong with that. Any local authority may refer an employer to the Disablement Advisory Service and may call meetings of local employers to discuss their practices. If a local authority is still not happy, it can bring in the MSC or the Disablement Advisory Service. That is possible at present and will remain so. It is unnecessary, therefore, to incorporate it into the legislation. It does not achieve anything that is not already in the legislation. The distinction is between local authorities doing what is perfectly right and proper and deciding on the award of tenders on their subjective judgment as to whether a contractor complies with the code of practice.

Those are the misunderstandings that arose, and I believe that we will help more disabled people into employment by what my right hon. Friend the Secretary of State for Employment suggested than the amendment could ever hope to achieve.

The hon. Member for Liverpool, Walton (Mr. Heffer) said that the clause was vindictive towards disabled people. I do not believe that that is remotely true. He further said that many contractors would not employ their full share of disabled people because it would bring their profit margins down. That was vindictive towards disabled people. For the hon. Gentleman to suggest that employing disabled people is bad for profits and that therefore firms do not do it was a slur on disabled people, and the House was revolted to hear him say that. I hope that he will withdraw it, and I hope that the House will reject this new clause.

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On a point of order, Madam Deputy Speaker. I did not say that the clause as drafted was wrong; I said that the attitude of the Government to it was wrong. I said that some employers would no doubt feel that they might lose a bit of profit, but that is not a slur on disabled people. I have always fought for disabled people and I shall continue to do so. It is the Government's attitude that forgets disabled people.

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I can confirm at the outset that my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) has just repeated exactly what he said in his speech—[Interruption.] After the speech of the hon. Member for Lancaster (Dame E. Kellett-Bowman), winding up with an abstention, we need take nothing from her.

The clause is so modest that one could ask why we should bother with it in the first place. However, there is a thoroughly justifiable reason for the clause. It is important that we should send signals to all sections of the community.

The clause was drawn up not out of thin air, but from the results and the experiences of our debates in Committee and on Report before the Bill got to the Lords. It was drawn up to take account of all the Government's objections to earlier amendments. It does not extend the enforcement role of local authorities—the Secretary of State's bogey men. It need not involve any additional resources in its operation. Its effect is simply to allow local authorities a limited discretion to ask a question and seek to foster good practice in place of the blanket prohibition currently contained in the Bill.

Let me go back to what this is all about. Lords amendments Nos. 7 and 8, which the Government are seeking to reject, amend clause 17 and add a new clause. Let me remind the House why clause 17 was put in the Bill in the first place. We are here to try to stop the Government taking it out on the disabled. The original notes on clauses stated:
"The purpose of clause 17 is to prevent local authorities and the other specified public bodies discriminating against particular contractors by introducing political or irrelevant considerations into the contractual process."
The notes on clauses list most of the things that should not be covered by the clause so that local authorities cannot get involved. The Government particularly highlighted the fact that local authorities should not ask about rates of pay, numbers of apprentices, work on nuclear missile sites, lorries crossing picket lines, links with South Africa and freemasonry. There is no mention whatever of banning local authorities from asking about the disabled employed by contractors. To seek now to lump in the disabled — that is what the Secretary of State is now trying to do—is a thundering disgrace and the Secretary of State should be ashamed of himself.

The issue is not central to the Government's economic policy, yet not a single Conservative Member of Parliament today has had the guts to come to the Chamber to support what the Government are doing with his or her voice, despite a three-line Whip. The Secretary of State is alone. Most of his hon. Friends, who have not heard the debate and are ignorant about the issues, will be shepherded in by the Whips to vote against the disabled at the end of the debate. That is not democracy. My hon. Friends do not have to be Whipped on a matter such as this.

Two of the three Conservative Members who have spoken gave the impression that they would support the Lords amendments in the Lobby. Certainly the hon. Member for Exeter (Mr. Hannam) gave every impression of doing so. However, I was not clear whether, as he sat down, he was saying that he would abstain.

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What I said was that I could not support their rejection.

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I thought so—another abstainer Why on earth are Tories abstaining when they speak as they do? The hon. Gentleman made it clear that he would not support the Government and that he stood by the all-party group in the belief that the Lords were right in putting the clause in the Bill.

6.15 pm

If the hon. Gentleman comes into the Lobby with the Welsh Nationalists, Liberals and Labour Members of Parliament, and, indeed, with at least one Conservative Member who is sitting behind, him, he will not be alone. [Interruption.] Have I got that wrong as well? I have got it all wrong. Not one Conservative Member of Parliament has had the guts to come in the Chamber and speak in favour of what the Secretary of State is doing. Three of them have come in with their bleeding hearts on their arms, but have not had the guts to support the Lords in what they have done. It is important that that should be on the record. They are only prepared to abstain.

This is a modest clause. I do not have to deploy the case of modesty too much because the clause has no teeth. No contractor or local authority need worry about it. But it is important that both Houses of Parliament should send out a signal, and we should send a signal to their Lordships that if the Government get their way the Lords should not lie down and accept it. They should have the guts to insist on their amendment and send it back to this place.

In addition, the House of Commons should send a signal to employers that Parliament will not tolerate continued discrimination in employment practices in so far as they affect disabled people. I do not propose to read out the list, but the Secretary of Slate's claims simply do not stand up to examination. Able-bodied applicants are at least 1.6 times more likely to receive a positive response from an employer than a disabled person, and the proportion of companies employing 3 per cent. or more registered disabled — their legal quota under the 1944 legislation—has fallen from 53 per cent. in 1965 to only 27 per cent. last year. Therefore, we must send a signal to employers and, even more importantly, to disabled people. We have a bounden duty to do so. All I am asking hon. Members to do is simply to assist us tonight in sending those signals.

Question put, That this House doth disagree with the Lords in the said amendment:—

The House divided: Ayes 258, Noes 208.

Division No. 206]

[6.17 pm

AYES

Adley, RobertBoscawen, Hon Robert
Alexander, RichardBoswell, Tim
Alison, Rt Hon MichaelBottomley, Peter
Amess, DavidBottomley, Mrs Virginia
Amos, AlanBowden, A (Brighton K'pto'n)
Arnold, Jacques (Gravesham)Bowden, Gerald (Dulwich)
Arnold, Tom (Hazel Grove)Bowis, John
Ashby, DavidBoyson, Rt Hon Dr Sir Rhodes
Aspinwall, JackBraine, Rt Hon Sir Bernard
Atkins, RobertBrandon-Bravo, Martin
Baker, Rt Hon K. (Mole Valley)Brazier, Julian
Baker, Nicholas (Dorset N)Bright, Graham
Banks, Robert (Harrogate)Brittan, Rt Hon Leon
Batiste, SpencerBrooke, Rt Hon Peter
Bellingham, HenryBrown, Michael (Brigg & Cl't's)
Bendall, VivianBruce, Ian (Dorset South)
Bennett, Nicholas (Pembroke)Buchanan-Smith, Rt Hon Alick
Benyon, W.Buck, Sir Antony
Biffen, Rt Hon JohnBudgen, Nicholas
Bonsor, Sir NicholasBurns, Simon

Butler, Chris Hogg, Hon Douglas (Gr'th'm)
Butterfill, JohnHolt, Richard
Carlisle, John, (Luton N)Hordern, Sir Peter
Carlisle, Kenneth (Lincoln)Howard, Michael
Carrington, MatthewHowarth, G. (Cannock & B'wd)
Carttiss, MichaelHowell, Ralph (North Norfolk)
Cash, WilliamHughes, Robert G. (Harrow W)
Channon, Rt Hon PaulHunt, David (Wirral W)
Chapman, SydneyHunt, John (Ravensbourne)
Chope, ChristopherHunter, Andrew
Clark. Hon Alan (Plym'th S'n)Hurd, Rt Hon Douglas
Clark, Dr Michael (Rochford)Irvine, Michael
Clark, Sir W. (Croydon S)Irving, Charles
Clarke, Rt Hon K. (Rushcliffe)Jack, Michael
Colvin, MichaelJackson, Robert
Conway, DerekJanman, Tim
Coombs, Anthony (Wyre F'rest)Jessel, Toby
Coombs, Simon (Swindon)Johnson Smith, Sir Geoffrey
Cran, JamesJones, Gwilym (Cardiff N)
Critchley, JulianJones, Robert B (Herts W)
Currie, Mrs EdwinaKey, Robert
Davies, Q. (Stamf'd & Spald'g)King, Roger (B'ham N'thfield)
Day, StephenKnapman, Roger
Devlin, TimKnight, Greg (Derby North)
Dickens, GeoffreyKnight, Dame Jill (Edgbaston)
Dorrell, StephenKnowles, Michael
Douglas-Hamilton, Lord JamesKnox, David
Dover, DenLamont, Rt Hon Norman
Dunn, BobLang, Ian
Dykes, HughLatham, Michael
Eggar, TimLeigh, Edward (Gainsbor'gh)
Evennett, DavidLightbown, David
Fairbairn, NicholasLilley, Peter
Fallon, MichaelLloyd, Sir Ian (Havant)
Favell, TonyLloyd, Peter (Fareham)
Fenner, Dame PeggyLord, Michael
Field, Barry (Isle of Wight)Luce, Rt Hon Richard
Fookes, Miss JanetLyell, Sir Nicholas
Forman, NigelMcCrindle, Robert
Forsyth, Michael (Stirling)Macfarlane, Sir Neil
Forth, EricMacGregor, Rt Hon John
Fox, Sir MarcusMacKay, Andrew (E Berkshire)
Franks, CecilMaclean, David
Freeman, RogerMcLoughlin, Patrick
French, DouglasMcNair-Wilson, M. (Newbury)
Gale, RogerMcNair-Wilson, P. (New Forest)
Gardiner, GeorgeMadel, David
Garel-Jones, TristanMajor, Rt Hon John
Gill, ChristopherMalins, Humfrey
Glyn, Dr AlanMans, Keith
Goodlad, AlastairMaples, John
Goodson-Wickes, Dr CharlesMarlow, Tony
Gorman, Mrs TeresaMartin, David (Portsmouth S)
Gorst, JohnMaude, Hon Francis
Gow, IanMayhew, Rt Hon Sir Patrick
Gower, Sir RaymondMellor, David
Greenway, John (Ryedale)Meyer, Sir Anthony
Gregory, ConalMiller, Hal
Griffiths, Sir Eldon (Bury St E')Mills, Iain
Griffiths, Peter (Portsmouth N)Miscampbell, Norman
Grist, IanMitchell, Andrew (Gedling)
Ground, PatrickMonro, Sir Hector
Grylls, MichaelMontgomery, Sir Fergus
Hamilton, Hon Archie (Epsom)Morris, M (N'hampton S)
Hamilton, Neil (Tatton)Moss, Malcolm
Hanley, JeremyNeale, Gerrard
Hargreaves, A. (B'ham H'll Gr')Needham, Richard
Hargreaves, Ken (Hyndburn)Neubert, Michael
Harris, DavidNicholson, David (Taunton)
Haselhurst, AlanOnslow, Rt Hon Cranley
Hawkins, ChristopherOppenheim, Phillip
Hayes, JerryPage, Richard
Hayhoe, Rt Hon Sir BarneyPaice, James
Hayward, RobertPatnick, Irvine
Heathcoat-Amory, DavidPawsey, James
Heddle, JohnPeacock, Mrs Elizabeth
Hicks, Mrs Maureen (Wolv' NE)Porter, David (Waveney)
Hicks, Robert (Cornwall SE)Portillo, Michael
Higgins, Rt Hon Terence L.Powell, William (Corby)
Hind, KennethPrice, Sir David

Raison, Rt Hon TimothySquire, Robin
Rathbone, TimStern, Michael
Renton, TimStewart, Allan (Eastwood)
Rhodes James, RobertStewart, Andy (Sherwood)
Rhys Williams, Sir BrandonStokes, John
Riddick, GrahamStradling Thomas, Sir John
Ridley, Rt Hon NicholasSummerson, Hugo
Ridsdale, Sir JulianTaylor, John M (Solihull)
Rifkind, Rt Hon MalcolmTebbit, Rt Hon Norman
Roberts, Wyn (Conwy)Thompson, D. (Calder Valley)
Roe, Mrs MarionThompson, Patrick (Norwich N)
Rossi, Sir HughThurnham, Peter
Rowe, AndrewTownsend, Cyril D. (B'heath)
Ryder, RichardVaughan, Sir Gerard
Sackville, Hon TomWaddington, Rt Hon David
Sainsbury, Hon TimWalker, Bill (T'side North)
Sayeed, JonathanWaller, Gary
Shaw, David (Dover)Wardle, Charles (Bexhill)
Shaw, Sir Giles (Pudsey)Watts, John
Shaw, Sir Michael (Scarb')Wells, Bowen
Shelton, William (Streatham)Wheeler, John
Shephard, Mrs G. (Norfolk SW)Widdecombe, Ann
Shepherd, Colin (Hereford)Wiggin, Jerry
Shepherd, Richard (Aldridge)Wilshire, David
Shersby, MichaelWinterton, Mrs Ann
Sims, RogerWood, Timothy
Skeet, Sir TrevorYoung, Sir George (Acton)
Smith, Tim (Beaconsfield)
Soames, Hon NicholasTellers for the Ayes:
Spicer, Sir Jim (Dorset W)Mr. Tony Durant and
Spicer, Michael (S Worcs)Mr. Mark Lennox-Boyd.

NOES

Abbott, Ms DianeDavies, Rt Hon Denzil (Llanelli)
Adams, Allen (Paisley N)Davies, Ron (Caerphilly)
Allen, GrahamDavis, Terry (B'ham Hodge H'l)
Alton, DavidDewar, Donald
Archer, Rt Hon PeterDixon, Don
Armstrong, HilaryDobson, Frank
Ashdown, PaddyDoran, Frank
Ashley, Rt Hon JackDouglas, Dick
Barnes, Harry (Derbyshire NE)Duffy, A. E. P.
Barnes, Mrs Rosie (Greenwich)Dunnachie, Jimmy
Battle, JohnEastham, Ken
Beckett, MargaretEvans, John (St Helens N)
Beith, A. J.Ewing, Harry (Falkirk E)
Benn, Rt Hon TonyEwing, Mrs Margaret (Moray)
Bermingham, GeraldFaulds, Andrew
Bidwell, SydneyFearn, Ronald
Blair, TonyField, Frank (Birkenhead)
Boateng, PaulFields, Terry (L'pool B G'n)
Boyes, RolandFisher, Mark
Bradley, KeithFlannery, Martin
Bray, Dr JeremyFlynn, Paul
Brown, Gordon (D'mline E)Foot, Rt Hon Michael
Brown, Nicholas (Newcastle E)Foster, Derek
Brown, Ron (Edinburgh Leith)Foulkes, George
Buchan, NormanFraser, John
Buckley, George JGalbraith, Sam
Caborn, RichardGalloway, George
Campbell, Menzies (Fife NE)Garrett, John (Norwich South)
Campbell, Ron (Blyth Valley)Garrett, Ted (Wallsend)
Campbell-Savours, D. N.George, Bruce
Cartwright, JohnGordon, Mildred
Clarke, Tom (Monklands W)Graham, Thomas
Clay, BobGriffiths, Nigel (Edinburgh S)
Clelland, DavidGriffiths, Win (Bridgend)
Clwyd, Mrs AnnGrocott, Bruce
Cohen, HarryHattersley, Rt Hon Roy
Cook, Frank (Stockton N)Haynes, Frank
Cook, Robin (Livingston)Healey, Rt Hon Denis
Corbett, RobinHeffer, Eric S.
Corbyn, JeremyHenderson, Doug
Cousins, JimHinchliffe, David
Cox, TomHogg, N. (C'nauld & Kilsyth)
Cryer, BobHolland, Stuart
Cummings, JohnHome Robertson, John
Cunningham, Dr JohnHood, Jimmy
Dalyell, TamHowarth, George (Knowsley N)
Darling, AlistairHughes, John (Coventry NE)

Hughes, Robert (Aberdeen N)O'Neill, Martin
Hughes, Roy (Newport E)Orme, Rt Hon Stanley
Hughes, Sean (Knowsley S)Parry, Robert
Hughes, Simon (Southwark)Patchett, Terry
Illsley, EricPendry, Tom
Ingram, AdamPike, Peter L.
Janner, GrevillePowell, Ray (Ogmore)
John, BrynmorPrescott, John
Jones, Barry (Alyn & Deeside)Quin, Ms Joyce
Jones, Ieuan (Ynys Môn)Radice, Giles
Jones, Martyn (Clwyd S W)Randall, Stuart
Kaufman, Rt Hon GeraldRees, Rt Hon Merlyn
Kennedy, CharlesReid, Dr John
Kilfedder, JamesRichardson, Jo
Kirkwood, ArchyRoberts, Allan (Bootle)
Lamond, JamesRobertson, George
Leighton, RonRobinson, Geoffrey
Lestor, Joan (Eccles)Rooker, Jeff
Lewis, TerryRoss, Ernie (Dundee W)
Litherland, RobertRuddock, Joan
Livingstone, KenSalmond, Alex
Lloyd, Tony (Stretford)Sedgemore, Brian
Lofthouse, GeoffreySheerman, Barry
Loyden, EddieSheldon, Rt Hon Robert
McAllion, JohnShort, Clare
McAvoy, ThomasSkinner, Dennis
McCartney, IanSmith, Andrew (Oxford E)
Macdonald, Calum A.Smith, C. (Isl'ton & F'bury)
McFall, JohnSmith, Rt Hon J. (Monk'ds E)
McKay, Allen (Barnsley West)Snape, Peter
McKelvey, WilliamSoley, Clive
McLeish, HenrySpearing, Nigel
Maclennan, RobertSteel, Rt Hon David
McNamara, KevinSteinberg, Gerry
McTaggart, BobStott, Roger
McWilliam, JohnStrang, Gavin
Madden, MaxTaylor, Mrs Ann (Dewsbury)
Mahon, Mrs AliceThomas, Dr Dafydd Elis
Marek, Dr JohnThompson, Jack (Wansbeck)
Marshall, Jim (Leicester S)Turner, Dennis
Martin, Michael J. (Springburn)Vaz, Keith
Martlew, EricWall, Pat
Meacher, MichaelWallace, James
Meale, AlanWalley, Joan
Michael, AlunWardell, Gareth (Gower)
Michie, Bill (Sheffield Heeley)Wareing, Robert N
Michie, Mrs Ray (Arg'l & Bute)Welsh, Andrew (Angus E)
Millan, Rt Hon BruceWelsh, Michael (Doncaster N)
Mitchell, Austin (G't Grimsby)Wigley, Dafydd
Moonie, Dr LewisWilliams, Rt Hon Alan
Morgan, RhodriWilliams, Alan W. (Carm'then)
Morley, ElliottWise, Mrs Audrey
Morris, Rt Hon J. (Aberavon)Worthington, Tony
Mowlam, MarjorieWray, Jimmy
Mullin, ChrisYoung, David (Bolton SE)
Murphy, Paul
Nellist, DaveTellers for the Noes:
Oakes, Rt Hon GordonMrs. Llin Golding and
O'Brien, WilliamMr. Tony Banks.

Question accordingly agreed to.

Lords amendment No. 8 disagreed to.

Clause 19

Provisions Supplementary To Or Consequential On Section 17

Lords amendment: No. 9, in page 18, line 28, after "1972" insert

"or in relation to Scotland section 56 of the Local Government (Scotland) Act 1973"

6.30 pm

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I beg to move, That this House doth agree with the Lords in the said amendment.

It is a straightforward drafting amendment to include reference to Scottish legislation, and should have been included from the outset. The provisions of section 58 of the Local Government (Scotland) Act 1973 are, so far as relevant here, the same in effect as those of section 101 of the 1972 Act, and the same provision should be made in respect of arrangements made under section 56 as are made in respect of section 101.

Question put and agreed to.

Clause 28

Prohibition On Promoting Homosexuality By Teaching Or By Publishing Material

Lords amendment: No. 10, in page 28, leave out lines 18 and 19 and insert—

"(a) intentionally promote homosexuality or publish material with the intention of promoting homosexuality"

Read a Second time.

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I beg to move amendment (e) to the Lords amendment, at end add

'other than by any action undertaken for the purpose of discouraging discrimination against or protecting the civil rights of any person.'

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With this, it will be convenient to discuss amendment (f) to the Lords amendment, at end add

'except that nothing in this subsection shall prevent the provision of any service by a local authority to any person where that provision is necessary in the view of the authority for a purpose other than that prohibited by this subsection.'

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Welcome though the Lords amendments are, frankly, they are simply not good enough to satisfy our remaining fundamental objections to the clause.

Before I refer to the amendments in detail, I reiterate our view of the major issues that are involved in this clause. The clause affects all local government, all education services, and the arts and library services of our country. It has caused a storm of protest, and understandably so. Here we are dealing with fundamental issues of principle. It is not just a provision to ensure neutrality on homosexuality. Much more than that is at stake. Indeed, everyone's right to information and the arts, the rights of minorities, the way in which a free society is tolerant of diversity, the way in which a free society organises itself, the way in which minorities are protected' in a free and plural democratic society are at the heart of our objections to the provisions of clause 28.

We are confronted here with issues of people's civil rights and individual freedoms. We are confronted here with the possibility of an extension of censorship, either deliberately or by default. That is why the Arts Council of Great Britain has been so active in opposing the provisions of the clause, arguing, as we do, the severe risk that prohibition on "promoting" homosexuality will prohibit almost any literary or artistic activity that has an element of homosexuality within it.

The provisions set a dangerous precedent. The clause represents a new and inherently dangerous direction for the law to take. It breaches an important principle of equality before the law, for minorities to seek to advance their own lawful interests, that could in future be extended to other people.

Whatever the Minister says about our amendments and the issues, I hope that he will give the House an assurance, a promise on the record, that the provisions will not be extended to other public bodies and activities — for example, broadcasting and the Arts Council — which could in future be prohibited on much the same grounds and arguments that could lead to further censorship. I hope that the Minister will make it absolutely clear that the Government have no intention to go further in that direction.

The proposals set a dangerous precedent, because they seek to control what is taught in the classroom, not directly through an education Act, but indirectly by restrictions on the provision of books or other materials that are not themselves prohibited by law. The proposals will encourage discrimination. It is impossible to accept any other construction when the civil rights of homosexuals are already under increased threat and hostility because of the appalling consequences of AIDS. We and many other organisations, including the National Council for Civil Liberties, believe that there is an even greater need to educate and inform and to protect people's equal rights. Whatever is the intention of the supporters of the clause, its impact can only be regressive. Local authorities will have to play safe. They may have to refuse to take any risk in an area that may appear to assist homosexual people, or possibly show them in a favourable light.

The proposals provide an excuse to discriminate against gay and lesbian people. Just as the Sex Discrimination Act 1986 and the Race Relations Act 1976 make it less acceptable to discriminate against women and ethnic minorities, this clause will have the reverse effect and will make it more respectable to discriminate against gay and lesbian people.

These are major and fundamental reasons why further amendments to the clause are necessary. As it stands, it will be bad law, because it is dangerously imprecise in drafting and open to wide and varied, differing interpretation. Take the key words — "promote", "homosexuality" and "acceptability". None of them is defined. As they stand in the Bill at present, they have no fixed meaning. Organisations outside the House and, for that matter, my hon. Friends, others and I have legal opinions almost by the dozen from senior counsel, saying that anything that is published or done in respect of homosexuality could be said to promote it. We need look no further than those legal opinions for reasons why the House should not accept the clause as it stands. The Government amendments to the local authorities' intention do not substantially alter the impact of the clause. It is still dependent upon how the word "promote" is interpreted.

The Government opposed a similar clause in 1986. There has been no explanation from Ministers of why, one year later, they have changed their minds on this matter. There has been no explanation, no argument and no evidence for the about-face by Ministers. There has been no attempt to answer those questions. The Government opposed identical proposals in 1986 specifically because Ministers argued that those proposals were open to harmful misinterpretation. The Government were saying that a year ago. We said it too, but we are saying the same thing now. Why have the Government changed their position?

I believe that they have done so for the basest and most contemptible political motives. I believe that they have done so because they seek some political gain from aiding and abetting bigotry and discrimination against gay and lesbian people. In the absence of any other explanation, that is bound to be the conclusion that people will reach, inside and outside the House. [Interruption.] If the hon. Member for Tatton (Mr. Hamilton) wishes to intervene, I am happy to give way to him or to his hon. Friend who is making so much noise from a sedentary position, but does not have the guts to stand up and say publicly what he is muttering in private.

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What the hon. Member for Copeland (Dr. Cunningham) is saying is totally contemptible to democracy. He is saying that the Government should not pay the slightest bit of attention to popular feeling on this issue and that, in his opinion, the population at large is bigoted. I should like him to withdraw that.

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I said no such thing. I was saying that the Government were bigoted and were seeking to encourage bigotry—which, unlike the hon. Member for Northampton, North (Mr. Marlow), I do not believe is a trait displayed by the majority of people in Britain. On the contrary, I think that the majority of people are decent and civilised in their approach to these matters, as we ought to be in any plural democratic society.

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This is a very important point. The hon. Gentleman expressed an attitude of principle. He identified what he calls gay and lesbian people, but he must do the House the duty of saying to what extent he regards perversion in any psychopathological form as wrong. There is no question at all that homosexuality in either sex is psychopathological perversion.

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Many people, in particular homosexual people, will find the remarks of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) deeply offensive. Apparently, he fails to recognise the reality of different people's sexual orientation. His intervention shows that he is portraying the very characteristic about which I was complaining among Ministers. He is showing a form of bigotry about these issues which has no place in our debates.

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It is honourable that the hon. Gentleman has given way again, but it is not simply a question of different orientation. Sadism and masochism are not just orientations of human conduct; they are psychopathological manifestations of morbid conduct—and homosexuality is the same.

6.45 pm

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I regret having given way to the hon. and learned Gentleman again. He has just repeated something which I think is totally unacceptable and, frankly, also wrong.

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The hon. Gentleman talked about the Government changing their mind. Will he help the House by explaining why he supported what was then clause 27 in Standing Committee? He said:

"I shall vote for the amendment and I hope and expect that my right hon. and hon. Friends will do the same."
In regard to the ban on the promotion of homosexuality he said:
"We do not wish to change that in any way, shape or form."

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If the hon. Member for Pembroke (Mr. Bennett) were to read all of what I said, he would see that I went on to say:

"it is not, and never has been,"
nor do we expect or want it to be
"the duty … of any local authority to promote homosexuality."ߞ [Official Report, Standing Committee A, 8 December 1987; c. 1211–14.]
No one is asking for that. Gay and lesbian people do not want that.

Since the hon. Gentleman was talking about the record, perhaps he will also acknowledge, as I am sure he knows, that I said in Committee on behalf of my hon. Friends in response to something produced at a very short notice in the Committee that we were fundamentally opposed to some of the provisions of this clause and we would seek to amend it drastically on Report.

That is what we tried to do, with the greatest support from outside the House. The hon. Gentleman and his right hon. and hon. Friends voted down those very wide-ranging amendments. We are now presenting the House with yet another opportunity to do exactly that today. I hope that the hon. Gentleman, having reflected on it, will take a different view now from the one that he took at the time.

We oppose the proposals because the prohibition on promoting homosexuality covers any and every activity in which a local authority engages in furtherance of its duties and responsibilities.

It is not an abuse for local authorities to recognise the existence of a minority in their communities. Estimates suggest that 10 per cent. of the adult population in Britain may be gay or lesbian people. It is not an abuse for a local authority to devote — as some do quite properly — relatively small resource allocations to meet the legitimate needs of those minorities. That is not an abuse. It is a perfectly proper thing for local authorities to do, and should be acceptable in a civilised society.

As we have argued before, the teaching of children in school and other places of education also could be adversely affected by the proposals, as could essential activities such as the counselling of young people because of their own sexuality or that of their parents.

Amendment No. 10 was said to be moved by the Government in the other place to clarify the Government's position on what was meant by "intentionally promoting homosexuality", although, as I have argued, the meaning of those words is still unclear. The amendment introduces some limitation, however minor, on the concept. As I said, we certainly will not oppose it, but it simply does not go far enough. Other Government amendments accepted in the other place make explicit reference in subsection (1)(b) to the publication of material, and further reference to "financial or other assistance" for the purposes of promotion are welcome in so far as they go, but they do not remove the fundamental objections.

Amendment No. 12 is simply a declarity, in that it states that a court shall draw such inferences from evidence before it as it sees fit. That does not seem to move the debate on at all.

The amendments tabled in my name and in the name of my right hon. Friend the Leader of the Opposition deal with the issues of civil rights and the provision of services for a purpose other than the promotion of homosexuality. I am grateful that they have been selected for debate.

I do not want to be too unkind to the hon. Member for Southwark and Bermondsey (Mr. Hughes) as we are probably speaking on the same side of the argument—[Interruption.] Well, I welcome the fact that we are on the same side on an important issue of civil liberties. I suppose that he must somewhat regret his comments that were published in The Independent this morning—although perhaps, like me, he was not consulted by the journalist who wrote the article in the first place. However, I am grateful that we are on the same side of the argument in this debate.

The amendment, inserted by the Government on Report in the House of Lords, does not go far enough. Amendment (e) would qualify the prohibition on the promotion of homosexuality in relation to
"any action undertaken for the purpose of discouraging discrimination against or protecting the civil rights of any person."
It is an important amendment, pointing to a serious practical difficulty which has still not been resolved either by the Government or by the House of Lords.

Amendment (f), which is also tabled in the name of my right hon. Friend the Leader of the Opposition and myself, goes even further. It would deal directly with the question of a service provided for a purpose other than "the promotion of homosexuality", which, under the clause, would risk falling within the prohibition. The amendment provides that where a service is provided for another purpose and where the provision is necessary to meet a need within the community, it should fall outside the terms of reference of the clause.

The amendment seeks to highlight the areas of activity that are undertaken as part of a council's provision which might be thought to have an indirect consequence in the terms of the clause. [Interruption.] The hon. Member for Northampton, North is muttering again. I hope that he will participate in the debate and put his views on the record. I am trying to explain to him the purpose of our amendments. If he has something to say, I hope that he will try to catch your eye, Mr. Deputy Speaker.

The fact is that the Government, at least privately—they do not have the courage to say so publicly—must be deeply regretting ever having given way to the pressures to embark on this legislation in the first place. There have been many debates in both Houses, and debates and demonstrations around the country, illustrating not only the depth of opposition to this proposal, but the deep concern that is felt by many people in all walks of life, including people way beyond the boundaries of the Labour party or, indeed, any other political party.

I make it clear that we do not support the intentions of the clause. The motives and implications behind it are deeply to be deplored. It should not be accepted by Parliament. I make it absolutely clear that a future Labour Government would not allow the implications and provisions of the clause to remain on the statute book.

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I have listened to our previous debates in the Chamber and suspect that I have read as widely as any hon. Member on this issue both since and during our proceedings. I did not support the clause originally and all that I have subsequently seen has not ultimately persuaded me to change my mind. Amendments (e) and (f) that were moved earlier, by the hon. Member deserve support.

I begin on a point on which I hope that I can unite hon. Members. I recognise, as I think do all hon. Members, the importance of protecting our children from evil influences, however defined. I speak as someone who has two teenage children of my own, so I have a little knowledge of what is involved. However, the permutations of wording through which this House and the other place have gone have not persuaded me that we have either justified the need for the clause or that the wording that we have produced is other than a minefield, awaiting exploitation by scores of lawyers in years to come. I do not know whether "promotion" means "talking about", or "selling the advantages of", to take but two possible interpretations. Undoubtedly, hon. Members could provide many more.

I speak as one of the honorary vice-presidents of the Conservative group for homosexual equality. We want to put forward four brief points. I hope that if my hon. Friend the Minister for Local Government cannot answer them during the debate, he will at least take account of them. They relate to the question, "What is 'promoting homosexuality'?" First, if a local authority assisted a well-run counselling service to help homosexuals to come to terms with their sexuality and to cope with the consequences that many experience, is that "promoting homosexuality"? Secondly, if a local authority allowed a homosexual organisation to hire a room in one of its buildings for a public meeting on the same terms as any other organisation — I am referring to law-abiding citizens—is that "promoting homosexuality"? Thirdly, if a local authority bought for its public libraries books that discussed homosexual love favourably or presented sympathetically the lives of homosexuals such as the late Lord Britten and Sir Peter Pears, is that "promoting homosexuality"? Fourthly, if sex education classes presented homosexuality in a balanced way, as required by the Department of Education and Science under the Education (No. 2) Act 1986, is that "promoting homosexuality"?

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From a sedentary position, my hon. Friend says "yes", and in that case we have a slight problem of conflict with the law.

I have mentioned that I have two children. I happen to think that the teaching of sexuality of any sort does not belong in school. I believe that the hon. Member for Lewisham, Deptford (Ms. Ruddock) made some comment to that effect in our earlier exchange. I agree completely that school is not the place for that sort of thing. However, it is the place for teaching an honest and balanced approach to this subject just as to any other.

In one of our national newspapers today—the most well-read one—there is a cartoon portraying a middle-aged man retiring through the front door of his house, leaving his son, who is drawn effeminately, hanging by a rope from a lamp post, having clearly been hanged or attempted to be hanged. I put to one side those people who may find the subject funny — presumably that is why they drew a cartoon—because that is not the point that I want to make. In my constituency, I probably have a substantial minority of law-abiding, God-fearing Roman Catholics—I suspect a proportion similar to the number of homosexuals and lesbians—

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rose

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I shall give way to the hon. Gentleman when I have finished my point.

If it were suggested that a cartoon be drawn, portraying either some militant Protestant group stringing up some Roman Catholic, or the other way round — some Roman Catholic stringing up an identified Protestant—we would be outraged and would raise that issue on the Floor of the House saying, "This is disgraceful." As a further example—again it is an obvious one—if we were even contemplating similar action from somebody of one colour against somebody of another colour, who is another law-abiding citizen we would again be horrified. The person responsible would be in breach of the law, as I understand it, because they would be accused of inciting racial prejudice. I remind hon. Members that we are talking about a law-abiding minority.

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I am glad that the hon. Gentleman mentioned the cartoon by Franklin in The Sun and which I have referred to the Press Council. If the hon. Gentleman is seeking to make a parallel with that cartoon, I suggest he looks at Der Angrif—a German newspaper that was produced by Julius Streicher, the Jew-baiter, in Nazi Germany. I believe that Franklin bases his cartooning models upon that newspaper.

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I am grateful to the hon. Gentleman for that information.

7 pm

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I go along with what my hon. Friend says and I share his disgust at the cartoon in The Sun. Does my hon. Friend agree that part of the reason for such a cartoon appearing in a national newspaper, which is read by millions, is the aggressive proselytising by some local authorities on behalf of homosexuals? That has tended to disgust the vast majority of British people.

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I appreciate that my hon. Friend's concern is shared by several of my colleagues and it is important. However, in our discussions on this matter and in our attempts to extract evidence, it appears that most of that evidence arises from one book, in one teacher centre, in one school under one authority. I may be wrong, but I have seen no other evidence. Indeed, as I understand it, that book was kept to help teachers who are occasionally asked to advise pupils who come from homes with gay parents. It is important to realise that we do not live in a world where every child lives with a male and female parent.

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My hon. Friend has asked for examples and perhaps I can assist. I have in my hand a leaflet that was handed out to 15-year-olds at a Bristol school. I will not read out the details of that leaflet because I do not think that I should—[HON. MEMBERS: "Go on."] Opposition Members may want that, but suffice to say that the leaflet describes and illustrates homosexual activity and underneath that description says:

"Go for it! Share the pleasure with a friend."
That was handed out to 15-year-olds at a school in Bristol—[HON. MEMBERS: "By whom?"] The Terrence Higgins trust.

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I can only take at face value what my hon. Friend has said. Of course, it is deplorable and despicable that such leaflets exist and I would be happy to add it to my list of one. From a brief glance at that leaflet I cannot believe that it has been produced by or on behalf of a local authority. I shall pass it over to the hon. Member for Copeland and I will happily give way if he can tell me who is credited with producing it.

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I am concerned that it appears that my hon. Friend has not read any of the debates that have previously taken place. For instance, on 11 January the debate in the other place drew attention to the fact that children under two have had access to gay and lesbian books in Lambeth play centres.

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That is not true.

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That is a lie.

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rose

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I am not telling lies and I do not believe that it is the practice in this House for one who has intervened to give way again. I am quoting from the House of Lords debateߞ

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That does not make it true!

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The person in charge, Mrs. Jill Delaney, playleader of the Windmill gardens play centre, said:

"We have been on training courses where members have access to take this kind of literature into the playgroups but nearly everyone refused. Some of the books on display were terrible. I have children in here as young as 2 years old and I don't think they should be seeing pictures of grown men in the nude in different sexual practices." [Official Report, House of Lords, 11 January 1988; Vol. 491, c. 10131]

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I cannot respond to that specific point because I do not come from Lambeth and I have not seen the literature about which my hon. Friend complains.

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Does my hon. Friend not know of such literature?

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I am quite prepared to admitߞ

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There is a queue forming.

In answer to my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight), I understand that that charge has been denied in more than one quarter. However, I must leave it to other hon. Members who come from that area to confirm or deny that charge. If my hon. Friend is correct, I share her unease that such literature is available to young children. I recognise the importance of protecting young children and the need to do so.

Tonight we are trying to establish the need for the clause as drafted and to what extent the wording of the clause may influence other perfectly normal law-abiding citizens.

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I believe that the hon. Member for Spelthorne (Mr. Wilshire) should get his facts right. There is no information on the leaflet that he brandished as to who was responsible for its publication or distribution. I believe that the hon. Gentleman should be more accurate and precise in his allegations regarding such sensitive matters.

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I almost feel that there are two debates going on and I apologise to the extent that I have caused that.

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Will the hon. Gentleman give way?

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I am anxious to make some progress because I am aware that a number of other hon. Members wish to take part.

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It is specifically about Lambeth.

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Very well.

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I represent Lambeth and my wife is a nursery nurse in the borough. There is not a scintilla of evidence to support the monstrous allegation that has been made by the hon. Member for Birmingham Edgbaston (Dame J. Knight) who, presumably, is strongly in favour of the promotion of heterosexuality, adultery, troilism arid all the rest of it as opposed to the promotion of homosexuality, about which she is extremely economic with the truth.

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rose

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I must press on. I am satisfied that there has been some balance put forward for the Lambeth subculture.

Over the years there has been considerable scientific discussion about the extent to which people can be persuaded to adopt a sexuality that is not their own. In the overwhelming majority of cases it seems that people are born with a particular sexual preference or acquire it during the passage of their lives without the presence of the influences we are discussing. There are many famous examples in history of people who became homosexuals without the benefit of a gay counselling group ߞ we would be foolish to assume that such groups are an absolute essential.

As I have said, I have two teenage children and my wife is a former teacher. In her experience, the suggestion that one can address an average or even below average group of teenagers seeking to proselytise and expect to be heard sympathetically is unrealistic.

There has been much overstatement from both sides about the effect of the clause. It has been suggested that some great works of art, great books and great plays that have been performed for scores of years ߞ including during the time when homosexuality was illegal ߞ are threatened. I doubt that. However, it is possible that the clause as drawn, even with the beneficial effects of amendments (e) and (f), will be taken as some sort of signal by a large number of people that society is becoming more intolerant. I remind the House for the last time that we are talking about a law-abiding minority of people. If people break the law, they must be punished through all the avenues available. I do not wish to see my children threatened by sexual or other aggression, but I want to keep a sense of perspective and I very much fear that the clause goes much further than was ever intended.

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Three months ago I rose to express my distress and disquiet at the sudden appearance of what was then clause 27 of the Local Government Bill. I had hoped that in the intervening months a degree of common sense and decency might have crept into the Government's thinking and that we might now be applauding their decision to withdraw the clause in its entirety from the Bill and to reject everything that it stands for. Sadly, that is not the case. At the Government's behest, their Lordships have made two changes to the clause. Lords amendment No. 11 brings a marginal improvement. Lords amendment No. 12 inserts the idea of intentionalityߞof itself not an objectionable move, but, when qualified with such a sweeping catch-all definition of intention, leaving interpretation totally to the courts, it does nothing to allay the genuine fears that the clause has aroused throughout the country.

The amendments have left untouched the central flaw at the heart of the clause — the undefined, hopelessly vague and dangerously widely interpretable word "promote". The amendments in the name of my right hon. and hon. Friends attempt to circumscribe that word to a certain extent. That is why I support them. If the amendments tabled by the Liberal party are put to the vote, I shall not support them—[HON. MEMBERS: "Not selected."] I am pleased to hear it, because they would have made matters worse.

Three months ago I asked what on earth the originators of the clause meant by the word "promote". After three months of debate and discussion in this Chamber, in the other place, on the radio and television and on platforms up and down the country, that question still remains unanswered. All that we had in the intervening period were statements such as, "Well, we all know what we mean by 'promote', don't we?" or, "We all know that boroughs like Haringey are up to no good," or, "Of course, there will be no threat to sensible acceptable activities conducted by local authorities." None of those statements represents an accurate analysis of what the word "promote" can be interpreted as meaning by the courts. It is not good enough for the Minister to write to me, as he generously did after the debate before Christmas, to say that in his view none of the activities that I had listed as potentially unlawful under the clause would be caught by it. It is not up to the Minister to interpret what the word "promote" means; it is up to the courts.

After reading through many pages of the House of Lords Hansard, the only attempt at a definition that I could find — in all the many hours of debate — came from the Earl of Caithness, who is the Minister for Environment, Countryside and Water. He referred to local authorities that have in the recent past promoted homosexuality—
"that is, giving it a standing over and above the standing that is given to similar matters."—[Official Report, House of Lords, 1 February 1988; Vol. 492, c. 937.]
If I were in the business of writing a dictionary, I would certainly not go to the noble Lord for clarity of definition. Such an attempt to define what the word "promote" means takes us no further.

7.15 pm

Because of that lack of definition, the central problem remains. The clause will potentially affect any service provided by any local authority for, or on behalf of, or in support of, gays and lesbians in that local authority's area. Let me take just two examples to illustrate my point. First, let us suppose that a teenager begins to discover that he is gay. He feels nervous, upset and isolated. He may be on the verge of contemplating suicide, as the studies suggest many such young people are. Because he would find it difficult to turn to anyone else, he turns to a teacher at his school. He asks, "What on earth is all this about?" In such circumstances, any teacher worth his salt would sit the pupil down and say, "Look, there is nothing at all to be worried about. This is perfectly acceptable. There are millions of people who are gay and they make a valuable contribution to society. There is no reason for you to feel isolated or abnormal about what you are and what you are feeling." That teacher would attempt to advise and counsel and make the teenager feel better about himself and about what he was coming to understand about himself. Would such a teacher be in contravention of the clause? As I understand the clause — certainly as I understand the wishes of those who brought the clause forward—such a teacher would, indeed, be contravening the clause. That means that the important advice and counselling that ought to be available to that very concerned, very scared, teenager will not be available to him. That worries me deeply.

My second example relates to a local authority-owned art gallery wishing to sponsor an exhibition of paintings by David Hockney. I choose the painter advisedly because of what he has said forcefully in recent days. The local authority will fear that it risks being in contravention of clause 28, not simply because David Hockney happens to be gay, but because David Hockney's paintings frequently celebrate the fact that he is gay. That is the key point that will concern a local authority when it is considering whether to mount an exhibition of paintings by one of Britain's greatest artists. I believe that the way in which the clause will be interpreted moves us a step closer to censorship of the arts because that is how it is likely to affect local authorities. I have given just two of many examples.

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