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Commons Chamber

Volume 138: debated on Thursday 20 October 1988

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House Of Commons

Thursday 20 October 1988

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Private Business


Read the Third time, and passed.





PORT OF TYNE BILL [Lords] (By Order)

(By Order)

Orders for Second Reading read.

To be read a Second time on Thursday 27 October.

(By Order)

Read a Second time, and committed.

Birmingham City Council Bill


That notwithstanding that the Birmingham City Council Bill was taken into consideration by the Committee on the Bill before a report from the Attorny General on the Bill had been presented to the House pursuant to paragraph (1) of Standing Order 158 (Bills affecting charities or educational foundations) the proceedings of the Committee be deemed to have been taken in compliance with that Standing Order.—[The Chairman of Ways and Means.]

Barlow Clowes

Return ordered,

of the Report of Sir Godfray Le Quesne Q.C., to the Secretary of State for Trade and Industry on Barlow Clowes.—[Mr. Newton.]

Oral Answers To Questions

Agriculture, Fisheries And Food

Aboriginal Whaling


To ask the Minister of Agriculture, Fisheries and Food whether he will take further action to restrict aboriginal whaling.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food
(Mr. Donald Thompson)

We will go on insisting in the International Whaling Commission that the taking of whales by aboriginal communities continues to be very closely regulated. And the numbers permitted to be taken should be consistent with scientific advice on the status of the stocks. We will also continue to press for any necessary improvement in monitoring such whaling or in hunting methods employed.

While welcoming the tremendous international interest in the efforts that are taking place to rescue the three whales off Alaska, may I ask whether my hon. Friend agrees that the best way in which we can save the whale population as a whole is through organisations such as the International Whaling Commission? Does he think that possibly the time has come when we should stop whaling altogether?

The United Kingdom Government's record on whaling is second to none, and we support the International Whaling Commission in all its efforts. However, many aboriginal communities still live off the whale and depend on it for their whole lifestyle. It would be wrong to think of those communities becoming dependent on the state rather than on their own commerce and industry. Nevertheless, I agree with the broad thrust of my hon. Friend's suggestion.

I associate myself with the views of the hon. Member for St. Ives (Mr. Harris). I am sure that there is enormous support on both sides of the House for the banning of all whaling. As certain aboriginal communities clearly depend on whale hunting, would it not be appropriate for countries such as our own to give them adequate financial compensation, so that they will not have to make any sacrifices in achieving something that we want? It will be very useful if the Minister can send a message to the United States Government, commending them for their noble efforts in trying to save the three grey whales in Alaska.

I am sure that those associated with the United States Government read Hansard very carefully and will be pleased and surprised to learn of that last comment by the hon. Member for Newham, North-West (Mr. Banks). They need not have me slingshotted all the way across to Alaska. Besides, I have enough to do.

I cannot entirely agree with the hon. Gentleman's first suggestion, which was that we should put aboriginal communities on the dole, as it were, rather than let them follow their natural and long-established commercial practices. There is a time period over which we can change old-fashioned industries to modern ones. As we in the House all know, that pays dividends in the long run.

Common Fisheries Policy


To ask the Minister of Agriculture, Fisheries and Food what is his assessment of the effectiveness of current policing of the common fisheries policy.

As my hon. Friend knows, the United Kingdom Government have always taken the lead in advocating effective measures for enforcing the common fisheries policy. There are clear signs that other EC member states are now taking the steps necessary, as we have done, to achieve proper enforcement.

Is my right hon. Friend aware that, while the industry as a whole appreciates that better steps are now being taken, in some countries those steps are being taken from a very low base? There is still anxiety, particularly in this country, about the reduction in quotas, which is causing real hardship to many of our fishermen.

We take steps to reduce quotas only when scientific advice suggests that it is necessary for the long-term conservation of stocks, which is clearly in the interests of our own fishermen. As for enforcement, I am sure my hon. Friend has noticed that the Netherlands, for example, has made a big increase in the manpower of its inspection service, has strengthened its control system, is improving restrictions on its fleet's capacity and effort and is taking a number of its fishermen to court. There is no doubt that considerable efforts have been made in that country.

We are very vigilant. A recent problem related to reports of quota hopping by one or two member states, but I am glad to say that action on that was agreed at yesterday's Council.

Farming Unions


To ask the Minister of Agriculture, Fisheries and Food when he last met representatives of farming unions to discuss the state of the agriculture industry.

I meet representatives of the farming unions frequently to discuss agricultural matters. For example, I have met many of them from different parts of the country, including the president, on various occasions in the last fortnight alone.

What plans has the Minister to ease financial pressures on our agriculture so that it can compete on equal terms with its counterparts in Europe?

I am aware that in some sectors of the industry there are problems of declining incomes, and that others, such as the pig industry, also have real difficulties —although that is the case throughout the European Community. On the other hand, some sectors have experienced improvements in incomes in the past year or so, and in one or two earlier years. The overall picture is not one of declining incomes.

Obviously there have been pressures as we have dealt with the reforms of the CAP—which the hon. Gentleman, I think, agrees are necessary—but in this year's price negotiations we secured a better outcome on green currencies for the United Kingdom than for any other country, and it will come into operation on 1 January. That of itself will add £120 million to United Kingdom farm incomes.

Is my right hon. Friend aware that there is genuine concern among British farmers that our green pound may not achieve parity by 1992? The fear is that if it does not do so by then some Socialist Eurocrat may decide to freeze values as they are, in which case it would never do so. Can my right hon. Friend reassure the farmers that he will maintain pressure for devaluing the green pound?

Yes, I can. As my hon. Friend knows, the Commission and the Council have both committed themselves this year to the phasing out of MCAs and their elimination by 1992. I have made it clear that I strongly support that, and that I do not believe that there can be a proper single market in agriculture unless it is done. I assure my hon. Friend that I shall use every appropriate opportunity to continue working to that end.

In view of his further rejection of direct income aid at the last Agriculture Council—which, I believe, took place a couple of days ago—has the Minister any plans to help hill farmers in my constituency to keep up their incomes, which are among those that are diminishing?

I was by no means alone in making some strong criticisms of the Commission's current proposals for a direct income-aid scheme. Many other Ministers, including those from some of the bigger countries, also chimed in with different criticisms. I believe that the current proposals would not be cost effective, are not directed at the right ends and do not fulfil all the conditions that we were asked to carry out.

Will the Minister inform the House of the present position on his promise that he would work towards the elimination of pigmeat MCAs? Is he aware of the proposals now being ventilated in Europe concerning changes in sheepmeat and beef regimes, which would result in serious agricultural conditions in Northern Ireland? Will he keep in mind that feed stocks for the intensive sector in Northern Ireland are now soaring almost out of control, and that the intensive farmers are in great difficulties?

I argued strongly, and with some good arguments, for the elimination of pigmeat MCAs as quickly as possible. There was still a blocking minority on that, but I am sure the hon. Gentleman will be delighted to know that, as a result of the changes that we did secure, pigmeat MCAs will be down to zero on 1 January if sterling remains at its current level. That is a big change from a negative MCA of 28 points only about 18 months ago.

On the hon. Gentleman's second point, the proposals have just been presented to the Council. We had a brief discussion about them earlier this week and I believe that it will be a long negotiation. I shall certainly be fighting hard for all the United Kingdom's legitimate interests.

On the third point, the particular problem has been the American drought and its effect on soya, which has had an effect on feedstuffs for the intensive livestock sector—a problem that exists throughout the EC and elsewhere. I understand the problems that that unfortunate element is creating for our producers.

When the Minister met the farming unions' leaders, did he discuss with them the Commission's proposals to abolish the sheep variable premium and the consequential increase in the ewe premium? Will he confirm that the ewe premium will be based on a European, not a British, level, and that many farmers will get only half as much as they are expecting? If that is the case, how will the Minister ensure that we keep sheep farming in the hills and keep the areas attractive for people to enjoy and live in?

As I said earlier, I think that we shall have some complex negotiations on the sheepmeat proposals. There were criticisms from many sides, so I suspect that we shall see changes as they go through.

However, it is early days to be sure about that, as we have had only the most preliminary reactions. It is clear that budgetary discipline has to apply to the sheepmeat sector as to any other, and costs have been rising considerably. However, within that overall requirement, I am determined to ensure that we secure the best possible arrangements, which may well include the continuation of the variable premium. We have still to negotiate that. I am determined to ensure that we secure the best possible arrangements in the new regime for the United Kingdom sheep producers.

Can my right hon. Friend reassure NFU members who are milk producers that Britain's highly efficient Milk Marketing Board will not be subjected to the reforming zeal of EC bureaucrats?

From time to time there have been problems in ensuring that the Milk Marketing Board conforms with Community requirements, but, as far as I can recall, the main issue in that respect does not arise from the EC, but may follow from a court case in Northern Ireland, on which I cannot comment because it is sub judice. That is the issue to which the Milk Marketing Board may have to address itself before too long.

Milk Quotas


To ask the Minister of Agriculture, Fisheries and Food if he has had any representations regarding the implementation of the Agriculture Act 1986 concerning compensation for milk quotas.

Is the Minister aware that real hardship is being caused to tenants by excessive delays in the payment of compensation by some landlords? Does he agree that that could be best tackled by requiring interest to be paid on that compensation?

I know very well the hon. Gentleman's concern for the matter in general and for some of his constituents in particular—and why not? I have with me the relevant correspondence. The matter is best settled by arbitration. Some cases will have to go to court, and that is the time when interest can be discussed.

I wrote to my right hon. Friend the Minister for Agriculture, Fisheries and Food on a specific question and asked him to take it up personally with the Chancellor of the Exchequer. In some parts of the country the commissioners of Customs and Excise are trying to charge value added tax on those compensation payments, which is wholly outwith the undertaking given by the previous Minister for Agriculture, Fisheries and Food when they were introduced. Can my hon. Friend tell me what progress the Minister has made in his representations to the Chancellor of the Exchequer on that important matter?

My right hon. Friend received my hon. Friend's letter last night and we have managed to have only the briefest of discussions on it. However, my right hon. Friend will be writing to the Chancellor of the Exchequer and others on that important matter.

Has the Ministry entirely forgotten about the additional quota that was allocated to Northern Ireland, which seems to have been misappropriated and distributed over the whole of the United Kingdom?

These questions seem to run on for a long time in Northern Ireland. I think that I have answered this question on about four previous occasions. The answer has not altered. I can see no hope of a future re-distribution.

In view of the substantial decline of the surplus of dairy products, does my hon Friend envisage that there will be further cuts in the milk quota?

The substantial decline in milk products came about on purpose. Therefore, we shall monitor very carefully the supplies of milk, butter, skimmed milk powder and other dairy products and, in consultation with our European partners, review the position.

Water Pollution


To ask the Minister of Agriculture, Fisheries and Food what further steps he is taking to reduce water pollution from farm sources; and if he will make a statement.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food
(Mr. Richard Ryder)

In our response to the Environment Committee's third special report the Government announced a number of measures to deal with the farm pollution problem, including a commitment to draw up regulations to ensure proper containment of silage and slurry.

I congratulate the Minister on his first reply from the Dispatch Box. I am sure he will be aware that in many parts of the country nitrate in the water supplies is already at an unacceptably high level. There are problems in the aquifers, which will show up for some considerable time. What steps do the Government intend to take to introduce protection zones and to encourage the proper use of nitrates by farmers and environment-friendly farming?

I thank the hon. Gentleman for his kind words. The Government are looking at a range of options. We have not yet reached any conclusions, and before we do we shall consult various bodies. We look forward to finalising those conclusions in the relatively near future.

Does my hon. Friend agree that the attitude of the National Farmers Union and the Country Landowners Association to nitrogen pollution is positive? We are getting fed up with the Opposition kicking the farmers round the block all the time. The farmers—not the whingers opposite—are the true safeguarders of the environment.

My hon. Friend is quite right. I particularly welcomed the speech made last month by Mr. David Naish, the vice-president of the NFU, in which he warned farmers that by continuing to pollute the rivers they were undermining their reputation in the countryside. Also, I draw attention to the fact that the maximum fines available to the courts for farmers who pollute the countryside are £2,000 and that many courts are not using those full penalties.

Is the Minister aware that farming pollution has risen steadily in Yorkshire and Humberside in recent years and that the Yorkshire water authority has been hampered by that extraordinary section in the Control of Pollution Act 1974 that he apparently has in mind? Is the Minister saying that his right hon. Friend intends to repeal that section, which has enabled farmers to evade prosecution if they pleaded acts of omission arising from good agricultural practice? A similar defence was not available for industrial spillage.

The hon. Gentleman has misunderstood my reply. I was reminding the House that £2,000 is the maximum penalty for polluting the countryside and that the courts are not using the maximum penalty. In the south-west, which has one of the worst pollution problems, the average fines that are dished out by the courts are £140, so it is quite clear that those penalties are not being used.

I congratulate my hon. Friend on his appointment. After so many years, we are delighted to hear his voice again in the Chamber. Does he agree that there is a far greater danger of water pollution from fluoride than from nitrates?

I thank my hon. Friend for his kind remarks. He knows that my views on fluoride do not coincide with his.

I offer the Minister the Opposition Front Bench's congratulations on his appointment.

As the Minister clearly recognises that there is a problem with nitrate pollution, can he explain why the Government are embarking on a programme of cuts in research and development, much of which is directly related to optimising fertiliser application and therefore minimising pollution risks? Will he confirm that if the Barnes report is accepted, about 1,000 scientists, many of whom work on environmental protection, will be sacked? In view of the Prime Minister's recent conversion to the cause of environmental protection, does he think that he ought to ensure that his Department's actions support her views?

I thank the hon. Gentleman for his kind words of welcome.

In part, the answer to the hon. Gentleman's question depends on the amount of industry funding. I emphasise that Britain has an excellent record in this sphere—we spend more money than any other country in Europe bar Germany on research into pollution. We aim to keep up to that mark.



To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to protect the bass nursery stocks.

As I announced on 27 July, we shall increase the minimum landing size for bass and introduce restrictions on the use of gill and similar nets with a mesh size between 65mm and 89mm. These measures are to take effect from 1 January 1990. There will be further consultations with local interests about establishing nursery areas to protect juvenile bass stocks.

I thank my hon. Friend for that reply. He will be aware that sea bass is a slow-growing fish and that it is essential that stocks be conserved. Will he therefore consider the matter rather more urgently and designate nursery areas for these fish to come into effect before 1990?

The matter is complicated because of the various sections of the community who have an interest in bass stocks and catch bass. I think that it will take a couple of years before we can reconcile the various interests.

My hon. Friend will be aware that fishermen on the south coast are not convinced of the need for the measures that he is about to introduce. More important is the fact that the measures will not apply to our EEC partners. That seems to be one more example of unfair competition with other members of the Community. On reflection, will my hon. Friend agree to withhold the new measures until they are applied throughout the EEC? Will he ensure that fishermen in places such as Poole are given the maximum, not the minimum, time to make the adjustments?

You, Mr. Speaker, have just heard both sides of the argument. It is vital that bass stocks be protected from as early a date as possible after proper negotiations. We must try to persuade the Europeans to come along with us while we are trying to persuade some of my hon. Friend's constituents to be more enthusiastic about the future of the industry on which they place such great reliance.

Nfu Horticulture Committee


To ask the Minister of Agriculture, Fisheries and Food when he last met the chairman of the National Farmers Union horticulture committee; and what matters were discussed.

My noble Friend the Parliamentary Secretary last met the chairman of the NFU horticulture committee on 20 September, when the main subject under discussion was horticultural research.

My right hon. Friend will be aware of the considerable concerns expressed in horticulture about his proposals for revised funding arrangements. This is a highly competitive industry. Can my right hon. Friend give me an assurance that any changes to the funding arrangements will be phased in to allow the industry adequate time to adjust to the new regime?

There is a later question on the Order Paper about research and development generally, but it is entirely right to ask the industry—whatever the sector—to undertake more of the near-market research. I recognise that a higher proportion of horticultural research and development has been classified as near-market because a high proportion of the work is close to commercial application. We are engaged in intensive discussions with the horticulture industry on this point, and I can tell my hon. Friend that timing is one of the matters that are being discussed.

I wonder whether the Minister will give some definition of precisely what is meant by near-market research for horticulture? Most of the horticulturists whom I have met in my constituency are bewildered. They have pursued the matter with the Ministry, but they are no nearer to understanding precisely what it is that they have been asked to do. They feel, and I support them, that 60 per cent. from the industry within the next three years is the death knell for it.

That is a big exaggeration. The broad definition of near-market research is that it is work that offers the possibility of commercial exploitation or application within a short enough time to justify investment by industry. That is what is happening in many industries outside horticulture and agriculture. We have specified in detail the kind of research projects that we believe come within the definition of near-market research. That is one of the subjects that is also part of the discussion with the industry—to agree on which of the projects should come within the definition.

Is my right hon. Friend aware that Hatfield polytechnic has recently launched a unique, new BSc degree course in horticulture, in collaboration with Writtle agricultural college? It is the first horticultural degree course that has been mounted outside the university system. Will my right hon. Friend take the opportunity to congratulate all those involved in the initiative, which will provide a steady stream of highly trained experts to ensure that horticulture is equipped to meet the challenges of the 1990s and beyond?

I am grateful to my hon. Friend for raising that matter. I am happy to congratulate those involved.

Many sectors of horticulture are facing expanding markets. It is important that they are competitive and that they meet the changing requirements of consumers. I am sure that the higher the skills involved, the better placed the industry will be.

Ministry's Centenary


To ask the Minister of Agriculture, Fisheries and Food what plans his Ministry has to mark its centenary during 1989.

The Ministry will be arranging a number of events which will be co-ordinated with the programme for Food and Farming Year, which also takes place in 1989. There will be exhibitions in London and in the regions, a centenary history of the Ministry and a special centenary appeal in aid of the Save the Children Fund.

I thank my right hon. Friend for that answer. Many hon. Members can probably remember the days of food rationing—[HON. MEMBERS: "Speak for yourself".] I am not speaking personally. Will not the celebrations present us with an ideal opportunity to congratulate all farmers on the magnificent efforts that they have made over the years to provide the country with sufficient food —always at the urging of Conservative Governments?

I entirely agree. One of the problems is that because we have had to grapple with the farmers' success and the penalties that that has brought, with surpluses and the CAP, there has been too much public emphasis on the problems of the CAP and not enough on the contributions that have been made by our farmers and food industry over the past 40 years. Especially in the past few years, the range and quality of food have been improving and the price increases of food are well below the general level of the RPI. There is a good record on production, quality, price and exports, and I believe that 1989 will give us a good opportunity to put that ease across.

Will the Minister find time to reflect in the centenary year that for most of the past 100 years Britain's food policy was determined in Britain and not in Brussels? Does he agree with me that consumers were better served when the policy was determined in Britain?

It is the case that we have moved faster towards self-sufficiency in those products that we can grow in the past 10 years than in earlier periods. Our farmers have used the opportunity of entering the Community to continue to expand our food production.

To ensure that the Ministry of Agriculture, Fisheries and Food and the industry can celebrate their bicentenary, will my right hon. Friend mark his Ministry's centenary by ensuring that he extracts from the Treasury adequate resources for agricultural research, in the interests both of farm production and of the countryside?

My hon. Friend will know that a large contribution is made to agriculture, food and fisheries research and development from public funds at present. The sum is currently running at about £200 million a year, which is a substantial contribution.

I wonder whether, when this centenary is celebrated, a plaque will be unveiled on the wall of the Ministry of Agriculture, Fisheries and Food and whether tribute will be paid to this industry, subsidised during the whole course of its 100 years. Will the Minister tell us what the exact amount of subsidy has been over the past 10 years, during which the Prime Minister and the Cabinet have talked about leaving matters to market forces, and during which time more than £10 billion has been ploughed into the industry from the taxpayer?

The figure has been too high, especially in relation to the production of surpluses. That is why we have been playing a leading part in the Community in achieving the reform of the common agricultural policy. As a result of our recent efforts, savings of more than £1,000 million will be made over the next four years in the United Kingdom alone, compared with what would have happened had we not undertaken the reforms.

Farm Diversification Grants


To ask the Minister of Agriculture, Fisheries and Food what types of projects have been most popular among farmers applying for farm diversification grants.

Good quality holiday accommodation accounts for just over 30 per cent. of applications and recreational and educational facilities for about 20 per cent. Food processing, farm shops and livery are also popular choices; indeed, there is a widespread interest in most of the enterprise for which grant-aid is available.

I thank my hon. Friend and welcome him to his new post, but may I suggest that many of the ventures that he described—indeed, probably all of them—could lead to many farmers falling foul of the planning legislation and that there is a great need to give guidance to farmers on planning and for a much more open-minded approach on the part of many planning and highway authorities?

I thank my hon. Friend for his kind welcome. I agree with his judgment of farmers' appreciation and understanding of planning laws. It is precisely for that reason that we shall be publishing a farmers' guide and leaflets dealing with the planning system later this year. I very much hope that they will help farmers to understand the planning system better.

In diversification, what emphasis is being given to organic farming?

How sure is my hon. Friend that the most popular diversification grant will not go towards housing, and what safeguards can he give?

I can give my hon. Friend an assurance that diversification grants do not go towards housing. On the other hand, I would point out that there is one grant which to the best of my knowledge, has not been made so far, and that is a grant for martial arts.

Sea Fish Industry Authority


To ask the Minister of Agriculture, Fisheries and Food when he last met the chairman of the Sea Fish Industry Authority; and what subjects were discussed.

I have not yet had an opportunity, since assuming my new responsibilities, of meeting the chairman of the Sea Fish Industry Authority, but look forward to doing so soon.

I hope that the Minister will meet the SFIA chairman very soon, and that during that meeting he will impress on him the need for him to meet the leaders of fishermen's organisations and to involve them fully in the training programmes that are to be mounted. The Minister will be aware that the European Community is urging that there should be training programmes across the EC, but it is crucial that those training programmes should meet local needs. Will the Minister do what I ask?

I am glad to welcome a question such as that. I agree with every word of it in thought and substance.

When the Minister meets the chairman of the Sea Fish Industry Authority, will he offer that gentleman the assurance that the Government have no intention whatever of abandoning the vessel building scheme? May I point out to him that there is growing concern among fishermen that the Government intend to abandon the scheme, except to provide replacement vessels for vessels lost at sea. Will he, here and now, dispel those genuine and growing fears of our fishermen?

The Government put no restrictions on people building their own boats. However, there is an EC moratorium on the priorities for boat building. We have to consider the size of the British and European fleets. It would be ridiculous to continue building bigger, better and faster boats with greater capacity for a diminishing fish stock. We must put conservation first and boat building second.

Set-Aside Scheme


To ask the Minister of Agriculture, Fisheries and Food what the response of farmerss has been to the set-aside scheme launched in June.

The response has been satisfactory. I will be announcing figures of applications and registrations as soon as they are available following the 21 October closing date

Does my right hon. Friend accept that there may be substantial environmental benefits from a temporary policy of land set-aside? All too often, modern farming practices can result in the destruction of our great national landscapes and habitats.

I very much agree that there are big opportunities through set-aside for those environmental benefits. In drawing up the scheme I was very careful to have environmental conditions written into it which will help to ensure that. One interesting point from our early analysis of applications received is that the most popular choice so far is permanent fallow. I hope that farmers who undertake set-aside through permanent fallow will use the opportunity to improve the conservation value of land set aside in precisely the way that my hon. Friend has described.

Are the Government thinking of introducing a set-aside scheme for factory owners whose factories have been set aside under this Government, causing the loss of 2 million jobs in less than 10 years? Will the set-aside scheme giving farmers up to £ 100 an acre for watching the grass grow apply only to farmers? Is it being denied to City institutions with offices in Mayfair which are taking Government money? They do not even see the grass grow—they are too far away.

It applies to all those who actually farm the land. There is a cost involved in looking after land and keeping it in good agricultural condition as well as environmentally attractive. The set-aside payments recognise that cost.

Country Landowners Association


To ask the Minister of Agriculture, Fisheries and Food when he last met the president of the Country Landowners Association; and what subjects they discussed.

I last met the president of the Country Landowners Association on 5 October. We discussed various matters of mutual interest.

My right hon. Friend will know how enthusiastic the Country Landowners Association is that voluntary set-aside should succeed. Although it is now almost too late for arable farmers to register for set-aside, is there a message that my right hon. Friend would like the CLA and hon. Members to convey to arable farmers who would like to register at this late stage?

Yes. I know that the CLA has been very helpful. I have been seen press reports that suggest that the president of the CLA has applied to set aside part of his land. The CLA is also helpful in assisting us to monitor—indeed, it will do some monitoring for us—what some people fear might be a problem in relation to tenants on set-aside land. I do not think that there is a problem yet, but the monitoring will be helpful. Although registrations have to be in by the closing date, that is only to help farmers who may wish to apply for set-aside in future years. It will still be possible for them to do that, but it will be more difficult if they do not register.

How does the Minister respond to the CLA's latest proposals for an automatic system of compensation for land blighted during nuclear incidents such as Chernobyl?

We are looking at several proposals made by the CLA, and my hon. Friend the Parliamentary Secretary will meet the CLA at the end of the month.

Bearing in mind the recent anniversary of the October hurricane, did my right hon. Friend take the opportunity to discuss with the CLA the number of trees still lying on the land, particularly in Kent? Was he able to reassure the CLA that his efforts will continue unabated until the trees are removed and new trees are planted in their place?

I have not only discussed that with the CLA, but, to coincide with the anniversary, I have visited many areas that have been affected. Although I recognise the difficulties, substantial efforts have been made by woodland owners and others to do the clearing up, and I believe that by early next year we may well see half the clearing up done. There is also a good prospective take-up of the schemes that we have introduced to help with replanting.

Prime Minister



To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

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

Does my right hon. Friend accept that the television and radio strictures upon Sinn Fein, the propaganda arm of that evil machine the IRA, have been widely welcomed in the country, as it has in the House, among thinking and feeling people? Will my right hon. Friend also accept that that is only one step on the road to its defeat, because anybody standing for public office in the United Kingdom should have to swear an oath renouncing violence and upholding the primacy of Parliament and the ballot box?

I am grateful to my hon. Friend and agree that the measures announced yesterday have been widely welcomed in the country by people who do not wish terrorists to have direct access to the broadcasting media. On the second point about those who wish to stand for local elections taking an oath to renounce violence, a similar proposal was put forward previously by my right hon. Friend the Secretary of State for Northern Ireland. If we go ahead with it, we shall do so by way of legislation and introduce it at the earliest opportunity.

In the argument between those who want to raise child benefit and those who want to freeze it, on which side is the Prime Minister?

The right hon. Gentleman knows full well that child benefit is reviewed every year. He knows that there will be an anouncement at the proper time. He knows what the proper time is, and he must await it accordingly.

Child benefit was reviewed last year and resulted in its being frozen. I am not asking for detail from the Prime Minister, I am asking for a statement of principle from her. Does she want to raise child benefit, or does she want to freeze it? How can a Government give £3 billion to top-rate taxpayers and not give an undertaking to increase child benefit?

This year, as the right hon. Gentleman is aware, we directed £200 million in net extra resources to families in income-related benefits, especially for the children. That was against the £120 million that uprating child benefit this year would have cost. If the right hon. Gentleman wants a general increase in child benefit, it would also go to the topmost people on top tax.


To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

Is my right hon. Friend aware that her recent remarks in Bruges and in Brighton last week reflect the opinion held by the overwhelming majority of people in this country and, if the truth were known, throughout Europe? Does she agree that other European Heads of Government would do better to concentrate on practical measures towards economic progress and their agriculture policies rather than harp on about ideological European union ideas?

Yes. The speech was greeted by an avalanche of support, as well as some criticism. I firmly believe that the best way to secure forward movement in the European Community is by active co-operation between sovereign states. Furthermore, we have concentrated on practical measures, and in doing so have often been way ahead in achievements—beyond those who talk in woolly terms about European union.

Inflation is now running at four times the level of that in West Germany and is 50 per cent. above the EEC average. Interest rates in Britain are nearly twice as high as they are in France and three times as high as in West Germany. Wage rates in Britain are rising two and a half times as fast as in France, and as an average are 50 per cent. higher than in the EEC. What grounds can there be for the Government's smug complacency about the economy?

I understand that the hon. Gentleman put a lot of work into his question, but he seems, at one and the same time, to be criticising both higher inflation rates and higher interest rates. Does he not know that the way to get inflation down is by higher interest rates?


To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

Does my right hon. Friend agree that no responsible Western Government would allow the right to strike or trade union activity to interfere with the security services? Bearing in mind the disruption caused at GCHQ and the genuine efforts that the Government have made to deal with legitimate trade union concerns, is my right hon. Friend aware that the overwhelming majority of British people will fully support the necessary action that has recently been taken by the Government at GCHQ?

Yes. The original decision that we took on GCHQ was upheld by the highest court in the land and the European Court of Human Rights. As my hon. Friend the Minister of State, Foreign and Commonwealth Affairs, said in the House yesterday, about 10,000 man days were lost at GCHQ in the period 1979 to 1981 as a result of industrial action that had nothing to do with GCHQ. We have made strenuous efforts to accommodate those who did not uphold the new conditions of service. Only about 18 did not, while 7,000 people accepted those conditions. The action that we have taken is correct.

Will the Prime Minister please explain what will seriously be achieved by not allowing the British people to hear and understand why both communities in Northern Ireland engage in violent conflict? At the time of the Anglo-Irish Agreement she promised reforms to reduce the alienation in Northern Ireland, but we have not seen them. We are now promised a series of measures that many of us believe will increase the conflict. Does she have a strategy to remove the causes of the violence, or will she allow it to rip under a blanket of censorship?

It would be a great help if we received full support for the measures that we have taken against terrorism, including the support of the Labour party for the Prevention of Terrorism Act.

Following the Labour party's abject failure over the Dundee episode, does my right hon. Friend agree that Ford's recent announcement of investment at Bridgend shows that foreign firms believe in this country, which is good for jobs and for Britain?

Yes. We all welcome Ford's decision to site its main engine investment in this country. We were very concerned when forces in the trade union movement—though not in Scotland—stopped Ford from going to Dundee. I am delighted that it has decided to make much investment in this country, which is a vote of confidence in the United Kingdom Government.


To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

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

Will there be any reconsideration of the Government's proposal to impose charges for eye tests? Does the right hon. Lady appreciate that there is particular worry about the plight of pensioners who, because of charges, will be deterred from seeking tests? Is she also aware that, because of that, there is a serious risk of an increase in the number of cases of glaucoma? Does the right hon. Lady realise that there is considerable concern on this issue among her Back Benchers? Bearing in mind the right hon. Lady's eye affliction some time ago, can she tell the House whether she shares that concern?

Those on low incomes will not have to pay the charge, as the hon. Gentleman is well aware. It seems reasonable that those who can afford to pay should pay about £3 twice a year on dental charges or up to £10 on spectacles, although competition among opticians may result in virtually no charge. The hon. Gentleman is aware of the enormous increase in prosperity this year. Indeed, the Labour party voted against tax reductions, including some that would have affected older people. It would seem reasonable that those who can afford it should pay this small, modest charge for something that is fundamental to their health.

Will my right hon. Friend confirm that if she were to undertake a 10-day speaking tour she would do so during the recess? Does she assume that the only reason why the hon. Member for Yeovil (Mr. Ashdown) waits until we reassemble is——

Order. The hon. Member can ask questions only about the Prime Minister's responsibility. She is not responsible for that matter.


To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

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

The Prime Minister is well aware of the unfairness and cruelty that will be inflicted on people on low incomes when the poll tax is introduced. Is she aware of the unfairness and cruelty that will be inflicted on a pensioner couple when they will have to pay twice the poll tax while their income will be only 50 per cent. more than that of a single pensioner? Will the right hon. Lady do something to arrest this cruelty that will be inflicted on people on low incomes?

Community charge is the way of paying for a part of local government services. It is therefore an obligation that falls on all citizens unless they are unable, because of low income, to afford the whole amount, in which case they will get an 80 per cent. rebate. In the last resort, they will get an average of 20 per cent. of the community charge on their social security benefit to enable them to pay it. The hon. Gentleman loses sight of the fact that it is a citizen's duty to pay towards the cost of local income and that there are full rebates for those on low incomes.


To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

Will my right hon. Friend consider the suggestion that the ultimate solution to the problems of Northern Ireland lies in a re-drawing of the border, generous resettlement grants, its restriction to those British who wish to remain British, and thereafter its treatment on exactly the same terms as any other region of the United Kingdom?

We have not considered that approach. I do not think that it would work. There have been countries and incidents where it has worked in the past—for example, with Greece and Turkey afer the first world war—but previous efforts to do this in Northern Ireland have failed. We must carry on with our present pledge to the people of Northern Ireland, which is that there will be no change in their status, except at their wish and through their express consent and the express consent of the House. Northern Ireland is part of the United Kingdom and must be governed in that way.


To ask the Prime Minister if she will list her official engagements for Thursday 20 October.

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

Does the Prime Minister remember lecturing the nation—something that she does quite regularly—on spending money that it does not have? Why, then, do she and her Chancellor encourage people to spend money that they do not have?

I congratulate the hon. Gentleman on being able so frequently to secure the last question at Prime Minister's Question Time. I do not know quite how he does it.

I do not think that it is right to encourage people to borrow more than they can afford—nor, I believe, does the hon. Gentleman. The steps that we have taken on interest rates will reduce borrowing and increase saving, and that is necessary both to get inflation down and to reduce the trade deficit. It is the right step to take.

Barlow Clowes

3.30 pm

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry
(Mr. Tony Newton)

With permission, Mr. Speaker, I wish to make a statement on Barlow Clowes.

Many people have been badly affected by the collapse of the Barlow Clowes operations. The extent of the suffering and distress has been fully set out in the letters I and my colleagues have received from Members of both Houses and direct from those concerned. We share the deep concern expressed on all sides, and sympathise with those who have suffered loss.

The story is very complex: it stretches over many years and involves many different participants. The House will recall that, following my right hon. and noble Friend's statement on 13 June, he appointed Sir Godfray Le Quesne QC to prepare an independent report on the facts of the Departments handling of this matter. My right hon. and noble Friend is today publishing Sir Godfray's account, subject to minor deletions made on legal advice in order to avoid possible prejudice to criminal proceedings. His report is one of the most open and exhaustive ever volunteered by a Department of State into its handling of a matter of this kind, and contains a full account of the Department's role.

I should make it clear to the House that, while the Government attach importance to maintaining the normal rule that officials' confidential advice to Ministers should not be made public, we have decided that, in the quite exceptional circumstances of this case, it is in the public interest to include the submissions to Ministers and other material which would not normally be published. In accordance with normal practice, the names of officials involved have been excluded.

We are extremely grateful to Sir Godfray Le Quesne for the thoroughness and speed with which he produced his report. In accordance with his terms of reference, the report is purely factual. The Government have studied it with great care and have taken legal advice, including that of leading counsel, and I would now like to set out to the House the key events and our conclusions.

It is only possible to judge the events that occurred in the light of the regulatory system in place at the time. The legislative framework within which all but the final events of this case took place was based on an Act of 1939, which was consolidated in the Prevention of Fraud (Investments) Act 1958. There was very little change in the way it operated until 1983. Then, against the background of Professor Gower's much broader review of investor protection, commissioned in 1981, the Government introduced new regulations. These regulations required, among other things, first, much more information about prospective licence holders; secondly, a certificate from a qualified auditor as to the firm's ability to operate as a going concern during the lifetime of the licence; and thirdly, regular financial monitoring returns, verified by a qualified auditor, covering the proper holding of client money and investments. The regulations were designed to enable the Department to rely on the verification of prescribed information by qualified auditors and solicitors.

Sir Godfray's report shows that Barlow Clowes first came to the Department's attention in 1975–76. It received advice which, due to a misunderstanding within the Department, did not adequately cover the point at issue and it did not then apply for a licence to deal in securities. The consequences of this have been carefully examined. Had it applied in 1975–76, it is almost certain that a licence would have been granted, given practice at the time. If Barlow Clowes had received a licence in 1975–76, the first monitoring return of the sort I have described would have been required by the end of December 1984. In the event, Spicer and Pegler certified in July 1985 that it had obtained verification of the clients' investments and cash, and that the statement of clients' funds gave a true and fair view of their composition as at 28 December 1984. There is no reason to think that the fact that Barlow Clowes was not licensed in 1975 had any material effect on the course of subsequent events.

The partnership again came to the Department's attention in late 1983. The review and tightening up of the system in 1983 had brought large numbers of unlicensed dealers to light. Wholesale prosecution would have been unjustified and, as Sir Godfray's report explains, it was the policy to bring unlicensed firms into the regulatory net and to take other action only where there was evidence of wrongdoing or that investors' funds were at risk. The Department originally believed that the partnership was applying for membership of the National Association of Securities Dealers and Investment Managers (NASDIM), which would have meant that it did not need to be licensed directly by the Department. When it became apparent that the partnership was not doing so, the effective choice open to the Department lay between prosecution of Barlow Clowes for not holding a licence—the only sanction provided by the legislation—and licensing the firm if it could meet the regulatory requirements. As Barlow Clowes was a partnership, the Department—even where grounds existed—had no powers to investigate it or to apply for a winding-up order, nor was there any provision for intervening to protect investors' funds if a licence were refused.

The Department therefore decided to seek to bring the partnership within the regulatory framework. In doing so it had four main aims. The first was to subject the partnership to the conduct of business rules (strengthened in 1983), the second to secure examination of its affairs by qualified auditors, and the third to persuade the firm to incorporate a limited company so that the powers available under the Companies Acts would become available. Fourthly, it was also necessary for Barlow Clowes to make arrangements which satisfied the Bank of England that the partnership was not in breach of the Banking Act 1979. When all these objectives had been met, licences were issued in October 1985 to the partnership and the company. In issuing the licences the Department made clear to the Barlow Clowes' solicitors that it had been heavily influenced by the assurances received from or through them. The Department also took full account of the report from Spicer and Pegler on clients' funds as at December 1984.

In 1986 new licences were issued to Barlow Clowes after it had submitted applications accompanied by the verifications and auditors' certificates required by the legislation. Although the majority of the powers under the Financial Services Act 1986 did not come into force until 29 April 1988, stronger and wider powers of investigation contained in that Act became available on 18 December 1986.

By the time of Barlow Clowes' licence applications in 1987, the Department had received material from the stock exchange and others that caused concern about Barlow Clowes' United Kingdom business. The Department did not at that time have the power to apply for a winding-up without first conducting a statutory investigation. Even if there had been such a power, there was not at that stage sufficient evidence to be confident that an application to wind up the company would be successful.

The Department had three courses open to it. It could refuse the licence. This would have stopped the company from lawfully taking on new business. But because the Department could not apply for a winding-up, there would have been no way of securing existing investors' assets. This action could therefore have precipitated a disorderly collapse of the business, which would have damaged existing investors' interests—[HON. MEMBERS: "But that happened anyway."]

The second course was to grant the licence but immediately to issue notice of intention to revoke it. The company could have referred that to the licensed dealers tribunal, which would have meant that it could carry on trading until the tribunal had decided the case.

The Department therefore adopted the third possible course. This was to institute an investigation under the powers newly available under the Financial Services Act and to issue a new licence, subject to review, pending the outcome of that investigation. The investigation proceeded but even six months later, in April 1988, with all the information the investigators had by then uncovered, there were legal doubts whether sufficient grounds existed for a winding-up petition to succeed. By May 1988, the combination of the investigation and new information on the company's solvency had yielded enough evidence to secure a winding-up order.

We are informed by the liquidators of Barlow Clowes Gilt Managers that on current information investors are likely to receive in excess of 75p in the pound, and they are hoping to make a substantial distribution before Christmas.

I now turn to Barlow Clowes International. This company was based in Gibraltar, and was not licensed. Any offshore company dealing with expatriates, and not holding itself out as dealing in securities in the United Kingdom, would not need a licence. The question, therefore, is whether the Department had reason to believe that BCI required a licence. As Sir Godfray's report shows, no firm evidence came to the Department indicating that this was so, and the information provided by the United Kingdom company from 1984 to 1987 indicated that BCI serviced expatriates and non-residents. During this entire period there were no complaints from investors, no questions about whether BCI was licensed, no approaches from intermediaries that would have revealed that BCI was dealing with United Kingdom residents.

From 1984 the Department decided that, as part of its licensing function, it would adopt a policy of sample monitoring of advertising in the national and financial press. No advertisements from BCI came to light as a result of this monitoring. Subsequently, it has emerged that a single advertisement was placed by BCI in one general supplement of The Times devoted to Gibraltar. This was not picked up by the sampling system. It has since transpired that BCI received business as a result of advertisements placed by authorised intermediaries, not in the general or financial press. These advertisements did not mention BCI, which was named only in subsequent private correspondence. No example of such correspondence was referred to the Department before the Barlow Clowes collapse.

The liquidators of Barlow Clowes International predict that there will be sufficient funds realised to make a distribution in excess of 30p in the pound. The complications in BCI will take some considerable time to resolve but the liquidators are hoping to make a small interim distribution early in 1989.

I should now like to turn to the main conclusion that the Government draws from Sir Godfray Le Quesne's report. Within the constraints of the old legislation and the information available to the Department at the time, the Department's general handling of the licensing of Barlow Clowes and Partners, and Barlow Clowes Gilt Managers Ltd., was careful and considered and its actions reasonable. Barlow Clowes International had no licence: only since the company collapsed has it emerged that its activities were such that it probably should not have operated without one. Sir Godfray's report shows that the Department did not have reason to know this.

I must also inform the House that the legal advice the Government have received on the question of liability to investors with all these businesses is clear. The Government have no legal liability.

In view of the hardship that has been caused, the Government have considered carefully whether there is a case for ex gratia compensation. The facts set out in Sir Godfray's report in the Government's view provide no grounds for concluding that the Department's handling of the matter was unreasonable or caused the losses experienced by investors, and therefore provide no justification for using taxpayers' money to fund compensation.

We are aware that the Parliamentary Commissioner for Administration has said he is considering whether to investigate complaints of maladministration in the Department's handling of the matter. My right hon. and noble Friend has today sent him a copy of Sir Godfray Le Quesne's report. If he decides, in the light of that, to carry out an investigation, the Government will, of course, co-operate fully with him and consider carefully any report he may make.

My right hon. and noble Friend is also sending copies of Sir Godfray's report to the Institute of Chartered Accountants in England and Wales, the Securities and Investments Board and FIMBRA, for them to see whether there are matters for them to consider.

It is all too clear from the account of events in Sir Godfray Le Quesne's report, and from the points I have made so far, that there were a number of significant weaknesses in the legislative framework of the Prevention of Fraud (Investments) Act 1958, even after the regulations were greatly tightened in 1983. There were no provisions for injunctions to slop unauthorised businesses or breaches of the rules, or powers to restrict business, safeguard assets or appoint trustees. Nor was it possible to investigate unincorporated investment businesses. The Government have acted to correct those weaknesses in the Financial Services Act 1986, whose main provisions came into effect in April this year. These improvements do not mean that the present system of investor protection is completely risk-free. No regulatory system can eliminate fraud or guarantee investors against loss. But the legislative framework has been radically revised and strengthened since the chain of events covered by Sir Godfray's report took place.

For the 11,000 investors in Barlow Clowes who have waited for more than four months for this report, who expected not only a factual narrative but some accompanying conclusions from Sir Godfray and who hoped, not for a set of ministerial excuses but for a statement of ministerial responsibility, this report will come as a profound and bitter disappointment. Their sense of grievance will be all the greater in that Sir Godfray's report is not the report that we were promised.

Will the right hon. Gentleman comment specifically on the following words of the Secretary of State:
"This is an inquiry to determine the facts of what actually happened within the department and to determine whether or not the department is to blame in any way"—[Official Report, House of Lords, 13 June 1988; Vol. 498, c. 11.]
Why do we not have such a report? [HON. MEMBERS: "Yes, we have."] We have not. Why, instead of an independent objective judgment of the facts, have we been given the Government's shamefully partisan, self-serving interpretation of the facts? Does the right hon. Gentleman not know that it is all very well to refer to the parliamentary ombudsman, but that what the investors wanted above all today was some sense of finality—not to be shunted from one investigator to another in a game of ministerial pass-the-parcel?

As for the Minister's claim that Sir Godfray's report shows that the Department was not negligent, I ask him to deal specifically with the following points. From my brief examination of the report I believe that it bears out each one of them. Is it not true that when the licence was first issued to Barlow Clowes in October 1985 the Bank of England had raised objections to the company, and that NASDIM, the City watchdog, had said that Barlow Clowes was unsuitable for a licence? Is it not true also that the DTI had been given assurances and had discovered that they were false? Barlow Clowes had then been trading illegally for more than 12 months under the Prevention of Fraud (Investments) Act 1958. How on earth was it given a licence in 1985?

Is it not right to say that in 1986—and I ask the Minister to answer this point specifically—the stock exchange expressed misgivings? The deputy head of the Bank of England's banking division said that he thought that there was a possible "fraud". The accountants to Barlow Clowes said that they thought clients' money was being misused. The monitoring returns submitted to the DTI were, according to the Minister's own inspector, seriously inadequate—but the licence was reissued.

In 1987 the stock exchange inquiry report stated, as Sir Godfray says, that there were "serious doubts" about whether Barlow Clowes was fit and proper. The police investigated Barlow Clowes, according to Sir Godfray. The Inland Revenue investigated Barlow Clowes. The DTI sent in its own inspectors. Yet in October 1987, when virtually every single body, private or public, with any responsibility for regulation was shrieking warnings at the DTI, the licence was reissued.

Is it not further the case that when the monitoring returns came in from Barlow Clowes in December 1987 —as, again, Sir Godfray finds—they were unsigned, unaudited, and then the firm was allowed to trade for a further six months, taking in millions of pounds, until in May this year the new SIB shut down in three weeks what the Minister's Department had left open for three years? What about the "disorderly collapse" that happened then, in May 1988? I may tell the Minister that in the light of all that, confirmed by Le Quesne, his denial of any negligence on the part of his Department is so brazen that it is risible.

I turn to the question of the ombudsman. Will the Minister undertake that the Government will abide by any compensation order made? Does he agree that the ombudsman should look also at the offshore investors, who, I may tell the Minister, had their funds managed in the United Kingdom, advertised in the United Kingdom, and run by residents in the United Kingdom? Will the Minister also, even at this stage, accept a proposal that I believe would command support from all quarters of the House—that the Government are bound to have some liability and should be using their good offices now to convene all those with a potential liability so that the spectacle of long, drawn-out legal proceedings can be avoided and a proper lifeboat scheme mounted? Is that not both a fair and a wise course?

Finally, I may tell the Minister this. The file in my hand is only of letters that I have received from investors over the past few months. Many right hon. and hon. Members will have received similar letters. Those who sent them are not get-rich-quick speculators. I doubt that many of them are drawing £1,000 per week for living expenses. They are Britain's new class of investors. They are the elderly couple with an accumulated nest egg. They are the young couple who have been left a small inheritance, perhaps from the sale of their parents' home. They are the mine workers or steel workers made redundant. Is it not the case that they are the very people whom the Government have encouraged into the market place of investment? The question asked by thousands of Barlow Clowes investors who are victims of malpractice today is echoed by millions more in this country who fear that they may be victims of malpractice tomorrow. Will the Government stand by them, or will they let those investors fall? Today, they have their answer, but we on the Opposition side of the House will not let them down.

Let me seek to comment on the points made by the hon. Member for Sedgefield (Mr. Blair) in the order in which he raised them.

First, it was made entirely clear in Sir Godfray's terms of reference that the purpose of his inquiry was to establish the facts on which judgments could be made. Inescapably, in a matter of this kind, those judgments will differ. Manifestly—and I understand this—the hon. Gentleman's judgment differs from the Government's judgment, which I have outlined to the House. However, it is a comprehensive description of the facts, which I believe will assist everyone in the House in considering in detail—and I hope that people will study the report in detail—the sequence of events against the background of the legislation existing at the time. I repeat that that is a very important point.

I well understand that people would have preferred some sense of finality, to use the term employed by the hon. Gentleman. But it is in the nature of an event such as this—with all the potential that it creates for legal action of various kinds—that it is very unlikely that one single statement can bring the sense of finality that he has sought. I certainly do not pretend that my statement could have done that today.

The hon. Gentleman raised a good many points about the detail of particular comments at particular times, which are set out clearly in the report. Let me make two observations that I do not consider were properly reflected in his remarks. First, as is very clear from the report, the majority of those comments did not come in the form of anything that could be construed as evidence in the context of the action that the hon. Gentleman suggests that we should have taken. [Interruption.] I hope that all hon. Members will study the report. It is very clear that in general what came to the Department consisted more of rumour and speculation than of evidence. The Department's duty was to seek to establish evidence on which proper decisions could be made, and that is what it sought to do.

Let me make it absolutely clear that there was no question of the Securities and Investments Board precipitating action that the Department had been unwilling to take. It was decided, in the light of powers that had become available at the end of April 1988, under new legislation passed by this Government, that the best way of producing an orderly conclusion—an orderly winding-up of Barlow Clowes—was for the SIB to take the action that it accordingly took.

There was some laughter in the House when I referred to the issue of a disorderly collapse, which was the likelihood under the previous powers on the occasions to which the hon. Gentleman has referred. The suggestion was made, I think probably from a sedentary position below the Gangway, that what happened was a disorderly collapse. Let me make the difference clear. What happened was a collapse in which a proper winding-up order was made in circumstances in which equitable dealing between all the investors in the companies could be secured. A disorderly collapse would have occurred if the Department had taken action that would have precipitated a position —[Interruption.] I hope that the House will listen to this point—[Interruption.]

—which would have caused the collapse in circumstances in which no action could have been taken to safeguard and freeze the assets. The more sophisticated investors would have got all their money, and the rest would have got nothing. That is what I mean by a disorderly collapse, and that is one of the risks that the Department was concerned to avoid.

It is not for me to suggest what the Parliamentary Commissioner should investigate, how he should investigate it or what he should conclude, but I have no doubt that he will have noted the hon. Gentleman's comments.

Lastly, the hon. Gentleman asked me what view the Government took of the need to ensure proper protection for that growing army of investors that we are rightly proud of having brought about. The answer is that we have already passed a comprehensive Act which has dramatically improved the framework of regulation in this whole sphere—and that comes after a period in which the Labour Government, as far as I can discover, did nothing whatever with a framework that went back to 1939.

Is my right hon. Friend aware that most hon. Members will have sympathy with him in handling this case when he was not in the Department when all these things happened? Does he agree that when the DTI had its reservations about Barlow Clowes, without winding it up with a disorderly collapse or whatever, the advice from the civil servants to Barlow Clowes should have been "Don't take any more investments from the public until we have satisfied ourselves that you are safe and sound as an investment instrument"?

The report refers to expatriates, but, in all kindness to my right hon. Friend, I can assure him that the investors in Barlow Clowes who live in my constituency are not expatriates. Consequently, for civil servants to suggest that the overseas fund was being used only by expatriates really is beyond belief.

Secondly, many invested their money unwittingly not knowing the full facts, yet those facts were known by the Department, which had reservations. Not giving that advice must be a dereliction of duty. Can my right hon. Friend assure the House that whichever officials were responsible for that dereliction of duty are no longer in that section?

First, there must have been a risk, which would have weighed with the Department, that action during most of the period of the kind for which my hon. Friend asked in the first part of his question would itself have contributed to the company's collapse, and that would necessarily have been a disorderly collapse, given the legal framework at the time.

Of course, I am not suggesting that my hon. Friend's constituents, or the many others who so unhappily have been caught up in this wretched business, are expatriates, because manifestly they are not. The issue is whether the Department could reasonably have been expected to know that those non-expatriates were being invited to invest in Barlow Clowes in the way that subsequently transpired. In the passage of my statement on the advertising that took place and the way that that was done, I think that I have shown why, in my judgment, the Department could not reasonably have been expected to know.

On the question of facts and civil servants, I should tell the House that the permanent secretary at the Department —it is a matter for him to investigate rather then for Ministers—has considered whether the facts set out in Sir Godfray's report give rise to a case for disciplinary action, and has decided that they do not.

Are Ministers in the Department satisfied that the people in the Department who are having to deal with these sharks and the rumours and speculation—to use his own phrase—which were drawn to the Department's attention, have sufficient expertise and qualifications to do so?

Secondly, the Minister tells us that the Government are advised that there is no legal liability, but does he agree that a particular feature of this tragic collapse is that many of the thousands of investors were elderly people, such as my own constituents, who put all their redundancy pay into the fund believing that they were buying British Government securities with the DTI's stamp of approval? In those circumstances, is there not a moral liability?

It is precisely because we had doubts about the overall adequacy of the previous regulatory system that such an immense amount of effort went into producing the Financial Services Act 1986 and to bringing it into effect. An important part of that Act is to improve the regulatory system by bringing to bear on it the expertise of those who really are involved in the field. Hence, the establishment of the Securities and Investments Board, and, of course, FIMBRA, regulating the sort of people about whom we are talking in important respects of the statement.

I have made the position on legal liability clear. I have also made it clear that the Government have considered the issue of compensation on other grounds but arrived at the conclusion that I gave in my statement.

Order. There can be hardly an hon. Member whose constituents are not involved in this, including my own. May I ask those hon. Members who are called not to repeat questions that have already been asked and, furthermore, to ask single questions rather than a range of questions?

Does my right hon. Friend agree that those who press for compensation to be paid by the Government should bear in mind that compensation will come from taxes paid by all taxpayers and we should be cautious before we go down that route? However, is it surely not right that there should be a thorough investigation into the role of the financial intermediaries who made such rash recommendations, and, perhaps, the auditors, who should have known what was going on in Barlow Clowes throughout?

I obviously acknowledge my hon. Friend's first point. Whether it would be right to ask taxpayers to compensate is an issue to which the Government gave close consideration. I hope that my hon. Friend and the House will realise that in making the statement I labour under the difficulty, among others, that further action of various kinds may well arise from the facts revealed by the case. The point that my hon. Friend has in mind is perhaps best covered in the statement by my having said that my right hon. and noble Friend the Secretary of State has referred the report to the Institute of Chartered Accountants in England and Wales and to other regulatory bodies. I think that my hon. Friend will understand that I cannot go much beyond that, but I am sure that his point will have occurred to others.

Is not the point encapsulated by one of my constituents who, at the age of 50, put all his redundancy money into Barlow Clowes, having gone to an intermediary, been informed that this was Government gilt-edged, that the company had its certificate and that its certificate had been renewed? Is not there clearly some sort of duty upon the Department to make some sort of compensation to such people?

I agree entirely with the right hon. Gentleman that the problem is encapsulated in the case that he has set out. However, I am afraid that I cannot agree that on the basis of the account of the Department's actions within the legislative framework—I am sorry to have to emphasise this again—that existed at the time the Department's behaviour gives rise to a case for asking taxpayers to fund a compensation scheme.

I warmly welcome the factual content of my right hon. Friend's statement, but does he accept that many hon. Members find his conclusions completely unjustifiable and con-fused? How is it that the Department granted a licence to a group of companies about which it had been warned by me, among other hon. Members, and when clearly, before granting the licence, there was inadequate monitoring, incompetent accountancy advice and inadequate auditing? Despite all that, the Department still gave the licence. Is it not correct to say that this was not an official decision but a political decision because the Department knew that something was wrong with the company and if it did not grant the licence some people would lose, whereas if it did grant the licence people might come out of it all right? Was not it a gamble—a gamble that went wrong for which the Government should accept liability?

I can readily accept, because it is made clear in the report, that at certain points in time decisions were put to and taken by Ministers, not by officials, which is entirely right. That is not at all the same as saying that they were political decisions in the sense that my hon. Friend rather implied in his remarks. They were decisions made in good faith on the basis of the information available and applying a necessary judgment about the balance of advantage and disadvantage, including to investors in general, arising from different courses of action. I have explained why judgments were made which led to the decisions that were taken at the time. I hope that my hon. Friend will study the report with care, which I recognise he has not yet had time to do, before continuing with suggestions of the kind that he made in his question.

Is the Minister aware that it was the case of my constituent, Mr. Leslie Mullard, aged 75, and his wife, who have lost £65,000, which went to the ombudsman as a test case, and of the reply to me from the ombudsman of 8 July? If the Government are not prepared to offer compensation, will they at least give a plain assurance in the House today that they will abide by any recommendation for compensation which may be made by Sir Anthony Barrowclough? What does the Minister say about the remark of the right hon. Member for Chingford (Mr. Tebbit) that he was minded to refuse the licence? How could the offshore fund have existed without the licence for the onshore fund?

I was of course aware, because it had been reported in the press, although I am not sure that it has been confirmed by the Parliamentary Commissioner, that the right hon. Gentleman had referred a case to the Parliamentary Commissioner. I have no doubt that a number of other cases have been referred to him as well. I made it clear in my statement, and I readily reiterate it, that the Government will co-operate, as they rightly should, and that they will consider with great care any report that the ombudsman may make. Beyond that, I am not prepared to engage in speculation about the hypothetical conclusions of a report that we do not yet know is going to be written without any opportunity to consider what it says.

I remind my right hon. Friend, and I ask him to make it plain, that although I was not at the Department at the time that the licence was granted and that although it was reported in the press —and no doubt it will be dealt with in the report of the inquiry—a document during my time at the Department said that I was minded not to grant a licence. As anybody who has been in Government will know—I realise that few of those who sit on the Opposition Benches have been in Government——

As anybody who has been in Government will know, such an expression is a commonplace expression in correspondence, whether a Secretary of State has or has not minded himself to grant a licence. [AN HON. MEMBER: "Wriggling."] The hon. Gentleman says that I am wriggling. I think that he has forgotten that the correspondence said that I was minded not to grant a licence. What I am making plain is that I cannot take credit for having made a decision not to grant.

I think that I would simply like to thank my right hon. Friend for his observations.

Popular capitalism, which this Government and many hon. Members support, surely depends on trust in institutions. How can we trust an institution, in this case the Department of Trade and Industry, when we know that the Bank of England and the stock exchange raised very serious questions? Can the right hon. Gentleman really come to the House and say that, given the background to these events, its actions were careful, considered and reasonable? Is it not time for this House, as an institution of Government, now to demand ex gratia payments for these small investors?

I hope that the right hon. Gentleman will —as I am sure he will—read, in the case of the Bank of England in particular, the text of the letter that it wrote, which is contained in the report. The suggestion in that letter on which I think his comments rely is of the form that "it occurs" to the writer that something may be the case. I think that the right hon. Gentleman will accept that that is not a basis on which a Department could launch action that would precipitate the collapse of a company or, in this case, a partnership. As for the stock exchange, my statement made it absolutely clear that once the concern began to have some flesh put on it, which was only at a relatively late stage, the Department not only took it seriously but set in hand the action that ultimately brought about the winding up of the company.

Is the Minister aware that over 400 investors in my constituency have been affected and is he also aware that the majority of these people are not City whizz-kids? They put their life savings into Barlow Clowes largely because of the guarantee that they thought they had of a DTI licence. Will the Minister comment on the fact that if the Financial Services Act 1986 had been fully in operation when Barlow Clowes collapsed, many of these investors would probably have been protected by the fund that was established under the provisions of that Act? As the Government recognise the principle and the need for such funds to be available in those circumstances, will they not accept that principle and do something about it, not because they are legally required to do so but because they have a moral duty to help people who are now in extremely dire circumstances?

It is certainly the case that, had the full framework of the Financial Services Act been in place, the position would have been a great deal better than under the legislation as it existed at the time. I cannot quite endorse the precise proposition that my hon. Friend has put to me. It would have depended on whether or not this or any other firm was duly authorised under the Financial Services Act. In the light of v/hat we now know, it appears to be highly unlikely that that would have been the ease, but what is very clear indeed is that the new legislation —the improved regulatory system—should make it very much less likely—even though, in the nature of things, it cannot make it totally impossible—that events of this very unhappy kind for my hon. Friend's constituents and others will occur again.

Is it a fair summary of the Minister's 17-minute statement that for a long time members of the DTI knew that Barlow Clowes were criminals but could not prove it and that when they could prove it and had the option of prosecuting or granting a licence they chose to grant a licence? Is that the acceptable or the unacceptable face of Thatcherism?

The short answer to the hon. Gentleman's question is that that is not true. When he has had a chance to read the report I think that he will recognise that that is not true.

Is my right hon. Friend aware that his very full and detailed statement will be studied with care not only by Barlow Clowes shareholders and investors but by investors throughout the country in many other concerns? I put it to my right hon. Friend that the lesson to come out of this is that we should not wait for the horse to bolt before we close the stable door. Whether it is the Department of Trade and Industry or the Securities and Investments Board, I think that investing members of the public would like to feel that at an earlier stage of the proceedings the whistle was blown on fraudsters and rip-off merchants such as this. When this matter was discussed in the House during the passage of the Financial Services Bill, hon. Members on both sides of the House argued the case for the Securities and Investments Board to be able to play a much more incisive and investigative role in these matters, but that argument was resisted by the Government who said, "We are too afraid of a more powerful body overseeing the City." I believe, as do many other people, that the time has come for a rethink.

First, I agree with my hon. Friend that there is material in this report and in the sequence of events for large numbers of people to study. I hope that the report will be studied by many intermediaries and by all those who are concerned with the regulatory system. Secondly, if my hon. Friend is suggesting that we waited for the horse to bolt before we shut the stable door, may I make the simple point that this Government, after decades during which no previous Government had tackled this problem, set up the Gower committee on investor protection in 1981 and introduced new regulations under the existing legislation in 1983. The Government have now produced a comprehensive framework. Far from waiting until the horse had bolted, we have got on with the job and a new framework is now in place.

When the Minister remembers that many thousands of small investors have lost at least a quarter of their capital, some of them perhaps 75 per cent. of it, together with the income that they derived from it, and when he recalls the crocodile tears that have been wept over the years, by the Prime Minister in particular, over the erosion of old people's capital by inflation, and also the very substantial "lifeboat" that was launched in the past to assist the banks who got into trouble, does it not smack a little of hypocrisy for him now to speak of protecting taxpayers' money in order not to compensate the small savers who have lost their savings?

The hon. Gentleman will, I hope, recall from my statement that I made it clear that we considered very carefully—I mean that—whether it would be proper to compensate for just the sort of reason that he has outlined. We came to the conclusion that, on the basis of the facts set out in Sir Godfray's report, we could not properly do that.

My right hon. Friend will recognise the concern felt on both sides of the House, which is justified, but we must not reach a judgment until people have had time to study the report. Sir Godfray was asked:

"to investigate … with particular reference to … the monitoring of the activities of the licence holder."
We have not heard anything from my right hon. Friend about the activities of the licence holder, which many of us believe were extremely dubious. If he conducted his business in a doubtful way, ought that fact not to be made clear from the Dispatch Box? If it is believed from the report that there are liabilities attaching to the auditors and to the financial advisers, can the Government bring together those who are liable—many of whom are insured, so the insurance factor will deal with the liability—so that we can finalise the matter quickly and not have it drag through the courts for years and years?

I note my hon. Friend's latter suggestion. I hope that people will read this extremely comprehensive report thoroughly. With regard to monitoring, my hon. Friend will realise that he is taking me back to the ground, over which I skated delicately some questions ago, concerning possible issues of liability in various directions arising from the report. My hon. Friend will realise that I cannot speculate or comment further on that, having made it clear that the report has gone to the relevant regulatory bodies.

The Minister has given us his interpretation of the facts and mentioned a possible reference to the ombudsman. May I suggest that he goes much further and assures the House that, if the ombudsman finds a different interpretation of the facts and also finds maladministration, there should be full compensation? If he does not, the right hon. Gentleman is saying that the Government will accept the ombudsman's findings only when they suit them.

I do not think that I have implied any such thing. I have said very clearly that we shall consider carefully any report which the Parliamentary Commissioner produces. I repeat what I said to the right hon. Member for Manchester, Wythenshawe (Mr. Morris) —I am not prepared to engage in speculation about hypothetical reports before we have had a chance to study them.

We shall obviously have to examine the report in great detail and not rush to instant judgments. Is my right hon. Friend aware that he does not sound quite right, and nor, from what he says, does the Le Quesne report, when he makes such a clear distinction between the Barlow Clowes UK portfolios and its Gibraltar portfolios? Is he aware that some investors had their funds switched between the two, often without their knowledge, and that there was not the clear distinction that seems to be implied in the report? Will my right hon. Friend take that into account? My right hon. Friend is aware that the reference to the ombudsman will take several months, so will he not rule out the idea of temporary support and help for real hardship cases while this affair drags on?

With regard to the latter part of my right hon. Friend's question, I cannot add to what I have already said about the compensation issue as a whole. Of course I accept—it is clear with hindsight—that funds were switched from one portfolio to another and that a number of things that happened should not have happened. The issue that Ministers have had to consider is whether the Department, exercising its regulatory functions, could reasonably have been expected to know that that was happening when it was happening. That is the point to which my comments were directed.

Order. I appreciate the House's anxiety about this matter but I have to balance it against today's business. There was great distress among hon. Members last night who were unable to speak in the debate on the Defence Estimates. I shall therefore allow questions on the statement to run for a further 10 minutes when we shall move on to business questions. I shall endeavour to ensure that hon. Members who cannot be called to ask a question on this statement will be called then.

Is the Minister saying that his Department monitored only sample advertisements in the financial press? Was it unaware of massive advertising in trade union magazines and others aimed at professional and managerial people nearing retirement or taking large lump sums on redundancy? Was no check made on those advertisements to establish how many people might be caught?

I think that I made it clear in my statement that the Department's monitoring rested on sampling the national and financial press. Some of the advertising to which the hon. Gentleman refers was not covered by that sampling system. I am advised that there are about 8,500 periodicals and publications in Britain which carry heaven knows how many advertisements. I think that the hon. Gentleman will understand that monitoring each and every advertisement in each and every publication would be a task on a scale which would present great difficulties.

Is it really the Government's view that no fair-minded person reading Sir Godfray's report could believe that any blame, let alone any negligence, attaches to my right hon. Friend's Department? If the Parliamentary Commissioner should decide to investigate a complaint of maladministration against his Department, is there any information over and above that already provided by his Department to Sir Godfray which could be provided to the Parliamentary Commissioner?

I am certainly not aware of any additional information which the Department could make available because—I hope I need hardly say it—the Department has made available to Sir Godfray for his inquiry all the information and papers that it has on this subject. That is not to say that nothing further could conceivably emerge from other quarters. We have co-operated with Sir Godfray in good faith, just as we shall co-operate with the Parliamentary Commissioner for Administration if he decides to investigate.

The report sets out a set of facts on which, necessarily, a judgment has to be made. As I have said to one or two hon. Members on both sides of the House, it is obviously possible for judgments to differ, but I have given the Government's judgment on these facts.

Is the right hon. Gentleman aware that I have a great deal of sympathy for him as he has been landed with this problem although he had no ministerial responsibility during the course of events which led to his statement?

It is extremely important that the right hon. Gentleman should take up the point made by hon. Member for Croydon, South (Sir W. Clark) about civil servants in the Department, and the announcement from the Dispatch Box that the permanent secretary is examining whether civil servants should be moved or removed. Is he aware that it is highly undesirable for Ministers to come to the Dispatch Box and make such statements about civil servants? If heads are to roll, they ought not to be civil servants' heads but ministerial heads.

I thank the hon. Gentleman for his initial comments but, to judge from the rest of his question, I think that he may have misunderstood what I said. I was asked about the position of civil servants. I made it clear that that is a matter ultimately for the Head of the Civil Service, but in the first instance it is one for the permanent secretary to the Department of Trade and Industry. I said what conclusion the permanent secretary to the DTI had come to.

Will my right hon. Friend confirm that in the face of warnings from the Bank of England and the stock exchange his Department issued a licence in 1987, and that it did so on the balance of advantage, to avoid turmoil? What is the position of those investors who would have been saved had the Department taken action in 1987 and refused a licence, but many of whom invested their life savings thereafter? Does my right hon. Friend really feel that no moral responsibility attaches to the Government in that case?

My hon. Friend has rightly made a point that came up on numerous occasions in my statement and during the questions on it. Any decision on these matters had to be made on the basis of a balance of considerations and the consequences that would flow from alternative action. I hope that he will weigh the possibility at least —perhaps even more—that had Ministers made a different decision at the time we should be debating not his point about those who invested subsequently but instead the plight of those who had suffered from a disorderly collapse of the kind that I outlined earlier.

Is not the real reason why the Government do not want to pay compensation that the matter has implications for investors in Investor Discount Brokerage, Afcor Investments and Harvard Securities, all of which have closed down over the past 12 months? In each case, investors allege—and have sent evidence to the Department—that Department inspectors had refused to act when they clearly should have acted to protect investors' interests.

No, I do not accept that interpretation in any way. As I said in my statement, the Government have carefully considered the case for compensation against the background of the facts revealed in Sir Godfray's report and decided that against that background it was not possible for us to conclude that taxpayers should be asked to fund compensation.

Does my right hon. Friend accept that, from the point of view of anyone with experience of the investment industry, there is no question but that his Department acted in accordance with the correct and proper procedures, from all that he has said? However, the real issue surely is that the blame must lie substantially with the firms of accountants and solicitors that gave false assurances to his Department. I note that he did not say that he was referring the report to the Law Society, and I trust that he will assure us that he is. He must surely accept that the real question is not where the blame lies but how quickly old-age pensioners—the elderly investors who might die before they can get their money back—will receive compensation. Will my right hon. Friend look at the legal procedures and all the problems that those investors will face in getting quick compensation?

I referred in my statement to the estimates that we have been given by the liquidators in respect of this country and Gibraltar, both of the current position and of the timing of any payments to investors. In particular, the liquidator of the United Kingdom operation hopes to make an interim distribution before Christmas. I hope that that will be some encouragement to my hon. Friend. We shall certainly do anything that we can to ensure that the process is completed as soon as possible.

On my hon. Friend's first point, I refer him to what I said earlier in these exchanges about the position of the various advisers involved. I have no doubt that the Law Society will have its attention drawn to his remarks.

The Minister has outlined the long period of fiddling by Barlow Clowes and the dithering of the Department of Trade and Industry but then said to the House that there would be no compensation for those affected by this illegal action. On behalf of those of my constituents who have written to me, I must ask how the Minister and the Government can justify allowing £1,000 expenses a week for Clowes when some of the victims are now having to manage on social security.

I can certainly give the hon. Gentleman an undertaking that we shall do everything in our power to encourage the liquidator—the decisions in these matters are his—to ensure that the expenses are kept to a minimum. I do not accept the hon. Gentleman's description of the Department's handling of the matter, which was a very difficult matter involving complex issues. As I have said repeatedly, the matter involved courses of action all of which were bound to have some disadvantages. I believe that reasonable judgments were made at the time against the background of the information available at the time and in the context of the legal powers available at the time.

Could my right hon. Friend do a little more than take note of the suggestion made by my hon. Friend the Member for Honiton (Sir P. Emery)? Given that people who have just lost all their life savings are not the best placed to take legal action, and that the Department relied heavily on assurances given by Spicer and Pegler and Herbert Smith, could he not get together some of the professional advisers to decide whether there should be some sort of out of court settlement?

I note that that suggestion has been made for a second time. However, in the circumstances and for reasons that my hon. Friend will understand against the background of my remarks, I do not think that I want to go further on the role of the various special advisers involved.

After the Minister's long statement and all the answers that he has given I am still not clear how to advise my constituents who invested in Barlow Clowes and felt safe to do so because the DTI had given the company a licence in 1985. Will the Minister amplify what he said in reply to my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris)? Is some kind of compensation one of the options that he will eventually consider when he gets the ombudsman's report or should my constituents and all the other investors now abandon hope of any compensation and realise that they have been abandoned by the Government?

I should make clear what I said in my statement about the current expectations of the liquidators concerning the amount that will be returned to investors. As I suggested, in the case of the United Kingdom operation in particular, that amount is expected to be really quite substantial. I am sorry, but beyond that I cannot add to what I have already said about the Parliamentary Commissioner and the report that he may possibly produce.

Does my right hon. Friend accept that the sorry sequence of events that he has recited will give no comfort to the unfortunate victims of the affair, who may have hoped for compensation from his Department, for which there are clearly no grounds whatever, or for ex gratia payment, for which there are clearly no grounds whatever——

—but that in what my right hon. Friend has said about the position of the solicitors, accountants and intermediaries of all sorts there are grounds for hope? More generally, does my right hon. Friend accept that in the regime following the enactment of the Financial Services Act 1986 events such as these could not be repeated?

I am grateful to my hon. Friend for the first part of his remarks. I should perhaps make it clear that I have not—in the sense in which he implied—said anything about the accountants or the solicitors. I have also made it clear that there are issues which will need to be—and which no doubt will be—considered by the relevant regulatory bodies.

I note my hon. Friend's last point.

Business Of The House

4.37 pm

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

With permission, Mr. Speaker, I should like to make a statement about the business for next week: MONDAY 24 OCTOBER—Consideration in Committee of the European Communities (Finance) Bill.

Motion relating to the Local Government (Prescribed Expenditure) (Amendment) (No. 2) Regulations.

TUESDAY 25 OCTOBER—Opposition Day. There will be a debate on an Opposition motion entitled "The State of the Econony".

Second Reading of the Road Traffic Bill [Lords], the Road Traffic (Consequential Provisions) Bill [Lords], and the Road Traffic Offenders Bill [Lords], which are consolidation measures.

WEDNESDAY 26 OCTOBER—Consideration of Lords amendments to the Housing (Scotland) Bill.

Motions relating to Scottish community charge regulations. Details will be given in the Official Report.

THURSDAY 27 OCTOBER—Remaining stages of the European Communities (Finance) Bill.

Motion on the Housing (Northern Ireland) Order.

FRIDAY 28 OCTOBER—There will be a debate on the disposal of radioactive waste on a motion for the Adjournment of the House. The Environment Committee's first report Session 1985–86 on radioactive waste (HC 191) and the Government's second stage response (Cmnd. 9852) will be relevant to the debate.

MONDAY 31 OCTOBER—Second Reading of the Rate Support Grants Bill.

The House will wish to know that it is proposed that Government business will be taken in the week beginning 14 November. The new Session will open on Tuesday 22 November.

[Debate on Wednesday 26 October 1988: Abolition of Domestic Rates (Domestic and Part Residential Subjects) (Scotland) Regulations 1988; Community Water Charges (Scotland) Regulations 1988; Community Charges (Registration) (Scotland) (No. 2) Regulations 1988; Standard and Collective Community Charges (Scotland) Amendment Regulations 1988; Personal Community Charge (Exemption for the Mentally Impaired) (Scotland) Regulations 1988; Community Charges (Registration) (Scotland) (No. 2) Amendment Regulations 1988.]

I thank the right hon. Gentleman for his statement, and, in particular, for the Opposition day set down for next week. In view of the fact that the parliamentary year is scheduled to last no fewer than 18 months on this occasion, will he tell us whether we shall have an Opposition day every week during the spillover period to go some way towards compensating for and matching the enormous extension of time made available for Government business?

In view of the widespread concern over today's statement about Barlow Clowes, and the number of hon. Members who wished to ask questions after the statement and did not get in, can we expect an early debate on the matter?

In view of the Prime Minister's recent much-vaunted conversion to protecting the environment, can we expect an early debate on that subject in Government time, or will her conversion prove to be about as authentic as the Turin shroud?

Does the right hon. Gentleman recall that he has still failed in his duty to the people of Scotland in not getting enough Tories to serve on the Select Committee on Scottish Affairs? When can we expect the promised debate on his failure to set up that Select Committee?

Finally, in view of the growing crisis of homelessness, and the likely further increase in homelessness as many people cannot find the money to meet their mortgage repayments, can we expect a debate on homelessness and housing in Government time?

The hon. Gentleman asked me five questions on the business for next week. First, he asked me about an Opposition day. I recognise that it has been a long Session, and that we have already provided one extra day over that required by Standing Orders. I suggest that we discuss the question of additional time through the usual channels.

The hon. Gentleman raised the matter of Barlow Clowes and the report. I recognise that it is a very important matter, which the House will want an opportunity to discuss. I suggest that we spend the weekend reading the report, and perhaps have discussions through the usual channels to decide how best to proceed, as clearly many important issues have emerged from the exchanges that we have just had.

The hon. Gentleman's remarks about the Prime Minister and the environment are not really worthy of him, from his present position, but there will be a number of occasions when those issues will be debatable in the near future. I have no doubt that opportunities will be taken in the debate on the Queen's Speech, and so on.

With regard to Scotland, the hon. Gentleman, representing a London seat, seems continually to misrepresent the position. As he knows, proposals were put to the Opposition which were unacceptable to them. I regret that. I gave an undertaking that there would be a debate on it, and I shall honour that undertaking, but I consider that discussions through the usual channels will be the best way to proceed.

In regard to homelessness, I am conscious that a debate did not take place as intended, as a number of Opposition Members wished to raise an earlier matter at considerable length. That presents us with some difficulties. I think it is a matter best discussed through the usual channels.

Would my right hon. Friend arrange for a general debate on Northern Ireland before the summit meeting between our Government and the Government of the Republic of Ireland to review the Anglo-Irish Agreement so that Her Majesty's Government will have the benefit of the views of the House on the matter?

I fully recognise my right hon. Friend's concern, and the force of his argument. I shall have to look into whether I can provide time, but of course there will be occasions when Northern Ireland issues can be raised. I shall look into the matter for my right hon. Friend.

In view of events during the summer Olympic games, and certain remarks attributed to the Minister of State, Home Office since then, will the Leader of the House find an early date for a debate on drugs in sport? When he is considering that, will he bear it in mind that 179 hon. Members, in the current Session, have signed an early-day motion supporting in principle the proposal that anabolic steroids should become controlled drugs under the Misuse of Drugs Act 1971?

[That this House notes with concern the evidence of mounting use of anabolic steroids by sportsmen and women which is recognised as having dangerous medical side-effects including the risk of death; is concerned that such drugs are freely available in the United Kingdom and are a source of temptation to naive competitors, unscrupulous coaches and over-ambitious parents; and expresses its support for the principle of making anabolic steroids controlled drugs under the Misuse of Drugs Act 1971.]

That is a suitable subject for debate. I cannot promise an early debate on it, but I shall certainly bear the hon. Gentleman's suggestion in mind.

As my right hon. Friend and his ministerial colleagues are preparing for the Barlow Clowes debate, will they consider not just what Ministers and officials could reasonably be expected to know, but what investors could reasonably be entitled to think?

I do not think that I shall stray any further into the matter than my right hon. Friend the Chancellor of the Duchy did when speaking at the Dispatch Box a few moments ago. However, I shall certainly take note of my hon. Friend's point and draw it to his attention.

When this debate on Barlow Clowes takes place, can we have a guarantee that by the time we have the debate the Secretary of State will have got the sack and been replaced by an elected Member who can carry the can? Will the Leader of the House ensure that the Chancellor of the Duchy does not take part in the debate, in view of the fact that it will not be lost on the British people that that Minister spent a lot of time at the Department of Health and Social Security when 138,000 people were arrested and tried under this Government——

I am just suggesting that we do not have that Minister in the debate, because the British people understand that if a Minister can be part and parcel of 138,000 people being arrested and convicted for fraud on the DHSS when the Government do not have the guts to deal with licences——

The hon. Gentleman's question is not much about next week's business, but I think that I can answer him. In a fairly uncertain situation, one thing is certain. As far as I know, my right hon. and noble Friend will still be Secretary of State when we have any debate on the matter, and almost certainly my right hon. Friend the Chacellor of the Duchy will reply to any debate in this House, and he will do it extremely well.

Before we have a debate on Barlow Clowes, be it the week after next or whatever, will the Minister, whose statement today, frankly, was extremely disappointing and sounded too much like civil servants protecting their own backs, come to the Dispatch Box next week and announce what he will do about the specific suggestion made by two Conservative Members—that the affected interests should be called in to see if they can sort it out as the Minister is not prepared to do it himself?

I shall certainly pass that suggestion to my right hon. Friend, who has already taken note of it from the questions raised with him. I do not think I can add anything more at this stage.

Does the Leader of the House have any proposals to bring forward a Bill for the removal of Crown immunity from the Palace of Westminster? In the light of the removal of asbestos from offices in the Tea Room corridors, will he make arrangements to report back to the House meetings he has had with Ministers at the Department of the Environment to make sure that hon. Members and their staff who are working in the Tea Room buildings can be sure that there are no asbestos fibres there, and, rather than depending on random sampling of asbestos, will he ensure that each office has been sampled so that the same safeguards apply that would apply to local authorities throughout the land?

There are two parts to the hon. Lady's question. First, on bringing forward legislation on the matter, I can assure the hon. Lady that at this stage in the Session, I am very anxious to get existing legislation through and I have no proposals to bring any further forward at this stage. Secondly, I recognise her concern and perhaps that of other hon. Members. I am looking into the matter, and I shall be in touch.

There has been considerable anxiety about the Government decision to repatriate 9,000 Vietnamese boat people who are now in Hong Kong. Can we have an early debate or a statement by the Foreign Secretary so that we can probe the assurances that have been given that those unfortunate people will not face punishment or starvation?

I recognise the concern expressed by my hon. Friend. It is an important matter. I cannot promise an early debate, but I know of occasions in the near future when such matters could be raised when the Foreign Secretary will be taking part in a debate in the House.

In considering the case for an early debate on the bid for Scottish and Newcastle Breweries by Elder IXL, will the Leader of the House take note of the unity of Scottish opinion on that matter across party boundaries? Will he take note of the fact that the Secretary of State for Trade and Industry has powers under the Industry Act 1975 to prevent, by prohibitive order, the transfer of control of important manufacturing concerns? Given the unity of Scottish opinion, is there not a substantial case for early action to end the uncertainty that should be tested in an early debate in the House?

As the hon. Gentleman knows, the proposed acquisition is being considered by the Director General of Fair Trading. He has a statutory duty to advise my right hon. and noble Friend the Secretary of State. It would not be appropriate for me to say anything more at this stage.

May I draw my right hon. Friend's attention to early-day motion 542 which deals with the appointment by Derbyshire county council of a former Labour Member of Parliament to the post of county director at £45,000 a year?

[That this House deplores the appointment by Derbyshire County Council of Mr. Reg Race, former hon. Member for Wood Green, former Research Officer for the National Union of Public Employees, former head of the Greater London Council's programme office, former consultant to the Association of Cinematograph, Television and Allied Technicians and former researcher to the Labour-funded London Government Information Unit, to the £46,000 a year post of County Director; and believes that all local authority employees should be politically impartial and that Derbyshire County Council is making appointments on the basis of whether or not candidates are acceptable to the ruling group 's left-wing views and not on the basis of merit and experience.] Would it be possible to have a debate on the conduct of local government, bearing in mind that unsatisfactory appointment? The man has now resigned—[Interruption.] Well, he has resigned. The people of Derbyshire are wondering how much it cost to appoint him and how much has been spent on removal expenses for what has turned out to be an unsatisfactory nine-month political appointment. Is it not time for proper debates on the conduct of local government?

My hon. Friend has raised an important point. Effective local government rests solidly on the tradition of politically neutral officers, serving with equal commitment whichever party is in political control. There is increasing concern that in some cases appointments are politically motivated. The Widdicombe committee has put forward proposals aimed at preventing such abuses and the Government are considering them carefully.

Mr. Tony Banks
(Newham, North-West)