I thank the Liaison Committee for today's debate and for drawing attention to the estimates and supplementary estimates that we are specifically voting today. I welcome the Under-Secretary of State for Health and Social Security, the hon. Member for Derbyshire, South (Mrs. Currie), to the debate. No doubt, Mr. Deputy Speaker, she will wish to catch your eye and respond to the debate. She has a somewhat schizophrenic attitude to public expenditure. Some days she is in favour of cutting it, and some days she is in favour of increasing it.

At the beginning of the debate, it is important to establish just how large the estimate is. In cash terms, class XIV, vote 1 is the largest ever single vote in the history of voted expenditure. The vote covers what most of us would call in shorthand the health authorities' budgets. We are debating the supplementary estimate, which involves an amount of about £538 million, the vast majority of which is to cover the additional pay costs to health authorities of pay awards to doctors, dentists and professions allied to medicine. At the beginning of the debate, we are discussing the supplementary estimate and the review body's recommendations.

I ask the House to bear with me if, on occasion, I must quote from official documents. The debate is technical and it is important that certain matters are clearly put on the record.

The pay review body stated:

"our recommendations will result in a substantial increase in the pay bill. This flows largely from the exceptional circumstances associated with the introduction of the new clinical grading structure, which will affect the vast majority of the nurses, midwives and health visitors covered in our review … It is in our judgement right that the new pay structure should be sufficiently flexible to provide a fully satisfying career within the clinical field. But the cost of introducing it is unavoidably high."

I stress that the pay structure should be "sufficiently flexible" to achieve the objective.

It seemed that the review body had two objectives in mind. The first was to make a major change in the relative position of nurses in the pay league. I asked staff in the House of Commons Library whether they would update the 1974 Halsbury report on staff nurses and compare it with the pay review body's proposals. Although the results are not exactly the same, they are certainly comparable. We must take note of that objective. Those hon. Members who have fairly long memories will remember how important the Halsbury report was in its attempt more adequately to pay nurses.

The second objective of the pay review body has been summed up by many hon. Members, but perhaps best by the Prime Minister. It was not summed up most eloquently by the Prime Minister, but, as she runs the show, what she says normally goes. Therefore, it is worth paying attention to how she puts a message on the record. She said that she was anxious that those directly involved in patient care should have a pay structure that reflects their skill, qualifications and responsibilities. The review body's first objective was to lift the relative pay of nurses, and its second objective was to provide a pay structure that would keep nurses in wards rather than in administration.

The Select Committee welcomed the statement that the Government intend fully to fund the pay award. It was one of our constant pleas to the Government. I do not wish to make party political points by drawing attention to the number of times the Government rejected our plea. It is important to note what the Secretary of State said when he announced the Government's decision on the pay review report. Again, I apologise to the House for quoting, but it is important to be clear about what everybody said in the debate. In a press release, the Secretary of State said:

"In reaching this decision"—

to accept the review body's recommendations—

"the Government has again demonstrated its commitment to the nurses and the other NHS professions concerned … The Government will be implementing all these awards in full from 1 April, and will meet the full additional costs … from the Reserve. In consequence, these awards will be fully funded."

That is where the debate began. From that point, certain doubts have been raised about what is meant by "fully funded". Once again, as recently as 14 July, the Prime Minister introduced some doubt when she addressed the House. In response to an oral question she said:

"The amount that has been made available was the amount that was estimated by the nurses' pay review body. That full amount has been put forward. [Interruption.] The formula used for estimating the total sum required was agreed between representatives of National Health Service chairmen and the review body. That amount is intended to be the amount which they said regrading of the structure would cost."—[Official Report, 14 July 1988; Vol. 137, c. 546]

Again I emphasise the Prime Minister's point about what it was said that the pay review body award would cost. When one reads the pay review body's words, one realises that we are not debating an estimate but that we are looking at an estimate based on an estimate based on an estimate. That is the very point that the Select Committee drew to the attention of the House in its third report, which is the basis of this debate.

The House will be pleased that this is the last quotation that I wish to put on the record—

Shame.

Well, I may give hon. Members more quotations a little later.

The crucial quote from the review body is as follows:

"Our estimates are necessarily approximate because they themselves are based on estimates. First, the Health Department have provided earnings and paybill estimates for 1988–89 at current rates of pay and allowances, together with recent manpower figures … Secondly, since assimilation of staff to the new clinical scales depends upon local decisions based on a process of examining individual posts, it is impossible to predict with any certainty the numbers who will he receiving each level of pay. Our calculation of the cost of the recommendations for these staff is based on an estimate by the Health Departments of the numbers which in their view will be placed in each of the new grades. For these reasons, the actual cost of our recommendations may well differ from our estimates".

I shall repeat the last sentence because it is crucial to this supplementary estimates debate. After listing the basis of the estimates based on the estimates of the estimates and coming up with that figure, the pay review body stated:

"For these reasons, the actual cost of our recommendations may well differ from our estimates".

That has led us to the current position.

Late last night I wrote to the Under-Secretary of State listing some of the questions which I hope will be answered in this debate. In order not to disappoint my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith), I may well quote from them a little later.

It is clear from the press reports and the information that we are getting back from the local areas and our contacts with those in the nursing profession that the regrading is not going as smoothly or as positively as those of us who welcomed the Government's original statement had hoped. Indeed, there is some difficulty in answering quite simple questions about the allocation of funds from this supplementary estimate.

One question to which I hope we shall get a clear answer in the debate is: how have the Government divided the total sum? Has it been divided down on a per capita basis for the regions or according to the number and seniority of the nurses employed in those regions? Secondly, is it true, as some of us have heard, that the regions are holding back some of the money partly because they do not know how the review will take place at a local level but also perhaps because they hope to get some spare cash out of it? That applies to the regions that have done relatively well in the distribution.

Thirdly, what is actually happening at district level? Are the reports correct which Opposition Members and, I am sure, Conservative Members have received—that the districts are cash-limiting the review exercise and that because there is a cash limit local hospitals are changing or limiting the structure on to which the nurses can be fixed? If that is so, it is not only a serious matter for our consideration, but it goes back on the second objective which the Prime Minister laid down when she welcomed the pay review body's findings and the Government's full implementation of the recommendations, and said that we should have a flexible pay scale or, in other words, one large enough so that people with various skills, abilities and training can, at the end of the week, receive pay which to some extent matches the skill that they bring to their daily jobs. Those are the three important questions which we hope will be answered before the end of the debate.

As I said at the beginning of my remarks, most of the debate will be used to discuss the pay awards and the funding of this year's increase in pay, but although many of us are concerned only with the nurses, the estimate does not relate only to nurses. It also covers doctors and their pay award. Can the Minister enlighten the House about reports that the money available for the doctors' award may be insufficient to fund their increased subscriptions for medical defence insurance, two thirds of which will be met for the first time by the health authorities? What will happen to the Whitley council pay awards? I know that the hon. Member for Eastleigh (Sir D. Price) hopes to catch your eye, Madam Deputy Speaker, in a moment, and will no doubt raise that point.

The current position is compounded with irony. The reason why the Select Committee, many hon. Members who are not members of the Select Committee and many outside organisations which are concerned with the National Health Service pleaded with the Government to fund this year's pay award fully was to take out of the Health Service debate the element of uncertainty that arose in previous years when the pay award was not fully funded. We have a clear statement from the Prime Minister and the Secretary of State down that the Government will fully fund the award, yet there is massive uncertainty again in the National Health Service about the position on pay and how the pay bills will be met in October this year.

So that I do not disappoint my hon. Friend the Member for Strathkelvin and Bearsden, I refer the House to paragraph 26 of the third report of the Select Committee on Social Services. Some time ago, we drew attention to the nightmare that we thought might exist if the Government appeared somewhat mean in implementing their pledge of fully funding the pay awards. We stated in the report:

"The most immediate effect of the Nurses' Pay Review Body Report will be to increase uncertainty about the budgetary situation in the autumn when most of the award will become payable on a back-dated basis. There is no certainty at present about whether the sum allocated in the Supplementary Estimates will be sufficient to meet the full additional cost to health authorities of the pay review body awards."

Since the publication of the report the number of questions to which we need answers has increased. I listed three of them earlier and I hope that the Minister will take them on board. In the letter that I wrote to her last night, which I expect she did not receive until this morning, I listed other questions which I should like to draw to the attention of the House. I for one am uncertain about the level of the basic pay increase for those nurses who will not get an increase in pay because their position has been regraded. I have asked questions about the basis of allocating the total sum and whether it was on a per capita basis, the RAWP basis, or on the pay bill basis.

Can the Minister tell us something about the instructions that the Government have issued to the regions and districts about implementing the pay award? Do those instructions—I am sure that they exist—tell local health authorities that they should get on with the regrading exercise in the spirit of the review and that they should not be concerned with the total cost, or are the Government anxious to limit the cost of the findings of the pay review body? If that was their original intention, and given the extent of disquiet, will the Government think again and issue new instructions? What steps will the Government take to ensure that all the additional funds, for which I hope we shall vote today—without a Division—will be spent on pay and will not be earmarked for other projects within the Health Service?

It is not my intention to argue a case other than that we are considering an original estimate, which represents the largest single estimate, in cash terms, for health authorities. I do not dispute that, in their initial response, the Government were anything but proper and generous to the nurses and the other groups when they said that the pay award would be met in full. Sadly, however, we are a little older and a little wiser since the Government made that first statement and we know that life in the real world is rather complicated.

Since the original Government statement regional and district health authorities have had to try to implement the Government's intentions and there have been two reactions. First, nurses are beginning to say, privately and publicly, that they do not believe that they will get the pay increase that they thought they would get as a result of the regrading arrangements. I am not talking about those who will not be regraded and who, therefore, will receive a modest pay increase—that was the intention all along—but the remaining 85 per cent. who were led to believe that they would receive a substantial increase in their pay. The nurses' disquiet about their pay is spreading a degree of despondency within the Health Service the like of which has not been seen since before the Government announced their intention to implement the pay review body recommendations in full.

Secondly, if additional funds over and above those that we are debating today are not made available in the autumn it is clear that, as well as increasing staff demoralisation, looming on the horizon will be the prospect of further cuts and ward closures. When the Minister replies I hope that she will say that the Government have listened carefully and that they will meet the issues that we have raised.

The hon. Gentleman has referred to cuts and closures, but I am sure that he would be the first to agree that it is not just a question of finance. What does he think about the small minority of consultants who are causing tremendous problems in the regions and districts? Last week in my district health authority, west Essex, a theatre had to be closed to be cleaned. That meant that the anaethetist lost his session and that he did not have much to do. He was asked to go five miles up the road to St. Margaret's hospital in Epping to work with the surgeon. That would have helped a lot of people with serious problems who needed operations. However, the anaesthetist refused to do so and that meant patients had to be turned away and operations cancelled. The senior consultant anaesthetist of the district, rather than telling the man that his behaviour was ridiculous, warned surgeons at St. Margaret's hospital that anaesthetists would not—

Order. I must remind the hon. Gentleman that he is making an intervention, not a speech.

Does the hon. Gentleman agree that such a state of affairs is unacceptable and that, perhaps, the answer is for consultants to have contracts with the district and not the regional health authorities?

The answer to those questions is yes. I wish that the hon. Member for Harlow (Mr. Hayes) was as gentle with me when asking for my views in Committee.

We are not debating a motion that criticises the Government for not giving resources to the Health Service. I have bent over backwards to draw attention to the Government's generosity, but I hope that the Government will keep faith with the nurses and, if need be, come up with extra funds.

I know that one cannot always appeal to the best instincts of the Government to achieve the right results; therefore, I appeal to their political instincts. It would be absurd for the Government to make this record allocation and then, in October, to end up with a disgruntled work force because the pay review body recommendations had not been fully implemented and because further cuts were imminent. My grandmother used to say that it is not worth ruining the ship for a hap'orth of tar. We may need more than a hap'orth of tar to ensure that the review body recommendations are implemented in full. I appeal to the Government's instincts to do right by the Health Service and also to their political instincts. The Government have funded a large increase in the Health Service budget, but this winter they must not end up in the same position as last winter.

I thank those people who helped us to draw up our report, namely our three advisers, Nicholas Bosanquet of York university, Dr. Steve Engleman of the university of Edinburgh and Dr. Ken Grant of the City and Hackney health authority. May I also thank the staff of the Select Committee, which is headed by Helen Irwin. Those of us who work on that Committee know what an extraordinarily talented group of people we have around us. The only caution I have in drawing the House's atttention to that fact is that the Secretary of State and the Under-Secretary of State are listening. If the Secretary of State was truly interested in value for money he would poach our staff to work in his Department.

There has been an on-going debate about the implementation of the pay review body recommendations and the Minister for Health has gone on record as saying:

"I have every intention of ensuring that it"—

the pay review body recommendations—

"is carried out in good faith."—[Official Report, 12 July 1988; Vol. 137, c. 178.]

No one is seeking to doubt the Government's good faith so far, but we have enough evidence to suggest that the Government must make a firm statement about what they will do if it turns out that the supplementary estimate that we are debating and for which we are seeking approval is not enough to meet their commitment to implement the pay review body recommendations—a commitment welcomed by the House. Such implementation would raise the pay of nurses and other workers within the NHS to a better—although not necessarily a fairer—level than it has been for a long time.

rose—

Order. This is an appropriate time to remind the House that we had a debate on this subject on 5 July. There is a great deal of interest in today's short debate and, unless hon. Members cut their speeches short, many will be disappointed at the end of the day.

It is always a great pleasure to follow the hon. Member for Birkenhead (Mr. Field) whose fair-minded approach not only to life, but to life in this House, is a model for many. His concluding remarks remind me of the slightly suspicious child who does not truly believe in the sweetshop's existence, but who suddenly finds himself inside it. He then prefers to spend his time searching around the heavily laden shelves for something that might not be there rather than enjoying the goodies all around him. Therefore, I do not intend to follow the hon. Gentleman in his study of the potential difficulties arising from what he admitted to be the most generous cash vote ever passed by way of a supplementary vote. I wish to consider some of the positive aspects.

I shall relate my remarks to the general structure and financing of health authorities and I shall consider my district health authority in detail. I am pleased to have this opportunity to speak in this debate, as my father has worked in the Health Service all his life as a general practitioner. He practises in Bury and is also chairman of the family practitioner committee.

Although I shall not say a great deal about primary health care, I take this opportunity to pay tribute to all those involved in primary health care and to all those who work in family practitioner committees for their excellent work. I pay particular tribute to the FPC of Bury for what it has done recently in computerising its cervical cancer screening system and acting as a model for the north-west. My brother also works in the National Health Service. He is an anaesthetist who works in a London hospital, so I have something of a medical background, although my own life took me in a slightly different direction.

Recent debates on the NHS in this place have been characterised by three trends—first, the lack of enthusiasm and general support from Labour Members for a subject in which they are supposed to have such a deep concern; secondly, an over-concentration on selective history; thirdly, a lack of ideas about how to deal with the future. In the most recent Opposition day debate on the subject, those three characteristics came together. Those Opposition Members who bothered to take part waxed lyrical about the origins of the Health Service. They paid full and due credit to Bevan and lingered long over the injustices intended to be put right by the shining step into tomorrow when the NHS originally came into being.

However, Opposition Members' tragedy is that that love of history, which is so much part of the Labour party's tradition, can become a quicksand and entrapment, denying them the flexibility to consider the present problems and thus develop new ideas for the future. It was lost on no one in this House that the most effective contribution from Opposition Members came from the right hon. Member for Plymouth, Devonport (Dr. Owen) who made the speech that should have been made by Members on the Labour Front Bench.

Although Labour Members remember that rich heritage in a lyrical way, Conservative Members are entitled to remember another heritage, particularly bearing in mind the size of the estimates that we are discussing today. If I had spoken 10 years ago, I would have been concerned about the desperately low morale of Health Service workers in my constituency, owing to strikes in the service. I would have been asking about the low pay of nurses and why inflation had destroyed their rises. I would have been angry that the economic collapse had cost my constituents their new general hospital in the capital expenditure wash of those days, which had left the district as the only district in the north-west not to have a new general hospital in the past century. However, I appreciate we are not here to deal with history. In these estimates, we are concerned with the present and the future.

I want to consider the grassroots example of my own health authority of Bury. Those hon. Members who know the area in which I was born and brought up will know that Bury, Ramsbottom and Tottington are not part of a great rolling shire. It is not an unduly privileged area. It is as average a constituency as one could wish to find—apart, of course, from being the most important, as each hon. Member would say of his constituency. The story of that health authority over the past few years and the way in which it has coped with the finance given to it and has planned to cope with the finance given to it and has planned to cope with the finance symbolised by the estimates before us is the story of how one health authority has adapted and responded to change in a demanding world.

It is an appropriate opportunity to pay tribute to all those who work in those local services in the Bury health authority—the nurses, doctors, all the professionals in primary care in hospitals and in the community and all those who support them in the various ancillary services. It is also an opportunity to be grateful to those who administer the enormous funds that we are debating today, including Mr. Philip Bacon, the district administrator, all those who work with him and those who have been chairmen of the health authority. Great chairmen include the late Aubrey Clayton from the Labour party and the present chairman, Mr. Ted Schofield, from a Conservative background.

When talking about this size of budget, it is easy to get lost in great national statistics. They tend to smother what is really important to people at the grass roots, in the surgery, in the community, in hospital or in any other form of care. We sometimes forget that when we are talking about those vast sums. What matters is what is being delivered to the person in the surgery. When I think about that and about some of the examples of what my health authority has done in the past few years and what it can do with those sums that we are discussing today, I can see that we are in a different world from that we hear portrayed by Labour Members.

Let me quote some examples from an ordinary health authority in the north-west of England. In 1979, the number of staff employed in direct patient care was 1,020. On 31 March 1988, that number had risen to 1,307. Over the past five years, nine additional consultants have been appointed. Over the next 12 months, we hope to make five more appointments. That will mean that, since 1982, there has been an increase of 40 per cent. in the level of consultant staffing in the health authority. The number of in-patients treated in 1978 was 19,412. By 1987–88, that had arisen to 25,571. In terms of capital development, since 1979, there have been over 40 separate developments, costing a total of £17 million.

When my right hon. Friend the Prime Minister comes to the Dispatch Box to talk about the Health Service and deliver some statistics, Labour Members often express concern, but statistics are about real people. One cannot walk around a statistic, but one can walk around my new hospital, the first phase of which was completed on the 40th anniversary of the creation of the Health Service.

My hon. Friend referred to the new Fairfield hospital. Does he acknowledge that we had been waiting for that for 18 years, that it took a Conservative Government to put it there and that the people of Bury are now benefiting from it?

My hon. Friend is right. If we had been talking about this size of estimate 10 years ago, our constituents would have had the hospital 10 years earlier.

One cannot shake hands with a statistic, but one can shake hands with one of the nine new consultants whom we have appointed over the past few years. One cannot comfort a statistic, but one can comfort one of the thousands of patients who have been treated in the past year as a result of the increased efficiency in the local health services.

Perhaps the hon. Gentleman would like to come a little further north, to Newcastle. where 322 hip operations were put in the waiting list initiative for this year. That was much to be welcomed. Hip operations in an area like Newcastle are very important, as there is a large number of elderly and dependent people. I would have been the first to say so if those operations had been carried out, but, unfortunately, as the regional health authority has banned all new consultant posts for this year because of the lack of certainty about funding, those operations were taken out of the waiting list initiative. Perhaps the hon. Gentleman would like to come north and explain to the 322 people concerned.

The point at issue is whether the resources are effectively administered. First, 15 or 20 years ago, there would not have been a waiting list for hip operations because such operations could not be done. The number of such operations has grown tremendously. Secondly, the way in which the waiting lists are constructed locally and the way in which the regions deal with their resources is a matter for those regions. The statistics that I have given are for my health authority and show how it looks after our people.

The way in which the resources are applied has to do with the way in which they are administered. Over the past couple of years, as the Health Service has come under increased scrutiny, it has become clear that what is at the root of the problem, is not money but the way in which different authorities and regions look after that money. Recent surveys, including the Sunday Times awards for district health authorities, show that the greatest problems lie in the way that some districts look after the money that they are given. Perhaps the hon. Gentleman should ask why his authority has not done something else with that money.

Will the hon. Gentleman give way?

I cannot give way because so many other hon. Members wish to speak in the debate.

The problems that underlie the estimates cannot be hidden. There is no doubt that the Health Service has problems on the horizon that must be faced—the problems of an elderly and aging population and the problems of regrading to which the hon. Member for Birkenhead referred.

We must not miss the opportunity to emphasise the positive aspects and the care with which the Government are looking at the problems of the Health Service for the first time. The difference between the two sides of the House is that Opposition Members are trapped and hidebound by history and are producing no ideas on how to deal with the problems; for them it is merely a matter of increasing the amount of money going into the Health Service. All the ideas about reform and about dealing with the problems come from Conservative Members.

I wish strongly to stress to the Minister first that there is a great deal of good inside the National Health Service. The way in which my health authority is coping with its cash and the way in which it will cope with the extra money that will come through the estimates shows that there are good district health authorities that are well managed and well run. Within those health authorities are people who have lessons for other health authorities. It may be necessary to draw good people from the National Health Service who are working in districts that are proving to be efficient so that they can go to regions such as that represented by the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) and help put right the problems of administration.

We must not lose sight of the fact that there are good people in the National Health Service who must not be lost in a general view that we must have only outside advisers in the Health Service review. We must make sure that the good people who work in the Health Service and who know the system are given the opportunity to put forward their ideas about reforming the system.

Secondly, we must ensure that the scope for private health treatment and for liaison between public and private care continues. That might be a way of dealing with the problem of waiting list operations. The district health authority in my region adopted such a solution to problems of National Health Service waiting lists, liaised with private hospitals and started to reduce those lists.

Thirdly, we must remember that the patients, our constituents, the people with whom we deal are not interested in the slightly arcane problems of how a service is delivered. What matters to them is that that service is delivered. One cannot ask someone who is desperately ill whether they mind going into a private hospital. They need a job to be done, and if that job has to be done through a mixture of public and private care, it still has to be done. What matters is that the service is delivered, not the ideology behind the way in which it is delivered.

Lastly, the review should take account of the importance of building a new consensus on National Health Service spending. We realise that the National Health Service is a precious asset. Over the past few months, we have been talking about change. Today we are talking about the use of resources in the new estimates and the hon. Member for Birkenhead was kind enough to be generous in his remarks about Government spending. There is a great deal of consensus. This place emphasises differences, but if we are truly to serve the people we represent we must make the most effective use of the estimates that we are voting today. If we are to produce the best ideas of how to run the Health Service in future, those ideas must coalesce. The money we are debating today will give the Health Service a great start. With that start, with the vision of the future and the ideas from this side of the House and with decent people to administer them, we shall have a Health Service in future of which we can truly be proud.

I begin by extending thanks to the Select Committee on Social Services for the extremely important work that it has been doing and to my hon. Friend the Member for Birkenhead (Mr. Field) for the way in which he opened the debate. The report produced by the Select Committee is extremely timely and is about an issue of concern to people throughout the country.

It is absolutely clear what the Government must do. They must give the Health Service enough money to pay the nurses the increases that they have been promised. If the Government do not do that, the consequences will be disastrous. Either thousands of hospital beds will have to be closed to pay the nurses their increase, or the nurses will not get their pay increase, they will feel cheated and demoralised, they will leave the Health Service, and beds will have to be closed because there will not be enough nurses. For the sake of all the patients waiting for treatment on growing waiting lists, the Government must promise tonight to pay the nurses their pay increase.

Nurses have considerable training, they do a responsible job and they work anti-social hours. Yet the problem of nurses' pay slipping behind has been a perennial one. It is absolutely clear that nurses' pay is a classic case of sex discrimination. If most nurses were men rather than women, we would not be facing that problem year in, year out.

In the past, the fact that nursing did not provide attractive long-term career prospects was masked by the continuous supply of 18-year-old girls ready to take up nursing. Not enough attention—indeed, hardly any attention—was paid to keeping experienced older nurses within the Health Service. It was assumed that every nurse who did not return to nursing after having children would be replaced by an 18-year-old girl. That was very wasteful of the skill and experience of older nurses, but it was overlooked until demographic changes meant that there now are not enough 18-year-old girls to take the place of the 30,000 nurses who leave the Health Service every year.

The Government have tried to imply that the nursing shortage is a problem only of particular nursing specialties, or only in London and the south-east, but that is not the case. At the beginning of this year, I conducted a survey of all district health authorities and 120 replied. It revealed that 83 per cent. reported difficulties in filling nursing vacancies. I should like to go into some detail about the findings of the survey, as it is still the most up-to-date survey on nursing shortages throughout the country.

It is not the case that there are nursing shortages only in paediatrics and intensive care. My survey showed that 60 per cent. of districts have shortages in mental illness nurses, 48 per cent. in theatre nurses, 40 per cent. in nurses in geriatric care, 36 per cent. in intensive care nurses, 31 per cent. in nurses nursing the mentally handicapped and 29 per cent. in paediatric nurses. We are talking about a national problem which hits geriatric wards and paediatric wards, intensive care and care in the community. It is the Government's responsibility to sort it out.

As children in Birmingham had their heart operations cancelled, it was exasperating to hear Ministers saying, "It is nothing to do with us. It is not our fault. It has nothing to do with resources; it is the nursing shortage." The nursing shortage is very much bound up with the question of pay.

Nurses join the Health Service because they want to help others, because the work interests them and because they believe in the National Health Service. The Price Waterhouse survey carried out on behalf of regional chairmen confirmed that that was the case. Nurses leave the Health Service because of pregnancy. They do not return to nursing after having their babies because of low pay and lack of job satisfaction.

Against the background of a nationwide shortage of nurses that was putting services at risk, the pay review body recommended an average 15 per cent. increase for nurses, and we welcome that. In April, the Government led everyone to expect that the pay award would be fully funded and that the Government had made that commitment.

That was reflected in the headlines at the time. The Guardian said:

"Nurses pay rise stems tide of health debate";

The Independent:

"Tory nerves calmed by 15·3 per cent. award for nurses";

The Sun:

"Loadsa loadsa money for our super nurses";

The Star:

"A welcome tonic for the NHS";

The Daily Mail:

"Record rise for nurses";

and the Daily Express:

"15 per cent. pay joy for nurses".

The Government basked in the glory of that good publicity. On 21 April, the Prime Minister said:

"the Government have decided that the cost in excess of the allocation already made for this year should be met from the Reserve."—[Official Report, 21 April 1988; Vol. 131, c. 528.]

On the same day, the Secretary of State announced that the Government would provide £749 million. He said:

"In consequence, these awards will be fully funded."

The problem is that the £749 million he mentioned was an estimate. The pay review body warned that its estimates of the cost of the pay award

"are necessarily approximate because they are themselves based on estimates."

The agreed plan was to introduce new clinical grades according to what each nurse was actually doing. The average pay award of 15 per cent., with some nurses receiving up to a 60 per cent. increase, would then be paid at the end of the year.

Managers, in consultation with the unions, are carrying out that review, but there is no sign of the relief that swept over nurses and managers in April. That has gone. Reports are beginning to emerge that at local level in all regions managers are downgrading nurses. The Nursing Standard of 16 July accuses health authorities of being cowardly. Its editorial states:

"Cowardly because they are not willing to return a higher percentage than that allocated for fear of another round of cost cutting to pay for the extra cash."

An internal memorandum from the North-West regional health authority, leaked to The Guardian, revealed that the allocation that the Government had made for the pay award was

"at least £3·3 million short."

The authority said that the options available to it included spending cuts, slowing down the regrading exercise—that is, cheating the nurses—or manipulating the regrading to reduce the cost—that is, cheating the nurses.

The Prime Minister and her health team have lately become rather shy and convoluted when talking about the pay awards. Although, when pressed, they repeat the magic phrase "fully funded", they are careful at the same time always to mention that they mean fully funding the specific sum of £749 million extra. That puts local managers in an invidious position. Should they respect the integrity of the clinical grading review and risk a large pay bill, for which they will not be reimbursed and which will trigger a massive round or service cuts? The size of the review body pay award and the number of nurses in the National Health Service mean that underfunding would have disastrous effects on services.

The North-West regional health authority reckons that the cost of the award will be not the anticipated 14·5 per cent. but between 17 per cent. and 21 per cent. The additional cost, if that were to be reflected nationally, would be an extra £140 million, or even as much as £360 million. If health authorities were forced to find, taking the lower estimate, £140 million from service reductions, 7,000 beds would have to be closed for a year. Regional health authorities will not be certain of the extent of any underfunding until at least halfway through the financial year. To meet a shortfall of £140 million, they would have to cut 14,000 beds for half a year.

We have to face up to these figures if we are to understand the scale of the consequences, should there he underfunding. If it were to amount to £150 million, t hat would represent the loss of 10,000 heart transplant operations, or 45,000 coronary by-pass operations. The Minister is laughing, but that is exactly why managers and nurses are nervous. If she were to listen to what they are saying, she would be less complacent. It is because they are facing up to the figures while she is not that they are concerned.

I think I heard the hon. Lady say that we should have to give up 10,000 heart operations. Will she please tell the House how many heart operations we used to do and how many we do now? It is not 10,000, or anything like it, thank God.

That is absolutely beside the point. [Interruption.] Yes, it is beside the point. I am trying to explain to the House, but the Minister fails to understand, that there is great uncertainty and fear at local level. People believe that there is to be a trade-off between the pay awards and nurses. It is about time that the Minister understood—[Interruption.] The hon. Member for Gillingham (Mr. Couchman) says from a sedentary position that the uncertainty and fear are spread by me and my friends. That is not so. We are responding to genuine concern at local level.

I intend to read letters from nurses who express the fear that is felt at local level. No wonder that managers and nurses are nervous. It is no good trying to improve nurses' morale by improving their pay if at the same time their pay increase is funded by cuts in services. Nurses' complaints have never been just about pay. They are also about cuts in services.

Cuts in services due to the underfunding of pay awards have been bad enough in the past four years. I remind the House that there was a £32 million shortfall in 1984–85, a £36 million shortfall in 1985–86, a £12 million shortfall in 1986–87 and a £24 million shortfall in 1987–88. No wonder managers fear underfunding for this round. If the underfunding this year is as large as £140 million, the cuts will be catastrophic. It is fear of underfunding that is interfering with and gnawing away at the base of clinical regrading.

The pay review body warned that it is difficult for local managers to insulate their judgments about grading from their preoccupation with budgetary constraints. Indeed it is. Nurses suspect that managers are downgrading or undergrading nurses to fit the amount of money that they think they will get, rather than risk the service-cutting consequences of sticking to the regrading. They are aided and abetted in this by DHSS guidance, which the unions fear undermines clinical regrading.

I shall give just one example. I said at the beginning of my speech that the idea was that nurses would be graded according to what they do and that it would not involve restructuring, yet the DHSS has told managers that they are to be allowed only one grade G post per ward. If two sisters on a ward have equal responsibilities that ought to qualify them for grade G, they will have to compete for one post. Instead of the two sisters receiving the pay increase that they are expecting, only one will get it. The other will be downgraded. The clinical grading review was supposed to improve morale, not to set nurse against nurse and leave the profession feeling cheated.

I shall read letters from nurses at local level to scotch the complacent view of the hon. Member for Gillingham, who thinks that this is my invention. A nurse in West Yorkshire wrote:

"Our AUGM"—

that is, the assistant unit general manager—

"has said that the Authority must work to a 15 per cent. budget and that unfortunately most of us will be disappointed."

A nurse in Dorset wrote:

"If the grading process is not implemented fairly it will only cause more nurses to leave the National Health Service and lead to further industrial action which may on this occasion prove fatal."

It is signed

"from one very discouraged nurse."

A nurse in Cheshire wrote:

"It is also becoming increasingly apparent that managers are taking every opportunity to downgrade job descriptions."

I shall not read out all the letters of protest, because there are so many of them, but they show that this does not seem to be an exercise that is successfully raising nurses' morale.

If regrading is used to cheat nurses out of the pay increases that they are expecting, they will become even more demoralised. Nurses' hopes will have been raised only to be dashed. I had hoped that we should not be accused of being alarmist, but if we are accused of being alarmist and of stoking up fear it would be very easy for the Government to reassure people by simply saying that they will fund the pay awards in full. I notice that the Under-Secretary of State for Scotland, the hon. Member for Stirling (Mr. Forsyth), said in a Scottish Office news release:

"I deplore the campaign of rumour and innuendo which COHSE in Scotland are mounting".

However, he then said that the additional funding of £92 million for Scotland is expected to meet, without shortfall, the cost of the review body pay award to nurses in Scotland. But the question that is begged is, what if it does not do so? Everybody is keeping quiet about that.

It is not as though we cannot afford to give nurses decent pay rises. The National Health Service is not too expensive. We spend less, as a percentage of our national wealth, on health than America, France, Germany, Italy or Holland. The Treasury has enough money available to enable the Minister to say from the Dispatch Box that managers can carry out the grading review with integrity, because it will be funded.

The Treasury has deliberately underestimated revenue by up to £3 billion. It is receiving more tax than it admits, and it is selling more assets than it expected to sell. It is doing so to pull the wool across the eyes of the hon. Lady, who is in a spending Department. It is trying to distract her from calling for extra spending. But the NHS need not be kept short of cash. The Secretary of State for Health could pay the nurses and keep beds open.

Earlier this year, the Government were faced with widespread protests about cuts in services and the declining morale of nurses. It was that massive protest, supported overwhelmingly by the public as well as by those providing health care, that forced the Government to promise full funding of the pay award. If the Government betray the nurses, they will cause a storm of protest far greater than that which we saw earlier this year.

The Government need not allow uncertainty to continue and morale to ebb. All that needs happen is for the Minister clearly to announce tonight that she will fully fund the pay award. We shall listen carefully to her words, as will managers and nurses all over the country. It is no use the Minister saying that she will fully fund the estimated costs. Estimates, by definition, can be wrong. The Minister must say that she will fully fund the pay award. If she does not, it will be clear that managers must choose between cutting services or cheating nurses. The Minister should end the fear and uncertainty that has cast such a shadow across the Health Service.

When the pay award was announced and the Government declared that it would be fully funded, the Secretary of State said:

"It is good news for the staff, good news for the patients and good news for the country."

That promise must not be broken.

It is not just nurses who are concerned about their level of pay this autumn, because there is a legacy of anger among other workers. There is a resentment among porters, cleaners and catering staff, who have been offered only 5 per cent. They already make up a large proportion of the working pool of people who, although they work long hours, have to rely on benefits to supplement their income. There is also concern about laboratory staff pay levels. Medical laboratory scientific officers are paid about 50 per cent. less in the Health Service than they would be in the private sector. As a result, it is difficult to recruit and to keep those staff. Laboratories are short-staffed, with those remaining coming under more pressure. One district health authority has been compelled to suspend its cervical cancer screening because of a backlog of smears for analysis. There is no chance of the Government, in paying the nurses, robbing Peter to pay Paul. They cannot take from other parts of the pay bill to finance the nurses' award.

I ask the Minister to take this opportunity to make a statement about the Government's plans to introduce eyesight test and dental check-up charges. When the Health and Medicines Bill was debated on Report, not a single Conservative Back Bencher supported the Government's proposals to charge for eye examinations. The Government will face a major row if once again they bring their proposals to make those charges before the House. The people most likely to lose are the elderly. It is they who most need eye tests, and who are most likely to be deterred by charges. We should not have to wait until October for a statement on this important matter. The Under-Secretary of State for Health and Social Security is present and it is for her to say whether those charges are to be reintroduced, or whether the Government will drop that wretched and unpopular proposal.

First, I must apologise to the House and to my hon. Friend the Minister for not being present for the beginning of this debate. I apologise also to the hon. Member for Birkenhead (Mr. Field) who leads the Social Services Select Committee with great distinction in this Parliament. I fear that I may go over some of the ground that he has already outlined, but that is because there is on the Select Committee—on which it is a great honour to serve—an immense consensus among Members representing most parties on how the problems of the Health Service directly relating to the estimate we are debating should he tackled.

The hon. Member for Peckham (Ms. Harman) will forgive me if I do not immediately follow her on the path down which she led the House, albeit that I have sympathy with the sentiments she expressed, if not the language that she used, in respect of eye test and dental examination charges. As a member of the Social Services Select Committee, I hope that the Government will take a mature attitude to what happened in another place earlier this week and will give serious consideration to the view expressed there—which was endorsed by the overwhelming majority of the Select Committee's members—that it is undesirable to charge for eye tests and dental examinations, and that, to some extent, that goes wholly against the preventive medicine campaign that my hon. Friend and other Ministers over the years have organised and undertaken in the length and breadth of the country. I say to my hon. Friends on the Treasury Bench that I shall not be able to support the Government if they seek to overturn the decision that was taken in another place on that matter.

I understand that the problems of nurses and nurses' pay has so far dominated this debate. I have immense sympathy with the Government, who I believe made an announcement in good faith that they would fully fund the recommendations of the independent nurses' pay review body. However, we know that on this occasion that body did not recommend a straightforward pay increase but a complex, total regrading of nursing staff at every level. It is for nursing and other managers throughout the Health Service to undertake that very difficult duty carefully.

However, I say to my hon. Friends on the Treasury Bench and to my hon. Friend the Under-Secretary of State in particular, who I understand will be intervening later, that if in the light of a considered and responsible clinical regrading of nurses it is seen that the Government underestimated the amount that needed to be allocated for pay, I hope that they will have the courage and the determination—and perhaps I ought to address this remark to my hon. Friend the Minister and not to the Government as a whole, because DHSS Ministers must fight their own corner—to go to the Treasury and ask for further resources to meet the cost of the clinical regrading which is a critical part of the Health Service structure. It will be irresponsible and bordering on the immoral if the Government, having stated to the people of this country and to their own supporters in the House that they would fully fund the pay award, dc not in the event carry through that promise and assurance.

Other statistics have been quoted relating to regional and district health authorities throughout the country. The hon. Member for Birkenhead may have mentioned our discussions in the Mersey region with the chairman of that authority, Sir Donald Wilson. He is currently chairman of all the regional health authority chairmen, so he holds a responsible and important position. His senior managers indicated to the Select Committee when it visited the Mersey region—particularly the Wirral and Macclesfield health authorities—that in their estimate it was likely to be £.1·5 million underfunded, and that is after it had undertaken a well-considered and responsible nurses' regrading.

If the Mersey region, which is currently a RAWP loser, is expected to provide the necessary funds, and if there is inadequate money within the cost improvement programme to pay for the nurses needed and the regradings that are necessary, patient services will inevitably be cut.

As the hon. Member for Peckham knows—and as the Minister for Health knows—my district health authority has had to reduce theatre sessions to stay within budget. That is increasing critical waiting lists in important categories, not least orthopaedics. I have been a member of the Select Committee for more years than I care to remember—for longer than any other hon. Member has sat on any other Select Committee. That has, I hope, given me an understanding of the Health Service that not all hon. Members have the privilege to possess. It has been of immense interest to me for nearly 14 years, and I have made contact with almost every branch of medicine. It is critical that the Government reconsider. If additional supplementary resources are required, they should be provided this year.

The nurses' pay review body dealt not only with a single year's increase, but with the critical aspect of regrading. We must ensure that we retain the nurses whom we have, and encourage other young men and women to come into such a magnificent career. As the hon. Member for Peckham pointed out, we can no longer rely on the many 18-year-old young ladies who were happy to come into nursing, perhaps seeing it as a vocation, but a vocation lacking the salary to reward their skill and care. Many were fortunate to come from families that could provide them with assistance, but that is no longer so. The competition in the market place for able young women—and men, for that matter—is very great. Unless we are to lose more nurses, the Government must look again at the total cost this year following the nurses' clinical regrading.

I understand the Government's position. It would, perhaps, have been irresponsible to say, "Whatever the total cost, we will meet it." Those responsible for undertaking the regrading might have regraded more generously than was merited. There is no doubt that some nurses merit regrading and others do not. I believe that the Royal College of Nursing has in general taken an amazingly responsible attitude throughout this difficult period, and continues to do so.

Time and again the Government tell us that they are trying to achieve better value for the massive sums that they spend in the Health Service. The hon. Member for Birkenhead began by admitting that the Government had given generously. That is to the credit of the hon. Gentleman, who represents not only Birkenhead but the Labour party in this place. We do not often hear such a constructive approach to the opening of a debate on a vital issue.

The Government also say that they want better management. If that is the case, they must provide the wherewithal first to allow the Health Service to operate more efficiently and secondly to give the management the tools to enable them to make the right decisions, with proper knowledge of all the facts. They are certainly not able to do that at present. I recently visited the King's Fund college where I had the pleasure of addressing people on a course in management within the National Health Service. A number of them said to me, "We are concerned that the Health Service is not committed to management, and that the Government are not either, despite the Griffiths report and all the talk that followed its publication. If they were committed, they would be more determined to provide us with the equipment to enable us to do our job." Adequate resources for computer systems and information technology will play a vital part in enabling health authorities to provide value for money, and to enable consultants and others to make informed decisions.

The hon. Member for Peckham mentioned laboratory assistants, medical physicists and pathology staff. All those groups are vital to the Health Service, but there is a problem over pay. They are not remunerated in accordance with their skills, and, with the growing competition in the market place, the Health Service will undoubtedly be starved of people who are vital to the provision of an efficient service and value for money. Accordingly, I make a special plea on behalf of all who are employed in the professions allied to medicine.

Let me also make a plea, as I have done elsewhere, for medical secretaries. Time and again—not just during the Select Committee's current inquiry into the resourcing and structure of the Health Service, but during other inquiries—consultants have said, "We are here because of our operating skill, but we are unable to work to the extent that we should like because we have not the back-up staff." Only recently when we visited Guy's hospital, just across the river, a leading consultant said that he was losing his medical secretary because she was going elsewhere for a better salary. The hospital was unable to pay the salary that was essential to maintain that vital member of staff. I have referred outside the House to the case of Mr. Lennox Holt, a rheumatologist in Manchester, who told me that his work was being gravely impeded because he could not employ the right quality of medical secretary to enable him not only to do his job but to refer the case notes back to other doctors who would follow up the care and treatment of his patients.

Let me make two more brief points. We have severe problems with capital spending, and perhaps I could link that to my continuing concern about care in the community, to which the hon. Member for Peckham referred. It worries me dreadfully that managers throughout the country are deciding to close psychiatric hospitals—and other hospitals, for that matter. I am particularly concerned about the position of the mentally ill, but inevitably my concern extends to the mentally handicapped.

Those managers are trying to run down the psychiatric hospitals and discharge patients into the community, where there are inadequate facilities for them. There are not enough trained and qualified staff to maintain an acceptable level of care and treatment. The managers are then disposing of the hospital sites for large capital sums, many of them for development. Once those sites are lost, there will be too little long-stay hospital care for the more severely mentally ill, particularly those suffering from schizophrenia. There is growing anxiety about decisions that some health authorities are being forced to take because of the resource problems that they are facing which will result in chaos and suffering for groups within our society about whom we should be concerned.

Some time ago the Select Committee undertook an inquiry into care in the community. Some of the recommendations that we made, which have not been accepted by the Government, are as relevant as, if not more relevant than, they were when we produced our report. The Government should take a greater interest in what district health authorities are doing in closing psychiatric hospitals and hospitals for the mentally handicapped. We could produce a situation such as exists in Italy today. It closed those hospitals and people are now on the streets, sleeping on park benches, under bridges and in the call-in day centres and night shelters. Those people no longer have the care and medical attention that they require to contain their condition and enable them to maintain an acceptable standard of life.

Debates such as this give those of us who study the Health Service carefully an opportunity to express some of our deep anxieties. Such hon. Members come from both sides of the House. If the hon. Member for Peckham had tackled this subject in the caring and responsible way that the hon. Member for Birkenhead did, rather than concentrating so much on the entirely political issue of the nurses' pay review body, its recommendation and the full resourcing of the award, we might be able to find the common ground which would enable the House to produce policies and proposals, perhaps as we did when the Health Service was founded 40 years ago, without any bickering.

So often the nurses are used as a political weapon by one party with which to beat the other. [Interruption.] That is the case. I represented the Conservative party when I spoke alongside the leader of the Labour party and the leader of the Liberal party at a nurses' rally in Central hall, Westminster, and I was pleased to do so. I said that I would fight to make my Government implement in full the pay review body's recommendation. The Government announced that they would do that and I expect them to live up to that assurance in full. Not only should they implement it in full, as they have agreed in principle to do, but if there is a shortfall because of the regrading due to an error in underestimating that, they should if necessary come forward with a supplementary estimate to ensure that the pay review body's recommendation can be implemented in full.

This is a vital subject. Despite the bickering and anger that occasionally flares across the Floor of the House, I feel instinctively that there is a growing consensus on how to tackle the problems of the NHS. I cannot speak for my hon. Friends. They fight their fight in their own way. I shall fight my fight in the House in the way that I have done ever since I came here 17 years ago.

I hope that the hon. Member for Peckham, perhaps in private moments with me, will accept that the private sector, of which she made no mention, is not generally in competition with the NHS, behind which I stand 100 per cent., but is more complementary to it. It works in co-operation with the NHS and it can make a growing contribution in filling some of the gaps that for a time will inevitably exist within the NHS.

I hope that the Government will continue to look sympathetically on the needs of a service that is close to the hearts of the overwhelming majority of the British people, and, perhaps, of all the political parties here. It is also probably close to the heart of 99 per cent., if not 100 per cent., of Conservative voters.

The hon. Member for Macclesfield (Mr. Winterton) made an independent speech and I hope that the hon. Member for Bury, North (Mr. Burt) listened carefully to what he said and the manner in which he said it.

The vote deals with expenditure in excess of £15 billion and I want some of that unimaginable sum for a highly important, much under-rated sector—the provision of fully trained speech therapists in our state schools for the benefit of youngsters suffering from speech defects. If those defects arc not tackled, boys and girls at school will never realise their full potential. To say that in 1988 is to point to something that is desperately wrong.

Perhaps hon. Members will agree that youngsters are only young once and that the happiness of their families will be blighted if parents know that their children are not getting the expert attention or sufficient time to mitigate and/or eliminate their speech defects.

I want to quote from several letters that I have received from constituents on the matter. The first, from a Mrs. Davies, says:

"The school is a marvellous place and our son has achieved a great deal since going there over four years ago. The nursing sister whom we had absolute total confidence in is unfortunately retiring at the end of July 1988 and we have learnt to our horror she is to be replaced with a nurse who will only be on duty for 24 out of the 37½ hours at present, which means our child will be at school for several hours a week without a qualified nurse on duty to attend to any emergency which may arise."

She goes on to say:

"there are about 75 pupils at school. Over 50 of these pupils need regular speech therapy. We have one part-time speech therapist. The school needs two full-time speech therapists plus an assistant. We as parents arc not asking for these things for ourselves but for our children. It is their right. They cannot go to ordinary schools."

My constituent ends:

"Please, please help us to get the nursing staff and speech therapists that our children are entitled to. Please, we beg you to help us in our campaign."

Another of my constituents, Mrs. Gerrard, writes:

"My husband and I arc parents of a child who attends Dorin Park Special School in Chester. We are extremely concerned and worried to find that there is no full-time 'Speech Therapy' at the school."

That is a school, incidentally, that the parents praise highly. The letter continues:

"It is extremely vital that two full-time speech therapists, plus an assistant be employed at Dorin Park. As parents we cannot understand the reasons behind neglecting to employ someone, the education of the children being foremost. The children must come first and not the cutbacks. We would be extremely grateful for any help".

Mrs. Gerrard has a five-year-old child who suffers from severe cerebral palsy. I believe that the House would wish that such a fine school should have a full complement of speech therapists.

I repeat at this juncture that the budget for votes 1 to 5 exceeds £15 billion. On behalf of my constituents, and thousands of parents elsewhere in England and Wales, I claim a bigger share for speech therapy and physiotherapy.

My hon. Friend the Member for Alyn and Deeside (Mr. Jones) has raised the issue of speech therapy. I must tell him that I was rung by a speech therapist at 8.15 this morning who said that she had read in The Guardian that morning that the House would debate the estimates. She asked whether the pay award would be fully funded today and she asked me to ensure that the Minister addressed the issue of speech therapists' pay, because speech therapists had been struggling to get their pay award for many months. Whether it will be fully funded is another issue that they have been anxious to find out about. I am grateful that my hon. Friend has raised the matter and I hope that the Minister will make a reply that will give the speech therapists some hope that the pay award will be made and funded.

I am grateful to my hon. Friend for her apposite intervention. I am certain that the Minister will respond fully on this important matter.

I shall conclude my remarks on speech therapy by quoting briefly from a letter sent to me by Mrs. Dorothy Price, the chairman of the governing body of Ysgol Del yn, a special school. She says:

"The children have very specific needs which require the expertise of qualified therapists. The feeling is that if we don't have a statutory right to provide the necessary service surely we have a moral obligation."

She goes on to say:

"We are reneging on our responsibilities to these young people if we don't provide the service that has been shown to be needed."

First, I ask the Minister, in the knowledge that those matters are appropriately to be described as a moral issue, whether the Government will enable those youngsters to have a statutory right to that necessary service. Secondly, will the Government give extra cash to the authorities that must deliver speech therapy and physiotherapy services? Thirdly, have the families of deprived children the right to take that case and similar cases throughout England and Wales to the European Court? Fourthly, w ill the Government launch a campaign, under the auspices of the careers service, to promote careers in speech therapy and physiotherapy? Fifthly, will the Government give speech therapists and physiotherapists sufficient salary and status to attract applicants for training and for designated and advertised posts?

I note that £1·5 million was paid in 1987 to British Telecom in respect of the priority fault repairs service for general practitioners and pharmacists. I further note that for the current year £2 million is earmarked. That is extraordinary. Are the telephones of GPs and pharmacists so very faulty? I know that British Telecom is making a small fortune from repairing those faulty telephones—if it is repairing them—so why is priority repair hideously expensive? Does the Minister know how many telephones needed priority repair in 1987? We know that British Telecom's profits in 1987 were huge. Was its telephone service to GPs and pharmacists as unreliable and bad as the figures suggest? I look forward to receiving from the Minister a breakdown of the figures, which are to be found under the appropriate vote heading. If £2 million is earmarked for the repair of GPs' and pharmacists' telephones, there must be something very wrong indeed.

The social fund stands at £179 million and is for budgeting and crisis loans. It is also for community care grants, maternity expenses, funeral expenses and heating expenses in exceptionally cold weather. I do not think that the social fund is enough, and I would urge the Government to enlarge it.

I know from my work as an hon. Member who holds regular surgeries that the social fund is the last bastion of defence for the poverty-stricken and those who are destitute. One of my constituents came to me in distress, saying that he needed a new pair of shoes, and I said that I would try to help him. In the end, I am glad to say, the Department of Health and Social Security offered him £30. My constituent, who was under great pressure, had to repay that £30 loan which was described as a "budgeting loan".

My constituent desperately needed the pair of shoes but he did not feel that he could repay the loan at £3·50 a week. After all, he came to me because he was not managing on the weekly cash that he had. In the end, a kindly social fund officer rescheduled the budgeting loan at £1·41 a week. My constituent accepted that, but he is under immense pressure in finding that £1·41. He does not have a lot of money—

Order. The hon. Gentleman is straying a little outside the terms of the debate. We are discussing hospital community services and related services, whereas the hon. Gentleman is straying into the social services. I am sure that he will bring his remarks back to the subject under debate.

I am glad of your intervention, Mr. Deputy Speaker. You have brought me back into strict order, but I thought that while we were discussing the Supply estimates I could make the point on behalf of a desperate constituent.

I support my hon. Friend the Member for Peckham (Ms. Harman) on the question of nurses' pay. I have had deputations and much correspondence on the subject and the nurses in my part of the world tell me that, although a pay award of 15 per cent. has been trumpeted, many of them may receive only 4 to 5 per cent.

The hon. Member for Macclesfield made a strong and independent point about charges for dental examinations and eye tests, which we have debated in this place and on which we know the other place has a point of view. If the Government do not listen to the points made in another place and by the hon. Member for Macclesfield, the well-being of several million pensioners will be at risk. I urge the Government to listen carefully. If they do not, politically they will suffer greatly.

As we all know, this debate takes place during the year of the 40th anniversary of the National Health Service. We all agree that in the 40 years for which the service has existed it has expanded enormously away from the concept of a tick-over service once outlined by Aneurin Bevan. It is now treating more patients, with more staff, in more hospitals, for more illnesses and disabilities, than ever before. What is more, it is receiving more Government finance than at any time in its history.

As has been said, the supplementary estimate will give our nurses the largest pay award that any Government have given the nursing profession. Opposition Members carp about the pay award as if it were the Government who had decided upon the award and the Government who were going to restrict it. Yet, as I am sure Opposition Members will have heard, my right hon. Friend the Prime Minister said on 14 July:

"£803 million was the figure estimated not by the Government but by the nurses' pay review body."—[Official Report, 14 July; Vol. 137, c. 547.]

They will also know that Mr. Trevor Clay said:

"There are many problems at local level. But some managements are succeeding in some districts. Why can't others make the same speed?"

I cannot criticise any Government who provide £803 million for the nursing profession. I hope that the grading problem will be sorted out as soon as possible. We must all recognise that it is a new dimension in nursing. We all know that it will produce difficulties and we should not imagine that they will be sorted out in a matter of three of four months. To hope for that would be unreasonably optimistic.

This supplementary estimate relating to the nurses' pay award has already produced much controversy in the Chamber. That suggests that, like the Supply estimate on which it is based, it is a source of controversy between the two sides of the House, as estimates have been in the history of the Health Service. We are all aware that Supply estimates and the inevitable supplementary estimates are merely guesstimates—no doubt informed guesstimates—by the Treasury and the DHSS. They are not estimates that are demand-led by the Health Service, the regions and the districts. They are figures chosen by Treasury officials to fit an extrapolation which may or may not be correct and which we seek to improve as the months of the financial year pass with supplementary estimate after supplementary estimate until we arrive at a figure that we think approximates to the resource needs of the NHS.

Does the hon. Gentleman agree that, in South Glamorgan health authority, nurse is being set against nurse? Operating theatre nurses are being told that there are only a certain number of grade G posts, so some of them will have to go down to grade F, even though they have the same responsibilities as their colleagues on grade G

I do not want to get involved in grading. I am not an expert on it, nor have I had complaints about it from my district health authority. In fact, I have not had a single letter about it.

I want to pursue my point about the estimates. They are the only way by which the Health Service is funded. We pass them year after year and we have a right to expect that they should be more than informed guesstimates. They should have some bearing on the demands within the service. Those demands are the yardstick of the resources that need to be provided.

I am pressing my hon. Friend the Minister for a better way of funding the NHS than the system that has obtained in the past 40 years. These estimates, both supplementary and Supply, do not give me the basis for calculating how the global figures in them are reached. I do not know whether they assume additional savings within the Health Service, or a percentage increase in the number of patients to be treated and staff to look after them, and whether they take into account the effect of inflation on the equipment that hospitals will have to buy. I do not know what emphasis they place on savings in general health care. We all know that about £100 million has been saved by privatising certain services in the Health Service in the past nine years—mainly domestic and catering services. But what savings could be made by using the private sector of medicine to relieve demands on certain parts of the NHS for specialist treatment? Does the Department have a figure? if so, are those savings assumed in the estimate, let alone the supplementary estimate? Without such knowledge, statements about underfunding have little validity.

Yet underfunding was almost the keynote of the third report of the Select Committee on Social Services. The report, entitled "Resourcing the National Health Service: Prospects for 1988–89", gives two definitions of underfunding: first, it is

"the amount of funding less than that required to maintain current service levels and planned development";

secondly, in a retrospective sense, it is

"the amount of funding required to maintain the service at a constant standing in relation to changes in demography, technology and policy aims."

Neither definition refers to further measures aimed at making existing funds go further with better management.

I admit that in paragraph 11 the Committee states that it accepts that the better use of resources can lead to higher performance but it goes on to say that that

"does not of itself solve the continuing problem of underfunding."

That is such a definite statement that one must assume that the Committee is arguing that, with or without savings, the National Health Service is underfunded. I cannot help wondering whether the Committee has allowed itself to be persuaded by certain district and regional health authorities that such is the case.

I cast doubt on the Committee's conclusions because some health authorities appear to do rather better out of their budgets than others. As reported in The Times last week, some hospitals also seem to have a better record for treating patients than others. I recognise that, as the Committee pointed out, if budget savings or lower average costs mean treating more patients, that can lead to increased total costs. However, the obverse of that argument seems to be that the fewer patients treated, the lower the costs. That is clearly a self-defeating concept.

I am not arguing against more money for the NHS, but the old Parkinson rule—that expenditure tends to rise with income—still holds good, and I would be sorry if the Select Committee's comments were read as if they endorsed those who argue that the NHS is as efficient with its budget as it can be and that large additional sums for it are imperative to stave off further reductions in hospital services. It cannot be for nothing that the Trent and Birmingham health authorities have asked BUPA to provide them with a system for costing the services that they give. Probably I am not comparing like with like—I speak with a special interest in the matter—but I wonder why kidney dialysis units run by private health care companies for the NHS can provide dialysis that is 30 to 40 per cent. cheaper than the NHS dialysis units, and still make a profit. Carrying that argument to its natural conclusion, the present figure of 47 new kidney patients on dialysis per million could be almost doubled, which would put us right up alongside the top levels in western Europe. Will my hon. Friend explain, if she can, that wide diversity of charge?

Another area in which considerable sums of money could be saved and a better service provided is hospital laundry. By September 1987, privatisation of laundry work had saved £8·1 million, but considering that laundry and linen services cost the NHS £231 million a year, according to the National Audit Office report published in April 1987, one must wonder whether that is the best that we can do—

Will the hon. Gentleman give way?

No, I shall not. Other hon. Members want to speak and the hon. Gentleman will have his chance.

A member of the laundry service in my constituency tells me that he believes, and it is the considered view of his trade, that savings of as much as £100 million are waiting to be made if private launderers are encouraged to tender for hospital contracts. Despite all the talk about privatising services since 1983, the amount of hospital laundry work, by value, being handled by the private sector has decreased. Yet I know from experience that the supply of sheets, pillow cases and blankets is often extremely haphazard in the National Health Service—

Will the hon. Gentleman give way`'

so much so that the service spends at least—

Will the hon. Gentleman give way?

No, I shall not give way. It is no good shouting at me.

The service spends at least: £100 million on disposable linen substitutes, although I doubt whether anyone prefers them to ordinary linen. When I was a patient in one of the hospitals in Oxford, I was asked by the nursing staff to take up with the administrator the wretched supply of linen and blankets to the patients. I was asked to do that because, as a Member of Parliament, I was assumed to have some clout with the administrator. I am glad to say I did have some, because we did get a better supply—but what a miserable state of affairs.

I ask myself why the private sector is finding it so difficult to submit tenders for hospital laundry. I am told that the private sector, when asked to tender, is asked to tender in such a way as to make the chances of it wishing to proceed extremely improbable. I shall give three examples. When the Lewisham and north Southwark district health authority asked a private tenderer to submit a tender for its laundry service, it required a book containing 226 pages. The tender documents for the Peterborough hospital contained 186 pages and that for south-east Kent contained 238 pages. My constituent told me that one tender document was six books long and took him nearly four hours to read.

I shall quote a letter from a hospital laundry contractor who supplies hospitals all over western Europe. This is a letter that the contractor wrote to the district general manager of the Airedale health authority, giving his reasons for not tendering for the work. It said that the company

"is sorry to have to inform the Airedale Health Authority that it cannot submit a tender under the conditions to tender laid down by the Health Authority. This is in spite of investing hundreds of man hours and many thousands of pounds in the exercise to date."

The letter continues that the company

"has twenty years' experience of providing Full Rental Textile Care Services to hundreds of hospitals, clinics and old people's homes. It is part of a Group whose whole raison d'être is serving healthcare institutions. It cannot permit itself to enter into a contractual obligation which it believes to be neither commercially responsible and reasonable nor potentially a successful service to the customer."

That company told me that its standard contract is usually only five pages long, but the three examples I have given involve tender documents hundreds of pages long. One is forced to the conclusion that health authorities do not want to put their laundry service out to tender, whether savings can be made or not, and achieve that objective by asking for massive tender documentation. I remind the House that we are talking of little, simple things such as linen, blankets and towels. By imposing unreasonable contract terms, they do their best to dissuade private tenderers, despite the willingness of those same tenderers, to invest in the necessary equipment. They, or those responsible for running the laundries, prefer to have it in-house, perhaps because the wage structure relates to the number of pieces processed per week. Dare I say that hospital laundry managers have a vested interest in exaggerating the piece count? The private sector tell me that when they win a tender, the number of pieces processed falls by between 17 and 40 per cent., simply because payment is made on a different basis.

By the same token, is there any reason why the capital accounting procedures used in hospitals should favour in-house as opposed to external tenderers? In-house tenderers are allowed to discount their equipment purchases at the unrealistic figure of 5 per cent., and we all know what the standard price for money is in the market.

I have touched on three areas of National Health Service spending where the private sector can provide services that could mean major savings. Major savings mean getting more out of the resources that are available. If we are to move away from the idea that the National Health Service is chronically underfunded, we have to improve both the way in which we draw up our estimates and ensure that the resources available are used as wisely and prudently as possible.

Although this has been a short debate, it has been interesting. I welcome the opportunity to take part as a Front Bencher in a debate on a report of the Social Services Select Committee, having for a number of years taken part in such debates as a member of that Select Committee when I was a Back Bencher.

It is a pity that the words of the Chairman of the Select Committee, the hon. Member for Birkenhead (Mr. Field), were not listened to by more of his hon. Friends. When he got to his feet, I counted two of his Front Bench colleagues listening to him and five Back-Bench Members, which, of course, has been par for the course in recent health debates. When the Labour party spokesman got to her feet a little later the number went up to seven Back-Bench Members, but, of course, that included the Chairman of the Select Committee. I am afraid that it needs no more figures to demonstrate the real interest of the Labour party in issues to do with health care.

I shall answer briefly one or two of the points that have been made. The hon. Member for Peckham (Ms. Harman) asked for a statement on dental and eye charges. I do not know whether she heard it, but a statement was made earlier today by my right hon. Friend the Leader of the House, and I have nothing to add to it.

The hon. Member for Alyn and Deeside (Mr. Jones) asked a number of questions, including questions about speech therapy and British Telecom. I hope that he will understand that, because of the short time available, I cannot answer his questions in detail, but I undertake to write to him.

We have had three splendid speeches from Conservative Members. I congratulate my hon. Friends the Members for Bury, North (Mr. Burt), for Macclesfield (Mr. Winterton) and for Newbury (Sir M. McNair-Wilson). I especially appreciated the excellent, robust speech of my hon. Friend the Member for Bury, North. I enjoyed the elegant and thoughtful remarks of my hon. Friend the Member for Newbury, who might like to know that, on provisional estimates for renal dialysis, it looks as though the number of new patients per million is now up to about 50, so we have further progress there.

I hope that my hon. Friend the Member for Macclesfield will forgive me if I deal with his points in a moment.

As for the priority given to Health Service spending, the figures speak for themselves. This year alone the Government are spending some £23·5 billion on the NHS in the United Kingdom. Our spending will rise by nearly £2 billion over last year. That is a cash increase of some 9 per cent., or about 4·5 per cent. in real terms after allowing for general inflation. We have allocated a slightly higher proportion of our money to the regional health authorities in England this year, so the figures should be 9·5 per cent. in cash terms and 4·8 per cent. in real terms for the RHAs.

Will the hon. Lady give way?

Spending on the National Health Service this year will have risen by 39 per cent. in real terms since 1978–79. That compares with an increase in public spending as a whole of 16 per cent. in real terms over the same period. In other words, spending on the Health Service under this Government has risen two and a half times as fast as public spending in general. I am sure that the Chairman of the Select Committee will agree that this is the biggest budget that the National Health Service has ever seen.

My hon. Friend the Member for Bury, North—who has left us—left us with the picture of Labour Members and, sadly, one or two Select Committee Members acting as bewildered children in a shop full of goodies, looking for the gaps on the shelves. My only concern is that his metaphor was a shop full of sweets—I would have preferred a shop full of fruit, but the point is well made.

Will the hon. Lady give way?

I should like to get a little further into my speech, because I want first to answer some of the points made by hon. Members who have been here the whole time.

Hospital and community health service spending on staff for all groups in the United Kingdom last year, including agency staff, was more than £11 billion. Of that, the estimated pay bill for our nurses and midwives was £5·2 billion; for doctors and dentists in the hospital and community health service it was £1·6 billion; and for the professions allied to medicine it was just over £500 million. We have accepted the estimates of the full cost of this year's review body awards which come to £803 million for nurses and midwives, £168 million for doctors and dentists, and £45 million for the professions allied to medicine. The £538 million sought in the summer supplementary estimates is the additional amount required on top of the 4·5 per cent. included in the public expenditure White Paper for England for the hospital and community health service. The hon. Member for Birkenhead is nodding. He is with me, even if no one else is. Other items are included in other supplementary estimates.

The difference between these estimates and those in the review body report is accounted for by employers' costs, that is national insurance and superannuation. The assessment of the hon. Member for Birkenhead of the historic size and importance of this supplementary estimate is far more accurate than the somewhat trite remarks of the hon. Member for Peckham.

We are employing more nurses than ever before. The last count last September showed a further increase to record levels. In England, there are 405,200 whole-time equivalent nurses and midwives—that is 490,000 on a head count. In itself that makes the regrading exercise so much more of a headache. It is a fact that more nurses in our employ are better qualified than ever before, including in the community nursing service where more than 80 per cent. of staff are qualified. I believe that that is all to the good.

It is a firm Government policy to improve nursing education through Project 2000 and to reduce the service burden of students so that they are no longer treated like skivvies. We feel just as strongly as the Royal College of Nursing about that and I believe that our stand has been courageous and welcome.

It is also a firm Government policy to look after nurses and midwives for their own sakes and because they are our core work force. In this country we rely very heavily on nurses and we have relatively fewer doctors compared with other countries. Our job and theirs is to look after the patients and we can do that only with a skilled, productive work force in a professional atmosphere with high morale whose contribution is recognised in the pay packet.

I am slightly worried that the Minister will not answer the very important question that we raised. If more money is required as a result of regrading than that already set aside by the Government, will they find the additional money to fund fully the regrading exercise?

The hon. Gentleman is aware that I think very highly of him. However, every time he rises I cannot help remembering that he came to this House after being a consultant in the National Health Service. He gave up £10,000 in salary to do so. We are certainly looking after someone very well out there. If he will bear with me, I hope to answer his question in full shortly.

We hope that the Opposition will not vote against the mammoth package of extra money for the nurses and midwives. I noted that the Labour party had a vote last night to which attention was drawn earlier by my hon. Friend the Member for Norfolk, South-West (Mrs. Shephard). The national executive committee of the Labour party had to decide whether the Royal College of Nursing should be allowed anywhere near the Labour party conference. There was another split in the Labour party. There was a vote of 21:1 against the RCN going to the Labour party conference. The one was the Leader of the Opposition and the deputy leader was among the 21. I have checked up on this and I can state that the RCN is welcome at the Conservative party conference. I confirm that we expect to see the RCN at Brighton in October.

We have had plenty of humbug and hypothetical questions tonight. If the Labour party had won the 1979 general election there would not have been a nurses' pay review body or a supplementary estimate of the size that we are discussing. My concern about the Opposition's approach and that of the Select Committee on Social Services on occasion is that they are so negative. Every change is seen as a problem and every effort to cope with problems is seen as a failure, even when it is a blazing success. Every improvement is ignored and every opportunity to run down achievement is seized. The hon. Member for Birkenhead again described the pay awards as very generous. We are content to accept that compliment.

I want now to consider what is happening in Macclesfield. As my hon. Friend the Member for Macclesfield is aware——

Will the Minister give way?

The hon. Lady has not given me enough time to answer all the questions that she asked. I will come to them in a moment. I hope that she will allow me first to pay a courtesy to my hon. Friend the Member far Macclesfield who served on the Select Committee for Social Services with such distinction for so long.

If my hon. Friend the Member for Macclesfield does not mind, I want to read a letter sent to me by Mr. Richard Jordan, who lives in Macclesfield. I imagine that he is a constituent of my hon. Friend. I checked with Mr. Jordan and he said that he would be delighted if I were to read out his letter. His handwriting is a little shaky and hon. Members will understand why in a moment. He wrote: "Dear Mrs. Currie,

I am fed up with hearing the complaints about the NHS, of course everybody wants more money, but please tell us all how wonderful the service is, the Macclesfield General and West Park Hospitals have brought me through two heart attacks and now two strokes, hence my bad writing.

All the staff at our hospitals are marvellous and I hope you will praise them. Doctors in our village on the spot at home within minutes, ambulance, doctors, nurses, equipment is here within the half hour, immediate doctor and nurses attention on arrival at hospital, food very good, with varied menus, sisters and nurses nothing too much trouble.

When I had my strokes the doctor and even the specialist from the hospital called at home to confirm my condition and examine me. My local doctor saw to the nurses, physiotherapy, calling and providing me with a wheelchair, stick, chair, and everything including oxygen etc. I felt that the NHS has done so much … We are so grateful to the NHS and feel sure there are many more people who feel the same way."

He comments further about the cheerful and expert service. That is the service in Macclesfield, and it is repeated throughout the country.

The hon. Member for Birkenhead asked one or two specific points. I will consider those and then consider the regrading exercise in some detail.

As my hon. Friend the Minister has referred specifically to my constituency, I want to confirm everything in Mr. Jordan's letter. I have splendid doctors, wonderful nurses and, as my hon. Friend the Minister knows, a new district general hospital. However, with regard to my local hospital, perhaps she will refer to the fact that its new operating theatres are closed for several sessions a week when they could be relieving people who require hip replacement or knee joint replacement operations. They are closed because there are inadequate resources to staff the hospital and theatres to operate 100 per cent. of the time. We have growing waiting lists in important specialties. I fully accept that we have an excellent hospital and that it provides fine service, but perhaps my hon. Friend the Minister should direct her attention to the point that I have raised.

As my hon. Friend is aware, part of the difficulty in some of the theatres, as has been shown in recent research studies, has arisen in obtaining the key staff, especially the nurses, to work in them. That is why we are undertaking a clinical grading review so that highly qualified staff who accept a lot of responsibility should be paid appropriately. We are certain that that will help to alleviate the problems in future.

It is a little late.

If it is a matter of being a little late perhaps the hon. Member for Birmingham, Ladywood (Ms. Short) will stay here a little longer and hear what I have to say.

I am here for the next debate.

Right.

The hon. Member for Birkenhead asked about Medical Defence Society subscriptions. As he is aware, the doctors' and dentists' review body recommended that two thirds of the costs of subscriptions should be reimbursed directly. As the hon. Gentleman will realise, the cost to the health authorities can be estimated quite precisely and they have been included.

The hon. Member for Birkenhead also asked about Whitley. As he is probably aware, the settlements are coming in fairly close to the figures that we anticipated. Others are not yet settled, and we do not normally speculate while pay negotiations are still under way, for obvious reasons. I hope that the hon. Member for Birkenhead will be satisfied with that reply.

Let us consider the regrading exercise. I suspect that there has been some misunderstanding and I want to assist the House. First, it does not apply to all nursing staff. Managers and students are excluded by agreement. About 85 per cent. of our nursing staff are affected, but that means that we are talking about a large proportion of the half a million nurses that we employ. The nurse managers are the subject of a separate grading exercise. Students will be affected by Project 2000. However, under the 1988 review body awards, the minimum for senior nurses will be 5 per cent. The minimum for students will be 6·3 per cent. and the minimum pay rise for all the nurses will be 4·2 per cent.

The hon. Member for Birkenhead asked several questions about how the pay bill was divided and calculated.

We know all that.

The hon. Member for Birkenhead asked some questions and I am answering them. He obviously did not know the answers.

The Government set up a sample survey of staff and asked them of what their work consisted. We tried to work out, by grossing up, how many staff will be involved in changing grade. We gave the figures to the review body along with our considered views on the increase in pay needed for other reasons such as inflation or the extra costs of living in London. We accepted what the review body said about the costs of the exercise to the National Health Service. I shall remind the House of precisely what Sir James Cleminson said in the review body's report. In paragraph 154 he says:

"Our estimates are necessarily approximate because they are themselves based on estimates."

We provide estimates of manpower levels and pay bills every year. That is how the DHSS cash was calculated, and we accepted the figures in good faith. If the hon. Member for Birkenhead thinks about it, he will agree that the method that I have described is easily the obvious method of calculation. Had he recommended it, I would have said that it was an intelligent and serious approach to a fiendishly difficult problem.

With the exception of funds for the London supplement, the total sum allocated to regional health authorities was in proportion to their initial cash limits. This tried and tested method has been used in previous years. We considered doing it differently; other methods have their advantages and disadvantages.

Hon. Members asked whether we are satisfied that the estimates are accurate and whether we will implement the exercise in the spirit in which it was intended. Of course the answer is yes. When such large numbers of staff are to be regraded there are a limited numbers of ways for a Government to respond. They can offer the figures and accept the calculations in good faith—which we did; that meant requesting a set amount of cash as a supplementary estimate—they can reject all the calculations and use guesswork, which we were not prepared to do, or they can say "Go ahead, never mind the cost." But that implies offering a blank cheque. I accept the strictures of my hon. Friend the Member for Macclesfield that that would have been irresponsible. We have issued much guidance, which is all in the Library. I sometimes wonder why we put it in the Library, because I do not think that anybody reads it.

I shall set out precisely for what the money for which we are voting is intended. I shall set out in public the views that we discussed in private with regional health authorities. The money is to regrade jobs as they were in post on I April this year. We accept that that is a snapshot, but there must be a set date or it is not fair. The money is not for new posts or to fill vacancies as at 1 April. That would be growth, which has already been argued for. Some 1·2 per cent. is provided for RAWP and 1·5 per cent. for cost-improvement and income-generating programmes. There has already been more than 2·5 per cent. growth this year.

The money can be used to replace agency staff. It is not intended to permit health authorities to bow to trade unions or industrial relations pressures. The entire review body system for nurses, midwives and professions allied to medicine was set up precisely because those professions had put their patients first despite industrial action by others. In a press release last week, the Royal College of Nursing told us to get on with it. It said that it was confident that the Government would keep their promises and that the sooner the exercise was finished the better.

The money is not for health authorities to think up their own gradings. This is not a local version of regional pay. We have put our views about regional pay to the review bodies, but that is a completely separate issue. It is essential to have consistency of grading across the country so that the same grade does the same work. Our officials will be visiting health authorities during the summer to ensure that this consistency is achieved. That is only fair and it is what we have agreed with the staff.

The hon. Member for Peckham bleated on about the sufficiency or otherwise of the enormous sum on which we shall be voting. We have received no firm information and we shall not act on rumour, especially rumour put about by one or two trade unions that might want to bid-up gradings, to try to poach members or alarm good staff.

It is early days and there is a long way to go. We are unlikely to have any solid information before the autumn—much closer to the deadline of 31 October. Any other views are pure speculation, and many of them are plain wrong.

I shall write to the hon. Member for Birkenhead in more detail about the issues that he raised, but I should like to put the regrading exercise in context. It is the biggest change to face nursing for many years. It is the biggest personnel activity since the National Health Service was established. It is probably the biggest review this decade of health care staff in Europe. It is certainly far bigger than anything we have handled before and it affects far more staff, every single one of whom is personally assessed and regraded. It is a heck of a lot bigger than regrading the staff in the citizens advice bureau in Birkenhead and it is light years away from the proverbial whelk stall which, on the admission of Opposition Front Bench spokesmen, Opposition Members could not run.

It is worth remembering the regrading exercise in the Halsbury report, which was mentioned by the hon. Member for Birkenhead. I have read the report, which says:

"Within the time limits which we set ourselves to submit our report we have not been able to carry out evaluation in depth of the work of each grade … what we have seen and heard has left us in no doubt that an evaluation of this kind is urgently needed."

That was November 1974. We are undertaking the exercise because we have the management skills and the resources. I hope that the House will honour and recognise our commitment.

There seems to be some question about when the debate should finish. Before I make my brief concluding comments, will you, Mr. Deputy Speaker, say whether I am right in thinking that this debate can run for three hours?

By a resolution of the House of 22 June, this debate can last three hours. If the House wishes, the debate may continue until 8.23 pm. I understand that some arrangement may have been made to finish the debate earlier so that the second debate can begin. The resolution of the House is clear.

On a point of order, Mr. Deputy Speaker. I apologise for raising a point of order at this stage, and I understand what you, Mr. Deputy Speaker, said about formal arrangements being made. In her opening remarks, the Minister criticised Labour Members for not being available to debate the Health Service. She did so in the knowledge that her office refused my request for a meeting to discuss underfunding in my constituency. An apology was given on the basis——

Order. The hon. Gentleman is making a point that would be perfectly legitimate in a debate, if he were called.

You kindly informed the House, Mr. Deputy Speaker, that an informal agreement has been made. When these agreements are made, the experts in the usual channels should talk to the people—

Order. I made clear the resolution of the House, by which I am bound. I added in parenthesis that I thought some informal agreement had been reached. It is my job to carry out the resolution of the House. I hope that is clear to hon. Members.

I am grateful to you, Mr. Deputy Speaker, for saying that and I hope that hon. Members have heard your remarks. My hon. Friends and some Conservative Members have been present for all the debate. My hon. Friends do not now wish to take part, so I can therefore bring the debate to a conclusion.

I think that the Whips have an important lesson to learn from tonight's proceedings. I hope that it will be learnt by Labour and Government Whips. It is not pleasant for hon. Members who have been present throughout the debate—who have much expertise and who wished to contribute to the debate—to be leaned on so that some informal agreement can be adhered to. That is a sour note for me to begin my summing up on, but perhaps it is appropriate, given the comments made by the Under-Secretary of State for Health and Social Security.

I have merely two things to say. Many hon. Members made efforts to divide what I said from the sentiments that were expressed by my hon. Friend the Member for Peckham (Ms. Harman). Perhaps my hon. Friend made her points more gently than I did, but there was certainly no disagreement between us. It was strange for the hon. Member for Macclesfield (Mr. Winterton) to have to make his point. Apart from the hon. Members for Newbury (Sir M. McNair-Wilson) and for Bury, North (Mr. Burt), who did not think that it was necessary to discuss the estimates, there was no disagreement at all.

Opposition Members are concerned about one central issue, which I put to the Under-Secretary of State. I hope that she heard the message, if not from Opposition Members, from practically every Conservative Member who has spoken in the debate. They are as pleased as we are about the size of the supplementary estimate. They and Opposition Members are pleased that, officially and unofficially, we welcome the Government's commitment fully to fund the pay award. We have raised a single crucial question. Is the regrading exercise to be screwed up because of a cash ceiling, or will the Government give the green light so that the regrading exercise can take place and fulfil the review's expectations that the Prime Minister outlined?

Being the written word, Hansard does not take account of the way in which hon. Members shake their heads. It is important for us to recall that, when I asked whether the exercise is to be cash-limited, the Under-Secretary of State said no. She shook her head like one of those dogs that sit in the back of cars. When the cars stop, their heads move. It was a terribly important intervention from her.

The hon. Gentleman should beware of reading anything into my gesture when, at one stage, I talked to the Whip, who was sitting on one side, and to my Secretary of State, who was sitting on the other side. I apologise if I made my point in a rushed way, but I am conscious that a large number of hon. Members are waiting to speak in the next debate, and we must be courteous to them also. We did the calculations in good faith. We accepted the recommendations of the review body in good faith and in good heart. We are voting today on the biggest supplementary estimate that the Health Service has ever seen. The regrading exercise is being done in detail for 500,000 people.

We have no hard information and no information that will confirm any of the rumours or negative comments that are being put about. We already have some information that we may well have got it right. I hope, and I am sure that the hon. Gentleman also hopes, that all the experience that is going into the matter will bear fruit and that the net result will be some contented nurses and well-cared-for patients.

From the Under-Secretary of State's careful statement I hope that we may infer that, when we return after the summer recess, we may seek more time to consider a further supplementary estimate so that we can make a reality of the Government's commitment fully to fund the nurses' pay award.

Will the hon. Gentleman, who is Chairman of the Select Committee, agree that my hon. Friend the Under-Secretary of State herself admitted that the pay review body stated that this is its best estimate? Therefore, there could clearly be an error. Should we not be able to accept from that, if indeed there is an error after a responsible clinical regrading is carried out, that the Government should have the courage and decency to come forward with another supplementary estimate?

As usual, I could not have phrased the point better than the hon. Member for Macclesfield has. I hope that that message has clearly gone to the Government.

As Chairman of the Select Committee, will my hon. Friend ask the Under-Secretary of State to reconsider the matter and agree to meet me and discuss the basic point relating to the underfunding of my health authority?

rose—

I shall not give way to the Under-Secretary of State. As my hon. Friend spoke, she was beckoning with her first finger. I hope that, when the regrading exercise is completed, the Under-Secretary of State is as happy to give signs to all the nursing profession as she is to give them to my hon. Friend the Member for Makerfield (Mr. McCartney).

We have an informal agreement to which the Select Committee was not a party. We have used four minutes of the time allowed for debate on the next topic, and I apologise for that. If the Whips want informal agreements, they should talk to the right people, and, in this case, it is Select Committees.

I remind the House that, under the resolution of the House of 22 June, this estimate is to be considered in so far as it relates to adult employment and youth training.

I am pleased to be able to introduce this debate, which gives the House an opportunity to consider and discuss employment training.

The Committee took evidence from the Training Commission, the Minister, and the permanent secretary at the Department of Employment. We published that evidence, and I hope that it will illuminate matters and inform the House. As yet, the Committee has not come to a common view on the merits of the new programme. I emphasise that the views that I shall express in opening the debate are my own and that other hon. Members will speak for themselves.

I fear that, compared with our competitors, training is something that we as a nation do not do terribly well or excel in. In the first half of this century, our survival was often held to depend on military capacity. But from now on it will depend as much or more on the efficiency and effectiveness of our industry, research and development, and investment in the skills of our people. When we compare ourselves with our competitors, there can be no room for complacency.

In the last Parliament, the Committee could not have been other than impressed to see young Japanese people going to school until aged 20, leaving with a thorough grounding in mathematics and science, and then joining the great Japanese companies and receiving a further year's training in the speciality of the company involved. Plainly, such enterprises benefit from a highly competent work force. Today, it is a matter not of just getting state of the art, modern, high-tech equipment, but of having a highly skilled work force to exploit and get the best out of.

Because of time restraints, I shall briefly mention only one other country. A fortnight ago, the Committee spent a couple of days in the Federal Republic of Germany. One had to recognise the thorough, comprehensive training that is given to the whole of the younger generation there. Of the 16 to 18 year group, 20 per cent. were in grammar schools preparing for university, 20 per cent. were in full-time vocational schools, and 56 per cent. were in the renowned dual system of apprenticeships. The average annual cost of an apprenticeship place was £8,000—incidentally, all paid for by employers, who seem to be as convinced of the value of investing in skills of their people as that of investing in their machines. We visited a railway workshop called Duewag making rolling stock. Many apprenticeship places there cost £10,000. But the proof of the pudding is in the eating. That firm has a buoyant, flourishing export trade. Coming from Britain—the country that invented railways and once built them all over the world but is now closing its railway workshops and will soon be importing rolling stock—it was an eerie experience to be shown a video of that firm's rolling stock being sold in many countries on every continent of the world. Obviously, training is a vital ingredient of success.

I refer directly to the estimates and, in particular, last year's estimate for the new job training scheme. We discovered that the initial sum that was allowed for the JTS was £215 million. Because of poor take-up, that sum was cut to £156 million, but, eventually, only £64 million was actually spent—in other words, just 42 per cent. of the reduced figure. There was a massive underspend. We must recognise that the programme was wildly unsuccessful. It was hugely unpopular, with an extremely large number of drop-outs. There were resources for 232,000 entrants. Over 100,000 people entered the programme, but, by the end of the year, only about 30,000 were in place, so the Training Commission agreed that the programme had failed.

As there are several similarities between the JTS and the new employment training scheme, we asked the Training Commission what lessons it had learned from the experience. The Training Commission suggested four things: first, to start with realistic, not over-ambitious targets; secondly, to give sufficient financial incentives, both to trainees and managing agents; thirdly, to sell the scheme better to employers, some of whom were hesitant to take on the long-term unemployed; and fourthly, to gain the co-operation of all the parties involved on whom it is dependent for the delivery of the programme: employers, local authorities, voluntary associations and trade unions. We were told that these are the lessons that need to be incorporated into the new programme.

Before looking at how successfully the lessons might have been learned, may I say that in none of the countries that we have visited has training or training programmes been a cause of acute political controversy between the parties. The approach to these matters has been agreed by all those principally concerned.

In those countries, there is thus a consensus approach, and everyone gets on with the job. Indeed, on a visit to the DGB, the German TUC, I specifically asked whether there were any differences between the parties on training, and was answered with a categoric no.

Only in Britain have these matters been rent by acrimony. Why? The answer is partly the inadequate nature of programmes, and the motives for introducing them. We have had YOPS, TOPS, CP, JTS, and much else—all schemes which, in their time, we were told to be proud of, yet now all scrapped. Therefore, it is not perhaps surprising that there is some cynicism. Few of those schemes were meant to be permanent; they were conceived as temporary palliatives to ameliorate the effects of unemployment.

In answer to question 121 in his evidence to the Committee, the Minister of State, whom I am pleased to see in his place, said of the community programme:

"You will know that the Community Programme originally was—if I can put it this way without being too crude—to fill in the time of the unemployed in ways useful to the community. That was the idea behind it."

The schemes were specifically designed to have a "register effect", in other words, to reduce the unemployment count. I fear the Government's motives were suspected. Many people saw the schemes as a cheap way of massaging the unemployment figures for electoral reasons.

What the country needs is not temporary expedients, not cosmetic palliatives, but high quality, credible, training programmes, ideally aiming to give us a work force as well trained or better trained than any in the world. That needs agreement, and the active co-operation of all parties concerned. It means a national consensus as to what is required. To obtain a consensus people have to listen to each other, and that includes the Government. It is no good the Government saying that they have a huge majority, therefore they can do what they like, because that way leads to disaster. It means, for instance, the Government listening to the trade unions. That is not something that the Goverment have been very good at. They have preferred to regard the unions as the enemy within, to be undermined and eliminated. That is riot the way to reach agreement or consensus. The trade unions must be valued as essential partners.

I turn now to the new employment training programme. It does not, of course, address the training needs of the 90 per cent. of those in employment. That is another story for another time. It is a programme for the long-term unemployed—and lit is targeted on two groups: the 18 to 24-year-olds who have been unemployed for six months, and the 18 to 50-year-olds who have been unemployed for more than two years.

I fully support the concept of a programme for the long-term unemployed. As a result of the seven-year recession that we suffered after 1979, we have between one and two million people who have been unemployed for years. Unless something is done specifically for them many will never work again. Unemployment is not an orderly queue, where those waiting longest are first off. The reverse is the case.

The programme is not, of course, an exercise in job creation. To succeed it should ensure that the long-term unemployed get a fairer share of the jobs which are available. The Committee has paid great attention to the long-term unemployed and in the previous Parliament we produced a report advocating a job guarantee for the long-term unemployed. I do not know whether Ministers have seen that report, but they might care to read it at some point.

The most useful thing that I can do this evening is to turn to the question marks over the new programme. The first is the level of funding and the quality of training. The numbers of people to be put through the programme annually are scheduled to increase from the 400,000 who were on the old programmes to 600,000 on the new programme—an increase of 50 per cent. but with no new money. How is it possible to increase the numbers by 50 per cent. and at the same time to enhance the quality of the training without any more money? The participants will spend only 40 per cent. of their time on directed training, in other words, two days per week for about six months. Perhaps we could hear what vocational qualifications that will achieve.

Let me come back to the lessons learned from the new job training scheme. The first is the need for adequate financial incentives. The Government are great believers in financial incentives. The last Budget was predicated on the need to give already wealthy people thousands of pounds of incentives to get them to work. So what are the financial incentives to come on the programme? The fact is that most of the participants on the present community programme will be worse off on the new employment training programme.

Many of the participants on the community programme are young single men. The pay is an average of £67 a week for a part-time place. In a letter dated 2 July, the Minister of State told us that a single person aged 22, with travel costs of £8 per week, would receive a net income of £33 per week—that is for doing three days' work or work experience. Like such single people, many others will be more than £20 per week or as in that case £30 per week worse off. Presumably that is the way in which more people are put on the programme for the same amount of money.

The new employment training programme moves away from the idea of some sort of rate for the job for the work part of the programme to benefit plus. That, not surprisingly, is controversial. Some people see it as a move to workfare, the approach which was discredited in some states in the United States of America. The plus is some £10 above benefit. Out of that, the first £5 of travel expenses must be paid, reducing it to some £5 per week. Being out of the house and being on the programme will inevitably involve extra expenses, such as buying food, so people could be worse off financially.

On 24 May, the Secretary of State, who I am pleased to see in his place, stated:

"we are aiming to ensure a position in which no one is worse off when taking part in the programme than they would be on benefit."—[Official Report, 24 May 1988; Vol. 134, c. 281.]

Well, yes, but should there not be an incentive that makes them better off? My modest suggestion when the scheme was first announced was that the plus above benefit should be doubled, because that would be something of an incentive. To do so would cost £180 million per annum. We are told that the Treasury is currently awash with revenue, so it cannot say that it has not got the money. I should like to reiterate that suggestion this evening—

rose—

I shall give way to the hon. Gentleman who is an extremely valuable member of the Committee. However, the intervention may take time from the time available for him to make the speech which I hope to hear later.

I am grateful to the hon. Gentleman for giving way. If, as he began by saying, training is indispensable to people's future employment, should they not value it a great deal more than enforced idleness? Therefore, should they not see the benefit of a training programme as being of considerable advantage to themselves?

Yes. That is precisely what was said about JTS, but it failed. When we asked the Training Commission why, it gave us four reasons and one of the things it suggested was that a financial incentive should be offered. Some may argue that there should be no such incentive and that people should value the training and do it for nothing, but the Training Commission considered that a financial incentive was important.

The other major lesson that the Training Commission drew from the failure of the JTS was the need to secure the support and co-operation of all the other parties involved and on whom the Training Commission is dependent for the delivery of its programme.

The other parties involved in the programme are the employers, the local authorities, voluntary organisations and trade unions. The Secretary of State knows that he faces some problems in that regard and that the conditional support of the TUC is less than full-hearted. The vote in the general council was extremely close and it will be a contentious matter at the congress in September. Britain's largest white collar union, the National and Local Government Officers Association, and Britain's largest unions, the Transport and General Workers Union and the National Union of Public Employees, are actively opposed to the programme.

Trade unionists have expressed a number of concerns about the programme, which include the low level of allowance and the perception that employers will get workers for £5 a day, thus exerting a downward pressure on wages. They are concerned that trade unions had to be consulted about the proposed schemes for the community programme, but that trade union approval is no longer necessary for the employment training programme. The principle of parity on the Training Commission has been broken—six extra employers' representatives have been placed on the commission to outnumber trade union representatives. I do not understand why, but we may receive an explanation tonight.

The most important worry for some unions is whether the programme is voluntary—for the critics of the programme that is the key issue. At present, the programme is not compulsory, perhaps for no other reason than that there are not nearly enough places for the client group. The Secretary of State has said may times that the programme is voluntary and that he has no plans or intent to make it compulsory. Nevertheless, many people have the strong fear that, if the unemployed vote with their feet, as they did with the JTS, they will be pressured into the scheme or lose benefit.

: rose—

I am just about to quote my hon. Friend, but I hope that she will forgive me if I do not give way.

The Secretary of State has been asked many times, as he was on 24 May by my hon. Friend the Member for Birmingham, Ladywood (Ms. Short), to state that he will not designate the scheme under section 26 of the Employment Act 1988 during the lifetime of this Parliament. I hope that I have anticipated the point that my hon. Friend was seeking to make. However, each time the Secretary of State has declined to say that he will not designate the scheme. If he did not designate the scheme that, more than any other step, would defuse opposition to the programme. If the Secretary of State really does not intend to designate and thus make the scheme compulsory, I cannot understand why he will not make that simple categoric statement. So much depends on it.

The Secretary of State is aware that many voluntary organisations that have participated in the community programme have written to hon. Members to express their worries—one of the main ones is the lack of funding to continue project training.

The Under-Secretary will know of an organisation called Mutual Aid, which he has visited. It sent me a document that showed a nice picture of him visiting that organisation and described the kind things he said about it. He might care to know that Mutual Aid has written to me because it is worried about the new programme and it voices its criticisms of it.

The Secretary of State knows that many local authorities, including many Conservative-controlled authorities, are declining to participate. The Minister of State wrote us a letter to inform us that Kensington and Chelsea will not participate, apparently because they believe they will be out of pocket.

I believe that a number of improvements will be necessary to obtain the support of the partners, who are necessary to deliver the programme. I welcome the £50 allowance for child care for single parents. I hope that that will prove to be the thin edge of a desirable wedge to develop child care in this country. The Secretary of State might care to have a word with his right hon. Friend the Chancellor of the Exchequer about removing the existing tax disincentives for workplace nurseries and creche facilities. It will also be necessary to ensure that single parents coming off the employment training programme obtain jobs with sufficient pay to enable them to continue to finance such child care.

rose—

My hon. Friend will have a chance to make his point in his speech and I am not anxious to prolong my remarks.

A programme directed at the long-term unemployed is vital. I am sure that, after the recess, the Select Committee on Employment will want to pay great attention to ascrutinising and monitoring the programme. I believe that what we have presently is half a loaf and I shall devote my time to seeking to obtain some improvements so that we get the whole loaf.

As time is short and as many colleagues on both sides of the House wish to speak, I shall be brief.

The debate must be put in a wider historical context. Last summer I read an extremely important work on Britain's industrial decline during this century by Correlli Barnett entitled "The Audit of War". That describes the collapse of our competitive industrial position vis-à-vis the other developing European countries from the postindustrial revolution era until now. It highlights a number of the essential ingredients that have contributed to that decline and the key ingredient was our attitude to acquiring skills compared to the attitude in other countries. At the higher level of skill training for management and at the basic level of skill training of the work force we have progressively, over many decades, lost out to our competitors. The Select Committee report has highlighted the effect of chickens coming home to roost after a long time.

In today's edition of the Evening Standard there is an interesting article that highlights the problem to which the hon. Member for Newham, North-East (Mr. Leighton) referred and the problem we face with schemes such as the community programme. The article is entitled

"Thousands can't read after 11 years at skool".

That article states:

"Alarming disclosures are made today about school-leavers who can't read, write or do simple sums … after 11 years in the classroom.

Thousands of teenagers leave school without these vital skills and six out of ten are so frustrated in fifth forms of comprehensives that they play truant either part or all of the time.

Dr. Tom Wood, head of a youth training centre, says:

"We have to give basic literacy and numeracy skills to the young people who have for some reason reached 16-plus with limited proficiency in these areas' … When teenagers are urged to take part in any training involving the three Rs … they usually pretend to be sick to avoid being humiliated … One in three of the teenagers questioned at training schemes said they had not been interested in passing exams at school because they thought this would not help them get work."

I know that every hon. Member in the Chamber has visited, as I have on a number of occasions, youth training schemes in their constituencies and in other parts of the country. They will be only too aware of the fact that, in many cases, they cater for the drop-outs from schools—the people to whom the article referred. The most interesting thing that one discovers is that, when training is put in the right context and the trainees can see a skill coming into their hands which they will find relevant to their futures, they are remotivated to learn. Perhaps one of the most important pressures behind the Education Reform Bill, which attempts to deal with the literacy problem in schools, was to address the difficulty of children who are demotivated during the latter years at school. The schemes that we are debating relate to adult and youth training which is designed to help people who have left school recently or some time ago.

This debate, which I suspect will become increasingly significant in the years ahead, takes place against the background of the changing nature of the labour market. In many parts of the country, employers are saying over and over again that they simply cannot recruit people to fill vacancies because people do not have the necessary skills. Only today, I had a letter from Leeds city council. which is typical of many of the stories told to Members of Parliament. It states:

"The Council has a nursery building programme closely monitored by the Nursery Committee. The Committee's objective is to spend budgets allocated with the minimum of 'slippage' and achieve set building 'targets'.

One problem experienced in the last few months has been the difficulty in recruiting skilled builders, particularly bricklayers.

One contractor has a contract to build 3 nurseries of a total value of £4½ million and this Contractor … has had repeated difficulty recruiting bricklayers to the extent that the contract is now several weeks behind schedule.

The Committee has pursued this matter through its own Education Department and it is hoped that 'Employment Training' and 'Training for Skills' courses could help the situation."

Until recently, in many parts of the country, people were not motivated to take skills training because they could not see any jobs available for them when they had acquired those skills. However, as a consequence of the 23-month record period during which unemployment has plummeted in all parts of the country, that situation is now quite different. We can now say to youngsters, "The problem is that you lack the skills that employers need. This programme is designed to help you obtain those skills."

The old scheme had its shortcomings. The hon. Member for Newham, North-East described some of the shortcomings of the new JTS. Those were highlighted in the Select Committee report which is a most valuable document. It stated that only 110,000 people were in training in September 1987 when the resources of the scheme catered for 232,000. The hon. Gentleman described that as a failure. I am not sure whether one should look at the glass and describe it as half full or as half empty. That depends, I suspect, whether one is on the Conservative or Opposition Benches. Clearly, 110,000 people benefited from that scheme, although at least as many again could have done so. Basically, the scheme was about right, but there were a number of factors in it which did not enable it to develop its full potential.

At the end of the year, there were only 30,000 people in training.

I noted that point. That led to my right hon. Friend asking the Manpower Services Commission, as it then was, to review the scheme to see whether it could be made more attractive. It has done that with a view to providing a scheme that will offer literacy and numeracy training at the lowest level and go right through to the high-tech training that is also needed. It is important to note that the scheme was approved by all the commissioners, including the three trade union commissioners, in the MSC.

The scheme is fair and, as the hon. Member for Newham, North-East has conceded, the lessons of the new JTS have been learned, although he argues that the financial incentives should be increased further. I would take rather a different line. If the scheme is to be successful, the greatest incentive must be that those taking part in the scheme see that the skills that they acquire will lead them to a job. Otherwise, we shall run into the danger that it will become an infill operation. The real incentive, if the scheme is to be successful, is that those who participate will acquire something that will be valuable to them in the long term so that they will have an exploitable resource to offer the labour market in years to come.

This scheme is only part of the picture. Training is vital across the spectrum. I should not like anyone to think that, because the Government are putting such a great deal of money into the scheme, that absolves everyone else from responsibility for training. Everyone has a fundamental responsibility for training. That starts in the schools and continues in the colleges, polytechnics and universities. It also lies with local authorities and employers. I am also delighted to see that some of the more enlightened trade unions, such as that of the electricians, are undertaking significant and valuable training schemes of their own. The identification of training as one of the high priorities by some in the modern trade union movement is a welcome sign.

Skill training is about how we tackle the problem of unemployment and how we meet the industrial needs of our society. There is a need for motivation. Hon. Members on both sides of the House are preoccupied with that. The difficulty with a scheme of this kind is that people who should know better pump negative publicity at it. Even if, in the words of the hon. Member for Newham. North-East, they would prefer to see a whole loaf rather than half a loaf, they should not condemn it. Those people should encourage its development. It is a disgrace that the TGWU, NALGO, NUPE and COHSE should oppose the scheme.

It is a disgrace that the Government are putting forward such a rotten scheme.

Opposition Members are taking a negative attitude towards the scheme.

Undoubtedly, young people will look to the scheme as a way to make up for the opportunities that they have missed in the education system as a result of a series of problems inherent in the structure of our society that we are trying to tackle at all levels. People outside the House will see Opposition Members and those in the union movement who oppose the scheme as using that group of people and exploiting them for political ends.

The scheme is a good one. It meets important needs in our society and everyone who is concerned about skill training should do everything in his power to ensure that it succeeds.

In the short time available to me, I should like to concentrate on those aspects of the new training programme which have caused great concern to those organisations involved with the programme. I want to concentrate on the voluntary organisations that are involved.

To set the tone, I should like to quote from the Church of Scotland's Church and Nation deliverance at the 1988 General Assembly, which the Prime Minister attended. It states that it views

"with great concern the Government's plan to end the Community Programme, under which many thousands of jobs involved with care and support in the community have been created, which jobs will, in general, be lost in September when the programme comes to an end."

It also views with concern.

"the morality of the Government's new Employment Training Scheme believing that the proposals militate against natural justice. (For many years Job Creation has provided union approved wages related to the work done; the proposals depart from this by paying a negligible bonus in addition to the existing state benefit.); and instruct the Church and Nation Committee to communicate with the relevant Government Departments, with a view to having the provisions of the scheme considered."

The Minister will perhaps tell us how he has replied to the deliverance, to which his right hon. Friend the Prime Minister no doubt listened with great concern. I questioned the Minister when he was before the Select Committee on Employment about the attitudes of voluntary organisations. He suggested, not dismissively but curtly, that the bids for places were over-subscribed. That included many bids from voluntary organisations. I then asked the local organisations whether they agreed with the Minister's views. The Dundee association of social services said that there was no evidence of any local discussions initiated by the Training Commission with that organisation, which brings together all the voluntary sector organisations in Dundee. As far as it was concerned it was hardly voluntary, given that after September there was no alternative. Obviously, given the very good work that they do the organisations might well be opened to opting out. In many cases, they were not prepared to sacrifice their organisations without some commitment from the Government to ensure that the organisations would not suffer because they had participated in the scheme.

The Tayside committee on alcohol abuse was very concerned that after September there would be a closure, or certainly a curtailment, of some of its activities. Its service was a giving service and it certainly could not cope with training and managing a particular scheme. It was concerned that the Wishart centre in Dundee might have to close its day centre because its capabilities would be reduced. It could lead to alcoholism research being discontinued and affect the benefits to other organisations.

My hon. Friend the Member for Dundee, East (Mr. McAllion), who unfortunately is unable to be here tonight, received a letter from the Wishart centre. He had written to the Under-Secretary of State for Employment. I should like to put on record the response to the letter from my hon. Friend. It stated:

"Thank you for your letter of 5 July enclosing a copy of the letter you had received from Patrick Nicholls.

I read Mr. Nicholls' letter with great interest—especially the second page which included statements that I had never heard before and which sounded quite promising. Eagerly, I began asking questions about Mr. Nicholls' `third option'. Unfortunately however, I discover that it is not a viable alternative to community programme or employment training, but 'a tinkering round the edges', as it was put to Dundee Survival Group and the Wishart centre have registered their intent to become a Training Manager with reluctance because we cannot see a viable alternative if we wish to serve our client group."

It went on to refer to something which I shall explain briefly. My constituency is a soft fruit growing area and those who are unemployed or who earn very little traditionally go to what is called the berry picking instead of having a holiday. The letter continues:

"I know we're into 'the berry season', but after advertising for care workers in the Job Centre for ten days I have only had two applicants this week! I really cannot see this new scheme being highly sought after come September. For us, as you know, we have the additional problem that trainees will have to face abuse, threats and working with HIV carriers. Who, I ask you, would do that for a tenner a week for the sake of training?"

That is one more voluntary organisation that does not believe that the scheme is a good one.

The Keep Scotland Beautiful campaign, which employs 400 part-time staff under the community programme, will not be able to keep them on when the new Training Commission replaces the Manpower Services Commission in September. The staff, including 25 in Tayside, will be forced back on to the dole. The campaign says that the people that they employ on the scheme

"are exceptionally good at what is almost a sales business, selling a litter-free environment to the public and receiving training they would never have got from the MSC alone."

The Dundee liaison committee on homelessness was concerned about the way in which the Secretary of State could assist those community programmes which may feel under threat. In a letter to me on 11 July 1988, it said:

"We understand that Mr. Fowler, the Secretary of State for Employment, and his Ministers have been putting the case for additional funding from other Government Departments to ensure that those community care schemes which are wholly dependent on Community Programme funding and are unsuitable for Employment Training funding should be able to continue in existence after the end of August. It is now into July and no concrete proposals for alternative funding have appeared."

Where have those suggestions come from? They have come as a result of various discussions that have taken place in Scotland with the Minister of State, Scottish Office, in particular on 22 June when the Scottish Council for Voluntary Organisations met the Minister, who obviously gave some sign that he would be prepared to consider a scheme.

It would be useful to highlight briefly which services the schemes provide and then to put on record the separate funding that they would require. The social care schemes supported by the community programme include care attendance scheme, lunch clubs, gardening and decorating for the elderly, services for the disabled, support for single parents, children's creches and adventure playgrounds. youth clubs, home insulation and support for ex-offenders. It would be easy for the Minister to say that all those areas could provide training. Unfortunately, in almost every case they are a scaled-down version of professional, full-time employment. If that training went too far, it would come into contact with that professional area and therefore would have to be discontinued.

The meeting on 22 June proposed two ways of using the programme. The first suggestion was:

"Scottish Office Departments with responsibility for 'Care in the Community' services shoul'd set up a Social Care Fund for a transitional two-year period. The Department of Employment might be expected to contribute towards the costs of the Fund in recognition of the contribution the Fund would make to maintain the maximum choice of quality training places."

It goes on:

"a fund of £1 million would allow for 200 places per year. Applications for funding would be assessed and awards made by a committee of officials of the funding Departments of the Scottish Office and by MSC Scotland."

It goes on to say that after a two-year period the recipients obviously would have to find alternative funding, but it would give the community programmes a chance to find alternative funding.

Another suggestion to which the council has received no response yet is for

"the MSC to contribute to the 'core' costs of providers of social care training opportunities within Employment Training."

Perhaps the Minister will respond to those two initiatives. Some of the community organisations in Dundee and in Scotland as a whole which are extremely concerned may consider entering the scheme.

The Scottish Trades Union Congress and the Convention of Scottish Local Authorities have made it quite clear that they are not prepared to participate in the new employment training scheme. They had a meeting with the Minister on 14 July and I spoke to them today. They said that during that meeting the Minister conceded that he had nothing further to add to the assurances that they sought, which were similar to those sought by my hon. Friend the Member for Newham, North-East (Mr. Leighton), that the scheme would remain voluntary, at least during this Parliament. The Minister still could not give them an answer.

That is extremely important for local authorities, given that the Secretary of State for Scotland, like the Minister with responsibilities for England and Wales, has clawed back considerable amounts of money from those local authorities. The Minister is still considering the plea from local authorities for extra funding for the additional financial aspects of the scheme, if they were to become training managers. He still cannot give them an assurance that if they joined the scheme and used their own funds to top up the money that the trainee would receive the Government would not claw back the money through some form of penalty. Unless the Minister can give some affirmative response to that, it is unlikely that the STUC or COSLA will be able to encourage their members to enter the scheme.

There are many other aspects on which I should like to concentrate, such as the experiences of my colleagues and me in Germany and America. It was an experience to go to the land of capitalism and see how it is retraining its workers. It was an eye-opener to see what the Secretary of State for Employment had seen when he visited the United States.

I welcome the decision to provide a weekly sum for women to enable them to return to work, but the scheme does not go far enough. It does not deal with mothers who have children under school age, so we are still discriminating against women who do not have enough money to send their children to nursery schools or to day care centres. They cannot therefore return to work. That was not what we found in West Germany or the United States. The Secretary of State now has the assistance of an adviser from the other side of the Atlantic, who we hope will be able to influence the Secretary of State and his team. We hope that it will result in the good practices in the United States being followed in this country.

The Under-Secretary of State must refer to the organisations that provide care. He must not just say that the Government hope to do something for them in the future. These organisations need to know now whether they can seriously commit themselves to employment training. It is no use if they operate for a short time and then discover that they have to fold up because money is no longer provided for them. Unless the Under-Secretary of State can give the assurance for which the Scottish Trades Union Congress and the Convention of Scottish Local Authorities have asked, the organisations that provide care will disappear and the people of Scotland will suffer a serious loss. The Minister must give that assurance tonight. These organisations must know exactly what the Government intend to do so that the viability of the employment training initiative can be ensured.

I am a member of the Select Committee, but, as the hon. Member for Newham, North-East (Mr. Leighton), the Chairman of the Committee, has already said, we have not yet discussed the details of employment training and reached a decision. He put forward his personal view, as did the hon. Member for Dundee, West (Mr. Ross). It is only right, therefore, that I should do the same. The House will not be entirely surprised when I say that I do not agree completely with what they have said. There is a dire skills shortage in many parts of the country. My constituency unemployment rate stands at 2·8 per cent., and we face terrible problems when we try to recruit for all forms of business. There are pages and pages of vacancies advertisements in local newspapers.

My hon. Friend represents a constituency with extremely low unemployment, but I represent a constituency with one of the highest unemployment rates in the country. I have received today from the Teesside chamber of commerce details of the skill shortages that it expects to see during the next three months. There are still shortages in every grade, from skilled labour to part-time workers.

I welcome my hon. Friend's intervention. It demonstrates that the problem affects the whole country and all businesses.

I am surprised that so many Opposition Members have defended the community programme. They slanged it for many years, but now they say that it has been useful. I am not sorry to see its demise. It was always a make-work system. It provided very little good-quality training. In fact, very little training at all was provided and it achieved very little. I understand the worries in the voluntary sector, but it is not the role of the employment training programme to provide the services that are needed in the community. They should be provided in some other way. The new adult programme that is to start in September will be much more flexible than any of the previous schemes. It begins with an assessment of each trainee. As any expert in training knows, the best programme starts with an individual assessment to tailor the training to the needs of the trainee.

For many reasons I welcome the introduction of child care benefit for single parents. In three or four years we shall desperately need those people in the work force. I welcome, too, the flexibility that the supplementary grants system will provide for specific skills training, for which extra money will be required.

I am sorry that the business enterprise training programme has been incorporated in the new scheme. The private enterprise programme for the would-be entrepreneur and the would-be self-employed is to continue. That is good, but it is strange that as soon as people have got their business off the ground they will lose the opportunity for further training, other than through the new programme. That is where the business enterprise training programme would be of help.

A great deal has been said about the financial benefits that would be provided for the person who is being trained. It is strange to say in one breath that training is vital and we need to spend more on it and to emphasise its value but in the next breath to say that it is not worth while for people to be trained for an extra £5 a week. They are contradictory statements. Everybody on the scheme will be at least £5 a week better off.

Mention has already been made of the Select Committee's visit to Germany two weeks ago. We looked at the dual track programme and the adult programme. German unemployment benefit is paid as a percentage of the unemployed person's previous wage, but there is also a premium, apart from the benefits system, for the adult programme. That premium is 5 per cent. of the unemployed person's previous wage. That works out, on an average industrial wage, at about £4 a week.

The hon. Gentleman must work it out properly. His figure is wrong.

The hon. Member for Birmingham, Ladywood (Ms. Short) makes a sedentary intervention, but she will have to go to Germany and check the figures for herself. Members on both sides of the House visited Germany and they will vouch for the fact that that figure is correct.

The average wage in Britain is considerably higher than the £80 a week that was implied by the figure that the hon. Gentleman gave, and the average wage in Germany is considerably higher than that. There is something wrong with the hon. Gentleman's arithmetic.

I said specifically that the premium was 5 per cent. of the average industrial wage, and 5 per cent. of £80 is £4.

There is no doubt that there is a very great need for effective training. I entirely endorse the comments on that point made by the hon. Member for Newham, North-East. I would demur only with his suggestion that we have not achieved anything like it. In my view, the youth training scheme, and now the new employment programme, are very much what the country wants. Contrary to the opinion held by many, I believe that they are comparable to the programmes offered by many of our major industrial competitors in the West.

I grow tired of hearing Opposition Members, trade unionists and others criticising those programmes on the evidence of a few isolated instances. On that basis they castigate the whole scheme. As my hon. Friend the Minister will know, I served for a number of years on an area manpower board. The sadness is that the vast majority of those involved do not really know a great deal about training and are not involved in monitoring or able to make the kind of assessment that matters. If individuals, be they Opposition Members or trade unionists, wish to criticise a particular training programme in a particular place, they should take their criticism to the MSC and ask what is being done to improve the standards. It serves no purpose to castigate the whole scheme.

We had experience of a group who pretended that they were capable of training young people. I went to the MSC and to the Secretary of State for Scotland about that matter and we exchanged a great deal of correspondence. Despite the fact that there was evidence to show that that group was not carrying out its responsibilities, it was given approved training organisation status.

I shall not disagree with the hon. Gentleman because I do not know the details of the case. However, I also know of managing agents who were given approved training organisation status but who should never have been granted it. That underlines my earlier point that many of the people who are sitting in judgment on area manpower boards are unfit to make those judgments. That applies to trade unionists as much as to others who are nominated for election to those boards. I do not want to digress and talk about the YTS but will continue my discourse on the adult programme.

Many of the major objections to the adult programme come from trade unions and local authorities operating in areas of greatest need and of high unemployment. Mention has already been made of the "rate for the job". That demonstrates a total lack of understanding of what training is all about. There is no such thing as the rate for the job if one is being effectively trained. In reality, employers will have to make massive contributions to the funding of the schemes. It must also be recognised that the contribution made to a business by unskilled labour is minimal. There is no justification for saying that the employer should pay the rate for the job because the trainee is making a contribution to the business, because he is not. I hope that that attitude represents the final dregs of "The country owes us a living" culture, which brought Britain down in the 1970s. It is time that we—

Will the hon. Gentleman give way on that specific point?

No, I shall not give way again.

It is time that we got away from cradle to the grave employment and recognised the need for training through one's lifetime and for retraining, however unfortunate may be the reason—including unemployment. Training is not just about time serving. We must abandon the belief that it takes years to learn new skills. That was in the old days, of the "Sit by Nellie" approach to training, whereby one was supposed to sit and watch, and learn over the years. Modern training technology has developed a long way since those days, and time scales for the assimilation of skills have been dramatically reduced.

The programme recognises that skill shortages exist, as we heard from my hon. Friend the Member for Langbaurgh (Mr. Holt). It also builds on modern training principles and practices. It offers the opportunity to all unemployed people to gain the skills that they need. It is very sad that the scheme is not being welcomed and recognised as being good and valuable, building on the strengths that the YTS developed over the years. The new programme should be welcomed by all who really care about the unemployed and the unskilled.

During the present prolonged spell of high unemployment and lack of job opportunities, the provision of proper training schemes becomes a matter of major importance. I remain unconvinced that the Government's proposals are in any way the best method of proceeding. However, if the alternative is straightforward unemployment, the schemes clearly become the lesser of two evils.

Ideally, my party would like to see introduced a proper system of training similar to those of other European countries, and adequately funded and geared to the changing needs of industry, commerce and the individual employees in a rapidly changing world. I regret that the Government have chosen to abandon the rate for the job that was previously paid under the community programme in favour of a benefit plus system—a premium of between £10 and £12 a week, thus leaving its single, under 25-year-old trainees, who represent about 50 per cent. of total trainees, about £10 worse off for a full week of training and work experience than they would have been as part-time community project workers.

I know that that situation is posing major difficulties for existing schemes in my constituency. In the city of Brechin, current schemes run by an energetic Church minister have transformed the lives of otherwise unemployed individuals, giving them employment, improving the local environment, and leading to a high success rate in finding consequent employment. That excellent scheme is now threatened by the Government changes, which mean that individuals will cease to be offered a working wage—and that was at the heart of the previous scheme's attractiveness. Unless local government funding is obtained, that particular scheme will founder and the whole community will be the poorer for it. With cutbacks in local government funding, the chances of obtaining that money from local authorities are growing more and more remote.

By replacing community benefit with job training as the main focus, the Government put at risk about £50 million of Scottish social care projects that may not be able to adapt to the new scheme. I ask the Minister to examine the specific problems being posed to organisations such as the Angus Crossroads caring scheme and other caring groups by proposed changes in employment training programmes. I know of the tremendously good work being done by those groups and the advantages that they offer to families and to individuals by the programmes they have been allowed to initiate and undertake. Some tremendous local initiatives and services will be destroyed unless proper funding is restored.

I reiterate the fears already expressed by organisations such as the Tayside services liaison committee on alcohol, whose employment scheme may be wiped out. The supported flats made available under the Dundee Cyrenians scheme may also have to close. The Wishart centre's effectiveness as a day centre will be greatly reduced, and the Dundee survival group will be struggling to continue its tremendous services for the homeless. The fears expressed by those voluntary caring organisations are repeated in my constituency and throughout Scotland.

Over the past five years, many voluntary organisations have been able to utilise the community programme to the benefit of various needy groups. Organisations that are first and foremost service-giving cannot also take on a major training role without their services suffering. I direct the Minister to those organisations and to the concerns that they express. That point is of particular importance to Scotland, where a proportionately greater number of programmes have been concerned with community care rather than with the environment, as is the case in England and Wales.

I know that approaches are being made by many of those organisations to the relevant local authorities, but with the severe constraints in local authority budgets the chances of obtaining funding are limited. I believe that the Secretary of State for Employment mentioned the possibility of other Government Departments being asked to find funds to assist voluntary organisations that have developed caring schemes under the community programme. What reassurances can the Minister give Crossroads and other community schemes about future funding?

Many parts of Scotland need job creation schemes as well as training schemes—indeed, some would say more. I believe that the Government's offering is hopelessly inadequate. Not more than £400 is, I understand, to be spent per six-month trainee. Sweden spends £12,000 on training its unemployed, whereas the average employment training place here will cost about £5,000 a year. While value for money is always a desirable goal, mere cheapness can be self-defeating. Moreover, restart and the stricter eligibility conditions for unemployment benefit mean that even without formal workfare compulsion the scheme is highly coercive, as has been said earlier. As no time scale is attached to ministerial guarantees of the voluntary status of the scheme, no wonder such concerns are being voiced.

Because of the abandoning of the rate for the job, employment training had destroyed the political consensus that supported the community programme and was one of its strengths. The voluntary sector warned that that would happen. Now voluntary agencies are caught between dependence on local authority funding and trade union good will on the one hand, and the need for MSC funding on the other.

May I suggest some methods that might help such voluntary organisations? Would the Government consider, for example, allowing the Training Commission to permit agency contracts for the community programme to be extended until the end of February 1989, as with project contracts, to provide time for negotiation with local authorities? Could an additional £10 a week premium be payable to single people to bring their weekly income close to what they would have received as a rate for the job? That, I believe, would cost approximately £150 million on a total budget of £1·5 billion, so it is certainly financially feasible.

Initially, the Scottish Office—or the Minister's Department—could exempt local authorities from clawback penalties on the amount that they spend on topping up trainees' incomes. Perhaps a community fund outwith employment training could be introduced to which agencies feeling that they could not provide a quality caring service within employment training could apply for transitional funding.

The scheme is far from ideal. I hope that the Government will look again at funding in Scotland for caring schemes that not only provide employment, but are a crucial lifeline for individuals and their families who are helped by them.

I welcome this huge employment training scheme, which is probably larger than any such scheme over the past 25 years. I do not think that it is putting it too strongly to say that training, more than anything, will determine our economic growth over the next few years. It is equally true that the problems of skill shortages are the result of demography as well as the industrial restructuring of the past few years. The demographic problems are well known, although it is worrying to see that the National Economic Development Office survey showed last week that only one in seven employees was aware of them. Nevertheless, there has been an increase of 900,000 in the work force, and between 1987 and 1995 1 million fewer 16-to-19 year-olds will be available for training. That is a source of potentially severe skill shortages in apprenticeships, technicianships and the other forms of training available to young people at present.

The problems are by no means new, and they are common to the whole industrialised world. We have recently been told by Professor Charles Handy that 70 per cent. of jobs over the next 10 years will be knowledge-related, whereas 20 years ago the proportion was only 30 per cent. It has been estimated, probably more cogently, that by the year 2010 even people who stay in the same job will have to be almost completely reskilled three times in their working lives.

Does that apply to Members of Parliament?

I do not know.

Evidence of that is working through into the labour market. While we have 1·8 million extra jobs since 1983, and although we have 700,000 vacancies in the economy, the Engineering Industry Training Board shows that the increase in vacancies is mainly in such industries as electronics, in which vacancies have increased by 95 per cent. over the past nine years, and in instrumentation, where the increase has been 30 per cent. Those skilled industries are creating the demand for labour. Although the demand for engineering operatives, for example, has fallen by 43 per cent. over the past nine years, the demand for technicians and scientists has risen by over a half.

That is why, when we are talking about a high demand for the skilled, flexible worker, I welcome the employment training scheme, not only because of its size but, more important, because of its emphasis on quality. I applaud the youth training schemes, approved training organisations, competence objectives, transferable qualifications and, perhaps most important, the requirement for a knowledge of computers and information technology on every youth scheme.

I have no doubt that the employment training scheme, with its broad scope from literacy to high technology, will be a better-quality scheme than we have ever seen before. Evidence presented to the Select Committee showed that in the west midlands, although there were only 35,000 places available, 125,000, applications were received from trainee managers. A point was made earlier about smaller funding for more places. We should remember that a large proportion of those trainee managers will bring private capital into the scheme to improve the quality of training that it provides.

I believe that the scheme will do an important job in countering skill shortages. However, although the Government should give a lead in tackling skill shortages, the primary responsibility for skill training should be and is with employers. As the hon. Member for Newham, North-East (Mr. Leighton) said, that is a truth which we in Britain have been slow to grasp. For example, a survey was carried out in 1984. The figures for vocational training were difficult to obtain, but it was estimated that the private sector in Britain was spending £2·5 billion compared with £7 billion in West Germany. As a result, Germany was producing three times more engineers than we were. That is still a worrying factor. Two out of three firms in Britain do no training.

Although the good firms spend the equivalent of 4 per cent. of labour costs on vocational and educational training, the average in the United Kingdom is only 2 per cent., and that works out at 0·7 per cent. of turnover. That is ironic when the economic monitor, the Engineering Industry Training Board, says that 43 per cent. of firms complain that skill shortages will constrain their growth over the next six months, yet apprentice recruitment is still only 8,000 a year.

It is equally ironic that, when we are talking about skills shortages in microelectronics, a Policy Studies Institute survey showed that only 51 per cent. of firms were doing any staff retraining. It is also ironic that when apprenticeships are so valuable, half the industrial apprenticeships available in my constituency go unfilled.

The Government are providing help on such matters through, for example, open technology, the regional technical centres, projects such as Trident to improve links between schools and industry and by making sure that the youth training scheme is more clearly and closely linked to the needs of, for instance, the engineering industry. I understand that the engineering industry has just set up a youth training scheme which gives 53 weeks of off-the-job training rather than the normal 30 weeks.

There is no doubt that the major power to solve skills shortages lies with the employer. I should like to see more employers taking up the joint scheme between the National Economic Development Office, the Engineering Industry Training Board, the City and Guilds organisation and the Training Commission to train more craft workers on the German meister system. I understand that the take-up has been poor recently. I should like to see more employers take up the signposter initiative and the Engineering Industry Training Board's green site and primary projects initiative with schools. I should like to see further development of the segmented craft engineering traineeships by companies. Most of all, I should like to see companies give a far higher priority to the recruitment of scientists and engineers.

The hon. Gentleman should get the Government to do something about it.

This is a private sector responsibility.

When the private sector is paying newly-qualified engineers on average only £10,800 a year and technicians £8,300 a year, about the same as the average industrial wage, it is not surprising that they find it difficult to encourage people into the industry. It was worrying to hear the vice-chancellor of the Open university tell the Select Committee on Education, Science and Arts yesterday that, although it is easy to get firms to pay for business studies training for their employees at the Open university, only 30 per cent. of them regularly pay for scientific or technical training. It is in the interests of private sector firms to do that. It is their responsibility. They are the best people to do the training and, in increasing numbers, they must accept that responsibility.

Perhaps understandably, some companies in the small firms sector are put off going into training by the multiplicity of schemes and sources of funding. That is one of the problems addressed by the consultation document on the funding of vocational and educational training, which I understand is still out for consultation. It is daunting that some training schemes are the responsibility of the British Institute of Management, the CBI, universities, and industrial bodies and yet others are the responsibility of different Government Departments.

I hope that as a result of the review of vocational and educational training those schemes will be drawn together, at least in terms of the way in which information about them is disseminated if not in the way they are organised. I hope that greater emphasis will be put on local employer networks within each local education authority, using the chambers of commerce to develop joint schemes between employers which will stimulate training and prevent poaching of trainees between firms.

The final area in which the Government are making a contribution but where more needs to be done and will be done when the Education Reform Bill is enacted is the need to ensure that young people have the necessary qualifications to enter the engineering industry in the first place. It is significant that the qualification for a technician in the engineering industry through the Engineering Industry Training Board will be four passes at GCSE grades A to C. However, only 26 per cent. of school leavers at the moment get passes in O-level mathematics and physics. That will be exacerbated by the declining number of pupils over the next few years. The reason for that low figure is too much specialisation in the fourth year in schools and the fact that too many students drop scientific and technical subjects and mathematics. In Scotland, schools have started to address that problem and, as a result, they have one third more people who are qualified in those subjects.

The Government, through the national curriculum, will, I hope, begin to solve that in a big way. The national curriculum, the technical and vocational education initiative incentive grants to teachers of shortage subjects and education support grants should lead to more pupils taking a wider range of technical subjects. That will form the bedrock of the solution to the skill shortage in this country.

I should like first to congratulate my hon. Friend the Member for Newham, North-East (Mr. Leighton), the Chairman of the Employment Select Committee, on his contribution at the beginning of this first-class debate. I listened to every word he said. There is no doubt that my hon. Friend knows what he is talking about when he speaks about training. I should also like to congratulate hon. Members on both sides of the House who are members of that Select Committee and who have contributed to the debate. All of them do a first-class job in the Select Committee.

All of them?

Yes, all of them, under the leadership of my hon. Friend the Member for Newham, North-East. I kicked off by congratulating him because the Select Committee would not work properly if he was not at the helm.

I also want to congratulate the Secretary of State for Employment on being here during the debate. I shall not give way to him, but I welcome him to the debate on training. However, he was not present very often when this year's Employment Bill was in Committee. He was swanning around in Sweden and here, there and everywhere, but my hon. Friend the Member for Oldham, West (Mr. Meacher) was there regularly and he is here tonight, so I congratulate him. I felt that I must make that point about attendance.

I also want to speak about the principle of training. I shall not go into all the fine details, as the Select Committee does, but I wish to talk about the principle. I went into the pits in 1944 and I had first-class training. The training that was talked about in Committee and the training that the Government propose is labour on the cheap. The Government have poked their noses right into training instead of leaving it to industry. I was trained in industry and the Government had nothing to do with it.

I started at 50 per cent. of the rate of the chap I worked alongside, who was an experienced man. I worked at the coal face during the two-year training course and every two months I got a percentage increase. After two years, I was fully qualified and got the same rate as the other man. That is why this scheme is unfair,—it is labour on the cheap. Youngsters in my constituency let me know that in no uncertain terms. I am here on their behalf to tell the Government that the system is unfair, not only for youngsters but for the people who have been taken out of employment because of the Government policies.

There used to be nine pits in my constituency. Now four are left because they got rid of five. Where are all the youngsters and the people who worked in those pits? They have gone on the dole queue. Now the Government provide money for training under the NCB (Enterprise) Ltd scheme. They hold seminars and issue leaflets urging people to take another regular job and retrain outside mining in some other industry. People have been encouraged to accept redundancy so that the Government can do away with the pits and no one will work in them again.

NCB (Enterprise) Ltd., paid for by the Government, means that these people cannot go on training schemes unless they are guaranteed a job. That is a con trick. If the pits had not been closed they could have continued working in them and contributed to the energy requirements of the nation. We heard a statement today on the nuclear industry, and there will be more. The Opposition said long ago that we would go back to the coal mining industry. I am sorry that we have problems. Once a pit is closed it is finished—it cannot be reopened. We must open new pits in the new seams throughout the country.

The hon. Member for Langbaurgh (Mr. Holt)—he is probably on the train back home now—spoke of a shortage of skilled workers in his constituency. The hon. Member for Cambridgeshire, South-East (Mr. Paice) agreed with him and said that there were such shortages across the whole nation. The tragedy of all this is that the Conservatives have been in office for 10 years now and have not done a great deal about the problem. We are still struggling to provide skilled workers. If the Government went about it in the right way we might get somewhere. They should listen to some of the things being said by Opposition Members such as myself—[HON. MEMBERS: "Where are they?"] I do not know what the hon. Member for Elmet (Mr. Batiste) is laughing about: he does not know what work is. I do. I had to work to keep a family, but his lot are professionals. They have lived on easy street. Some of the beggars are working outside as well, earning up to five or more salaries, while the poor devils that we represent are trying to get work and cannot. And they are conned with this so-called training scheme. It is training on the cheap all right.

The Secretary of State has said the scheme is voluntary, but there is nothing voluntary in this flaming scheme. I remember the right hon. Gentleman saying something in Committee about people's social security benefits being taken away if they did not go on the scheme. Now the right hon. Gentleman sits there blinking at me, but he knows what I am talking about. The hon. Member for Colne Valley (Mr. Riddick) served on the Standing Committee and made a contribution or two—he was one of the few Tories to do so. Opposition Members had to do it all; we had to put Conservative Members in the picture about what was going on.

Every now and again, the Government change the name and direction of their training schemes. They do not even know where they are going. I wish they would listen to what the Opposition say about training. When people who have lost their jobs through Government policy manage to find a job, I will go along with the Government's scheme—but the jobs are not there. In my constituency, I have youngsters who have gone through the two-year training scheme but cannot find a job at the end of it. There is still 12 per cent. unemployment in my constituency. The Government say that unemployment stands still, but in my constituency unemployment will rise and rise because of what is happening.

I believe that the Government arc planning further pit closures in my constituency—in addition to the four that have already closed—which will make matters even worse. That will affect not only the industry in my constituency, but suppliers there and in other constituencies. It is a difficult problem, but the Government do not listen. They know it all. They are dogmatic. People must do what they say. We have had enough; we have had a bellyfull; and I tell the Government that the next time that the Prime Minister declares that there will be an election, that lot over there can look out.

The hon. Member for Ashfield (Mr. Haynes) talked about labour on the cheap, but I think that that was a Whip's speech on the cheap to cover tip the fact that there is nobody else on the Labour Benches to speak in this debate. That is what it is all about. He might have his fan club up there in the Strangers Gallery—all one of them—but where are the rest of them? There are none.

On a point of order, Mr. Deputy Speaker. What the hon. Gentleman is saying is totally unfair. He knows full well that my hon. Friends are now back working in their constituencies.

They might be back in their constituencies working, but some of us are trying to represent our constituencies here in the Chamber—that is the difference.

I am pleased to have the opportunity to speak in this fascinating and riveting debate on the important topic of training. I agree with my hon. Friend the Member for Wyre Forest (Mr. Coombs) that British industry has let down the nation to a certain extent in this sector. It has not provided enough training. It must be said, however, that Governments of the past two or three decades have not allowed British industry to earn sufficient profits to invest in training.

Like the hon. Member for Ashfield, I had a proper job before I came here. I used to work in sales management in industry—the coal face of industry. I first started work with an American company called Procter and Gamble, which had an American business culture. It carried out all its own training and invested heavily in its own people. I was then poached from the American company—after it had invested in my training and had improved my effectiveness—by a British company, which was fairly typical.

I recently met one of the directors of the Confederation of British Industry in Yorkshire. He told me that at a time of deep recession training and research and development are the things that tend to go. He assured me, however, that once the profitability of British industry picked up, training would be back on the agenda, and it would invest in training once again. I hope that my hon. Friend the Member for Beverley (Mr. Cran), who used to be with the CBI, will confirm that that will happen in the future.

That is a question of training people already in work. Tonight we are debating the Government's proposal and their massive training role to help the long-term unemployed. There is an enormous need for high quality training which cannot be over-emphasised. The change in the pattern of job vacancies demonstrates the need for skilled people. There are fewer vacancies for manual, unskilled workers in manufacturing industry, but a far greater demand for individuals in the professional, managerial, technological and service sectors who have the appropriate skills.

If we consider manufacturing industry, it is significant that from the low point of the recession in 1981 to the present day, as the economy has picked up, output has risen by 22·3 per cent. During that same period, employment in manufacturing industry has fallen by 1·1 million—a drop of 18·2 per cent. In other words, productivity has increased by about 40 per cent. British industry needs fewer unskilled manual workers.

However, unemployment remains high. At the same time, the CBI and the chambers of commerce and trade in Yorkshire and elsewhere are reporting very serious skill shortages. For example, an ice-cream factory on Merseyside reported that it could not find enough maintenance fitters or refrigeration engineers. In Manchester, seven new hotels can barely find the staff to open their doors.

The jobs exist. Moreover, now that the baby boom of the 1960s has flattened out, there are marvellous opportunities for our young people. However, we must ensure that the long-term unemployed in their 30s, 40s or 50s are not ignored. They must not be left on the scrap heap. That is why the new training scheme is so important.

How do the Opposition react? Apart from the playful little speech from the hon. Member for Ashfield, Opposition Members react with a mixture of bewilderment—in some cases a measure of support and in others downright opposition. The dinosaurs in the union movement, notably the Transport and General Workers Union, the National and Local Government Officers Association and the National Union of Public Employees, complain about workfare and cheap labour. However, they claim to champion the cause of the working class and the unemployed. What humbug.

The response of employers and training organisations to the employment training programme has been very good but if the trade unions wish to cause trouble they can; but if they do that they and hon. Members opposite—in particular, the hon. Member for Birmingham, Ladywood (Ms. Short) who has been stirring things up to such an enormous degree—will bear a very heavy responsibility for depriving some of the most unfortunate people in society of an opportunity to better themselves and have a chance in life.

Instead of complaining about cheap labour many of the long-term unemployed will welcome the opportunity of a long-term future and will then sell their newly-found, newly-learned skills at a decent wage to companies that are prepared to employ them.

When my hon. Friend the Member for Elmet (Mr. Batiste) referred to the prospects of the new employment scheme, the hon. Member for Oldham, West (Mr. Meacher) said under his breath in a rather threatening way, "We shall see." He does not want it to succeed because the Labour party likes to see high unemployment. It believes that that is good for its political prospects. It is unfortunate that the hon. Member for Oldham, West makes many ambiguous noises about this and gets the hon. Member for Ladywood to do all his dirty work for him. Whatever the dinosaurs of the Labour movement do, the new scheme will start in September and give the long-term unemployed a chance to learn new skills to take long-term job opportunities. The Government are to be congratulated on giving them that chance.

I am sure that we are all grateful to the Select Committee on Employment for giving us an opportunity to debate this important subject. My hon. Friends regret that the debate has been on a Thursday evening as many of them have had to return to their constituencies. [HON. MEMBERS: "Why"] One only has to stand in the post office to see that the quantity of mail received by Labour Members compared with that received by Conservative Members shows who does more work for their constituents.

Like every hon. Member who has spoken, I want to concentrate on employment training—ET. It is just as ugly as the original ET, but with none of his lovable qualities. Before doing so, I should like to mention youth training. I put on record the Opposition's deep resentment and opposition to the removal of the right to benefit for 16 to 18-year-olds, thus making the youth training scheme compulsory. The level of refusal to take up YTS was low. We do not believe for a moment that that action was necessary to make young people take up further education and training. It was done so that the allowance paid to young people on YTS, which has decreased over the years—the Government deliberately allowed it to be eroded—could decrease further.

It was deeply wrong to remove young people's freedom to choose their training scheme. Good quality training schemes should give young people a freedom of choice. Out of desperation, because they have no income, young people are having to take the first scheme on offer, whatever its quality. Even worse—this has had a big impact in my constituency—the right of young people in receipt of benefit—whose families cannot support their children aged 16 to 18 years in full-time education—to study at their local further education college, take O or A-levels and vocational qualifications has been wiped out by the loss of the right to study for 21 hours. That is an outrage and the option should not be destroyed but expanded to allow young people to stay in full-time education. We are behind in the number of young people who stay in further education compared with our competitor countries. We are deeply critical of the moves that the Government have made in removing the freedom of choice for YTS schemes and young people's opportunities to study full-time if they so wish.

The hon. Lady decried the allowance paid to YTS trainees and said that it was decreasing. Does the hon. Lady accept that the amount paid is a minimum, not a maximum, and that many work experience placements pay considerably more in addition? That is constantly increasing, so to talk about the minimum as the norm is quite incorrect.

A minority of YTS placements receive top-up. It is important that top-up is allowed. It is deeply regrettable that top-up is not being allowed in the employment training scheme, although the model is identical to YTS. We know that a growing minority of young people on YTS are receiving top-up, but if the YTS allowance had remained at the original value of the youth opportunities programme allowance it would be worth not £20+ but £40+. I hope that as the 16 to 18-year-old cohort declines, more young people will be in work with training and not taking any job to avoid YTS. That is what is happening at present and the Government must take action. I hope that more young people on YTS will receive top-up and a decent wage and that the possibility of using top-up under YTS will be used by the trade union movement to improve the position of young people in the labour market. That is not only desirable but likely to happen.

I now refer to the adult training scheme, or ET, as the Government have now decided to call it. The Opposition's view is that it is a deeply flawed scheme and a tragically wasted opportunity to provide improved training for the long-term unemployed. There is a desperate need to expand training opportunities for everyone, but, in particular, for the long-term unemployed, because of the changes that are taking place in our economy. Conservative Member after Conservative Member has said how deplorable it is that we have skill shortages and that there is not more training. The Government have been in power for nearly 10 years. They have eroded training mechanisms. They have cut the number of skillcentres, got rid of the industrial training boards, cut the apprenticeship system. and so on. They deplore the lack of training in our country. It is a serious lack for the economy and for the quality of life and work for individuals, and the Government are responsible for it. They should organise things so that we have more training rather than less training. ET is deeply flawed, but we desperately need more and better training for the long-term unemployed.

It is also our view that the community programme, which is now to be abolished, has provided enormously valuable schemes to care for some of the most needy and desperate people in our communities. For example, in my constituency, mobility for the disabled is provided through a community programme. It includes decorating many elderly people's homes, doing up their gardens, schemes for disabled children, and so on. They are important community services, but we do not believe that they are all that should he on offer to the long-term unemployed. We have always argued that the CP should not have been only part-time but should have been a mixture of part-time and full-time work, according to people's needs.

There should have been more training opportunities for the long-term unemployed. When crucial services were being provided through the CP to some of the most vulnerable people in our communities, the jobs should have been permanent. Long-term unemployed people should have been given priority for such jobs. As they acquired skills and knowledge through working with such vulnerable people, they should have been allowed permanently to stay in their jobs and use their skills to take care of the local community, instead of constantly being forced to leave the scheme just as they had learnt to do their jobs particularly well.

We have consistently argued that point. That has always been our view. We said it when CP was first launched, we said it throughout the life of CP, and we say it now. Instead, what do we get? We get employment training, which builds on the failed job training scheme, rather than the best of the community programme. We continue to be told that it is a £1·5 billion programme. Of course, that is not true. There was some training in the community programme. Many schemes funded and organised training for themselves. After a great deal of pressure on the Government, funding was provided for training. [Interruption.] If Conservative Members who do not know about these matters would listen, they might learn something. After the scheme was launched, the Government provided funding for training in the time when people were not working. It was building up nicely, and the Government cut the budget. We demanded training. At last we got a budget, the programme was starting to build, and the Government deliberately cut the money. Conservative Members should not tell us about the lack of training in the community programme. When they launched the programme it failed to provide training and it was a deliberate part of the Government's strategy to cut the training that we later squeezed out of them.

I was referring to ET. We are constantly told that the budget is £1·5 billion. Of course, people on the scheme are to be paid £10 or a little more on top of their benefit. A large part of the budget is simply benefit money that people would otherwise receive. We are talking about half that amount of money. It is not such a big budget. Conservative Members should face up to that fact and be honest about it.

As someone who had worked in this subject for many years before I was elected to the House, written reports, done research and demanded improvements in schemes and more training before most Conservative Members even knew their way around the initials of the Manpower Services Commission, it is my view that, in their obsessive desire to cut wage levels, the Government have constantly destroyed our efforts to improve training opportunities for young people and the long-term unemployed. The Government use the schemes to lower wage expectations and restructure the labour market. The expectations of young people in employment have been deliberately lowered by the youth training scheme and a number of other schemes which subsidise employers who pay low wages. The success of that is measurable. Much of the inspiration behind this scheme has been the search to reduce the wage expectations and conditions of those in employment. Because the Government have that ulterior motive, they are throwing away a major opportunity to improve our training provisions for long-term unemployed people.

Some of us remember when the right hon. Member for Chingford (Mr. Tebbit) was the Secretary of State for Employment—all these measures were tried before. He tried to bring in the removal of benefit rights as a means of forcing trainees on to YTS. He tried to introduce benefit-plus for the long-term unemployed, but he failed. He then threatened to abolish the Manpower Services Commission because he was so angry about having failed. The MSC now has much less independence and authority than it used to have. The Government now have compulsory YTS and are bringing in the benefit-plus scheme because they seek to lower the wage expectations and not because they wish to help the long-term unemployed or improve our training provision.

We object to the benefit-plus model because one of the most immediate and desperate experiences of the long-term unemployed is poverty. Any of us could live on benefit for a short time because we have things that we have bought in better times and we might have a little in savings. However, if one is forced to live on benefit levels for months or years, one becomes extremely poor and cannot replace shoes, children's clothing, sheets, or bedding. The overwhelming experience of those who are long-term unemployed is grinding continuous poverty. Conservative Members talk about the need for people to make sacrifices to obtain training, but they do not know the reality of the poverty in which people have had to live.

This morning I received a letter from a constituent who was desperately upset. After three years of unemployment, he had found a place on a community programme and received £90 per week for working three days one week and two days the next. He said how happy he had been, how he worked hard because he always worked hard, that he liked working and was proud to work and that it made him feel better. He has just been told that he will be put on benefit-plus, get £10 and have to work full-time. He is distraught because he does not understand it and feels insulted. He had felt that his life was just getting better. He has written to me, pleading that I represent his case and try to get something better for him.

I advise Conservative Members that when this scheme hits the streets and many more people experience what is on offer, and when the overwhelming majority of 18 to 25-year-olds who predominate on the community programme and who are the guarantee or primary group for this programme, find that they are about £20 a week worse off, they will be extremely angry. There will be a lot of hostility to the programme.

I am grateful to the hon. Lady for giving way. I have heard what she has been saying about poverty being the major problem, but surely another major problem facing long-term unemployed people is boredom. They are bored because they have nothing to do. Surely this is an opportunity for them to learn some new skills and to have a new start in life. That is what the programme is about.

There is absolutely no question but that poverty is the primary problem. Other problems are that the long-term unemployed are isolated from society, and feel that they have no friends and that they cannot make a contribution. All those things are hurtful to people who then feel demoralised and unwanted, and who start to respect themselves less. They lose the confidence to apply for jobs. We know, because all the research tells us, that that is the effect of long-term unemployment. So what should we do? Should we make them an offer that does not make them any better off so that they have to grind on in poverty or should we make them an offer that gives them the chance to acquire skills and a decent income?

Opposition Members believe that the long-term unemployed are entitled to the chance to acquire skills and a decent income, but the Government are so determined to reduce the wage levels of some of the poorest people in our community that they bring in this kind of scheme, which will impoverish even more those who are already impoverished so that they are worse off than with the offer of the community programme.

It is said that benefit-plus will give an extra £10 per week, or even a little more because some special categories will get £11 and a few pence extra per week. When Conservative Members talk about the degree of TUC approval, they should remember that that "approval" came reluctantly because the TUC had feared something worse if it did not negotiate what it could from the scheme.

We are told that the scheme is the same as the TOPS allowance. People are willing to train full time and people have queued up for TOPS courses for such an allowance. When the skillcentre in my constituency kept waiting lists, they were years long. People wanted to train to obtain a skill in which there was a shortage, so they knew that they would get a job. When people are unproductive they are entitled to a training allowance. That might make them a bit better off compared with what they receive in benefit and they also get their bus fares paid and so on.

When people are put in a workplace and are producing goods and services alongside other workers, they expect to get some pay. They are entitled to an income that takes account of the work that they produce. It is not good enough to say that, in the case of the employment training scheme, they will receive £10 on top of their benefit. They must receive pay in proportion to their productivity. If they do not, they will be used to undermine the jobs and wages of those in work. That is what happened with YTS and YOP. The Minister's Department has produced a number of research papers that have shown that if young people are introduced to the workplace as free labour, they will displace other workers from jobs.

The employment training schemes threatens the long-term unemployed because it is worse than the community programme in terms of those people's income levels. It threatens people in low-paid work—the places on the scheme will be concentrated in such work—because that scheme will be used to displace workers. That is why we, together with many trade unions and many of the long-term unemployed, object to it so strongly.

How cynical can the Government get? I have with me a brochure handed out to employers to try to get them involved in the scheme. What does it tell them?

"Employment Training gives you the opportunity to hire people whose training you have been able to check yourself … You might regard the training period as an extended interview."

Now we get down to it. The Government might as well say, "Take on 20. Use them, they are free and keep the ones you want." An "extended interview" is not the high quality training that Conservative Members have tried to pretend the scheme is all about. The Government's expensive advertising budget has been spent trying to pretend that "an extended interview" means high-quality training. It is in their brochure and they are their words, not ours.

Ministers are aware that there is deep opposition to the scheme from the trade union movement, the voluntary sector and many local authorities, including a number of Tory local authorities. There will be a great deal of conflict. Roger Dawe, the director general of the Training Commission, has said that if one wants to learn the lessons from the failure of the JTS one must have consensus, support from local authorities from trade unions and so on.

Ever since the Government introduced the scheme we have pleaded with them to give us some basic assurances. We have sought an assurance that the scheme will be voluntary. My hon. Friend the Member for Newham, North-East (Mr. Leighton) has already referred to the duplicity of the Secretary of State who has constantly said that he has no plans to designate the scheme under section 26 of the Employment Act 1988 which gives him the power to take away people's social security benefits should they refuse a place on the scheme or leave it early. However, the right hon. Gentleman will not say that he will not designate the scheme. He is playing games. He has no plans to designate it now, but if things go wrong he will do so later. The Government are being dishonest and if they are considering the possibility of designation, they should tell us.

With the new availability-for-work tests there is an increasing compulsion on people to join schemes. People are called in and are threatened with the loss of their benefit. They are asked whether they are looking for a job and what wage level they are willing to accept. If they do not give the right answers they lose benefit anyway. Compulsion is creeping in through the availability-forwork tests and if that does not do the Government's job, they will designate the scheme and make it compulsory.

We are opposed to the scheme because it is not good enough. It is not good enough for the long-term unemployed and it has the potential to destroy the jobs of those already in work. It will not provide good training. We desperately want a scheme that will meet those criteria. If the Government will agree to pay a decent rate when people are working and producing—and an allowance when they are training—and if they give an absolute assurance that the scheme, including the availability-for-work tests, will be voluntary and if they will provide adequate funding for training, we will campaign for the scheme. I plead with the Government to heed what I say and what has been said on many occasions. We shall go out to the trade unions, which are rightly opposed to the scheme, and say, "OK. We have got something better now; let us all work for it."

We want a decent scheme for the long-term unemployed—they vote for us, and a lot of our relatives and friends are part of that group. We have relatives and friends who have been on training schemes and I do not believe that Conservative Members could say the same.

This is a desperately urgent and important matter to us. Of course, we want to form a Government, but in the meantime we want something better for the long-term unemployed and this is not the answer. There will be dissension and conflict and the scheme might well fail. The Government have made a grave error because they are obsessed with cutting the wages of the poorest people in the country.

In the few minutes available to me, I shall not be able to do justice to the interesting and valuable contributions from hon. Members on both sides of the House. I hope that hon. Members will accept that, if they think that I have not given their contribution sufficient treatment.

Before I reply to the specific points that have been raised, I wish to put matters into context. It is obvious that the Select Committee's report and this debate have concentrated primarily on the new employment training programme. That is entirely right, given the significance that we attach to it. The hon. Member for Birmingham, Ladywood (Ms. Short) was right when she said that the Committee had given us a valuable opportunity to discuss those matters.

Employment training will have a budget of about £1·5 billion in a full year, which will make it the largest programme of its kind anywhere in the world. The fact that the Government are investing that sum of money in employment training is a measure of our intent to help the long-term unemployed back into work. The case for training the long-term unemployed is clear and it should command the support of all Members of this House.

The prospect for jobs is better now than it has been for a decade. Unemployment has fallen for 23 months in succession by a total of 835,000, which is the largest and longest sustained fall on record. For the last six months, unemployment has fallen by an average of 40,000 a month. That is a direct reflection of the strength of the British economy. More than 1·8 million additional new jobs have been created since 1983. The economy is entering its eighth successive year of growth at an average rate of 3 per cent.

There is therefore every reason to believe that unemployment will continue to fall, provided that people who have been out of work can take the jobs which are increasingly available. That means, above all, that they need the chance to train in up-to-date skills.

We know from recent surveys that there are some 700,000 unfilled job vacancies in the economy as a whole. We now have a unique opportunity to train the long-term unemployed so that they can take advantage of those opportunities.

However, there is now clear evidence of a concerted campaign of intimidation directed against organisations which want to play a part in employment training. Of course, anybody is entitled to say that he does not want to take part in the new programme, but what is unacceptable is that anyone should try to intimidate other people into boycotting employment training.

There is clear evidence that officials of the Transport and General Workers Union have been involved in a number of violent demonstrations against officials of the Training Commission, the employment service and voluntary organisations that want to run training projects under the new programme.

In March, the newly elected executive of the TGWU voted to oppose employment training, despite the fact that their general secretary, Ron Todd, was one of the MSC commissioners who designed the programme and recommended it unanimously to the Government.

Since then, there has been a series of unpleasant incidents involving members and officials of that union. My right h on. Friend the Secretary of State for Employment wrote to Mr. Todd about that in April. He undertook to carry out an investigation. We are still awaiting a substantive reply. My right hon. Friend has now had to write to Mr. Todd again to draw his attention to two further incidents. One of those involved the week-long occupation of the Birkenhead job-centre—

Will the Minister give way?

The hon. Lady took more than her fair share of the time and she will have to forgive me if I press on.

One of those incidents involved the week-long occupation of the Birkenhead jobcentre, as a result of which no help could be given to unemployed people in that area. It is absolutely typical of that sort of demonstration that it is the unemployed who suffer.

Now we have the Liverpool city council not only opposing employment training, but threatening action against anyone who seeks to work with it. Liverpool city council, which is, of course under the control of the hard Left, voted on 29 June to boycott employment training. Not content with that, it also voted to take a whole series of steps designed to bully voluntary organisations and private companies in Liverpool into boycotting the programme. [Interruption.] The hon. Member for Ladywood does not like what she is hearing, but she will have to realise that she associates herself with those people by holding the views that she does.

If those threats are carried out, the unemployed people of Liverpool will be deprived of training and the elderly and disabled will lose the benefits of many of Liverpool's voluntary services.

Unemployment in Liverpool is higher than the national average. But if the council has its way, it will be even higher because the city's unemployed people will lose the opportunity to train for employment and return to work.

Even after hearing some of the speeches this evening, I remain an optimist and I should like to think that all hon. Members will join me in condemning that attempt to victimise those unemployed people who are most in need of help. It is the same destructive attitude that we saw in Dundee earlier this year. The conclusion is quite inescapable. If the hard Left cannot have jobs or training on their own terms, it would rather have unemployment. That is its message to the unemployed of Merseyside today, just as it was its message to the unemployed of Dundee in April.

I want to make it absolutely clear that the Government are not going to be deflected by any campaign of intimidation. The programme will go ahead as planned on 5 September. The Government will not turn their back on the unemployed. As a nation we need their skills and experience if we are to sustain our economic growth. I believe it is the duty of everyone in our society—including local authorities and trade unions—to help unemployed people get back to work. That is what employment training is all about and that is what is at stake.

The speech by the hon. Member for Ladywood did nothing to dispel the ambiguity which has surrounded the Opposition's attitude to employment training from the outset. Her speech contained the usual familiar recital of complaints about the programme—complaints which we have answered time after time.

It is obviously asking too much of the hon. Lady, given her particular prejudices, to ask her to take my word for it. Therefore, I refer her to the comments of Mr. Peter Ashby, writing in The Independent. The hon. Lady may sneer, but let us consider Mr. Ashby's credentials. He is not an uncritical supporter of Her Majesty's Government; he is a long-time member of the Labour party. He is a committed trade unionist and he spent three years working for the TUC. He is head of a body called Action on Long-Term Unemployment. This is what he had to say on the views of the hon. Lady, commenting on the views of her hon. Friend the Member for Oldham, West (Mr. Meacher):

"Michael Meacher's defence of the Labour Party's policy on employment training is sadly unconvincing."

We are all entitled to an under-statement.

"What he does not answer is the basic question: will the party support employment training?"

He continues:

"It is surely time for Michael Meacher and his colleagues"—

and we must assume that they include the hon. Lady—

"to speak out in favour of long-term unemployed people having the option of high-quality public-sector training.

It is too late in the day for those in positions of leadership to remain sitting on the fence. Unless they declare themselves in support of a programme, it will go down at TUC Congress."

He concludes:

"I hope from Mr. Meacher's letter that he is in favour of employment training. If so, could he please tell us in simple English?"

Of course he cannot, and the hon. Lady did not do so either.

In the few minutes that remain, I shall try to deal with some of the central points. Although the hon. Lady knows the facts, it is possible that some of her hon. Friends do not. Yet again she raises the old canard that Tory authorities are not in favour of the scheme. Again she mentions the case of Kensington and Chelsea. I can tell the hon. Lady that the position of Kensington and Chelsea is perfectly honourable. It has decided that for the time being it wants to wait and see, and it made it clear that it will not come into the programme yet. If the hon. Lady thinks that she can derive some satisfaction from that, she is welcome to it.

The hon. Lady is concerned that the programme will not be voluntary. There is not much point in trying to convince the hon. Lady that anything conceived by the Government is a right and proper approach.

The TUC, again not uncritical supporters of the Government, has given its conditional support to the programme. It is absolutely inconceivable that the TUC would have done that if it thought that the Government intended to make the programme compulsory. Accepting for the moment that there are some grounds for the fears of the hon. Member for Ladywood, surely she realises that the moment that we attempted—[Interruption.] If the hon. Lady will stop howling from a sedentary position, I shall try to deal with some of her points, inadequate though they were. If the Government tried to make the programme compulsory, the TUC would immediately withdraw its support and that would be the precise opposite of what we want. If the hon. Lady will not accept my word for it, she ought to reflect on the TUC's attitude.

The hon. Lady well knows that what she is asking the Government to do is to say that they will never at any time in the future invoke the Social Security Act 1975 that was passed by the last Labour Governmnt, at a time when her hon. Friend the Member for Oldham, West was a Minister with responsibility for social security. It would go against everything that we have planned and it would be against our best interests to do so.

I am afraid that we have again heard the hon. Lady say tonight that the Labour party is united against the scheme. Again I remind her, if she will not accept my words, of what Neil Fletcher, the chairman of the Association of Metropolitan Authorities education committee, had to say about it. He referred to the hon. Lady's employment training policy as "political posturing" and he is reported as saying that

"If the Labour movement goes down the boycott road, the first achievement will indisputably be to destroy upwards of 20,000 jobs. The avalanche of public odium that we would achieve by any such boycott would be well deserved."

The unemployed, employers and the economy need the programme. That is why I say that employment training deserves the unreserved support of Members on both sides of the House.

I hope that the House will take the view that the Select Committee performed a worthwhile service in allowing the House to debate employment training and that the debate has shed some light on the subject, as well as generating some heat. The Training Commission does not believe that the programme is set in concrete and it will keep it closely under review. When we return to the House after the recess, the programme will already be in operation. I feel sure that the Select Committee will want to monitor and scrutinise the programme closely and to report to the House on its scrutiny. I trust that the House will be able to look again at the issue.

The Question is, That the motion stands over under the Standing Order.

I was obviously too generous, Mr. Deputy Speaker, to the hon. Member for Newham, North-East (Mr. Leighton).

Order. The motion is stood over until Ten o'clock.

On a point of order, Mr. Deputy Speaker. I seek your guidance. I had it in mind that I might fill the vacuum with a few more words of wisdom and peaceful remarks, but if you are saying to me that I am not entitled to do so I shall resume my seat and will allow others to fill it with equally spurious points of order.

If I am entitled to do that, let me assure the hon. Member for Dundee, West (Mr. Ross) that I shall look into the specific points that he put to me about programmes in his constituency. We do not intend the community programmes—

Order. I must explain to the Minister that technically the position is that until Ten o'clock we ought to move on to the next item of business, the British Shipbuilders Borrowing Powers (Increase of Limit) Order 1988, but it would be inconvenient to call the Minister to begin his speech on shipbuilding, to interrupt him at Ten o'clock for the House to dispose of the estimates votes and then to return to shipbuilding. It is a difficult and, to me, a unique experience to have this hiatus.

On a point of order, Mr. Deputy Speaker. It seems that I could use the few seconds that remain to us to thank you for your guidance to the House—

Order. If the Minister will put it to me, I shall listen to his point of order.

The point of order, Mr. Deputy Speaker, that I was trying to raise with you—

I beg to move,

That the draft British Shipbuilders Borrowing Powers (Increase of Limit) Order 1988, which was laid before this House on 13th May, be approved.

The order concerns British Shipbuilders' borrowing limit. This is the statutory ceiling on the funds which the corporation may acquire in the form of public dividend capital from the Government, and loans from the commercial market. The order merely gives British Shipbuilders the power to receive the money. It will always be for the House to decide what actually should be made available through the estimates procedure.

The limit presently stands at £1,550 million, as a result of the British Shipbuilders (Borrowing Powers) Act which received the Royal Assent in July last year. The terms of the 1987 Act enable the borrowing limit to be raised by amounts not exceeding £150 million at a time to £1,800 million, subject to affirmative resolution of this House. I now propose that the borrowing limit be so raised by £150 million to £1,700 million.

I have stated very clearly on a number of occasions in recent weeks that British Shipbuilders has continued to consume alarming sums of money relative to its size. The total now stands at almost £1·8 billion since 1979, while employment is now only 6,261 people. No hon. Member should be surprised to see that the borrowing limit needs to be raised yet again—for the fourth time, I might say, in the last two years. The increase last July amounted to £20,000 per employee. This year's increase amounts to a further £24,000.

Of the £150 million provided by the British Shipbuilders (Borrowing Powers) Act 1987, around £100 million has been spent so far. British Shipbuilders forecast, that it will need the rest over the summer and early autumn so that, without the approval of this order tonight, there would be a risk to the corporation's ability to continue trading before the next Session of this House. This is the fourth time in the last two years that the House has had to vote extra money to save the business from closing down.

Since the 1987 Act received the Royal Assent, borrowing has been needed for three main reasons. Contract losses have continued to mount. For instance, the first of two ferries for Caledonian MacBrayne built by the Ferguson yard was discovered to be seriously overweight. This is likely to cost the taxpayer around £4 million more than expected on a ship priced at £7 million. None of the corporation's orders has been carried out without contract losses. Secondly, under-recovered overheads have been running at a high rate because of the chronic shortage of orders and work at the yards. Thirdly, the dispute with the customer for the Danish ferries at North East Shipbuilders has meant that no instalment income has been received for many months. British Shipbuilders has had to meet all the building costs itself, although the programme of work has continued. I will touch on that again later.

These and other costs have all required cash, including borrowing from the market and public dividend capital. For the same reasons the corporation will not be able to operate its business within this year's external finance limit of £80 million. The House has been invited to vote a further £74 million as a summer supplementary estimate for British Shipbuilders. The external finance limit will be revised formally once we are clear about disposal possibilities for the remaining facilities and the share of any further costs that the taxpayer will need to cover this financial year.

That history of losses provides the background to my policy for the corporation. We are not selling parts of the business because of some ideological hang-up. We are selling them for sensible commercial reasons. We believe that the parts of shipbuilding that are capable of survival in this country will be managed more efficiently in the private sector, and must face up to market conditions.

I now turn to the programme of disposals that I announced on 18 April when the letter of intent from Kvaerner for its proposed purchase of Govan was received. On 27 June I was delighted to announce the terms that had been agreed with Kvaerner. These have now been notified to the European Commission. I trust that the Commission will accept the terms at its meeting next week, so that the sale can be completed in early August as planned.

Kvaerner offers Govan a future. As British Shipbuilders had not succeeded in attracting other orders beyond the two ships for China agreed early last year, it is plain that the only alternative facing the yard was closure. I look forward to welcoming Kvaerner to these shores. Quite apart from the other business that it intends to bring, there is the prospect of at least one major merchant shipbuilder continuing in Great Britain. As I have said before, my aim now is to discover to what extent it might be possible to return all of British Shipbuilders' yards to private hands. The corporation is nearing the end of its life as a nationalised industry, and there is no realistic prospect of its ever achieving commercial viability in its present form.

It is of course important to stress that we are looking for serious purchasers with sensible business plans and substantial financial backing. We shall sell the parts of the business to substantial interests with a prospect of developing the business for the reasonably foreseeable future. We owe it to the work force and the taxpayer to negotiate on that basis. We are not prepared to facilitate asset-stripping, or to inject large sums of public money into flimsy or speculative ventures. I have to tell the House plainly that I cannot guarantee that we will find credible purchasers or affordable orders and work for every part of the business. My aim is to return every part of the business to the private sector on a basis that is fair to the purchaser, the taxpayer and the work force wherever possible.

British Shipbuilders now expects bids for Appledore from at least two groups interested in continuing merchant shipbuilding at the yard. British Shipbuilders will shortly set a bid date, which I expect to be in early August. As for the other yards, our main objective is to retain merchant shipbuilding as the principal business if that can be achieved on reasonable terms acceptable to ourselves and the European Commission.

Interest has also been expressed in Clark Kincaid and the Ferguson yard at Port Glasgow. I expect British Shipbuilders to set bid dates for those facilities in the near future. There remains considerable interest—I stress the word "considerable"—in Marine Design Consultants at Sunderland and Dundee. I expect bids for MDC will be invited a little later in the programme. In all these cases there will, of course, be delay between the receipt of bids and any request for consent for disposal to allow for negotiations with the parties.

There are, as I have told the House before, a number of parties interested in acquiring all or part of the British Shipbuilders facilities at Sunderland. However, I have to say that they are taking their time in bringing serious propositions to John Lister, the chairman of British Shipbuilders, as the basis for bids. There are naturally important points that need to be discussed in advance of bids on such matters as compliance with the European Community sixth directive and the various qualities that British Shipbuilders would expect to see in an attractive bid.

I am aware that two bidders in particular have made a great deal of their interest in acquiring the business in the press, especially the local press in the north-east. It can only be in the interest of the people of Sunderland if the people who say that they have plans for the yards now come to the table with solid propositions and evidence of financial hacking. For that reason, we have to set a definite target for bids to be received for North East Shipbuilders Ltd. in Sunderland. John Lister has agreed to set a final date soon for bids for NESL which will certainly not be later than the end of September.

I am particularly conscious of the uncertainties facing the work force at North East Shipbuilders. I am only too aware of the concern that that is causing to the work force and its families in Sunderland, which is a particularly troubled town at the moment. The House will recall that, apart from its appalling record on losses in recent years, the immediate problem at NESL began with the difficulties that I announced on 18 April between British Shipbuilders and its Danish customer. That dispute still drags on. Meanwhile, British Shipbuilders has cancelled a considerable number of contracts with Mr. Johansen and how has a number of excellent ferries completed in the River Wear and ready to sell. It is making considerable efforts in that direction, but ships take time to sell in today's markets. Meanwhile, inevitable layoffs have already begun at the yard, as was always expected from the moment that the order began if further orders were not attracted into the yard alongside the Danish ferries.

There is also a great deal of interest in the possible order for a series of general cargo ships from Mambisa, the Cuban deep sea shipping company. British Shipbuilders has put in an application for intervention fund support in connection with that order. After careful consideration, I have decided that I cannot offer such support to British Shipbuilders.

As I have said before, my reasons for that are not political or ideological. They are practical and commercial. I am simply not satisfied that British Shipbuilders could build those ships to cost or could do so within the terms of the sixth directive by which we are willingly bound. I have seen no persuasive argument to the contrary, and I have seen a good deal of evidence that supports my view. For instance, the last four ships for Cuba overran their intervention fund support, which was already a considerable cost to the taxpayer, by between 12 and 17 per cent. of cost. If we look back over the history of British Shipbuilders, we see that intervention fund support over the years has cost the taxpayer £250 million. Trading losses on top of that intervention fund support total about £1 billion. Most of us could find more attractive ways of spending £1 billion of public money on one public service or another.

However, I am prepared to consider intervention fund support for the Cuban and other orders from any who may successfully negotiate the purchase of a yard in Sunderland. Such a purchaser would have to accept the risk of contract losses over and above intervention fund support. Any new purchaser or manager would strive to avoid such trading losses. My Department has established that the Cuban company Mambisa has the authority to purchase these ships and to negotiate price and credit terms. One of my officials has been to Cuba to discuss that very matter.

It remains now to be seen whether any of those interested in the yards could negotiate satisfactory terms and they certainly face fierce competition. However, Mambisa has confirmed to my official that it is prepared to allow plenty of time for negotiations to take place.

All this confirms what I told the Select Committee on 28 June. The Cuban order is now a serious opportunity and there never was a June deadline for any contract. However, it is important—so that there is no misapprehension—for people in the north-east to understand that the order is not, and never was, a forgone conclusion. The Cuban order simply is not in the bag or readily available for anybody.

Mambisa is pleased with the ships that it has bought in the past and is happy to order again, but only on competitive terms that are attractive to it, which is, of course, the basis on which any prospective customer would proceed. If the order was won by any British bidder, work would be unlikely to start on the Cuban ships for some months. It could not start this year. The Cuban order, even if it is won, is not, of course, big enough to provide sufficient work to occupy both yards in Sunderland and all their work force. The Cuban ships are not the only ships that prospective purchasers are talking about with British Shipbuilders and my Department.

The situation is extremely difficult and it is important for me to play fair with the people of Sunderland. It would be quite wrong for me to disguise from the House or from the people of Sunderland the fact that there is a very large question mark over the future of the Sunderland yards. We must face up to the fact that there is no clear or certain expectation that any order for any ships can be found for those yards—under any credible ownership of the yards—at acceptable cost.

I have said before that I am not convinced that merchant shipbuilding offers the best future for the town, if it can be sustained only by huge subsidies for occasional orders. The whole business runs the risk of continuing on a hand-to-mouth basis, which is no certain future for the work force and their families. Substantial lay-offs, if not redundancies, are inevitable over the next few months. If no satisfactory bid is forthcoming, I shall in due course announce a package of measures for the town that will be designed to create new opportunities and which will underline all the efforts already being made to secure its economic future. I very much hope that that will not prove necessary, but it is the Government's duty to the people of Sunderland to help them to attract new enterprise and jobs should the need arise.

The order before the House tonight is essentially a technical matter, which is designed to allow British Shipbuilders to continue trading within its statutory trading limit. It is the occasion for a shipbuilding debate in which hon. Members who represent shipbuilding constituencies and other hon. Members who have legitimate interests in shipbuilding may give their views.

British Shipbuilders now has its programme of disposals well in hand. There are inevitable uncertainties. Some facilities may close. However, I hope that in place of a corporation which still makes appalling losses we shall shortly see a merchant shipbuilding industry which is strengthened by these disposals and has a promising future into the 1990s and beyond. I shall make every effort to ensure that we improve the prospects for profitable industrial activity and for secure employment which will last in all the shipbuilding towns.

I had intended to begin my short speech by saying that the Opposition welcomed the order and the fact that at least the borrowing limit is to be raised, which is a sign that the Government do not intend to pull the plug on British Shipbuilders at the moment. However, in the light of the speech that the Chancellor of the Duchy of Lancaster has just made, that welcome would be quite inappropriate. We have just heard nothing less than the sounding of the death knell of British merchant shipbuilding and, in particular, the death knell for shipbuilding on the Wear. The Chancellor's announcement that he is not prepared to provide intervention fund support in the present circumstances is nothing less than a knife in the back for the workers in Sunderland.

This debate traditionally provides the opportunity for asking questions about the future of the British shipbuilding industry. We have had precious little information from the Chancellor tonight, except for that staggering announcement of his refusal to support the British merchant shipbuilding industry.

We are within a week or so of the House rising for the summer recess. Events of great importance are likely to take place during that recess, and I ask the right hon. and learned Gentleman to ensure that I and the hon. Members whose constituencies are involved and who have an interest in shipbuilding are kept informed and allowed to question the Chancellor and his Department about each stage of the operation. We need to be able to continue to make the case for British merchant shipbuilding over that period, as it has certainly not been made by Conservative Members.

I was going to express a welcome for this order, but I was not going to welcome the reasons for extending the borrowing limit. They lie in the uncertainty, delay and confusion that have arisen because of the Government's attitude to the decisions they have to take. Because the future, particularly in Sunderland, is so unclear and, in the light of the Chancellor's speech, so gloomy, costs are rising, workers are being laid off and losses are sure to mount. Because of all that, British Shipbuilders continues to need the increase in borrowing limits for which the order provides.

The Chancellor had the opportunity this evening to provide the House and the industry with information on which the industry could base some sort of future and make better plans to reduce the inevitable haemorrhage of costs that will occur over the next few months. Instead, I fear that the industry will be left with no incentive except to bear the losses as they happen and to look forward to a future without hope.

The right hon. and learned Gentleman mentioned the future for Govan. It has a future of a sort in the hands of Kvaerner, and subject to the permission of the Commission it has a future with the intervention fund subsidy that is available. But it is reasonable to ask why it was necessary to give the yard away if the subsidy approved by the intervention fund is to be continued. That is an instance of the ideology that the Chancellor denies is at work.

We also heard some cryptic remarks about the future of Appledore Ferguson and Clark Kincaid. We were told that British Shipbuilders was setting bid dates. It should be put firmly on the record that British Shipbuilders is not taking the initiative in this respect. To the extent that John Lister and others are setting bid dates, they are doing so under the direction of the Chancellor of the Duchy of Lancaster.

The most pressing question arises not in respect of Govan, Appledore Ferguson or Clark Kincaid but—it was clear from the Chancellor's speech—in respect of North East Shipbuilders Ltd. Layoffs are already taking place and by Christmas no more than 200 men will be left on the site. By early in the new year the yard will have no more work and will close unless orders are secured. It is essential to the future of British merchant shipbuilding that the yard's future should be secured. It is surely common ground among all who care for the future of the industry—that must include the Chancellor—that the future of the yard depends on securing orders, not on the form of ownership.

Orders are the lifeline for NESL. The overwhelming priority for any Government, Minister or person concerned with the future of the yard must be to secure orders to keep it and the industry alive. The Government have their priorities wrong; they deny their commitment to ideology, but say that ownership must be established first, and only then can orders be examined. It is that order of priorities that threatens the survival of the industry.

The yard desperately needs orders. An order—subject, I agree, to the factors that the Chancellor mentioned—is available. One crucial precondition to the securing of that order is that intervention fund support should be made available. The Chancellor had an opportunity tonight to make it clear that, if British Shipbuilders, NESL, could reach agreement on price and could raise the necessary financial support—I will come to that in a moment—the difficulty that might arise in the absence of intervention support might be removed, the yard would be encouraged and helped to secure the order, and only then would the Government insist, if they wished, on sorting out ownership.

It is the Government who have reversed that order of priorities and insisted for reasons of no validity—reasons which rest entirely on their own dogma—that the order should take second place to ownership.

It is not as though the Chancellor's arguments bear any real examination. First, the doctrine peddled by the Chancellor speak very little for his confidence in the new management that he appointed only a year or so ago. I believe that he should have come to the House tonight to express some confidence in the new management, which has recognised the problems facing British Shipbuilders, especially the yard in Sunderland, which has taken great steps, with the co-operation of the work force, to get matters right. The Chancellor has expressed a substantial, if not fatal, vote of no confidence in both management and work force.

Secondly, the Chancellor bases his argument on the need to ensure—as he puts it—that contract losses, if they arise, will be borne not by the taxpayer, but by a new private owner. Even on the Chancellor's terms, that argument does not stand up. I do not believe that the case for the inevitability of contract losses has been made. If the Chancellor is simply making that assumption, it amounts to a tremendous vote of no confidence in the yard and its management.

I shall assume for the moment that the Chancellor was right in saying that, if the Cuban order were obtained and intervention fund support provided, there would still be contract losses, but there is no escape by selling to a private owner. No private owner worth his negotiating salt would sit at the opposite end of the table and ignore that factor when deciding what price to pay or, far more likely, what sum to demand to take the yard away. The taxpayer will pick up the bill for contract losses, irrespective of whether the yard remains in public ownership. Ownership is irrelevant to contract losses; as it is irrelevant to securing the orders and to the survival of the yard. It is the Government's dogma alone that makes ownership relevant at all.

There are real questions to be asked and answered. Unfortunately, in a remarkably uninformative speech, the Chancellor has provided little information on any of those real questions. On the Danish ferry contract, we have had no indication from the Chancellor of what the legal position was, how the negotiations were proceeding, what the Export Credits Guarantee Department's attitude was, what would happen if Johansen finally defaulted, and what that would mean for the work programme on the remaining ferries? We have no information on that, which is extremely disappointing.

What about the Cuban order? As I have said, that is the one remaining realistic prospect for keeping the yard open. The Cuban order was denied as a possibility for months by the Chancellor. It was only when the yard and its management insisted that it was a real possibility that the Chancellor deigned to take it seriously.

There was also a question about the application for intervention fund support. British Shipbuilders wrote expressing considerable interest in the order, referring to the price it thought that it would bid and the amount of intervention fund it would need. However, the Chancellor's Department told British Shipbuilders that help would he very unlikely. When it raised again and in public the need for intervention fund support, it was rebuffed with the excuse that no application had been made. That kind of double dealing epitomises the lack of support and interest that the Government have shown in securing the Cuban order.

However, at least a senior civil servant has now been to Cuba and presumably has entered into serious negotiations. We hope that he has come back from Havana with some serious propositions. Again, we heard very little information about that from the Chancellor tonight.

Will the Chancellor confirm that he believes that the Cuban order is a real possibility? Will he also confirm that British Shipbuilders—subject, I agree, to foreign competition—can bid successfully for the order? Will he further agree that with intervention fund support and a level of financial support in a package—which we, above all, must be able to organise in the City of London in the form of a package that will at least match that available from other supplying countries such as Spain—the Cuban order would be available and would save the yard? That is what we had hoped to hear this evening from the Chancellor. Instead we heard the sound of the slamming of the door.

If the Government insist on their ideological obsessions and on selling the yard before they consider support for the order, there are still real questions which the Chancellor has not deigned to answer. How many bidders have we had? How many are serious? How many of them would keep the yard going as an entity? How many intend to split up the yard, retaining only such bits as design capacity? What are the deadlines? Is there a serious prospect of the Copson bid or order materialising? If it materialises, what are the plans to bridge the gap that would inevitably arise? All those are real and practical questions, the answers to which will determine the fate of thousands of jobs and of this vital yard and part of the British merchant shipbuilding industry.

We have had no answers from the Chancellor to those important questions. I am left with welcoming the order. However, I suspect that the increase in borrowing powers is itself a poisoned chalice and that this is not an act of generosity, but something that will be hung around the neck of British Shipbuilder; in future as further evidence of how unsustainable it was. Time and again we hear the figures trotted out about how much public money is being devoted to the industry. The Chancellor has conceded in earlier comments that large proportions of that money have gone to warship yards that have since been privatised and to restructuring and causes other than trading losses. I hope that these further sums will not be added into that quite unfair and misleading total.

As the Chancellor is aware, I recently visited Sunderland and the two yards on the Wear. I was impressed, as any visitor would be, by the evidence of the taxpayers' investment and by the immense facilities available to the yards. I was also impressed by the keenness and realism of the management and the tremendous efforts made by the work force, which has suffered grievously in terms of job losses in recent years. I formed a very high opinion of the efforts made in those yards to sustain a future that is so important to British industry.

I am sorry to hear tonight that the Chancellor does not share that enthusiasm. No one discounts the difficulties involved, but I had hoped that the Chancellor would reaffirm his commitment to British merchant shipbuilding and NESL. Sadly, we did not hear that reaffirmation tonight.

The size of the borrowings revealed to the House by my right hon. and learned Friend the Chancellor is perhaps not a shock—the seriousness of the position has been rehearsed on many occasions over a long time—but it shows that we are indeed in a crisis and cannot just accept a continuation of the previous scene. I agree with my right hon. and learned Friend that action is needed.

My right hon. and learned Friend will understand the concern in the north-east about the fate of Sunderland Shipbuilders. He is, I know, aware that this is regarded as a regional problem not just of concern to all parties on Wearside but in the wider area.

Enormous efforts have successfully been made to modernise the local industry and provide alternative employment prospects on Wearside. My right hon. and learned Friend cannot, however, be ignorant of the serious unemployment problem in Sunderland. We must do all we can to seek to ensure a future for the town's shipyards.

There are signs of a changing world scene for shipping. It would not be right to say that the sun is rising and that there are rosy prospects, but ship demand is growing. There are signs that the era of cut-throat competition, which depressed prices and led to dramatic borrowing to cover British Shipbuilders' losses over many years or more, is easing. Prices are rising, and our main competitors in the far east are experiencing problems. The Japanese are suffering from the high yen. When I visited Japan earlier this year with a Select Committee, I was interested to note the difficulties that the Japanese are experiencing with all their exports because of the strength of the yen. For the first time, Korea is experiencing industrial relations problems. Demands are being acceded to for very large wage rises. These eastern competitors will not have the easy time that they had in the past.

The shipbuilding recession is an international problem and the House has rehearsed the problems many times over the 13 years of the recession. On many occasions, I have drawn attention to the need for international action. At last, there are signs of that happening. Discussions are now under way between the Japanese and the EEC to seek to establish some stability in the shipbuilding market.

I have referred to the concern on Wearside and in the north-east, but the reduction in capacity has a far wider knock-on effect on the engineering industry. The House is aware that I have been involved with the marine equipment industry for a long time. Twice as many jobs are involved in the manufacture of parts of ships as in assembly in the shipyards. Those jobs are nationwide, not only on Wearside.

Inevitably, there is much uncertainty on Wearside about the future of Sunderland Shipbuilders. However much we should like him to, I understand why my right hon. and learned Friend cannot reveal details of any discussions with potential purchasers of the yard or discussions with the Cubans or other potential purchasers of ships. Will he, however, undertake that any information about potential orders from Cuba or other shipowners will be made available to a potential purchaser of the yard so that the potential purchaser will know the state of any negotiations?

Will my right hon. and learned Friend consider the possibility of the two sites in Sunderland being converted into private ownership separately? I remind him that at one time they were two separate businesses before British Shipbuilders came into being. Will he give way on the end of September deadline if serious negotiations are in progress at the time? If by then there is a serious possibility of either site—or both sites—in Sunderland being transferred to a purchaser, will he undertake to extend the deadline?

One must accept that one cannot go on building ships at 45 or 50 per cent. losses. It is a measure of the Government's support for the industry that they are prepared to continue the intervention fund at 28 per cent. A 28 per cent. subsidy on future merchant orders will be available to any purchaser of the Sunderland yard and my right hon. and learned Friend should spell out that fact. I ask him to understand the wide concern in the north-east about the future of the industry, and I hope that he can give the House some assurances on my specific points.

I endorse the remarks of my hon. Friend the Member for Dagenham (Mr. Gould) about the Minister's speech. It was even more dreary, pessimistic and disappointing than I expected it to be. Some of his remarks were positively damaging to any prospect of the privatisation of NESL on which he is so bent. Any potential purchaser who took much notice of his speech would immediately be put off.

The Minister has created an absolutely hopeless mess for the future of NESL, because of his ideological obsession with privatisation first and, perhaps, orders later. That point can be illustrated in a pragmatic way. On many occasions, the Minister himself has acknowledged that the Cuban order is a serious possibility. He acknowledged that point tonight, despite saying that he was not prepared to give intervention fund assistance for it at the moment. That statement is to be welcomed, compared with his remarks earlier in the year that the order did not exist at all.

Having acknowledged it as a serious possibility, the Minister must surely accept that any immediate purchaser of NESL—a purchaser on whom he is insisting—will have to clinch the Cuban order, unless there are so many orders around the world at the moment that each potential purchaser can come along with different prospects. If that is the case, the scenario is different from the one that has continually been painted in debates over the past few years, when we were told that there were no orders in the world.

The Minister acknowledges that the Cuban order is essential. Some other things can be exciting in the longer term, but they will not happen unless the gap, or some of it, is filled by the Mambisa order in the near future.

I do not understand how the Minister has the audacity to talk about potential purchasers taking their time. Only a few weeks ago, he announced his determination to privatise NESL. Some people—one or two—have been seriously working night and day, putting other matters aside, to try to put together a package that will save the yard. If one is trying to put together a bid, I can hardly believe that it is helpful not even to know what the bid deadline is or what is happening with the Cuban order. It is a chicken and egg situation. How does one put together a business plan for NESL when one does not know what is happening with the Cuban order? How does one hope to secure the Cuban order when the Cubans do not even know with what ownership they are placing the order?

It is ridiculous for the Minister to say that people are taking their time. Some of the people who are not taking their time, other than the one or two serious potential bidders, are the growing number of sharks, charlatans and comedians who are coming on to the scene and, looking at the pickings. That is ridiculous when we are talking about 12 to 15 potential purchasers. It is so ridiculous that, I suppose, I could walk out of the Chamber and announce that I am to put in a bid for NESL, and my name would go on the list. Anyone can walk in off the street, ring up the Department of Trade and Industry, and another joker will be put on the list as a potential bidder. That is the ridiculous situation that has been created.

Men have been laid off and will be laid off in their hundreds in the next few weeks—that affects their families—but they do not even know the names of the potential bidders—the "blue tornado" and the rest of the jokers. The men do not even know whether this measure will provide them with some future security. The Chancellor of the Duchy of Lancaster has created that situation by his insistence on privatisation before anything else can happen.

Let us look at the outcome. From a pragmatic point of view, the position is ludicrous. There are only one or two serious prospects. As an example I shall take Mr. Zacchi and his consortium, which seems serious about wanting to secure the Mambisa order. We can also take as an example Mr. Copson and his bucket boats, which is a more long-term proposition. How does it help fitting together those different propositions and working out whether things can be built and outfitted in Pallion, Southwick or North Sands and how the facilities could fit together in a way that would maximise them when those people are, in effect, having to bid against each other and against a deadline that they do not even know?

Apart from the Minister's blank refusal, which I suppose was not that unexpected, there was the appalling announcement that in no way will there be intervention fund aid without privatisation. The other appalling development was his announcement that the bid deadline might not be until the end of September. As he knows, there will be hundreds more redundancies by them. If the Minister allows the damaging uncertainty to continue until that time—when there are people who, if he would only clarify the position, could start talking seriously about bids in the next few days—the position becomes even more damaging than we thought.

In conclusion, the Minister has created a mess and it is his responsibility to get out of the mess. There is a way out of it. If one puts ideology aside, the common-sense way to proceed is to say, "We have one or two potentially serious possibilities—the Cuban order, Mr. Copson and one or two others—and the job with which we should now get on is clinching the Cuban order, doing the work on Mr. Copson's proposition and talking about the one or two other potential orders. Let's leave NESL as it is at the moment to get on with that job."

When those orders have been clinched when we know whether Mr. Copson can build his bucket boats and whether he can get a licence and overcome some of the other hurdles facing him, and when the NESL's existing management who, at the top level, from the chairman down to the managing director, are one of the best managements in British Shipbuilders for a long time and who are supremely qualified to work out the practicalities of building those ships and arranging cycles and time scales to save the greatest number of jobs—when all that has been done, if the Minister must, we can then debate the privatisation of what has been achieved. That is the logical way to proceed.

If the Minister does not do that, this debate may mark the final announcement of a malicious and unnecessary sabotage of the largest remaining part of the British merchant shipbuilding industry.

I am grateful for the opportunity to make a brief contribution to the debate, because the decline of shipbuilding in this country has a significance which should not elude British industry as a whole and which is worth emphasising.

I am not suggesting that there is any great significance in the motion to increase the statutory limit up to which British Shipbuilders can raise additional public dividend capital or raise commercial loans. My right hon. and learned Friend the Chancellor of the Duchy of Lancaster has explained his object in that regard and what he has told the House that British Shipbuilders requires is analagous to a private company seeking to increase its authorised but unissued share capital or to raise the borrowing powers in its memoranda and articles of association.

What matters in any enterprise is the reason for which that additional finance is contemplated. The sound reason is to fund expansion beyond the scope of any current earnings and cash flow. The less happy reason which applies in the case of British Shipbuilders is to enable a company to accommodate the effect of cumulative losses, to cover the cost of cuts which managers euphemistically describe as "rationalisation" and to cover the cost of redundancies without breaching statutory limits.

Not surprisingly for British Shipbuilders, this evening's order comes after a decade of huge losses. The industry has struggled with the massive problems of over-capacity throughout the world, cut-throat competition, spectacular changes in marine technology and production methods in the shipyards. As such things had an effect, it must be said that British shipbuilding labour has all too often shown itself to be poignantly ignorant of the vital need to be flexible on matters such as demarcation and of the need for greater productivity.

That is not true.

I am not saying that there has been no progress, but there has not been enough. There is no question but that our labour has priced itself way beyond the competition offered by far eastern shipbuilders.

The sad story of Britain's shipbuilding decline from 80 per cent. of the world market to one third of the virtual captive market that existed during the rebuilding boom of the late 1940s and early 1950s and down to our present minute and paltry share of the market is a well-documented case study of industrial decline, upon which I shall not dwell.

The last chapter of that case study was the ill-judged nationalisation that scraped through in 1977. In the past decade, that has resulted in the massive drain of £2 billion of taxpayers' money. The purpose of that support has been to preserve the jobs of a few workers and—rightly perhaps —to sustain the shipbuilding communities. It might have been kinder if, long ago, the attention of such communities had been turned to other products, fresh markets, new enterprise and a renewed sense of determination.

No amount of taxpayers' money, grants or subsidies will turn the industrial clock back. It is sad that Opposition Members cannot accept that and cannot accept its significance for Britain's industry. No amount of subsidy will halt the inevitable progress of change. [Interruption.]Opposition Members may shout as much as they like, but it will not. The harsh fact of life that must be faced is that competition is here to stay. There are cheaper and more flexible sources of labour, and sophisticated technology and cheaper raw materials at the disposal of shipbuilders in Japan and—more worrying for our industry—in South Korea.

British Shipbuilders undertakes a production task whereby two thirds of the product cost is bought in and one third is open to management and employee control. That is not a basis on which our yards can compete with the far east.

The problems are not unique to shipbuilding; industrial change is taking place everywhere. In the early 1980s, countless firms in the black country faced a similar acute problem of over-capacity in world markets. Those companies had priced themselves out of the market as a result of wage-driven inflation.

What?

The hon. Member for Dagenham (Mr. Gould) may express surprise, but I worked in that part of the world and saw examples of the good times and the bad. I saw the problems and I have witnessed the resurgence. There is a lesson to be learned by the shipbuilding industry. The sooner Opposition Members grasp the import of that lesson and encourage the shipbuilding communities to understand it, the sooner prosperity will return to those yards.

I have borne the hon. Gentleman's outrageous lecture with equanimity for some time, but will he estimate a guess as to the importance and relevance of the 60 per cent. increase in the real exchange rate, brought about by an excessively tight monetary policy perpetrated by his Government, to the problems experienced by British industry in the period he mentioned, and especially industry in the black country?

It was undoubtedly a factor, along with the increase in oil prices in the 1970s. I recommend that the hon. Gentleman looks at the comments of his colleagues and the level of unemployment that they were predicting in the late 1970s before this Government came to power.

Wherever industrial change has been accepted as a challenge, and wherever the hankering after yesterday's markets has stopped, industrial and commercial resurgence has already begun, with new technologies and new opportunities to exploit. I hope that the British shipbuilding industry will grasp that vital lesson.

We have heard all about the resourceful and wholly commendable initiatives taken by the Government to provide subsidies for the possible Danish and Cuban orders and latterly to find suitable buyers. We have heard about Govan and Kvaerner and the initiatives taken towards Appledore and Ferguson, but, so far as the Wear and North-East Shipbuilders are concerned, the harsh reality of market competition must be faced. There will always be pockets of specialist shipbuilding enterprise in this country, but, on the Wear, we should not perpetuate a long-gone past, but create a new and prosperous future.

The speech to which we have just listened has been a complete waste of time in this short debate which is taking place at a disgracefully late hour about an important industry. I shall cut my remarks short and just make one or two comments about Govan shipyard.

The way in which Sunderland has been treated is outrageous. The Minister's speech, far from being helpful to the prospect of privatisation and the prospect of obtaining the orders that Sunderland desperately needs, has been extremely unhelpful and damaging. Sunderland has been treated in an utterly disgraceful way.

The deal concerning Govan has gone through, subject to the European Commission's approval. Although I have expressed my views on privatisation on a number of occasions, I have to accept that the privatisation of Govan will now go ahead. It is not an unmixed blessing, even with the orders that are coming to Govan, because 500 redundancies will accompany them. So far as making the yard profitable is concerned, it helps if one obtains the yard for nothing, all the assets, plant and machinery are written down to nil in the 1986–87 British Shipbuilders' accounts and if all the losses and any prospective losses on the orders in the yards at the time are borne by British Shipbuilders and, ultimately, by the taxpayer. Kvaerner is getting an extremely favourable deal at Govan, but I wish the company well at the yard because the interests of my constituents who work there are bound up with the success of the yard.

I want to ask about intervention fund support in the long term. It was announced in a written answer on 27 June that the two gas-carrying ships which are definitely to be ordered at Govan are to have intervention fund support and the two other possible orders will also be eligible. The sixth directive was meant to last for five years and we are only 18 months into it. The Government have already reneged on the directive, as they are not making support available to British Shipbuilders so long as the company remains publicly owned.

I hope that the Minister will tell us about the longer-term prospects of the sixth directive, both in Govan and elsewhere. It was intended to last for five years and there has already been a considerable resiling on that by the Government. Those hon. Members who still have shipbuilding interests are entitled to ask the Minister to tell us something this evening about the longer-term future of the sixth directive and intervention fund support. I should like to say much more, but I know that hon. Friends with constituency interests are anxious to be called.

The shipyard in my constituency is important to its economy. If the shipyard in Appledore were to be closed, or turned into a marina or a block of luxury flats, there is no way in which 520 jobs could be found for 520 very skilled people. I feel confident that privatisation will not lead to the closing of the yard.

I am puzzled by the unpleasant tone of some of the Opposition speeches. I appreciate that my shipyard, if I may use that familiar phrase, is different. At least half the men on the shop floor welcome privatisation. There is an exceptionally good relationship between management and men. The management, the men and I have had no difficulty in discovering who will be putting forward the bids. Would-be bidders have approached me and have asked to meet me. John Lister, the chairman of British Shipbuilders, has fobbed me off over making a closer link, sooner than he wishes, between the prospective purchasers and the men on the shop floor.

The Minister welcomed a large delegation from the yard to his office only last week. It was an immensely helpful and successful meeting. Of course he was unable to tell the men everything that they wanted to know. Commercial constraints mean, quite properly, that until bids are on the table, commercially sensitive information cannot be released. Everything cannot be put on the table during union and management negotiations when a prospective purchaser is being tempted to buy.

The yard has a good order book and a good future. There are no worries about far eastern labour, because nobody else makes such splendid little ships—dredgers—as Appledore Ferguson. The yard has made tremendous advances in the use of modern technology, with beautiful computer-aided design. It has already led to great advantages.

The fears and concerns that have been expressed more inelegantly than Opposition Members may realise will not be justified in the long run. Privatisation will lead to more jobs and to the expansion that the dead, cold hand of the state could never achieve.

You will forgive me, Mr. Deputy Speaker, if I err slightly on the inelegant side, too, but I must outline the consequences of the shattering blow that this state of affairs represents for my constituents and those of my hon. Friend the Member for Sunderland, North (Mr. Clay). Sunderland was built on shipbuilding. Well within the memory of many of the people who live and work there today, Sunderland was once the largest shipbuilding town in the world. Male unemployment now stands well in excess of 20 per cent. In some areas there are whole streets where hardly anyone has a job. A generation of children is growing up who may never have any work, except that provided by a Government scheme. If the Minister and hon. Members detect just a little anger on this side of the House, I have given him the reason for it.

I must knock on the head a couple of falsehoods that were lobbed in by the hon. Member for Bexhill and Battle (Mr. Wardle). He referred to workers pricing themselves out of jobs. The workers in the Wearside shipyards take home on average £110 a week. Their gross pay is between £145 and £160, depending on their grade. It is outrageous for the hon. Gentleman to talk in those terms. They are merely an illustration of his ignorance.

The hon. Member spoke about the need for flexibility and claimed that there had been demarcation problems, although I was interested to note that the Minister did not make such an allegation. Indeed, anybody with a knowledge of the industry would avoid making such an allegation because the workers in Sunderland have been extremely flexible. As one of them put it the other day, they have seen more changes than the traffic lights in Fawcett street. They have bent over backwards to make their industry viable. There is no sacrifice that they have not been prepared to make.

It has not been pointed out clearly enough just how much what has occurred has been in direct contradiction to the advice of the management of British Shipbuilders. Mr. Lister, the widely respected chairman, who was appointed just over a year ago by the Government, has left nobody in any doubt about his view of the situation. When he appeared before the Select Committee on Trade and Industry on 14 June, he was asked by my hon. Friend the

"Did you think when you were appointed last year to be chairman that you were going to be presiding over the fragmentation of your corporation within the year?

A: I would not have joined if I had thought that for a moment. I thought that my job was to turn it round and make it viable. After six months I believed I could see a way to do that, or I would never have come.

Q: So, as an experienced businessman, you can see that, in keeping the corporation together in its present form, whether publicly owned or not, it would have a future?

A: Yes."

Later, Mr. Lister said in answer to a question from the hon. Member for Waveney (Mr. Porter):

"In my view, if you took one yard out of British Shipbuilders it would not be able to exist in the form that it is … we would not be able to sustain the research and technical effort at the level that is necessary.

Q: Have you advanced that view to the Department of Trade and Industry?

A: Yes, I have.

Q: With what response?

A: I think they accepted it.

Q: Did they indicate what they were going to do about it? A: Their response was to suggest that we would sell Govan to Kvaerner.

Q: I do not see the logical connection between the view you have expressed and the sale of the yard.

A: Neither do I."

What is occurring is happening in the teeth of the interests of the work force, without regard to the social consequences and in defiance of the view of the management appointed by the Government. If there is some bitterness in Sunderland, it is due to a feeling—the Minister used the phrase "ideological hang-up" and perhaps that best describes it—that this is privatisation at all costs.

I join my hon. Friend the Member for Sunderland, North in saying that we should do our best to obtain the Cuban order and then discuss the form of ownership. The workers in Sunderland are practical people. Unlike some Members here, they dwell firmly in the real world. They have done their best to preserve their industry and the generations of skills that have been accumulated. As I say, let us get the order and then argue about the method of ownership.

The hon. Member for Devon, West and Torridge (Miss Nicholson) kindly referred to the joint interest that we have in Appledore Ferguson. I understand that she is to visit the Newark yard in Port Glasgow in my constituency at the beginning of August. Hugh Hagen, the convener of the shop stewards' committee, informed me this evening that he is looking forward to her visit.

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I do not have time to give way. This is too serious a matter for many hundreds of families in my constituency.

My hon. Friends and I must be brutally realistic over this matter. We must ignore the Minister's professions of ideological innocence. The Government are getting rid of what is left of British Shipbuilders. That is accepted by the shop stewards and employees at Clark Kincaid and at the Newark yard of Appledore Ferguson. It is now received wisdom. The Minister spoke of serious purchasers with sensible business plans, and I should like to speak about both facilities. Clark Kincaid is the only marine engine builder left on the Clyde. It is now building an excellent work force, entirely unlike that described by the hon. Member for Bexhill and Battle (Mr. Wardle)—a speech characterised in some respects by its insensitivity and stupidity. If our workers are paid so highly, why has Kvaerner come to Glasgow?

Clark Kincaid is building two engines for Chinese ships which are under construction at Govan. As I have told the Minister before, the Chinese superintendent engineers are delighted with the quality of the workmanship of the first engine, which has been test-run for scores of hours. Clark Kincaid would, I believe, become a much more attractive prospect to serious purchasers if Kvaerner would give us some indication that it would purchase the engines for the liquid petroleum gas carriers from the lower Clyde. I for one do not believe that the intervention fund money should be used to purchase equipment that is to go into a ship from outwith the European Community. Statistics from the Department of Trade and Industry prove that more than 90 engines for ships built in European Community shipyards—I see that the hon. Member for Tynemouth (Mr. Trotter) agrees with me—have come from engine builders outwith the EEC. In my view, that was not and is not the purpose of the intervention fund principle.

As I have said to Kvaerner, it could display plainly its commitment to the west of Scotland by placing orders with Clark Kincaid, which in my naturally biased view is among the best engine builders in Western Europe. When a replacement was built in the north-east for the Atlantic Conveyor, which was sunk in the Falkland conflict, the engine was built by Clark Kincaid. Cunard's technical director sent a letter saying that he had not encountered that quality of workmanship before. When the Atlantic Conveyor was extended at Scott Lithgow in my constituency, the superintendent engineer at Cunard told me, "This engine is a superb product of which the whole of Scotland can be proud."

If Kvaerner places those engine orders with Clark Kincaid, it will make it a much more attractive prospect to a would-be buyer. I hope that considerable sympathy will be shown to the management buy-out proposals. Those involved know the lower Clyde and are trusted and respected by the committee of shop stewards, who, led by councillor Robert Jackson, are demanding—rightly, in my opinion—that they be allowed to talk to the would-be purchasers. Is British Shipbuilders denying that facility to these highly experienced, mature and wise shop stewards? If so, it is a disgrace. They are a credit to the members they represent, and they will negotiate sensibly and realistically with a serious would-be purchaser.

Ferguson's—the hon. Member for Torridge and Devon, West will have to forgive me; to me it will always be Ferguson's of Port Glasgow—has been mentioned in that august journal the Greenock Telegraph, known to my Scottish colleagues and of course the hon. Member for Eastwood (Mr. Stewart). Last night's editorial stated:

"Appledore Ferguson is our one remaining shipyard. Whatever happens, they must not be sold down the river. British Shipbuilders must make sure that they find a buyer who can give reasonable guarantees about the future of this excellent little yard."

That is precisely what it is—an "excellent little yard". Despite what the Minister said about the recent error on the Caledonian MacBrayne ferry, that remains the fact. The error was the responsibility of the designer, as he knows. It had nothing to do with the work force, which is entirely blameless in that regard. The designers who committed the error have parted company with British Shipbuilders.

Appledore Ferguson is a first-class little yard. The shop stewards and the convener, Hugh Hagen, should be given the facility to speak to would-be purchasers. I believe that Ailsa Perth of Troon is a serious would-be purchaser with sensible business plans. I wish to hear from the Minister that the board of British Shipbuilders will give every facility to Hughie Hagen and his colleagues to meet would-be purchasers, whether they are from Ailsa Perth or elsewhere. That is what I am seeking for my constituents who work at Clark Kincaid and Ferguson.

As everyone here knows, when a company is acquired, the work force is acquired with it. That is a fact to which the hon. Member for Torridge and Devon, West alluded. Incidentally, I hope to visit the shipyard in her constituency at the beginning of September, with her agreement. It would be difficult to refuse to do so, given that I accepted her visit to my constituency.

I wish to ensure that the shop stewards at Clark Kincaid and Ferguson—they are fine, decent, honourable men, whom it is a privilege to represent—are not barred from talking to would-be purchasers. After all, they will be purchased along with the material facilities in the yards. I want to see both yards continue, although it looks as if that will be under private ownership. I want the best deal possible for my constituents at Clark Kincaid and Ferguson in Port Glasgow.

We have had the opportunity to hear a little industrial rubbish from the hon. Member for Bexhill and Battle (Mr. Wardle), who does not speak much in the Chamber. Having listened to him, I can understand why that is. We have heard "I'm all right, Joe" from the hon. Member for Torridge and Devon, West (Miss Nicholson). The Minister gave us a homily on borrowing powers, which amounted to the ability of British Shipbuilders to borrow its own death grant.

This is the death knell of British Shipbuilders. The Minister comes to bury it and I come to praise it. It has done a superb job in concentrating the industry, in keeping it going and ensuring that it can survive to inherit the turnaround in shipbuilding that will come in the 1990s, in which we need to be an active player. Thanks to the Minister's policies, we shall not be. Having done all that, British Shipbuilders is being sabotaged by the Minister. He is normally the genial face of industrial incompetence, but tonight he was the shamed face of industrial murder. It is no wonder that he had such a miserable and unhappy expression throughout the debate, bearing in mind the news that he brought. He was telling us about industrial murder.

A hole was knocked in British Shipbuilders by taking out the defence yards, so that they made no contribution to the whole. The idea that obsessed the Minister earlier in the year was the giveaway of Govan, which was 40 per cent. of BS's capacity. I shall not repeat my Victor Kyam joke that the giveaway is such an obsession that when it comes to Harland and Wolff, which is not part of British Shipbuilders, the Government are not bothering to check whether Mr. Tikkoo, who is presumably a Hindu, is a Protestant Hindu or a Catholic Hindu, before he is given the yard.

We are seeing the dismantling of British Shipbuilders. The Minister has told us that what is not sold will be scrapped, closed, sunk, made redundant or ended. That was his message. It was also the message that he gave to the Select Committee on Trade and Industry. He said:

"I rather think there won't be any yards in the ownership of British Shipbuilders in 12 months' time."

Can there be a more incompetent way of dealing even with the dismantling of British Shipbuilders? Is not that an invitation to every shark and to every crook—to all those strange creatures which swarm in these waters—to come in and take the pickings? Is not that treating British Shipbuilders like a rummage yard to be picked over? Is not the Minister saying to anyone who wants, "Come in. There are bargains here. There are profits for the asking"? Is he not saying to anyone who might place orders with British Shipbuilders, "Hold on to your orders. You'll get better terms and a better deal. You'll even get the yard"? Is not that incompetence?

What swindler in the City would announce that the company was to go within a year whatever happened and then, as the right hon. and learned Gentleman has done tonight, start knocking the goods and saying that they are not up to the job—that the vessels that the yards produce are not adequate for the purposes for which they are intended? What kind of industrial performance is that? What confidence does it show in British shipbuilding and in the industrial future of Britain?

The Minister compounds his asinine attitude to the sale of a national asset with dogma, particularly on the question of NESL. He has told us that the Government will not consider giving help—the kind of help that every other Government would give their shipbuilders. The Government will not consider helping NESL to win the Cuban contract. The Cubans want those ships, which are of a good basic Austin and Pickersgill design. All other Governments will provide help and say, "We shall build up a package and help with the financing." The Chancellor of the Duchy, on the other hand, has told us that the Government will not do that unless the yard is sold first, they will not do it if the yard remains publicly owned.

Effectively, that is the death knell of the shipyard. The lay-offs have already begun: by the end of August there will he about 370 lay-offs; by September, 600 to 700 lay-offs; by Christmas, there will be only a couple of hundred people left, and by February next year the yard will run out of work. The Minister has said that that yard must now twist in the wind while the agony of finding a buyer who can take on the Cuban contract continues. He should have been saying, "We will provide the help to get that contract for British Shipbuilders to keep the yard going and to keep the jobs in being." All that he has promised tonight is a little industrial mortician operation when the yard is closed. I am surprised that he did not promise the area a garden festival, as garden festivals have been passed round British industrial areas like wreaths under this Government.

It is a bitterly frustrating job being in Opposition and having to watch such industrial incompetence and sabotage going on. We are having to watch mistakes being made and the Government ruining a great British industry. We cannot stop it happening. The Government have the votes. We cannot argue against it, because sheer prejudice from the top—from No. 10 Downing street—is forcing this treatment on a British industry. What we can do is to pin the blame for the sabotage of the industry right where it belongs—on the Government, on the Minister and on his Department—the Department of Trade and Industry reduction and industrial sabotage. They are responsible for sounding the death knell for North East Shipbuilders Ltd. and for British Shipbuilders.

The hon. Member for Great Grimsby (Mr. Mitchell) has a racy turn of phrase which usually enlivens our debates, but I think that his flair for light entertainment is a little ill-placed in this extremely serious and important debate about the future of British shipbuilding. The hon. Gentleman added to the attacks on my hon. Friend the Member for Bexhill and Battle (Mr. Wardle), the one hon. Member to whom I do not need to reply.

The Minister agrees with him.

I agree with 90 per cent. of what my hon. Friend said. Unlike the hon. Member for Great Grimsby, unlike me, and unlike any other hon. Member who has spoken in the debate, my hon. Friend the Member for Bexhill and Battle has considerable experience of running a business in difficult trading conditions—and successfully. He spoke a great deal of business common sense in the face of a lot of completely hopeless wishful thinking and irresponsible financial suggestions from the Opposition.

Unfortunately, it is important that we make things clear to the people who are so worried in the shipbuilding towns. Several times I was accused of not being sufficiently informative. I was only too informative. I was probably looking serious and grave because I was setting the facts before the House, as everyone should know them. As my hon. Friends the Members for Tynemouth (Mr. Trotter) and for Torridge and Devon, West (Miss Nicholson) acknowledged, I had to hold back commercially confidential information. I will not give details of people who might be customers or purchasers and who do not want details about them to be disclosed. That would sabotage the outcome that hon. Members have said they want. I put forward the position as clearly and fairly as I could to the House. The only sensible way of proceeding is that which I set out.

I begin with the one yard that has a secure future—Govan—as a result of the policy that we have followed. The Opposition attacked the arrangements for Govan, on the absurd basis that we have somehow given away that asset to a Norwegian company. Of course, we have had to cover the cost of the losses on finishing the Chinese orders. Of course, we had to cover the cost of redundancies which were not the responsibility of Kvaerner, and we have made arrangements that I believe satisfy the Commission rules. They are prudent; they do not write off debt; they are fair arrangements that give that company a future. We have also complied with the sixth directive, to which I shall return.

The right hon. Member for Glasgow, Govan (Mr. Millan) made it sound as though the sixth directive forces Governments to give up to a certain level of aid. That is wrong: it does not. Other European countries do not give aid, but there is a limit if they do. We readily accept that to ensure fair trading within the sixth directive, with which we have complied.

For the future, we have made it clear to Kvaerner that, within the rules that appertain at the time, intervention fund support would be available for orders by Kvaerner. If the four ships are ordered, Govan has a work load well into the 1990s. The alternative was closure. Our policy has been successful in Govan, so it was absurd to attack what has happened there—

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I shall not give way to the right hon. Gentleman, as he is the least troubled Member in the Chamber, since Govan is safe into the 1990s, subject only to the approval of the European Commission, which I hope we shall get tomorrow.

Opposition Members will not face up to the background of what has happened to the other yards. I explained that background and set out the purpose of the policy. Opposition Members keep accusing me of being obsessed with privatisation, but this policy is not, in its origins, about privatising the yard. It is the Opposition who are obsessed with privatisation. Because an element of people bidding for particular yards has entered the scene, they are so obsessed by their preference for retaining what has proved to be an especially disastrous nationalisation of the yards that they insist on turning all their speeches around privatisation and saying that that is the root of the problem. It is not.

The hon. Member for Dagenham (Mr. Gould) said that the reason for the cuts and lay-offs in the work force is the Government's activities. It is not: it is because there are no orders. The Danish work in Sunderland is now running down. Lay-offs were bound to come at this time. It is because there is nothing to build that lay-offs are taking place. If a Cuban order, an order for a bucket ship or any other order were obtained now, work could not begin until next year. Lay-offs are inevitable and it is misleading people to suggest that the present situation arose because of the Government and could have been avoided.

We did not start with the problem of ownership. We began by looking at British Shipbuilders' application for the intervention fund support for the Cuban order. That is the background to the order tonight. This is the fourth time in two years that we have had to come to the House for more money. Last year it was £20,000 per employee; it is £24,000 per employee this time—and we shall all approve that in a few minutes' time. The history has been one of making losses over and above intervention fund support on every order.

But the hon. Member for Dagenham, supported by his Friends, says, "Never mind. Let's just get the Cuban order"—the implication being, "at any price." The business is highly competitive: the Cubans are not bound to order with us. But the Opposition say that we should carry the cost overruns at the taxpayers' expense and then sort out ownership. That cannot be done. Such an approach would not only be in breach of the sixth directive and disallowed by the Commission, but would be disallowed quite sensibly, because it is utterly irresponsible trading of the sort that the Opposition indulged in with the Polish ship order when they were last in government.

The Opposition cannot claim that they envisage a serious future for the corporation. They simply say, "Let us get the order at any cost. Let us carry on as we are now." The Government examined the matter and have said, quite sensibly, that there can be no future in going along that path.

The Chancellor can resolve the dispute by giving a simple answer to this question: will he provide intervention fund support for the Cuban order, irrespective of ownership?

We shall not give intervention fund support to British Shipbuilders, because its history is that it cannot comply with the sixth directive and it cannot stop making cost overruns on top.

The Cuban order has only become serious during the past few weeks, because Mambisa has only just received authority to place the order. We shall allow the Cubans to negotiate with any serious bidders and they will be notified of any bidders that we recommend. We shall give any serious bidders information about the order.

In answer to my hon. Friend the Member for Tynemouth (Mr. Trotter), we shall look at separate purchasers for the separate yards, if they come up. Mr. Copson—who needs a licence for his bucket ships—must apply for the licence. Mr. Zacchi, who has gone public, must put propositions to us. There are other purchasers who want to build other ships, but they have not gone public. We are negotiating with them. If other people think that they can buy these yards and take orders at intervention fund support levels within the sixth directive, the Government will consider them.

We shall also look at Appledore——

I beg to move,

That the Church of England (Pensions) Measure, passed by the General Synod of the Church of England, be presented to Her Majesty for her Royal Assent in the form in which the said Measure was laid before Parliament.

This Measure is the latest in a series of Measures designed to modernise and improve the pension provisions of those who minister in the Church of England. I shall give a few details of the pensions payable. On completion of 37 years' service, a full pension of £5,330 is available to Church of England incumbents and, as a result of clause I, the clergy scheme is extended to include deaconesses and licensed lay workers on exactly the same terms. The sum payable is reviewed annually and increased each April by at least the same proportion as the previous year's increase in the national minimum stipend for incumbents.

In addition, a capital sum of £12,900 tax-free is payable on retirement, which can clearly greatly help with the acquisition of a retirement home for members of the scheme. Further financial assistance in the form of loans at low interest rates is also available—repaid, if so desired, from the estate of the beneficiary on death. For those who do not want to purchase their own homes, the pensions board has purpose-built or other residential homes.

Widows of members of the Church of England pension scheme, which is now a non-contributory scheme, and covers the clergy and auxiliary ministry alike, are entitled to a survivorship pension equal to 60 per cent. of the pensions that their husbands would have received. In addition, every diocese has a group team assurance scheme under which widows receive a lump sum equal to three times the previous year's national minimum stipend.

Any child under 18 years of age at the time of a scheme member's death also receives a pension, as of right, until he or she reaches the age of 18. The sum is usually one sixth of the late father's pension entitlement. The pensions board can, in addition, give discretionary help to retired ministers or scheme members, their widows or widowers.

These broad provisions are, I believe, generous and highly commendable. They place the Church of England pension provisions, if not at the very top of private schemes, well into the upper quartile of such schemes. The payment of pensions now costs the Church Commissioners £39 million a year, taking the cost this year, for the first time, above the cost of stipends for working clergy. During the past five years, the commission contribution has increased no less than 73 per cent., which is way above the rate of inflation and indicate substantial real improvements for clergy pensioners.

There is, however, one area of provision about which the ecclesiastical committee has expressed regret in its report to the House, as hon. Members who have read it will note. It relates to the provision of pensions for a first spouse when a scheme member was divorced or has remarried. The General Synod took the view that, because the statutory or obligatory provision of pensions for first wives is the subject of an investigation by the Lord Chancellor's Department, it would be premature for the General Synod to go it alone, as it were, before the wider civil provision comes before the House.

Some members of the ecclesiastical committee took the view that the Church of England should have been a bit bolder and set the trend rather than wait to follow it. The fact that, for better of for worse, it decided not to go it alone, although perhaps regrettable, should not be allowed to detract from the broad general qualities of the Church of England's pension arrangements that I have described, nor suffice to deem the Measure other than expedient.

The matter was explored thoroughly in the oral evidence taken by the ecclesiastical committee, and in response to vigorous probings by, among others, the hon. Member for Birkenhead (Mr. Field), the chairman of the Pensions Board, Mr. Howard Gracey, made it plain that on an ex gratia, although not non-statutory, basis, the board makes provision by way of housing and of finance for divorced wives.

It would, I think, be tedious to take the House through every clause in the Measure., particularly as it has, in the ecclesiastical committee's report, substantial explanatory notes on each clause. By providing for a unified, non-contributory scheme for incumbents and auxiliaries alike, the process of steady improvement in provision has not been neglected, as evidenced in clause 3, with the provision, for the first time, of pensions for widowers, in clause 5 of lump sums payments on death—in addition to those payable on retirement—and provision for early retirement otherwise than on grounds of ill health, which is already provided for. These are all good grounds in themselves for commending the Measure to the House.

The right hon. Member for Selby (Mr. Alison) was kind enough to refer to the debate in the ecclesiastical committee, when several of us raised the status of divorced clergy wives. He correctly reported the committee's decision and its regret that the pensions board would not act imaginatively. The Church's behaviour on that is, to put it mildly, rather pathetic. Many of us look to it to take the lead, not to follow the secular state.

The right hon. Gentleman rightly drew attention to the commissioners' impressive record of building up pension entitlements for the clergy and other Church workers. The Measure has been a long time coming—so long that some people thought that it would have gone through by now, and have made retirement plans on the basis of it being on the statute book. I shall not take up further time and prevent its enactment.

I will be even more brief than the hon. Member for Birkenhead (Mr. Field). The Measure is welcome. I confirm that it is the general view that the provisions of pensions by the Church is generous, good and fair. The Measure helps in that. I also want to flag up a linked issue to which the right hon. Member for Selby (Mr. Alison) referred once in passing. This relates to the other side of the coin. The other matter that concerns the clergy and their families and for which they plan during their working lives is where they will live after retirement.

Another matter that is not quite as certain or secure sometimes is adequacy of accommodation for clergy in their retirement. I hope that the Church will complement its good work in this Measure by ensuring that all those who give their lives to the ordained ministry can be assured, for their entire retirement, of adequate and suitable housing of a type and in a place that they wish. That is equally important, and where it has not been met and achieved, it lacks the provision that pensions now have by virtue of this consolidating and expanded measure.

I begin by drawing the attention of my hon. and learned Friend the Minister of State, Foreign and Commonwealth Office to all-party early-day motion 119 in the name of my hon. Friend the Member for Dorset, South (Mr. Bruce) which has now attracted 176 signatures and which will, I promise, attract a great deal more. The motion summarises succinctly what I am about to say. It states:

"That this House, in welcoming the growing friendship between Japan and the United Kingdom, believes that this friendship will not fully blossom until the wrongs done during the Second World War to Allied prisoners are fully accepted by the Japanese Government and due reparation made."

In 1941, at a moment of great peril for our country, locked as we were in deadly conflict with Nazi Germany, the Japanese struck suddenly and without warning at the Americans, the Dutch and overselves in the Pacific. By the time Singapore had fallen, over 50,000 British service men and women and civilians, 20,000 Australians and 1,700 Canadians who had defended Hong Kong with great gallantry had fallen into enemy hands. Such was the appalling treatment of these helpless prisoners that over a quarter of them were either to be slaughtered in cold blood or to die of disease, malnutrition and unbelievable brutality by the time the Japanese surrendered.

I was a member of the personal staff of the Supreme Allied Commander in South-East Asia, Admiral Lord Mountbatten. I was in Asia in 1945 when the Japanese surrendered. I was moved to tears by the first sight of the pitiful survivors who came out from the hell of Japanese captivity. Many of them, still in their 20s, were to die prematurely, many more were disabled and crippled for life.

It is difficult at this distance of time to describe what they had endured. Field Marshal Slim, one of our greatest soliders, has put on record what the victorious British 14th Army found as it over ran the prison camps. He wrote:

"The state of these camps and of their wretched inmates can only be realised by those who saw them as they were at this time. Except for derelict huts and bashas, the camps were little more than barbed wire enclosures in which wild beasts might have been herded together. The Japanese and Korean gaolers, almost without exception, were at the best callously indifferent to suffering, or at the worst, bestially sadistic. The food was of a quality and a quantity barely enough to keep men alive, let alone fit them for the hard labour that most were driven to perform. It was horrifying to see them moving slowly about these sordid camps, all emaciated, many walking skeletons, numbers covered with suppurating sores, and most naked but for the ragged shorts they had worn for years or loin cloths of sacking. The most heart-moving of all were those who lay on wretched pallets, their strength ebbing faster than relief could be brought to them."

He concluded:

"There can be no excuse for a nation which as a matter of policy treats its prisoners of war in this way, and no honour for any army, however brave, which willingly makes itself the instrument of such inhumanity to the helpless".

I will mention just one case—I could mention a thousand—recounted to me by a former prisoner who suffered greatly. He refers to what happened to one of his comrades in Sonkrai camp on the notorious Siam-Burma railway. He said:

"He was chained to the teak tree at the entrance of the camp and we had to pass him every dawn when going out to work and at night when returning to Camp. We could do nothing to assist him or even get near him. He was left to die—in his own filth—exposed to the heat of the day and the cold at night. Tropical exposure is a nightmare. He grew weaker; no food or water was given to him and as death approached he lapsed into hallucinations and delirium. At nights, you could have heard a pin drop as we listened to his cries. It was sheer agony. In the end he died; a shocking and unnecessary death. The Japanese guards danced round his body shouting with glee. They enjoyed every moment of it."

I was already a Member of Parliament when, in May 1951, hon. Members pressed the Government of the day to ensure that when the peace treaty was to be signed later that year there should be compensation for the appalling sufferings our men had endured. I recall vividly the powerful arguments of Jackie Smyth, VC, who had fought in Burma, the eloquence of George Thomas, who was later to become our Speaker and is now Lord Tonypandy, and the moving personal testimony of the late Lawrence Turner, the hon. Member for Oxford, who had been a prisoner and whose health never recovered from the experience.

It was not to much avail, for under the provisions of the treaty our service men were awarded the princely sum of £76·50, while civilians received £48·50. The excuse for accepting such derisory sums was that the Japanese economy was in ruins.

All that was 37 years ago. It may be asked, why revive the argument now? There are two reasons. First, we should demonstrate that violations of international law, as Japanese behaviour certainly was, are never to be tolerated by civilised nations and that, where there has been a denial of basic human rights, adequate reparation must be made.

Secondly, since the 1950s the wheel of fortune has turned favourably for Japan. Today, she is a stable democracy and the second richest nation on earth. She plays a responsible role in the management of the world economy and is ready to help in the eradication of world poverty. All that is greatly to the credit of the Japanese people and their Government, but, if the slate is to be wiped clean and Japan is to take her place in the comity of civilised nations—if she is to enjoy the respect of the international community and to be honoured for her virtues and achievements—there has to be contrition for past crimes and proper compensation for the victims still living and the families of those whose lives were destroyed. That is the view of many hon. Members. It is certainly the view of survivors of Japanese prison camps and for them we should realise that the years are fast slipping away.

A lead has been taken by the Hong Kong Veterans of Canada, who have lodged a claim for compensation with the United Nations Human Rights Commission. They are supported by the International Commission of Jurists, Amnesty International, the International Committee of the Red Cross, the World Veterans Federation and the International Commission of Health Professionals, all of whom have status as non-governmental organisations to engage in such an undertaking.

The Canadian initiative has been systematic. Their approach to the United Nations Human Rights Commission is based on resolution 1503 of the United Nations Economic and Social Council of 1970. Their case is founded on an impressive in-depth study of the medical sequelae of what happened to the victims of Japanese cruelty. It presents a declaration of principle for consideration by the United Nations of compensation for gross violations of human rights. I understand that Australian veterans may be taking parallel action. There is to be a preliminary hearing at the United Nations in New York next month.

I am advised that, although Japan did not sign the Geneva conventions, that has been held by experts in international law to be of no consequence, since the Japanese Government of the day were aware that such a code existed and that the conventions had been accepted as the customary law of nations.

I hope, therefore, that I shall not be told by my hon. and learned Friend, as my colleagues have been told by other Ministers, that article 14(b) of the peace treaty specifically waived all claims that were not expressly provided for in the treaty itself, and that, in 1954, it was agreed that payment of a global sum of $4·8 million would be regarded as a full discharge by the Japanese Government of their obligations under article 16 of the treaty. No Government had and no Government have any right to sign away an obligation by another state to compensate for gross violations of the human rights of individuals and for the death and injury that occur in future years as a result of the sufferings that the Japanese inflicted on their helpless captives.

The relevant conventions expressly forbid such action by Governments. The regulations annexed to the 1907 Hague convention concerning

"the laws and customs of war on land"

provide that

"a belligerent party which violates the provisions … shall, if the case demands, be liable to pay compensation. It shall be responsible for all acts committed by persons forming part of its Armed Forces."

Article 130 of the third Geneva convention of 1949 refers specifically to grave breaches of human rights, such as

"wilful killing, torture or inhuman treatment including biological experiments, wilfully causing great suffering or serious injury to body or health."

They were hourly and daily occurrences in Japanese prisoner-of-war camps. Article 131 significantly goes on Ito state that

"no High Contracting Party shall be allowed to absolve itself or any other High Contracting Party of any liability incurred by itself or by another High Contracting Party in respect of … breaches."

I am advised that the International Committee of the Red Cross supports the legal; argument of the Canadian veterans that the peace treaty that the allied powers entered into with Japan does not remove Japanese legal and financial obligations to the victims of violations of the Geneva conventions. The conventions clearly provide that Japan shall not be absolved from compensation liability in respect of breaches committed by its armies during world war 2.

The Geneva conventions literally follow the Hague convention of 1907 and do not abrogate it in any way. Therefore, they are part of the customary law of all nations. A further consideration strengthens the Canadian claim and thereby strengthens any British or Australian claim. One of the non-governmental organisations supporting the veterans is the World Veterans Federation. My hon. Friend should note that, at the fifth international conference on legislation concerning veterans and war victims held at Bad Ischl on 21 to 24 April this year, it was agreed that there should be compensation for victims of acts contrary to international humanitarian law because of the post-traumatic stress disorders of such acts. A recommendation was made that the World Veterans Federation should initiate and support steps towards that end.

In short, the Japanese should not be allowed to escape the consequences of the damage that they inflicted on helpless prisoners for the rest of their natural lives.

It may be that the Japanese will answer that the peace treaty was the end of the matter—that is what Ministers have been saying. I suppose that if the United Nations ever ruled otherwise, it could not compel Japan to make reparation. If that proves to be the case, I am bound to say here and now that it will confirm the views held by many people in this country and elsewhere in the West that Japan can never be regarded as a civilised nation.

I pray that it turns out otherwise. Opinion in Japan is sensitive to the issue. There has been a stirring of conscience as a result of the revelations of earlier appalling atrocities committed by the Imperial Japanese Army in China before the second world war. The Canadian reference to the UN should help to encourage this process of inward questioning and with this the Japanese Camp Survivors Association in this country heartily concurs.

The Canadian Government are not involved in the claim being made by its veterans and I am not asking that Her Majesty's Government should be involved in any claim that might be made by British veterans. All I ask is that the Ministers here should stop saying that the rights of individual victims were signed away in 1951. It is shameful that such an argument should have ever been used. I have demonstrated that it is unsound in international law. Moreover, the action of the Canadian veterans shows that there is indeed a case to answer.

If our Government cannot help directly, I want an assurance that they will not impede action by the Japanese Camp Survivors Association or any other British veterans. Better still, they should show readiness to provide positive help and information as the Minister for veterans' affairs in the Canadian Government has done in respect of the Canadian veterans.

Therefore I shall listen with the greatest care to what my hon. and learned Friend says in reply but I would, with great respect, remind him that he will be speaking here in a free Parliament, as all his predecessors have done since the end of world war 2, because the men and women of my generation stood and fought cruel and repellent enemies who, if they had prevailed, would have blotted out our freedom. There is therefore an obligation on the part of any British Government to those who died and to those who suffered in enemy hands. It may be very late in the day but I submit that there is still time for the new democratic Japan to make amends if it will. Our Government should encourage her to do so.

I am most grateful to my right hon. Friend the Member for Castle Point (Sir B. Braine) for permitting me to participate in his Adjournment debate. He has a distinguished record, not only in this House but previously, to our country during time of war when he served, as I am delighted to record as a Staffordshire Man, with the North Staffordshire Regiment. I am only sorry that it was not with the South Staffs. There is another bond between us apart from our joint membership of this House, because my father served on Mountbatten's staff of the South-East Asia command during the second world war as a Royal Air Force liaison officer.

I join my right hon. Friend in this debate because I had occasion to have at my surgery one survivor of the Japanese prisoner-of-war camps, Mr. Robert Kelly, now aged 72 years, who worked on the infamous bridge over the River Kwai. For somebody of my post-war generation, like my hon. and learned Friend the Minister of State, to see before me a man who had worked in that infamous and intolerable labour camp in those appalling conditions brought home to me, as I hope that it will to my hon. and learned Friend, the fact that our generation owes a great deal to that generation and the sacrifices that it made.

In adding to the contribution which my right hon. Friend has made so eloquently, I shall add only two points. First, those men are a diminishing band. They are now in their twilight years and many are in straitened circumstances. It must be borne in mind that not only the physical but the mental anguish that they suffered at those barbarous hands all those years ago will have unquestionably debilitated them and impaired their earning capacity during their lifetime. They therefore find themselves more readily in straitened circumstances than their fellow citizens who served in the war but who did not go through those horrors.

My right hon. Friend has already said that, in 1954, when the agreement was signed, Japan was on its knees, it was trying to recover and rejoin the comity of nations. Today Japan is probably the most economically powerful nation on earth. I do not believe that it is immoral or improper for hon. Members to campaign on behalf of their constituents and to suggest to Japan that, in view of its enormous success—which it has been able to enjoy as a result of joining the free world and the free trade of that world—it should feel able to make some further recompense.

I do not believe that £76·50 paid in 1954 should represent the full and final settlement. I hope that my hon. and learned Friend will be able to assure my right hon. Friend, myself and our 200 colleagues on both sides of the House who have signed the early-day motion tabled by my hon. Friend the Member for Dorset, South (Mr. Bruce), that Her Majesty's Government will not be found wanting by our constituents.

I am glad to have this opportunity to answer a debate that has been instigated by my right hon. Friend the Member for Castle Point (Sir B. Braine), the Father of our House. His largesse of spirit has been shown so often in such debates—not least by what he has said tonight. It is a pleasure for me to answer any debates in which he participates having regard to the great kindness that he has shown me, and the support that he has given me over the years. It therefore saddens me that, although agreeing with many of the points that he raised, I shall be unable to give him much more satisfaction than some of my predecessors have done.

My hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) is right to say that those of us of the post-war generation who today live in freedom owe an enormous debt of gratitude to those who served in the war. We owe a particular debt to those who suffered as dreadfully as those whom my right hon. Friend starkly described, those who suffered at the hands of the Japanese. My father spent most of the war fighting in the far east, but, happily, he was never taken prisoner. He has told me of things that, once experienced, he has never forgotten; he remembers them as vividly as my right hon. Friend.

There is no dissent about the facts. We also know that the suffering was shared by thousands of Americans, Australians, Canadians, New Zealanders and other allies and by many thousands of civilians who were also treated appallingly. Although it is more than 40 years since those events, some wounds do not heal. If we had suffered in the same way, would the bitterness and anger ever disappear? I doubt it. Therefore, I am not surprised at the response that my right hon. Friend has had from a number of veterans to the case that he has raised.

I also understand the feeling at the heart of this matter—the feelings of those who, having suffered at the hands of the Japanese, now see a rich and successful Japan. They must believe that they surely deserve some further compensation.

My right hon. Friend, drawing on his 40 years of experience, was able to recall vividly the debate in the House in May 1951, when I was two years of age. At that time, it was a live issue and a great deal was said. Arguments were put forcefully and passed into the minds of the British negotiators. Behind the debate in the House lay many hours of discussion with the Far East Prisoners of War Association, which made a valuable contribution to the debate.

The negotiations proceeded on a bipartisan basis, the treaty of peace with Japan was signed by a Labour Government and ratified by their Conservative successors. The British delegation led the way in insisting that there should be a specific provision for compensation for former prisoners of war. That was not in the original treaty, and it is an unusual provision in a peace treaty, which reflects the uniquely dreadful treatment suffered by our service men in the far east.

As we know, the result was the peace treaty signed in San Francisco on 8 September 1951, which formally brought to an end the state of war between the United Kingdom and Japan. The treaty contained a number of articles, of which two are particularly germane. Article 14 concerned the general question of compensation and recognised that reparation should be made. It gave the allied powers the right to seize and dispose of Japanese property, which, alas, although my right hon. Friend the Member for Castle Point castigates the point, I fear cannot be readily evaded. Article 14(b) concludes with these words:

"Except as otherwise provided in the present Treaty the Allied Powers waive all reparations claims of the Allied Powers, other claims of the Allied Powers and their nationals arising out of any actions taken by Japan and its nationals in the course of the prosecution of the war … ".

Article 16 makes specific provision for the compensation of prisoners. That is what we might call the British article, upon which we insisted. Under that article, the sum of £4·5 million was paid and there was an agreed minute between the Japanese and the allied powers recording that payment and stating that the payment would be recognised

"as a full discharge by the Japanese Government of its obligations under Article 16 of the Peace Treaty".

Out of that, we in the United Kingdom received just over £1·6 million. That was made available to the former far east prisoners of war. The sum that has been described was the sum that was paid. Although the sum of £76 was worth a good deal more in 1952 than it is today, I well understand and appreciate that it was extremely small sum.

Will my hon. and learned Friend give way?

My right hon. Friend puts me in difficulties. I wanted to make the case. I do not want to be discourteous to him, but would he allow me to finish?

I want to ask my hon. and learned Friend just one question in the limited time available. Does he agree, as a lawyer, that the treaty does not absolve Japan from the conventions? That is the charge that has been put to the United Nations. This is a new situation.

We believe that the treaty that was signed is binding on us and was a full and final settlement. Whether it is right or wrong, that is the position today and we do not see any way round it. I can assure my right hon. Friend that it is not wilfulness on our part; that is just the best objective interpretation that we can give. Every Government have had to defend that position and give such an interpretation over the past 40 years, and I fear that I have no authority to diverge from that.

We can only rest on the fact that it is the function of peace treaties to put an end to claims. If that were not so, we would still be concerned about disputes throughout the centuries. No compensation would be adequate to meet the sufferings of the people concerned. I understand that this compensation will seem to many people peculiarly inadequate, but we can find no legal basis for going back to the Japanese Government and asking for more. It has been the opinion of successive Governments, and it remains the opinion of this Government, based as best we can on an objective assessment of the documents, that Ito seek to go back on the undertakings to which we put our signature would not be an act of good faith and could not be justified.

My right hon. Friend has raised the Canadian initiative. I am grateful to him for giving me advance notice, with his typical courtesy, of all his points, which I hope will allow me to deal with them. If I run out of time, I shall write to him, because I want him to have a proper explanation.

We do not think that it would be proper for the Government to press the claim. That was one of the considerations that the Canadian Government have had I o bear in mind. I understand that it is an independent association called War Amputations of Canada which have submitted the claim to the United Nations Human Rights Commission on behalf of the Hong Kong Veterans Association. I was interested o hear my right hon. Friend say that his claim has the support of the International Committee of the Red Cross, the International Commission of Health, Professionals and other nongovernmental organisations that have consultative status at the United Nations Commission on Human Rights. I understand that a delegation of former prisoners of war went to the 44th Commission on Human Rights in February, but I am not aware that any non-governmental organisation with consultative status raised the delegation's concern in that forum.

My right hon. Friend also mentioned that this claim was submitted under the procedures based on resolution 1503. I have every sympathy for the claimants—I cannot stress that enough—but I am afraid that the chances of success under this procedure cannot, in my judgment, be high. One of the criteria applied under that resolution when judging whether claims are admissible is that the allegation of the violation of human rights must be submitted within a reasonable period, and the 40 years that have elapsed may be held to be not within that proviso.

A second difficulty is that the question may be outside the mandate of the United Nations, since that body was not in existence at the time when the violations took place. All I—