Orders Of The Day

Regional Development Grants (Termination) Bill

Not amended (in the Standing Committee), considered.

Bill reported, without amendment.

Order for Third Reading read.

4.10 pm

The Minister of State, Scottish Office (Mr. Ian Lang)
I beg to move, That the Bill be now read the Third time. The subject of the Bill is the closure of the regional development grant scheme, which was introduced under the Industrial Development Act 1982, as substituted by the Co-operative Development Agency and Industrial Development Act 1984. Hon. Members have extensively and, if I may say so, thoughtfully and usefully, debated aspects of the Bill in Committee. Nevertheless, it returns unamended to the Floor of the House. The Bill is a short one. It has two substantive clauses. Clause 1 removes the power to make grants for projects, unless applications are received on or before 31 March 1988. Clause 2 establishes transitional arrangements concerning the availability of grants for projects in respect of which applications are received after 12 January 1988, except where applications are in respect of projects started on or before that date. As the House will recall, 12 January is the date upon which our intentions in that regard were announced to the House by my right hon. and learned Friend the Chancellor of the Duchy of Lancaster. The ending of the regional development grant scheme is part of a group of measures by which the Government aim to strengthen regional policy and to make it more cost-effective. At present regional development grant is available for a wide range of projects in development areas. The scheme involves virtually automatic grant payments at standard rates. This mechanistic nature of the scheme make it unsatisfactory in a number of respects. The grant is available to companies of any size and there is no assessment made at the time of application of whether a project really needs to be grant-aided before it can proceed or whether it is based on a viable business plan. A large number of projects therefore receive aid which would have gone ahead in the same location in any case. The waste of scarce public resources that arises cannot be justified. A less automatic approach to regional assistance is necessary. In this way we shall ensure that projects are properly evaluated in advance and that only those where need is demonstrated receive assistance. That is the basis on which regional assistance will be administered in future.

Mr. Dafydd Wigley  (Caernarfon)
The Minister stressed the importance of flexibility in the payment of grant, yet the Government show no flexibility over boundaries. The Minister appears to be standing by the statement that the boundaries will remain for the duration of this Parliament. Will he give us an assurance that, if there were an industrial catastrophe, leading to massive unemployment in an area outside those boundaries, the Government would be flexible and would seek to bring forward changes if necessary?

Mr. Lang
The hon. Gentleman will be aware that there are a number of weapons in the Government's armoury which we can use to help particular areas, but there is no need to change the development area maps in the context of the changes that we are now debating. The assisted areas will remain, and there will still be advantages of one kind or another under the overall regional aid package that will continue to be enforced. Any regular review of the boundaries involving changes on a rapid, regular and repeated basis would undermine the stability that is an important underlying feature of regional assistance. It is the relative need of different areas that is important, rather than the absolute need.

Mr. A. J. Beith  (Berwick-upon-Tweed)
Is the Minister refusing to recognise that the original decisions may have been wrong, or that the pattern may change, so that far greater need may exist outside an assisted area than inside it? If, as he now argues, the policy works even with a selective system, the effect would be to direct industry away from an area of great need to an area of lesser need.

Mr. Lang
None of these policies is absolutely set in concrete for all time, but my right hon. and learned Friend thought it appropriate to say that there would be no further changes before the end of the lifetime of this Parliament. It is important to give an underlying measure of stability, as I said earlier, and we have other weapons at our disposal to bring help where it is seen to be necessary. The House has, of course, been concerned about the effects of the ending of RDG on spending on regional assistance, but I can say that planned spending on regional assistance is not being cut. Some hon. Members have persisted in raising the question of what will happen after 1991, but they know that it is impossible to give expenditure figures as far ahead as that. Indeed, it would be irresponsible to try to do so. The position is that, looking as far ahead as we can, our spending is being refined and redirected; it is not being cut. More funds are being made available for regional selective assistance. It is now up to companies to come forward with good quality projects to support.

Mr. Austin Mitchell  (Great Grismby)
When the Minister says that spending will not be cut, he includes in that spending the money still in the pipeline from regional development grant. That is a point that arose frequently in Committee. Will he guarantee that when that money has gone through the pipeline, regional spending will stay as high as it is now?

Mr. Lang
The hon Gentleman presses questions which have already been fully explored in Committee. As he knows, the expenditure budget for the Department of Trade and Industry is expected to rise from £700 million, as stated in last year's White Paper on public expenditure, to about £900 million, as stated in this year's White Paper. Over and above that, there is further substantial help under the consultancy services, totalling about £274 million over three years. I think that if the hon. Gentleman sets that against the declining input of RDG 1, which he rightly identifies, he will realise that there is no question of a cut and that in many areas there are substantial increases. Hon. Members have also been concerned about the position of smaller companies following the ending of  regional development grant, but I can assure the House that that concern is misplaced. The Government have done a great deal to stimulate the growth of small companies, because we recognise that the future prosperity of assisted areas depends to a considerable extent on the further spread of the enterprise culture into those parts of the country which historically depended on a few large employers, often in heavy industry. Our regional policy fits naturally into that wider policy framework. Regional selective assistance is available to companies of all sizes. Making an application is not at all the bureaucratic of onerous procedure that some would suggest. A discretionary grants system that aims to direct assistance where it is needed will necessarily require more detailed financial information than would be the case with an automatic grant scheme. However, we are fully aware that, in order not to place undue burdens on industry and not to discourage companies from seeking assistance, such requirements must be kept to a minimum. As far as RSA is concerned, we have been keen to ensure that small companies make full use of what is available and for that reason, we recently introduced significantly simplified procedures for those applying for a grant of under £25,000. Companies with fewer than 25 employees in development areas will, of course, also be able to benefit from the new investment and innovation grants that are being introduced from 1 April. I can assure hon. Members that in drawing up the guidelines for the operation of the new grants, we have been mindful of the need to keep procedures as simple as possible. For all schemes, officials are always ready to discuss applications and to give guidance to companies. I am glad to see that the hon. Member for Fife, Central (Mr. McLeish) in his place. Most of us, if we are fortunate, have small parts of our speeches reported by the press in some newspapers the next day, but the hon. Gentleman has managed to achieve what some of us regard as impossible—extensive reporting of the speech to which he will treat the House later this afternoon. Perhaps I can help the hon. Gentleman and shorten the debate by answering in advance the remarks that he contemplates making. Today's edition of The Scotsman tell us: "A Labour MP will today use the last Commons debate on the scrapping of the Regional Development Grant to call for a broad-based campaign aimed at helping Scottish industry and business to take advantage of the Government's Enterprise Initiative." I could not agree more with the hon. Gentleman, and I am happy to join him in that broad-based campaign. According to The Scotsman, the hon. Gentleman "said yesterday that the row over cuts in regional aid was now a bogus issue". I entirely agree with him on that, too. In the same article, the Scottish Council (Development and Industry) is quoted as having submitted to my right hon. and learned Friend the Secretary of State for Scotland "a three-point programme, urging more flexibility in the new selective grant system, more emphasis on innovation, and a Scottish promotional campaign." In this happy harmony that we appear to have struck this afternoon, I accept and commend all three points  made by the Scottish Council (Development and Industry), whose support for our overall programme we warmly welcomed when the announcement was made. At various stages of the progress of the Bill, a number of hon. Members have referred to inward investment and expressed concern about what might happen to it as a result of the proposals in the Bill. I do not believe that inward investment will be undermined by the changes that we are making. I wish to share with the House the experience that I enjoyed last Monday, and I think that hon. Members may well then agree with me. On that day I presided at a press conference in Edinburgh at which the Bankers Trust, the seventh largest bank in the United States, with assets of more than $50 billion, announced that it was setting up an international administration project in Edinburgh. When asked what financial assistance it had been offered, it replied, "None." On the same day I attended a seminar promoted by the Compaq Computer Corporation, the fastest-growing personal computer manufacturer in the world, to mark the start of production, ahead of schedule, of its manufacturing plant at Erskine in Scotland. In its case regional assistance was offered and accepted, but the company, quoted in The Scotsman on 8 March, said that Compaq "chose to locate in Scotland although other European countries had offered it more lucrative financial packages … the other major European countries, including France and Germany … had put forward financial packages which matched each other" but "those packages had not been the key factor in the decision to relocate in Renfrewshire … Mr. Francois said that the company had been given no special tax treatment to set up on the greenfield site. One element, however, which obviously had been important was corporate income tax." I believe that regional assistance has a part to play in attracting inward investment — in some cases an important part — but regional assistance will still be available in selective form and can thus be tailored to the needs of specific projects—

Mr. Tim Devlin  (Stockton, South)
I am sorry to interrupt my hon. Friend, but there are a number of English Members in the Chamber, as well as Scottish ones. It might be helpful if I pointed out that we are enjoying the same increased level of inward investment in the northeast without the need for regional development grant. As a result of the advertising by the Teesside development corporation, a great deal of interest has been shown in sites in the TDC area and in the whole north-east of England. We are now in a position to say that there will be a severe shortage of factory and office space throughout the northeast, as reported in the Financial Times only three days ago. We look forward to a time in the near future when the north-east will be building, with the help of regional selection assistance, on the strength of its small firms, but we will not need the same RDG as we have in the past.

Mr. Lang
I am sure that my hon. Friend is right. He brings to the debate a close knowledge of what is happening in the north-east. It is clear that there, as in other parts of the country, the economy is reviving—

Mr. Tony Blair  (Sedgefield)
The hon. Member for Stockton, South (Mr. Devlin) is wrong. The story on the front page of the Financial Times did not say that there was a shortage of sites in the north-east—there is not. There is a plethora of them. There is, however, a shortage of factory buildings. One of the main reasons for that is that  the Government have wound up the Aycliffe and Peterlee development corporation and are not putting the money into English Estates to build new factory buildings.

Mr. Lang
English Estates' budget is being considerably increased. I take the view that most sensible people would take — that a shortage of factory space is a sign of success rather than of failure.

Mr. Nicholas Fairbairn  (Perth and Kinross)
Will my hon. Friend remind the hon. Member for Sedgefield (Mr. Blair) that when he speaks of the north-east, he presumably means the north-east of England? I regard the north-east as Aberdeenshire.

Mr. Lang
My hon. and learned Friend is right. The north, the north-east and north-west are parts of the United Kingdom that we Scots go south to reach.

Mr. Geoffrey Lofthouse  (Pontefract and Castleford)
Will the Minister advise his hon. Friend the Member for Stockton. South (Mr. Devlin) that although he may have too much in his area, 100 miles down the A1 mining communities are being wiped out and given no assistance by the Bill? No factories are being encouraged to come in to replace miners' lost jobs. As recently as yesterday, three more major pits were wiped out in the area. What will the Government do for those mining communities?

Mr. Lang
The hon. Gentleman is tempting me to stray far from the confines of the Bill, to which we are giving a Third Reading. From his knowledge of the mining industry, he will know of the substantial financial resources that are being brought to bear on the problems of mining areas by British Coal Enterprise initiatives.

Mr. Dennis Skinner  (Bolsover)
It is being bandied about by Ministers that British Coal Enterprise is providing jobs in coalfields where pits have closed. It has £30 million of taxpayers' money, but it is not providing such jobs. It is a front. It is laying claim to jobs that are being created in some cases by development areas and in others by regional grants, of which they will now be robbed. Merrik Spanton, who runs British Coal Enterprise, should be brought before an appropriate Committee of the House to explain where that £30 million of taxpayers' money has gone. If a Labour local authority had spent that money on gravy trains and junkets, it would have been surcharged. It is important that this matter be investigated.

Mr. Deputy Speaker (Sir Paul Dean)
Order. I hope the Minister will bear in mind, when dealing with these points, that we are now on Third Reading, and that it is in order to deal only with what is in the Bill.

Mr. Lang
I knew that it would be a mistake to give way to the hon. Gentleman. It is important to ensure that the transition from the present policy framework to the new one is fairly and equitably achieved. Clause 2 is designed to that end. Its purpose is to set out the restrictions that will apply on payment of grant to projects that were the subject of applications for approval received after 12 January 1988 and on or before 31 March 1988, and which commenced after 12 January 1988. The restrictions do not apply to any other projects. Projects that started on or before 12 January, provided that an application is submitted by 31 March, and applications that were received on or before 12 January, will be unaffected by the closure arrangements. The Bill signifies no reduction in our commitment to an effective regional policy, contrary to what some hon. Members have suggested. In Committee they proposed that various parts of the country should be excluded from the provisions of the Bill, but that would be unworkable given the bewildering pattern of assistance across the country. More important, such suggestions exhibit a failure to understand our proposals. They appear to equate regional policy with regional development grant, which shows a lack of willingness to accept that policy must be adapted to the circumstances of today. Our objective has not changed. It continues to be the reduction of disparities in job prospects between different parts of the country, and the encouragement of the development of local potential for self-generating growth. The means of achieving that objective must always be subject to critical examination. We believe that the time is now right for a change. The economy has been showing considerable improvement, and unemployment in the United Kingdom has fallen by almost 650,000 since July 1986 and is expected to continue to fall in 1988. Manufacturing productivity has improved markedly and business confidence is high. We want to ensure that the improvements that have taken place throughout Great Britain continue. The best way to do that in the assisted areas is to ensure that our regional policy is as effective as possible. No longer can a case be made for handing out grant in a general and automatic fashion. That is neither necessary nor effective. The greatest progress will be achieved by all individuals and businesses taking responsibility for their own future. That does not mean a simple sink-or-swim philosophy. It means that assistance is best given, not in an undirected manner or in such a way that dependence on assistance is created, but by relating patterns of assistance to need. Our general regional policy objectives continue to be those of stimulating local self-generating growth and reducing inequalities of employment opportunity.

Mr. William Powell  (Corby)
My constituency has been a substantial recipient of RDG over the past years, to its great benefit. The single most important factor that has caused the remarkable industrial turn around in my constituency has been the provision of derelict land grant, which has enabled sites to be cleared and new businesses to come in.

Mr. Lang
My hon. Friend's constituency is a remarkable tribute to the development of enterprise in an area which previously depended on one major industry and in which employment opportunities had substantially diminished. Unemployment in my hon. Friend's constituency has fallen from about 25 per cent. to about 12 per cent., which is a remarkable achievement.

Mr. Devlin
Does my hon. Friend agree that the structural problem of the north-east is heavy overdependence on large industries, with large employment probabilities? The need now is to restructure the local economy so that many more people can be employed, and encouraged to be employed, in small and medium-sized businesses and encouraged into self-employment. That will be the special value to the north-east of England of the enterprise initiative proposed in the Bill.

Mr. Lang
My hon. Friend is right. The general thrust of our policies in the Bill and alongside it emphasise the  importance of assisting small companies, which are the more likely generators of future jobs, and of encouraging enterprise and the growth of self-employment. The changes that we are making are positive. Regional selective assistance continues, and funding provision for it has increased. New grants to assist small firms in development areas to pursue investment and innovation projects will come into effect on 1 April. Firms in assisted areas now benefit from a higher rate of support under the new consultancy schemes, such as the business development initiative. These policies show our determination to use public funds wisely and effectively to strike at the root of the problem of regional disadvantage. No longer will money be thrown at companies in a wasteful and unnecessary attempt to ensure that they do what they had all along intended to do. The proposals enshrined in the Bill and the other regional assistance policies that accompany it build on, and flow from, the changes that we introduced in 1984. They update our approach against the background of the continuing sustained growth of the economy, which is responding to the broad thrust of our economic policies. We intend that success to continue. In 1984 we tightened the operation of RDG, notably with the introduction of job creation criteria. This achieved better value for money for the taxpayer and a more effective operation of regional policy, as the continuing revival of regional economies demonstrates. Now we perceive that it is right to go further. The changes that we propose will apply our resources—which are not being reduced—more cost-effectively, more flexibly and more selectively, the better to achieve our objective of helping the disadvantaged parts of Britain to rise above these historic disadvantages. This will enable us to stimulate in all parts of the country the self-sustaining spread of enterprise on which jobs and prosperity depend. I commend the Bill to the House.

4.32 pm

Mr. Austin Mitchell  (Great Grimsby)
If the Regional Development Grants (Termination) Bill sounds like an abortion, that is almost certainly because that is what it is. Although it is only a short, two-clause Bill, its malevolence is in inverse ratio to its size. It has all the hallmarks of the Government's new radical loony phase that began when Saatchi and Saatchi took over the Conservative party conference with the theme "The next move forward". That theme gave the Prime Minister her head, and the Bill is one of the consequences. It is a vicious Bill because it hits hardest those areas that are most in need and favours the richest areas. It is a mean Bill and exhibits a further petty economy. It will lead to a reduction in spending on the regions—which is what we are talking about — by a Government who are already spending only £1 on regional assistance for every £4 that the Labour Government spent when they were in power. It is a shabby Bill because it is justified with figures that the Minister is still fiddling. We cannot make this point frequently enough. The money that is in the pipeline for regional development grants is being counted in the Government's total for regional assistance. Also being counted are the consultancy grants and arrangements, 40  per cent. of which will go to the prosperous south-east. That is being counted as if it were going to the regions that are losing money. The Bill is also cynical. It is typical of the new approach of the Department of Trade and Industry under Lord Young of Graffham, Saatchi and Thompson, which is advertising worse as being better. The Minister told us that the Government's approach is not to throw money at problems, but the approach is clearly to throw advertising agencies and advertising budgets at them. The advertising expenditure of the DTI is in exactly adverse ratio to its powers. As those powers contract, the advertising budget goes up. That budget is going up pari passu with the gaping trade deficit. The only benefit of the Department's policy is to the advertising industry. When I say that the Bill is vicious, mean, shabby and cynical, I am saying that it is not exactly untypical of the Government and their approach to the regions. The Bill is based—the Minister repeated the point—on a hype, a distortion. He says that the economy is picking up, and for that reason we can seize this window of opportunity to abolish regional development grants that have been the mainstay of regional policy. That is what the Minister said, and if he wants to contradict it I shall be happy to sit down and let him do so. The Minister said that the economy is picking up and this is the moment at which we can get rid of regional development grants. The economy is picking up largely because in 1986 the value of the pound fell and that encouraged exports. The dollar has been falling only slowly and exports to the United States have been helped enormously. That has caused an economic recovery. The Chancellor has since been attempting to kill the goose that has laid his golden eggs and the Prime Minister has now taken the axe from his hands and has rushed in to uncap sterling, which is now rising. It is now up 18 per cent. in real terms against the deutschmark on the February 1987 figure.

The Parliamentary Under-Secretary of State for Industry (Mr. Robert Atkins)
This is the speech that the hon. Gentleman made this morning.

Mr. Mitchell
My speech certainly has similarities to the speech that I made this morning, but that is because made such a good speech. I am glad that the Minister remembers it and enjoyed it. The Prime Minister has seized power from the Chancellor of the Exchequer. She has uncapped sterling and the exchange rate has now risen in a way that will be directly harmful to the manufacturing industry that is so crucial to the areas of Britain that will be hit by the Bill.

Mr. Richard Holt  (Langbaurgh)
What exchange rate would the hon. Gentleman like to see, bearing in mind that three and a half years ago, when the pound was nearly at parity with the dollar, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said that it was not high enough?

Mr. Mitchell
The pound should be slimmed down, and so should the hon. Gentleman. Yesterday's editorial in The Sun was headed "Three cheers for rising pound". It said: "Foreigners are squabbling to buy our currency. Investors want to set up factories here. The pound is proud again. And that is no cause for tears.We should be cheering from the roof tops." That is The Sun in its well-known capacity as the toilet paper of the Tory body politic praising Government policy. The exchange rate that The Sun praises so lavishly will be harmful to manufacturing industry which makes a major contribution to the areas that will be hit by the Bill. The Government tell us that they are using the opportunity of a recovery to cut regional development grants. That is going up the well-known creek without a paddle. They cannot get interest rates down because they have unleashed such a credit explosion, and because interest rates are so high, the pound is kept high to strangle manufacturing industry. What is happening to the exchange rate and to interest rates bodes ill for the manufacturing heartlands of Britain, and we shall again suffer job losses. When there is contraction, those are the areas that will be hit by the Bill and they will suffer worst. It cannot be emphasised enough that a high exchange rate is a transfer of power from the north, the manufacturing area, to the south and to people who have money. Those who have much money are taking it away from those who have very little. The window of opportunity which the Government say is their justification for introducing the Bill is rapidly closing. A point that we emphasise constantly in Committee but which we still have not got across to Ministers is that the great advantage of regional development grants is that they are automatic. They are given automatically to firms going to development areas. Firms know that the grant is there and can take it into account. Firms pay less tax because of the automatic nature of those grants than they would pay under regional selective assistance. Because the grants are automatic it is easier to attract foreign firms. My hon. Friend the Member for Sheffield, Central (Mr. Caborn) will deal with how competitive are many of the regional incentives given in other Common Market countries compared to ours. Surely it must be easier to attract footloose international industry if we can offer it the automatic guarantee of a regional development grant. There is always a lot of pleasure in meeting officials from the DTI and even more pleasure in meeting Ministers from the DTI, but there is no money in it, like the automatic money that comes from regional development grants.

Mr. Bob Cryer  (Bradford. South)
Is there not also the important element that, if a grant is automatic, it keeps the civil servants at arm's length and all square with every applicant? Judging by our past experience, is there not a danger, with the exodus of civil servants from the Department of Trade and Industry to the boards of concerns as industrial advisers and the entry into the DTI of many business people, that there could be under this sort of legislation the invidious business of civil servants being able to hand out money on a somewhat arbitrary basis, which would lead to a form of corruption?

Mr. Mitchell
That is a further and important point which I am willing to acknowledge. On knowledge of trade and industry, I defer to my hon. Friend, who knows so much about it. It is a point which it is worth emphasising constantly. It is another advantage of the automatic grant, which is similar to a regional devaluation. An area of the country that is not competitive needs the opportunity to have some extra incentive, such as a regional devaluation and an automatic grant to industry going to the area. The Government are cutting the grant without consultation—nobody was consulted about the Bill; the Government produce straws of evidence, but there has been no consultation—and all the evidence that we have is that industry resents this cut and does not like it and that all the regional authorities are strongly opposed to it. The Government are doing this against all the evidence of their own research documents, the "Regional Incentives" and the "Investment Decision of the Firm" studies, which showed the importance and effectiveness of regional development grants. They are contradicting their own evidence, and they are also doing it against the evidence from the National Audit Office report which came out on 26 February.

Mr. William Powell
I am very interested in what the hon. Gentleman has to say about the advantages of the automatic system of grants. I wonder whether he can deal with the following point. The largest single recipient of automatic regional assistance in my constituency has been the British Steel Corporation, which has, of course, been the largest destroyer of jobs in my constituency.

Mr. Mitchell
The information is four years out of date, in the sense that we are talking about RGD 2, not the RGD system about which the hon. Member is complaining. If he has a complaint on that count, he should address it to Ministers. The report from the National Audit Office is a commendation of the grants which are being abolished. It makes several important points. It says that failures in RDG projects, which the Ministers complained of in Committee, are "no higher than for businesses generally." It also says: "studies by external consultants showed that a third of assisted firms that were interviewed considered that RDG II had been a critical factor in their investment decisions … Between 75 and 80 per cent. of respondents said the incentives had had some influence on their decisions." It is working. It is attracting industry to the regions, which is what it is meant to do. Yet the Government are abolishing it.

Mr. Lang
It is also pointed out that a rather higher proportion of beneficiaries of regional selective assistance regard it as important and critical to their investment decisions. So is not regional selective assistance working rather better?

Mr. Mitchell
No, because the report gives the cost per job of employment attracted by regional selective assistance and by regional development grants and shows that, in the year 1986–87, the cost per job of regional selective assistance was £3,341, while the cost per job or regional development grants was only £3,155.

Mr. Lang
I am most grateful to the hon. Gentleman. He has quoted extensively from the Moore, Rhodes and Tyler report at various stages. That report and the Robinson, Wren and Goddard report, which have tried to assess the cost of net additional jobs created by regional incentives, have both confirmed what common sense would suggest, which is that selective schemes are more cost-effective per new job created than are automatic ones.

Mr. Mitchell
That is just not true. This report is more up to date, in any case.

Mr. Lang
I apologise for repeatedly intervening, but the report is not adducing any new evidence. It is using evidence that was published some considerable time ago.

Mr. Mitchell
It seems difficult to get over to the Minister the basic essence of the argument that if we are to attract industry to the regions we need a panoply of weapons, and both regional development grants which are automatic, and regional selective assistance, which is based on consultation, have a part to play. There cannot be a one-legged approach. There must be two legs to the strategy. That is why we are defending regional development grants.

Mr. Devlin
Will the hon. Member accept that a certain number of businesses are going to move into regions for reasons totally unconnected with regional selective assistance or even regional development grants? A whole range of investment decisions are taken without any form of regional assistance in mind.

Mr. Lang
And there are others which are not.

Mr. Mitchell
Of course; the Minister is giving us a platitude there. They might even go to the north-east because they like the hon. Member's face, although I think that it is somewhat unlikely. But, among the reasons that firms give, regional development grants are cited as a major one. It stands to reason that if they can get a grant for going there they are more likely to go than if they cannot get a grant. It is chop logic to say that, because some firms go to regions without grants, they will all go to regions without grants. That just does not make any sense at all.

Mr. Fairbairn
rose—

Mr. Mitchell
I am sorry, but I am going to pursue my argument. I have given way a number of times. It is the automatic nature of these grants that is their strength, but it is also the reason why the Government object to these grants. They do not like the automatic nature. Specifically, the Treasury does not like anything that is demand-led, as this is, because, if a firm goes to a region, it gets the grant. That is what rankles with the Treasury. It wants the power to control those grants. it can cut regional selective assistance or impose cash limits on it. The Department's budget can be cut by decisions over which it has no control. That cannot happen with demand-led grants such as regional development grants.

Mr. Fairbairn
If we take a very simple situation such as that in my constituency in Perthshire, a person can move along the road to Dundee and collect some of the grants under the old system. But that does not make new jobs. It just robs my constituency of the jobs and moves them along the road, where some of the sort of people of whom the hon. Gentleman disapproves will collect the grant. Perhaps the hon. Gentleman would answer this question: at what price does he think that the pound should be to get the Elysium that he wants?

Mr. Mitchell
I always enjoy the hon. and learned Gentleman's contributions, but there was as much cock in that as there was in his speech last night on clause 29, because that is an argument against regional assistance or designated areas altogether. The Government are retaining the regional assistance structure. Our argument is about the array of weapons that the Government need to have within that structure. His is a criticism of the structure altogether, which is irrelevant to this argument.

Mr. Cryer
Would not the argument just advanced by the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) apply with equal force to the Government's enterprise zones, of which he is, one supposes, a fervent advocate? And is not the argument that we have always advanced against them that they just move people into another immediately adjacent area?

Mr. Mitchell
I am most grateful to my hon. Friend. With his usual perspicacity, he has picked on another important point which I should have included in my argument but did not. One would have thought that any Ministers, given the strength that the grants give them against the Treasury, would have fought to save those grants. The fact that they have given way shows how little guts they have for fighting against the Treasury for the interests of industry, the regions and their Department. Regional strategies, economic policies and incentives to attract industry to the regions are not only a matter of social justice and fairness between regions but make economic sense. This is a Government of the country by the south-east, for the south-east. The south-east is better off, yet it is the area that is producing the pressures and the inflation which the Government are using as an excuse to damp down economic expansion. Where does the pressure of skill shortages come? It comes in the southeast. Where is the pressure of rising house prices, which has an effect on inflation? It is in the south-east. Where are house prices being used as a lever to get more and more credit to spend more and more? It is in the south-east, not in the north. In other words, all those pressures of inflation from London are being used as an excuse to damp down the economy in a way that hits the rest of the country quite disproportionately. It hits the areas of the country that are represented by Labour Members, and the Minister is compounding that with this legislation. It is no good telling people in the north that there will be a trickle-down effect from the prosperity of the south-east. I do not know whether we are supposed to buy their secondhand Porsches or Gucci shoes or whether we are supposed to have the wetback economy of people travelling down the M1 to obtain work in the building trade because no jobs are available in their own areas. It makes sense to use the social capital and facilities of the north by attracting industry to the area. To do so we need weapons such as automatic regional development grants. The position will be made worse by the introduction of the single market in 1992. The tendency in an open market is not for development to be focused on the peripheries—which is what Britain will become in a single market—but on the growing centre. The single market will pose a threat to the north, yet the Government are removing one of our ways to attract development. That poses the danger of turning the United Kingdom into the Northern Ireland of Europe. It will drain off development from this country. The Minister has been unable to justify a decision that is irrational and which will harm economic and regional—policy. He did not—nor did any Ministers in Committee —have the decency to distance himself from the lunatic nostrums and the crank economics advanced by Conservative Members.

Mr. Devlin
rose—

Mr. Mitchell
I have heard enough crank economics; I do not want to hear any more from the hon. Gentleman. He may be an expert on piggy banking, but he knows nothing about regional development. Labour Members represent the north, Scotland, Wales and the areas that have been hard hit by the Government. That may be a political disadvantage, but it gives us a firmer grasp of economic realities and of the realities of manufacturing industry and of making things to sell to the world. We are talking about the real world, not the hypothetical money world about which Conservative Members talk. We have a passionate concern to ensure that those vulnerable areas of the country are not done down by this measure, which will be opposed to the end.

4.52 pm

Sir John Farr  (Harborough)
I welcome this short Bill. I hope that the hon. Member for Great Grimsby (Mr. Mitchell) will forgive me if I do not follow him too closely, but he seemed to ramble out of order by talking about exchange rates and the cost to jobs. I always thought that a high exchange rate would make the cost of raw materials imported by our industry less expensive and that it would therefore have certain advantages. However, it would be out of order to talk further about that subject in this debate. I should like to raise an important matter that has cropped up in my constituency during the past week. It involves a company in which 200 jobs are at stake. I shall give the House this specific example of the evils of the present regional development grant system. At present, the RDG system is causing gross distortions. There is a company in Logan street in Market Harborough that makes a very sophisticated type of valve. It has been there for 100 years and some of the grandfathers of the workers, who are highly skilled, also worked there. They are anxious to stay in Market Harborough and redevelop the town. [Interruption.] I wish the that hon. Member for Great Grimsby would listen, because I am trying to point out a matter of which he may not be aware. In many parts of the country, the RDG system is a gross waste of Government money. Crosby Valve has been tempted to go to the east of Corby, which is nine or ten miles away, despite the fact that in Corby — I am pleased to see my hon. Friend the Member for Corby (Mr. Powell) sitting beside me in the Chamber—there are no skilled engineering workers available. We have the ludicrous position that the company—which has been in Market Harborough since the turn of the century and which is doing a skilled engineering job —and its workers desperately want to stay in Market Harborough, yet simply because of the RDG system, and because of a grant of about £3,000 per job, the company can redeploy in Corby at no cost whatsoever. If the company is attracted to Corby by this distortion, the workers, who have remained loyal to the company for many years, will have to bus in and out every day. How stupid can outdated legislation become? The sooner the Bill is on the statute book, the better. I have been in touch with my hon. Friend the Minister, who is always helpful in these matters. I pointed out that, although an alternative site was available in Market Harborough, with planning consent for engineering purposes, the difference to the company between  relocating in Corby or to the new site that is available in Market Harborough would be over £500,000. In this competitive world, companies must do the right thing for their shareholders. Directors are responsible to shareholders for how they handle financial matters. There is no way in which an independent director, acting in the best interests of his shareholders, could do other than recommend that the company redeploy in Corby. I wrote to my hon. Friend the Under-Secretary, the hon. Member for South Ribble (Mr. Atkins) and said that Crosby Valve has been in Market Harborough for three generations. I told him that the proposed move had been influenced by the availability of £600,000-worth of RDG in neighbouring Corby. He wrote hack very promptly — he always writes back very rapidly, although he sometimes writes rather unhelpful letters—saying that there was no money available, and adding: "I would not wish to influence the company's consideration in any way." The company has been influenced in its decision by the grant that operates at present. It is because of the damaging influence of regional development grants that this tragedy has come about, and what is by no means a dormitory town is likely to become more so in the near future.

Mr. William Powell
My hon. Friend makes his point precisely and well, and I agree with him, even though it is the land in my constituency that may benefit if the company relocates and the land in his constituency that may lose. Many people have played a considerable part in the recovery of Corby, not least my hon. Friend the Minister, who, at a time when the town desperately needed friends wherever it could find them, played a notable part in the early stages of getting the regeneration going. The point that my hon. Friend makes on behalf of his constituents will be well received by mine.

Sir John Farr
I am grateful to my hon. Friend; he is a personal friend as well as being a friend in the House. His kind words do not disguise the fact that the loss of a thriving and enterprising company cannot be replaced by kind words. I have tried to give the House a common-sense approach. I did not bring in the rate of exchange more than I had to. To my mind, the debate is all about the RDG. The sooner the Bill is passed the better.

5pm

Mr. A. J. Beith  (Berwick-upon-Tweed)
I am glad that the hon. Member for Harborough (Sir J. Farr) raised that issue. It is a familiar story for many of us in other parts of the country. The Bill claims to be selective but it does not enable the Minister to be selective in such situations as the one described by the hon. Member for Harborough, and to bring assistance to companies so that they can stay in locations that are sensible for them—

Several hon. Members
rose—

Mr. Beith
I have not finished dealing with the hon. Member for Harborough. Like him, I receive many letters from the Under-Secretary of State who is coming to look at a similar situation in my constituency in a week or two. He has not yet been persuaded that the root of the problem is that the map is set in concrete and never modified to take account of changes that occur in places such as Corby and its neighbouring areas. The hon. Members for Corby (Mr. Powell), for Darlington (Mr. Fallon) and for Amber  Valley (Mr. Oppenheim) tried to intervene a moment ago. I shall not give myself the difficult task of choosing between them, so instead I shall turn to the Bill. I cannot avoid mentioning in passing the sequence of letters that I received from the Under-Secretary of State. Recently they have taken a strange turn. The last one, no doubt under instruction from the Secretary of State in another place, had had its royal arms removed and replaced by some republican hieroglyphic, which was meant to convey the new thrusting, enterprising spirit of the Department. I find that puzzling. The Secretary of State embarked on a political career that leads him to believe that he is heading for even dizzier heights than he thought when the chairmanship of the Conservative party was in question. When the royal arms disappears from the notepaper of a Department of State, I begin to worry where the authority lies in the Administration. We should remind ourselves that regional development grants have been a successful part of regional policy and have led to the creation of a large number of jobs, although nothing like enough jobs to replace those that have been lost by major structural changes, but certainly more than 600,000 jobs have been created. In at least one report, the Government have endorsed and recognised that, despite the criticisms from some Conservative Back Benchers, the regional development grant has proved important. The automatic grants must have been a significant part of that. The Government must take account of the real fears that the ending of automatic grants will reduce incentives. Those fears have been expressed by organisations and individuals with day-to-day experience of trying to persuade industry to move into regions. The Northern Development Company which has been commended by Ministers is a good example of a region trying to help itself. Dr. John Bridge expressed precisely that fear, and it has been expressed by other people in other regions about inward investment and investment from overseas. In the north-east, we have made particular efforts, with some success, to attract Japanese investment into the region. That policy has had some notable success, and I believe that it should continue, as it brings not only specific companies but a great deal of fresh air to the region. It brings new approaches to industrial working methods into the region, it gives a new approach to tackling some of our industrial problems. It has at last forced the British motor industry to look at all of its working practices and methods. That inward investment is invaluable to our region and to the country. There are real fears that it would be less feasible to carry out such operations against the competition of other countries with automatic and generous forms of grant aid. Throughout the regions which get assistance, there is the fear that the end result will be a reduction in the amount of grant available.

Mr. Devlin
I noticed that the hon. Gentleman spoke about automatic or generous systems of grant. Is it not the case that generous systems of grant will continue after the Bill has passed?

Mr. Beith
How do we know that we will get generous assistance in future, given that there are many voices in the Conservative party which are hostile to the very idea of regional development grant, and given the many pressures for the reduction of that expenditure? It is very hard to  imagine that there will be as high a level of grant expenditure in future. Indeed, we have seen the cuts in overall grant expenditure that have taken place so far. All the signs are that the level of grant expenditure will reduce, which will be severely to the detriment of the regions. I would be happy to be proved wrong about that in a year or two. If I am shown the figures that show that, in real terms, the Government have given as much assistance to the regions as hitherto, and directed that investment more effectively, I shall be happy to congratulate them on that achievement. I shall be very surprised indeed if that happens. I fear that the new pattern will lead to a lower level of grant. Another worry is what precisely will he the nature of ministerial involvement in those grants. There have been newspaper stories about what level of grant decision will involve Ministers personally. That gives rise to the question what considerations and what criteria will apply and to what extent political or other considerations will enter into decisions to give out grants. It would be helpful in today's debate if Ministers would reiterate very firmly that only industrial considerations will apply and that there will be no question of grants going to particular areas because they are thought to be marginal constituencies or areas in which the Government want to attract some political advantage. Indeed, I thought that the Prime Minister's attitude to the inner cities was expressed in a depressingly vivid way on election night. When the results came in from some parts of the country, it suddenly dawned on her that there was a problem in the inner cities. I am glad that she discovered that. Indeed she has a problem in the inner cities. That leads to the assumption that the policy was conceived in political terms. Selective assistance grants must not be given simply to parts of the country where the Government need to curry favour and gain success. Selective assistance grants must be given on industrial criteria or criteria related to industrial rejuvenation of the economy, and not on political criteria. The opportunities for ministerial intervention in the process that we are to have give rise to that particular worry.

Mr. Devlin
Will the hon. Gentleman give way?

Mr. Beith
I have already given way to the hon. Member for Stockton, South (Mr Devlin). He has intervened in many hon. Member's speeches and he has reached a stage where he might formulate his thoughts into a useful if brief speech later in the debate. Another reason why we should not support the legislation is that it is not part of any wider review. The measure does not form part of a wider review of regional policy or involve any commitment to give regions greater control over their own affairs. The Bill must be seen against a background in which local authorities are becoming less able to take any part in the affairs of their regions or make any decisions about the affairs of their regions. The Government have made no attempt to introduce any regional machinery that will enable decisions to be taken within the regions affected. The Bill leads to the opposite of the Government's proclaimed objective of letting the regions help themselves. If the regions are to help themselves, decisions must be made within the regions. If everything ultimately goes to civil servants in London or in the supposedly regional  centres who are ultimately responsible to other civil servants and Ministers in Lon don, that is not regional decision-making and is not a process by which self-help can be encouraged. The legislation also must be seen against the background of the Government's refusal to review the map. It seems a natural part of a piece of legislation which will change the system that the map should be reconsidered. Over the years, many of my hon. Friends have drawn attention to the defects of the map. My hon. Friend the Member for Truro (Mr. Taylor) and his late predecessor, David Penhaligon, spoke of the anomolies that arose in his constituency in Cornwall becaue the map was not up to date. The matter was also raised by Conservative Members. I have referred time and again to the anomaly in the Alnwick and Amble area in my constituency, where there is consistently higher unemployment than many assisted areas and which has been denied development aid. Not only has it lost the grants referred to in the Bill but it has also been denied European aid which also hinges on the assisted areas' maps. Under the Bill, if it is passed, the same thing will happen. People who want to start new businesses or to expand their businesses will be advised, in the same way as the hon. Member for Harborough's constituents, that they would be better off if they moved into assisted areas. People have come to my surgeries in the last fortnight saying that they went to Government officials for advice about grants and were told, "Yes, you can have grants if you move into the assisted area"—and that in an area with consistently high unemployment. Recorded unemployment in Amble is over 20 per cent., with over one adult in three out of work. Yet people are being told that if they move down the road they can receive either the current automatic grants or the selective grants under the Bill. That also applies to firms that are experiencing success, and want to expand and build new factory accommodation. There are grant opportunities for them too, if they move down the road into an assisted area.

Mr. William Powell
The hon. Gentleman makes an extremely powerful point. Sooner or later, Ministers will have to come to terms with it. At present, unemployment in my constituency is lower than in any other assisted area in the country by several percentage points, and it will become considerably lower, but, according to ministerial statements, we can expect no redrawing of the map until well into the next decade.

Mr. Beith
I could receive no better testimony or support than that—an hon. Member representing an assisted area saying, in effect, that the grant system has done its job, and it is time that the map was changed to reflect the facts as they now are. Refusal to face the realities of change seems extraordinary from a Government who are trying to argue that the regional grant system needs change—that it must be more selective. The selectivity that the Bill confers does not enable the Minister to say, "A grant is not necessary here. I will therefore go outside the assisted area, find another black spot where unemployment is even higher and give a grant to a company there." Indeed, one route that he could have taken to obtain that power would have been a review of the map.

Mr. Phillip Oppenheim  (Amber Valley)
My constituency, which is in the north midlands, does not form part of an assisted area, although unemployment is still quite high in parts of it. In the past five years, I have seen jobs move out of my area into areas that have received regional assistance. Is the hon. Gentleman aware that, under the rule changes that came into force in 1985, it is much harder for companies merely to shuffle jobs from one part of the country to another, because the Minister has discretion to ensure that, unless there is a substantial net increase in jobs, factories cannot be moved from non-assisted to assisted areas? I think that that has been of some assistance, although I accept many of the points that the hon. Gentleman has made.

Mr. Beith
It has not solved the problem that I face in my part of the world. My experience is not primarily of companies attempting that sort of thing, although I can think of one or two cases. It is of companies that genuinely wish to expand, want more space so that they can do so, need to spend a good deal of money to create that space and know that they could obtain grants if they moved into an assisted area. Under the Bill, they will not know with certainty, although no doubt they will be able to negotiate and make the decision to move on the basis that they will be offered a selective grant. The problem will still be there, and it also applies to those starting new businesses. It is extraordinary to invite the House to carry through legislation that makes one change—possibly damaging—in the whole structure of regional grants, without tackling other fundamental problems that affect the grant system, and without ensuring that the system can meet the needs of areas where unemployment is very high. The area in my constituency to which I have referred has the third highest unemployment of the non-assisted areas without development status. There are a number of such places around the country, which ought to have received attention before these measures were put into the Bill. The northern region and a number of others are working hard to help themselves, but time and again they come up against barriers created for them by Government. Those barriers have not been removed in the legislation, and fresh difficulties have been created. I therefore do not believe that the legislation should be given a Third Reading.

5.14 pm

Mr. Anthony Coombs  (Wyre Forest)
In welcoming the Bill, let me say first that the abolition of regional development grant and the subsequent changes in regional policy are long overdue. I say that not only because I come from the west midlands, which had to undergo its industrial restructuring without any benefit of regional development grant, but because regional development grants generally have not managed—in the words of the hon. Member for Fife, Central (Mr. McLeish) in Committee—to "equalise opportunities for our firms and businesses so that some day they can take part in the great enterprise culture which seems to be sweeping the nation".—[Official Report, Standing Committee D, 16 February 1988; c. 25.] Too often in the past, they have been inefficient and wasteful, and have distorted the regional economies and damaged the job prospects of precisely the people they were designed to help. That the grants have been costly is beyond doubt. Over the past 20 years, the 600,000 jobs have been bought at the cost of some £35,000 per job. Even the Labour-controlled city council in Birmingham, through its job creation scheme, spends a maximum of £10,000 per job. An average enterprise agency would not consider spending more than £5,000 per job, and the French system of regional assistance mentioned by the hon. Member for Great Grimsby (Mr. Mitchell) in Committee spends about £5,000 per job. The costliness of our sort of regional policy is evident for all to see. It is small wonder that the Public Accounts Committee said in 1987 that there were serious questions about the cost-effectiveness of this kind of assistance.

Mr. Holt
It is not only a matter of the cost per job. On Teesside, we have had a negative cost per job, in that, the more that millions of pounds have been poured into ICI and British Steel, the more tens of thousands of jobs have been lost.

Mr. Coombs
That is a very good point. I am coming on to that. The costs have been higher not only in financial but in economic terms. That is basically unsurprising, given that regional policy is based on the false premise that the extent of wealth depends on its distribution. Not only has regional policy too often raised company costs artificially by artificial relocations on a very footloose basis, which has damaged certain regions where they have relocated, but it has raised costs by making links with the original suppliers more difficult, taking them further away from their original pools of skilled labour and making their management more diffuse. There is also the ridiculous position that the midlands, which lost 200,000 jobs over 10 years in the motor industry and related industries, had no regional development grant to help it with its restructuring. Under the Labour Government before 1979, it was actually prevented by the industrial development certificates from the restructuring that was so vital to its future. Too often in the past, as recent research for the Regional Studies Association has shown, new firms that receive regional development grants have been condemned to marginalisation. By definition, they accept lower rates of return than normal, because of the grant that they are receiving. Too often they go into capital-intensive rather than labour-intensive projects, and too often they go into areas without an adequate prior analysis of the kind of market, the potential local excess capacity and the effect of existing local firms that they may have. Because the grant has been open-ended, automatic and not subject to viability, it has too often been ineffective and wasteful. In many instances, it has not even been effective in determining investment decisions.

Mr. Richard Caborn  (Sheffield, Central)
Can the hon. Gentleman give us any evidence from any independent, or, indeed, Government, report to substantiate his argument?

Mr. Coombs
As the hon. Member for Sheffield, Central (Mr. Caborn) said in Committee, according to the PIEDA consultants' report, only one third of firms receiving RDG said that the grants were critical for their investment decisions. One third said that they had no effect whatever on those decisions, and 71 per cent. said that they had no effect on their location decisions. The second problem that regional policy has caused is that at least until 1984 it affected the larger traditional industries, which were less dynamic, less entrepreneurial and more monopolistic. In Committee, the hon. Member for Great Grimsby supported that policy. He said: "We want giants. It is a battle of the big battalions." —[Official Report, Standing Committee D, 18 February 1988; c. 54.] But that ignores the fact that in Japan—to which the hon. Gentleman referred as part of his argument—three quarters of the jobs created in manufacturing industry are in firms with fewer than 300 employees, and in the United States, 75 per cent. of the 14 million jobs that have been created over the past 10 years are in smaller firms.

Mr. Austin Mitchell
It may he impossible to enlighten the hon. Gentleman's economic ignorance, but it is possible to correct his quotations. I did say that the battle of international trade was a battle of the giants. It is a fact that 94 per cent. of small firms in Britain do not export. In the Japanese economy, the ones that do export are the big corporations — the Sonys, Yamahas, Nissans and Datsuns—not the small suppliers about which he is talking.

Mr. Coombs
That may or may not be so, but we are talking about the regeneration of employment in the regions and the smaller firms have been at the forefront in creating employment, wherever they be. Too often, regional development policy not only encouraged the effective colonisation of many regions, but, in doing so, suppressed the talents of local entrepreneurs which most needed to be harnessed to create local jobs. The third problem with regional development aid and grants is that, even if they sought to create capital investment where it was most needed, they went in the wrong direction. Between 1979 and 1986, the north-west increased its proportion of gross domestic fixed capital formations by 9 to 10 per cent. and it received 19·7 per cent. of regional development grant. The northern area had 6 per cent. of gross domestic fixed capital formations, and that was rising. It also received 19·7 per cent. of regional development grant. Yet the midlands, which had 7 per cent. of capital formations — and that was declining—received no regional development grant. In practice, the regional development grant damaged local enterprise by subsidising imported competition. It ensured that industry in the regions was footloose. Indeed, it has been shown that in the northern region 80 per cent. of manufacturing firms are owned from outside. Most important, it ignored the basic fact that company formations and employment depend not on the region but on the sector of the economy in which they act. Indeed, according to "Business Trends", between 1980 and 1985 and the growth and contraction rates of employment in different industries, company formations are uniform, irrespective of the area, showing exactly what I have just been describing. The new policy will, rightly, concentrate principally on market opportunities, and, by increasing the design, marketing and production skills, it will enable entrepreneurial firms to take advantage of those opportunities. That is the correct policy. It is little wonder, as the Minister said in Committee, that there have already been 30,000 inquiries on the enterprise initiative. I suspect that, just as we saw with business improvement grants, 70 per cent. of the inquiries on the enterprise initiative, when it gets up and running, will come from the north and the regions where there is the enterprise and initiative waiting to be channelled in an entrepreneurial way in order to create the jobs that they so badly need and to make them, as they were at one time, the engine room of the economy. I want to make four further short points. First, if a market economy is working efficiently, regional policy should be redundant. Complementary to the reforms of regional policy in the Bill are the reforms of the rating system, the housing market — which will make the labour supply more mobile—and, most important of all, the reforms that will make sure that wages in the regions reflect local labour markets. It is crazy that East Anglia has an unemployment rate of only 8 per cent. and the northern region has an unemployment rate, on average, of 15 per cent., yet between the two there is a difference of only £3 per week in weekly earnings. Until bargaining is done at a genuine regional and plant level, irrespective of whether it is through councils, the Government or nationalised industries, or even large private industries, our regional policy will be less effective than it should be. Secondly, the enterprise document which has been released by the Department of Trade and Industry talks about the difficulties of attracting private investment to improve the industrial infrastructure. It mentions that it was to rely on English Estates, particularly for its managed workshops. That really is not necessary. If taxation allowances are given for industrial buildings which are kept in active management, the private sector will come in and do that in addition to the English Estates. That is a course of action that I shall urge on the Government.

Mr. Christopher Gill  (Ludlow)
Is my hon. Friend contending that regional development grants have exhausted industry in his area, the black country, Birmingham and surrounding places, and that, because of that, the private enterprise culture has not been able to do its proper job, and that by ending regional development grants those reverse incentives will also be ended and the private sector economy will be able to re-establish itself?

Mr. Coombs
Indeed I am. The third argument which I think has some substance is that recent changes in the operation of the European regional development fund, which mean that 80 per cent. of it will go to poorer regions, will mean that, if the United Kingdom is to keep its 70 per cent. proportion, it must have somewhere in the region of 75 per cent. of the remaining 20 per cent. allocated to it. A large portion of that will come through integrated operations of the kind that has recently given Birmingham, where I come from, £113 million from the European regional development fund over the next five years. Applications are presently in from Manchester, Strathclyde and Leeds, and the Government should give those their maximum support. Fourthly, the enterprise initiative and grant system need to be made more accessible. I am sure that that is one objective that my hon. Friend the Minister has in mind. I found it slightly sobering recently to visit a major engineering firm in my constituency, which has doubled its productivity since 1979 but which did not have a clear idea  of either the engineering initiative or the youth training scheme. I appreciate that the number of Department of Trade and Industry offices will be increased to carry the message to industry, but enterprise agencies and chambers of commerce have an excellent opportunity to play their role, through their local contacts and sponsorships, by spreading the message and acting as conduits for the enterprise initiative. In that way, the thrust of the policy, making Government aid more focused, accessible arid effective, especially for smaller firms, will be carried out. In my experience business people do not expect Government loans for loss makers on an open-ended basis, as the regional development grant allowed. They are perfectly happy to prove the viability of their projects, despite the fact that the Opposition would say that that increased uncertainty. They do not expect Government help just because they are Mancunians, Geordies or Brummies, but because they have the drive and ideas to make a success of their particular industries. That is the thrust of the Government's policy and that is why I support it.

5.29 pm

Mr. David Young  (Bolton, South-East)
I congratulate the Government on the consistency of their policies for regional development and for the health of citizens in the northern regions. Nobody would argue that grants are the only effective system. Development grants are very important for my region, which in 1979 had 7·1 per cent. unemployment and in 1986 had 15·7 per cent. unemployment. It has had the highest drift of population and has lost 500,000 manufacturing jobs. Bolton received marginally more than it will lose from the package, but it is dependent upon the health of the north-west. If the north-west region loses, my town loses with it, because we are a part of the region. We face a difficulty in attracting people, and also a communications difficulty. The Government established the third London airport in the south, not in the north, and British Rail is cutting off the night sleepers to Manchester, which will affect business men and the attraction of new investment. The regional grant is important to firms wishing to come to the area, so that they can plan according to how much grant they will receive. That certainty has been taken away by the legislation. Where will the firms go? This is part of the cheque-book approach of the Government. The firms will no longer come to the north, the midlands or the north-east, but will concentrate in the south, so we will lose the opportunity to attract investment.

Mr. Gill
Does the hon. Gentleman accept that when business men make decisions on where to locate their premises or factories they have more regard for commercial considerations, such as the proximity of their markets, the availability of labour, the cheapness of premises and the land on which they are built, than for the bribes that they have had in the past?

Mr. Young
The hon. Gentleman has made my case for me, because that is why the north has been disadvantaged. The Government have placed all their eggs in the south. The Government represent, not the north-west, but the south. We want to attract industry to the north. We would not have a problem in attracting industry if we did not  have a Conservative Government, because Labour would see to it that we had a communications system, a health system and the ability to attract investment. The grant system should be reformed, first by reelecting the Labour Government. I am not saying that we cannot reform the present grants system. I am saying that the Government are taking away items that would attract industry to the north and putting nothing in their place. The tendency is to pool everything in the south and to leave the north as an industrial deserted village. If the Government believe in the north, they should transfer some Government Departments from the south, as Labour did when it was in power. That would be an indication of good will. The Government are not helping unemployment in the north or helping to attract firms. In many areas of economic and social policy, the Government are making an all-out attack on the people of the north.

5.35 pm

Mr. Michael Fallon  (Darlington)
The Bill deserves a warm welcome from Conservative Members and from industry, and I was amazed to hear the hon. Member for Great Grimsby (Mr. Mitchell) say that industry has not welcomed the change. Obviously he has not read last week's CBI News, which said: "The new rules will ensure that money spent on industrial investment projects, in all but the very smallest firms, will go to where there is a demonstrable need of public assistance. Both of these aspects make for prudent managment of the public purse and have resulted in generally favourable reactions to the new proposals. It would seem, therefore, that the era of automatic handouts is behind us forever." The proposals have been warmly welcomed in the northeast region. I have not had a single letter from a company in the north-east opposing the abolition of regional development grants.

Mr. David Clelland  (Tyne Bridge)
I am listening with incredulity to what the hon. Member is saying about the reaction to the measure in the north-east, because I have here a copy of the minutes of the Northern Development Company, of which the CBI is an important part. The company's head of overseas operations has reported that the "likely effects of RDG termination on inward investment … would make the task of attracting Japanese investment more difficult in the face of strong European competition … In Hong Kong the Far East Liaison Office felt that companies from Taiwan and Korea etc. who have not yet invested in Europe may be inclined to go the easy route and accept automatic grants from European competitors. In the United States RSA was considered complicated and time-consuming."

Mr. Fallon
I shall be interested to hear the hon. Gentleman put that case when he captures your eye, Mr. Deputy Speaker. The Northern Development Company has not made those points to me, and I have no reason to belive that the task of attracting investment to the region will be any more difficult because of the changes that are being made, with the additional emphasis that will be placed on selective investment.

Mr. Oppenheim
Does my hon. Friend not find it astonishing that Labour Members are keen to attract footloose and fancyfree multinationals, when only yesterday during Question Time on trade and industry we  heard those companies referred to in the most insulting terms? Is it not far better that local, indigenous manufacturing industries should grow up, rather than that they should attract multinational companies which may decide to move out of the area after four or five years?

Mr. Fallon
In some parts of the north-east the local culture is known in business terms as being so hopeless that we have to help it by trying to attract companies from the far east to provide jobs. No region has suffered more than the north-east from the straitjacket of regional development grant and its limitations, because it is indiscriminate and automatic. During my first two or three years in the House, I received the quarterly list of grants from the Department of Trade and Industry for the northern region. Time and again I found that those grants went to the same companies. On Teesside, as my hon. Friend the Member for Langbaurgh (Mr. Holt) is well aware, the grants went to ICI and the British Steel Corporation. They did not simply go to the two largest companies; they went to the two companies that were shedding labour instead of creating new jobs.

Mr. Holt
I want to know where the money really went. It seems to me that the area as a whole received the grant, but the equipment that was purchased often came from overseas and there was no economic gain to the region. There were simply improved profits for ICI, based on handouts from central Government and fewer jobs in the region.

Mr. Fallon
I do not know whether my hon. Friend can confirm this, but I have received no communications from ICI or BSC about the effects of this legislation.

Mr. Holt
I have heard from the British Steel Corporation, urging me to get on with the denationalisation of that industry.

Mr. Fallon
My hon. Friend has made his point. It is no accident that the region that has enjoyed the largest share of regional development grants over the past 10 years is also the region with the smallest and poorest development of small businesses. There must be a relationship between our over-dependence on that kind of automatic, indiscriminate, non-job effective assistance and the stunted growth of the small business sector in the north-east. Small businesses will cheer the Third Reading of the Bill.

Mr. Holt
Does my hon. Friend accept that one of the major reasons for the lack of investment in the north-east has been the twin enemies of industry and commerce and enterprise—local authorities and trade unions? Is it not a fact that in his constituency there is a private enterprise plan which does not require any grant and which would create 10,000 jobs in Darlington, but it has been refused by Durham county council?

Mr. Fallon
That is typical of Durham county council's attitude to enterprise and business ever since the council was formed. Small businesses will cheer the ending of the huge automatic grants to large companies. They will also welcome the changes in selective assistance. Where small businesses have reasonable projects, with reasonable prospects of job expansion, for the first time they will be  eligible for selective assistance under the changes being made to the scheme. There will be a broad welcome in the north-east for the Bill. I have two very small reservations which I want to address to my hon. Friend the Minister. The first relates to the remaining distinction in our regional aid structure between development areas and intermediate areas. By removing regional development grants, my right hon. and learned Friend the Chancellor of the Duchy of Lancaster has reduced that element of discrimination. The intermediate areas are in a less disadvantaged position in relation to the development areas. However, the disadvantage will remain, because there will be differing rates of grant and new proposals for selective assistance. When my right hon. and learned Friend next reviews regional policy, will he look again at the necessity, especially in regions such as the north-east, for different types of financial assistance between, for example, Aycliffe and Darlington, or between Darlington and Teesside? Such a distinction is not sensible and is not consistent with the removal of discrimination embodied in these major proposals. My second reservation was admirably made by the hon. Member for Berwick-upon-Tweed (Mr. Beith). The map is set a little too much in concrete. We are told that it is impossible to review the map other than through primary legislation, yet there is no doubt that events move on in the development world. That is why we are abolishing Aycliffe and Peterlee development corporation and Washington development corporation, and setting up Teesside and Tyneside development corporations. The emphasis changes. I remember that the hon. Member for Berwick-upon-Tweed and I had intermediate areas prior to the 1984 review, and that we had the same rates of unemployment in our travel-to-work areas, of about 16 per cent. The Darlington area was kept on the map, but the Alnwick and Amble area was not. Four years later, unemployment in Darlington has dropped from 16 to 12 per cent., but the unemployment rate has remained unchanged in Alnwick and Amble. When we next consider regional policy, we should make the various instruments by which the map is set up a little more flexible, so that where circumstances change the Minister can come to the House and make variations in the difference between assisted and non-assisted areas, and between development and intermediate areas. Those two reservations aside, I welcome the Bill. I deplore the Opposition's attitude to the measure. Throughout the proceedings on the Bill, Opposition Members have confused spending on the regions with spending in the regions. Of course it is true that there has been a substantial increase in regional spending that is not part of the Department of Trade and Industry budget. There has been a dramatic growth in spending on training and retraining, and a dramatic increase in spending on environmental work in the region in clearing away the old industrial landscape and providing the new estates and factories necessary for new investments. It is wrong to consider regional aid simply in terms of regional assistance from the Department of Trade and Industry.

5.45 pm

Mr. Henry McLeish  (Fife, Central)
I am pleased to participate in this evening's debate after spending fruitless hours debating the issue with the Government. Tonight's  debate has been characterised by the same arrogance, complacency and contempt for the regions that we see most evenings when we discuss anything that is unrelated to the financial economy which the Government so enjoy discussing. This Bill is bad. It is also very simple, in that it terminates regional development grants. In doing that, it removes an area of certainty in terms of investment in a world that is very uncertain about attracting jobs, industries and companies to create wealth on which the country must depend in future. More importantly, the Government tend to forget that much of the manufacturing base is located in the regions. The future of the United Kingdom's economy depends on that, despite discussions in Committee, when there was no positive suggestion that that was the case. Tonight's speeches have been characterised by the simple notion that what is good for the paper economy, the financial economy of the south-east and of the City, will in some way solve all the problems of the depressed regions that are still depressed after nine years of the Government badly beating manufacturing. Apart from the fact that the Bill removes regional development grant, it is symbolic for many other significant reasons. It must be seen in the context of the Government's industrial strategy. I use the word "strategy" knowing full well that, with regard to the present Government, the term is used rather loosely. We are considering the language of enterprise. In Committee we referred to the DTI paper which is the language of enterprise and the rhetoric of the market. It also reflects the Government's complacency as they are not in touch with ordinary people north of Watford or in touch with industrial concerns or needs. Crocodile tears are shed over small businesses. The Government claim that they must help. After eight or nine years of this Government, it is obvious that small business have not benefited in the north or in the north of Scotland. Once again, the White Paper rhetoric only mirrors what we have seen over the past eight or nine years. In the context of industrial strategy, it is no good for Ministers to stand up and claim that the economy is on the right lines and therefore the benefits will spill over. Countries such as Japan, the United States, France, Germany and Scandinavia have a civilised view of the wealth-creating, job-creating, manufacturing base. Not this Government; they are obsessed by what I have described as the money economy. Obviously, the Opposition must at least put on the record the concerns of those whom we represent. We still have high unemployment and shaky investment levels. The Government talk about their policies being embraced by the CBI. I remind them that the CBI in most of its comments has embraced out of sheer relief the decision to scrap regional development grant. The CBI had thought that the whole of industrial policy would be abandoned. [Interruption.] If the hon. Members for Darlington (Mr. Fallon) and for Amber Valley (Mr. Oppenheim) would like to see my information, I shall send it to them; I hope that they will read it with interest. Clearly, we are witnessing not just the termination of regional development grant but the abandonment of any serious semblance of regional industrial strategy. This is a step-by-step process. The Government know from experience and, as my hon. Friends appreciate, they do not do things overnight. Step by step, we are seeing the  abandonment of any policy for effective regional aid. It is a "steady as the ship sinks" policy. We are used to that in the regions in Scotland and in Wales. The Government's policy can best be summed up by describing it as a "let them eat cake" policy, a phrase coined by Marie Antoinette. Those of us from the regions interpret Ministers and Conservative Back Benchers as saying that the regions can eat cake. After the election, referring to the inner cities, the Prime Minister said, "We want to win them next time." Clearly, it is a matter of no votes, no help. As with the inner cities, in the regions the Government's policies do not match the genuine industrial employment needs in the areas that my hon. Friends and I represent. I should like to highlight what surrounds the debate and what obviously must be the context within which anyone assesses the effectiveness, or otherwise, of abandoning regional development grants. Despite what the Minister of State said, there has been a significant cut in the Government's regional industrial assistance, especially for the period after 1991. Parliamentary questions on this matter have been tabled, but the Government are not willing to speculate on the financial assistance that will be provided when RDG disappears off the face of the industrial map. [Interruption.] The Minister need not shake his head, because his Department is the very one that will not provide the figures. Until we can find out what will happen post-1991, clearly the Government's measure must be interpreted as a massive cut in regional assistance.

Mr. Atkins
Rubbish.

Mr. McLeish
Rubbish? We shall await 1991, when the figures come before us in public expenditure statements and another Department of Trade and Industry paper. As was mentioned in Committee, there has been a massive redistribution of regional development aid within the regional industrial strategy. Scotland will lose £100 million-worth of aid from the 1986–87 figures. At the same time, the Government, with their friends in marketing consultancy firms, have decided — [Interruption.] The Minister may laugh, but this is a fact and I do not mind laughter when the facts are on our side. I may be obsessed, but, if the truth hurts, let it hurt a little more. Over the next three years, £274 million will be invested in what the Government call the business development initiative.

Mr. Oppenheim
What is wrong with that?

Mr. McLeish
The Government are proud of that, and I hope that that is on the record. At the same time as the hard, direct cash for each region has been cut, the support for marketing consultants has mushroomed on a United Kingdomwide basis. It is not even a matter of the £274 million being injected into assisted areas. It is a United Kingdomwide initiative. As was conceded in Committee, 40 per cent. will go to the south-east.

The Minister of State, Scottish Office (Mr. Lang)
That is not true.

Mr. McLeish
When that was conceded in Committee, the Minister justified it by saying that the area had 40 per cent. of the population and 40 per cent. of the economic activity. It is bad enough for the regions to have cuts, but  there is a double difficulty when the money is transferred to areas where, we feel, it is not entirely necessary on the basis of simple industrial and employment needs. The subject of the taxation of regional selective assistance has not been addressed. The Opposition asked whether that would continue, because RDG is not taxed. Clearly, if RSA is to be the only investment that we can expect in the regions, there will be another difficulty if it is taxed. The Government constantly urge flexibility —"flexibility" being the buzz word for the market. Everything is flexible because the market is about supply and demand. Clearly, the Department of Trade and Industry paper and the scrapping of RDG put the regions in a straitjacket. An amount of £274 million is earmarked for a United Kingdomwide initiative. How much will go to Scotland? The general thrust of the Government's thinking is away from the regions and on the United Kingdom. We do not believe that there is flexibility. The flexibility that surrounds RSA worries us, because, instead of automaticity in grants, civil servants will be allowed to tackle applications. I am afraid that the proper decisions will not be taken and that this is a way of hiding further Treasury cuts in regional assistance in the run-up to 1991. The discussions in Committee and in the House have been about disinvestment, disengagement, deskilling of our manufacturing base and, most appalling of all, lack of interest in anything that cannot be measured in terms of stocks and shares, the value of the pound and the amount of investment going out of the country.

Mr. Oppenheim
Will the hon. Gentleman give way?

Mr. McLeish
I shall not give way. I want to finish. There have been some truly hopeless interventions in this very short debate, and I should like to speak. The Minister of State was charitable enough to refer to some comments that I made to the press. It is an appalling indictment of the fact that the Scottish Office has surrendered Scotland's industrial interests to the Department of Trade and Industry that organisations such as the Scottish Council (Development and Industry), the Scottish CBI, the Scottish TUC and local authorities are concerned about the future. I made a point about any debate on the cuts being academic, because the Government smash all the legislation through the House regardless of facts, emotions and needs. In Scotland, as in the north-east, the northwest, Yorkshire and Humberside, people will want to get together because of their concern that the changes will not be distributed fairly. The south-east and East Anglia will cream off a large amount of the new investment which is going to business consultancy services. The Scots — either the industrial or the political community — will not sit idly by without a fight. We need much more from the Scottish Office than we are getting. Scotland needs industrial leadership. In view of the appalling debacle over the South of Scotland electricity board and British Coal, the need for industrial leadership from the Scottish Office has become more acute. Such leadership has not been forthcoming. If we enter into this new phase of regional industrial policy without firm guidelines and assurances that Scotland will get its fair share, the Bill will have added significance in the years ahead.

5.59 pm

Mr. David Clelland  (Tyne Bridge)
This Bill is a classic case of missed opportunity. It is more significant for what it leaves out than for what it includes. While I should be the first to acknowledge that the present system of regional aid is anything but perfect and would welcome meaningful proposals to amend and extend the system, I believe that the proposals before us are entirely negative. The Bill does nothing to allay the fears of many of us in the regions that the termination of regional development grant will be followed not by an improvement but by a deterioration in regional assistance. In Committee, we tried to introduce some constructive amendments to improve the Bill and the system of regional aid. Our proposals would also have complied with many of the Government's stated objectives outlined in the Department of Trade and Industry White Paper "DTI—Department for Enterprise". The proposals in that White Paper, which preceded the Bill and of which the Bill is an integral part, make much of helping people to help themselves, cutting red tape and encouraging inward investment. Yet the Government have refused to take the opportunity in this Bill to give effect to those objectives. Indeed, some of the provisions will have the opposite effect. Not surprisingly, I made a special plea in Committee for the northern region to be excluded from the Bill and for more local autonomy in the distribution of regional development grant. I would not paint as bleak a picture of the northern region as the Government have done, but it has to be recognised that the region still has its problems and that it is the duty of national Government to represent the interests of all parts of the country and not just of those where that Government have or hope to win support. The policies adopted by the Government give little room for optimism. Contrary to the comments of the hon. Member for Darlington (Mr. Fallon), total regional assistance to the northern region has been falling steadily under this Government and the proportion of Government regional assistance is now just half what it was before the Government came to office. Regional development grant in particular was £75 million less in real terms in the last financial year than in 1979–80 and a massive £135 million less than in 1978–79, the last year of the Labour Government. Our suspicion that the Bill has more to do with saving money than with assisting the regions was to some degree confirmed by the Chancellor of the Duchy of Lancaster on Second Reading. He said: "We are replacing automatic grants because they are becoming steadily more expensive and wasteful".—[Official Report, 25 January 1988; Vol. 126, c. 43–44.] Our suspicions were further confirmed yesterday when the Under-Secretary responded to a question that I had tabled: "My Department's planned level of expenditure on the main regional assistance measures in the years 1988–89 to 1990–91 is £330 million, £304 million and £265 million respectively." The House will note that the figure is decreasing. Total regional assistance in the last year for which figures are available—1986–87—was £409 million. Therefore, even according to the Government's own figures, the amount of regional assistance is declining. Furthermore, the figures given are all at present-day prices, so that when one takes into account inflation over  the next few years matters are even worse. The end of the Minister's reply confirmed the fears of my hon. Friend the Member for Fife, Central (Mr. McLeish). He said: "In accordance with normal practice, plans for 1991–92 have not been made."—[Official Report, 9 March 1988.] We do not yet know what the fate of regional development grant will be after 1991. Ministers may argue that regional development grant has fallen off in the north not because of reductions by the Government but because firms were not taking up the grant. I have already pointed out that total regional assistance has been falling and, according to the Government's figures, will continue to fall. However, the northern region faces one major problem that does, indeed, affect the take-up of grant, which is the shortage of larger industrial units, to which my hon. Friend the Member for Sedgefield (Mr. Blair) referred. That shortage has already cost the region jobs and it must be corrected as a matter of urgency. I look forward to hearing from the Minister that his right hon. and noble Friend the Secretary of State for Trade and Industry will be able to accept the invitation that he has recently received to meet the northern group of Labour MPs to discuss this problem. After all, it is the Government's abolition of Tyne and Wear county council and the winding-up of the new towns in the region that have led to the strains being put on the budget of English Estates. That has led to the use of the increased allocation to make up for the deterioration and to fill the gap. All this has resulted in an inability to provide the sought-after accommodation. Opposition Members believe that there is an urgent need to discuss regional arid industrial policy and attempted in Committee to open up the debate on the Bill to the wider issues to which it gives rise. The termination of regional development grant will mean the ending of the automatic system that applied to assisted areas, and therefore the special status of assisted areas is also threatened by its abolition. Indeed, that prospect has been welcomed by some Conservative Members. The fact is that the ending of automatic grant will also mean the ending of the certainty of help, which has attracted new business to the north and elsewhere. The total reliance on regional selective assistance with its form filling, question answering, and uncertainty — the very red tape that the DTI White Paper says it wants to cut through — is sure to place the assisted areas at a disadvantage in relation to areas in the European countries that retain an automatic grant system. I pointed out to Ministers in Committee that the north's job-hunting agencies had already said as much, and remained concerned that the new system will be less attractive. As I said, the existing system is not perfect and sometimes grant moneys have not been used as effectively as they might. However, the majority of anomalies in this regard concerned grants to existing business; one of the main benefits of the system was looked upon as its tendency to be attractive to prospective investors. Why could the automatic system not be retained for new business? Such an amendment to the Bill would have removed many of the anomalies while retaining the advantages. Ministers could not bring themselves to accept even that point. The Bill and the White Paper are only part of the Government's wider regional strategy. On Monday we saw the launching of yet another glossy brochure  promising action in the cities — many of which are located in assisted areas. In that brochure, as in all the Government's pronouncements on this subject, there is much talk of "the people". In the foreword, the Prime Minister herself refers to giving the people "more opportunities", "greater freedom and choice" "a bigger stake in their communities" and even goes so far as to say that the Government are resolved to work "in partnership with the people". Yet when the reader moves on from the foreword and through the 32 pages of the document, he finds not one reference to, or suggestion of, consulting the people in the cities about what they want. There is not even a reference to making those who will impose their ideas on the areas accountable to the people. Everything is to be in the hands of Government appointees—those who will not be so much interested in what is good for the people as in what is good for business or what is in line with Tory dogma. As with regional development grant, accountability is to be terminated and replaced by a system in which Ministers or their agents will decide who gets what and what goes where. So much for partnership with the people. If the Government want an example of partnership, they need only look to the work being done by local authorities up and down the country—in partnership with business and sometimes with the Government—but with those authorities always accountable for their actions, either through the ballot box or by virtue of the consultation processes that accompany development proposals — consultation processes which the Government see as obstacles to enterprise, barriers to be removed. If the termination of regional development grant was to make way for a new system in which those partnerships could be encouraged and helped, it might have been more welcome. If the northern region was to be given its own development agency, on the Scottish model, accountable to an elected regional assembly, we would be talking imaginative action. Although the northern group of Labour Members have drafted a bill to provide just such a structure, that is not exclusively a Labour party view. As I pointed out in Committee, the Tory Reform Group, of which the Chancellor of the Duchy of Lancaster is a patron, has recently produced a paper that argues strongly and unequivocally for a development agency for the northern region. In the recent article in The Guardian, the right hon. Member for Henley (Mr. Heseltine) gave some positive views about regional government. The Northern Regional Assembly Bill, which the northern Labour group has introduced, is a positive and progressive proposal, whereas the abolition of RDG is negative and regressive. What will the abolition of regional development grant do to promote a shift in development from the overcrowded south to the attractive regions of opportunity in the north? I read in the Financial Times the other day that there is an acute shortage of engineering skills in the south-east. It is surely nonsense that we cannot organise our affairs better, when the north is bristling with skills and labour that is not being used, and is suffering all the financial and other hardships of unemployment, while  at the other end of the same land people are working so much overtime that they are exhausted at the end of the week. Nothing in the Bill addresses that situation. The Government's policies have been disastrous for the regions. In Committee, the Minister spoke with pride of the fall of unemployment in the Newcastle travel-to-work area to 14·7 per cent. I had to remind him that that is still double the rate that applied prior to his Government coming to office and more than twice the rate in the southeast of England. There will be no room for self-congratulation until the rate falls below the 1979 level. What confidence can we in the north have that the region will be better off when Ministers who have presided over such a catastrophic situation will allocate grant based on their wisdom, rather than the automatic system currently operating? Regional policy is of vital importance. The separate and distinct identities of local communities must be preserved and local people must be allowed to develop their own economies and cultures and not have solutions imposed upon them from above. That means a degree of local autonomy, directly influenced by the people themselves. Everything that this Government do is against that principle and more and more centralist. By refusing to accept our arguments, which would have given the power to distribute grants to regional agencies rather than abolishing them, by merely terminating the system but not looking to improve it, the Government have yet again increased the powers of Ministers and reduced the attractiveness of the assisted areas. The grants that came automatically to the assisted areas will no longer exist, but the problems faced by those areas will not go away quite so easily. If the Government run true to form, more emphasis will be placed on the free market—"Let private enterprise decide". That philosophy will not help the regions, which are in need of help, and it will not help the people who live in the developing south either. It is they who will suffer, and are suffering already, the overcrowding and congestion which result from the uncontrolled free market development which this Government are so attached and which this Bill will further encourage.

6.12 pm

Mr. Christopher Gill  (Ludlow)
Much of the Opposition's case is founded on what I regard as a misconception—that Governments create jobs. In truth, Governments alone cannot possibly create jobs—not real, lasting jobs. Jobs are created by entrepreneurs who recognise a market, set out to satisfy that market, and do so at a profit which enables them to reinvest in the business and employ people. The other misconception of Opposition Members is that they delink wealth creation from people's prosperity. The two go absolutely hand in glove. In effect, regional policy has moved many of this country's jobs around the country. Much regional policy has not created new jobs. If one looks at the west midlands and especially the black country, one sees the dereliction and depression that have resulted from jobs being exported from what was once the workshop of the world to other areas where grants have been available, such as the development areas and the enterprise zones. Our jobs have been exported. I feel that keenly as someone who prides himself on having been born and bred a Wulfrunian and having run a business in the black country. I now represent a rural constituency and can see the effects of regional policy on Shropshire. Why on earth should people running a business—or attempting to run a business—in the remote parts of west Shropshire be disadvantaged simply because people at the other end of the road—across the border in Wales—have been able to get grants which mean that they have an unfair advantage? I leave the House with one thought for the day. As a result of regional policy, we have in Britain some of the longest production lines in Europe in terms of time. Hon. Members need only consider the motor industry to know that I am right.

6.14 pm

Mr. Alun Michael  (Cardiff, South and Penarth)
It is complete nonsense for the hon. Member for Ludlow (Mr. Gill) to talk about an unfair advantage in Wales. What we in Wales seek is not an unfair advantage, but merely a fair balance between the regions. If there is an unfairness anywhere in the system, an improvement in the system of regional development grants is called for — not the provisions in the Bill, which is a narrow measure proposing the abandonment of regional development grants. The one thing I welcome in the debate is the presence of a lone Conservative Member representing Wales— the hon. Member for Cardiff, Central (Mr. Grist) who is the Under-Secretary of State for Wales. I hope that he will join the debate and not demonstrate his membership of the Trappist tendency in the Tory party. In the long hours in Committee, we asked many questions about the effect that the Bill would have in Wales. We provided detailed argument and evidence and took apart the sham figures with which the Secretary of State for Wales has sought to mislead the Welsh public. It is a pity that during that extended debate, no Welsh Office Minister and not a single Conservative Member representing a Welsh constituency was present to face up to the examination and debate.

The Parliamentary Under-Secretary of State for Wales (Mr. Ian Grist)
The hon. Gentleman knows perfectly well that I was, and indeed still am, serving in Committee on the community charge Bill and therefore was unavailable for this Committee. My hon. Friend the Minister of State, Welsh Office, has been serving in the Committee on the Education Reform Bill. Therefore, neither of us was available, as the hon. Gentleman knows perfectly well.

Mr. Michael
The Minister has not explained where the Secretary of State for Wales has been. This is a matter of regional development and is important to Wales so perhaps the right hon. Gentleman might have been persuaded to help out his colleagues. The Under-Secretary's remarks do not explain the absence of every single Conservative Member representing Wales from those discussions. To be blunt, the Secretary of State for Wales has been exposed as a visiting salesman, with no goods in his carpet bag. Experience in Committee proved that his London and Scottish colleagues are no better. The one plus is that the lack of Welsh Office representation in the Committee has created a new unity between the regions. We thought that the right hon. Member for Worcester (Mr. Walker) was the only Minister whose tactics were to use aggressive public relations and hyperbole to sell a so-called bag of goodies  that is attractive on the outside, but empty on the inside. We now know that that is a deliberate policy adopted by the Government, including the English and Scottish Ministers who joined the Committee. Indeed, this week the Prime Minister has given that squalid technique her personal blessing. In opening the debate, the Minister claimed that we had misunderstood the Government's policies and confused regional policy with regional development grants He is wrong. We would welcome a new look at regional development policy and any real improvement in regional development schemes. However, the Government has not come up with new policies or resources. The Government has come up with a PR package on the one hand, but on the other has taken away the certainty of regional development grants, without putting anything in their place. I should be grateful if the Hansard writers would note that I used the singular there, because the Government is operating as a mindless singular entity and I should like my grammar kept right. The Government is trying to pretend that nothing will be lost as a result of the Bill. However, I challenge the Minister to deny that the Welsh Office expects a major reduction in regional expenditure as a result of the changes being introduced. Due to the greater difficulties in obtaining the regional selective assistance grant, it is expected that a lower percentage of expenditure will be made. Perhaps a £100 million spend on regional development grants will become a £40 million spend on RSA. I imagine that I shall hear from the Minister if what I have said is wrong. A quotation was given earlier from the journal of the Confederation of British Industry, I think by the hon. Member for Darlington (Mr. Fallon). I should point out that the hon. Gentleman was not reading from a policy statement made by the CBI, but from the briefing included in its journal. The briefing also included the sentence that the end of regional development grant will "give the Government complete discretion over its purse strings." That is what this mean little Bill is about. It legalises the theft of resources from the hardest-hit areas of Wales, and other regions. It legalises such theft from the oldest industrial areas on which Britain's prosperity depended; from the valleys and industrial areas where massive unemployment continues to bear witness that those areas and communities are paying the price for the restructuring of British industry, which was and is vital for all of us. The Bill, in common with so many other items of Government legislation that are being steamrollered through, is about squeezing expenditure without regard to need or the opportunity costs of introducing changes. In Committee we were accused of painting a bleak picture. We did not paint such a picture of our regions, about which each of us spoke with pride and care. We have painted a black, bleak uncaring picture of the Government, and it is true. In Committee we made a number of positive suggestions to lessen the impact of the Bill in the worst-off areas of Britain, to meet the criticisms of the existing system and to target our attention on small firms in development areas. We had no positive response to those suggestions. Conservative Members on the Committee had obviously been told, "Put your heads down and bash on, boys. Don't listen to any sensible argument." The Conservative party ceased long ago to be a democratic  party. In Committee it refused to listen to the Labour party. We can continue to claim the positive role as the party of enterprise in both the public and the private sector. Debates in Committee and on the Floor of the House have exposed the Conservative party as more concerned about the packaging than the contents of regional policy. Despite any faults, the RDG system has proved to be simple and effective. Industrialists know where they are, know where they can start up in order to qualify for the grant and exactly how much the Government will contribute. That element of certainty has helped to bring jobs to the development areas and that help has been directed at the worst-off areas of the country, including the valleys and the rural areas of Wales. As a result of the Bill those areas will lose out. What have the Government put in place of RDG? Nothing. The valleys initiative introduced by the Secretary of State is about to enter the "Guinness Book of Records" as the Government initiative that has been launched on a record number of occasions without any real information being given. However, we are aware that no extra money will be available for Wales and the Minister is doing no more than moving the money around in the hope that no one will notice.

Mr. Gill
Will the hon. Gentleman give way?

Mr. Michael
No. The Government are simply spreading the money around in even thinner layers. It is obvious that the worst-off areas of the country will be hit hardest. Wales, in common with other regions, needs a coherent regional strategy. The Government have given us glossy pamphlets, an effective publicity campaign, but that is all. We welcome steps to bring jobs to Wales, but until the Secretary of State for Wales can produce a viable alternative we are adamant that RDG should continue. During this debate I have been surprised by Conservative Members' lack of knowledge of industrial development. Over the years the Opposition have been working to redevelop our local economies in partnership with industrialists, investors, local authorities, foreign investors and local people who want to start up in business. We know what we are doing, but Conservative Members have demonstrated tonight an appalling mixture of impracticality and prejudice. Their support must have embarrassed even the Minister.

6.22 pm

Mr. Bob Cryer  (Bradford, South)
Play has been made about the support for the Bill from various Tory front organisations, such as chambers of commerce and the CBI. I should like to quote from Library research note No. 382, page 6, which contains a quote from the Association of British Chambers of Commerce—an association that I suspect has rather more Conservative members than Labour party members. It said about the Bill: "We will press for adequate transitional provisions and assurances about the increased availability of selective assistance in the regions. Also, the new policy does not represent a coherent response to the wider problem of overheating in the South and spare resources in the North. We will look for a clearer response from all Government Departments on regional policy." Therefore, the Bill is condemned by the very organisation that normally pays fulsome tribute to the Government. The Bill removes automatic regional aid and I wonder whether the Minister has been applying the Bill already. In my constituency a firm, the National Breakdown Club of Low Moor, made an application for regional grant but was refused on the basis that the firm was already successful and would go ahead and build its extension anyhow. That is a peculiar approach to adopt, especially when organisations such as Shell and ICI have also been receiving assistance. The criteria to judge whether they should receive such assistance appear to be somewhat different from those used for that firm. The Minister should bear in mind that he does not have the legal authority to act in such a manner. I am aware that, these days, the Government regard this place as little more than a rubber stamp, but Ministers are not supposed to do things without the authority of Parliament. It is called "illegality". It may well be that the Minister acted in a perfectly proper manner, but I seek an assurance that he has in no way anticipated the legislation that we are discussing. The Minister should note that my constituents made representations to me concerning their bitter disappointment at failing to receive regional assistance. Since 1979, under this Tory Government, 2 million jobs in manufacturing have been lost. They have not been replaced in the service sector and almost 3 million people are still on the dole. Some 130,000 of those jobs have been lost in Yorkshire and Humberside. Several thousand jobs in textiles and engineering have been lost in Bradford. The automatic grant was an assured and positive contribution from central Government. Repeatedly industrial representatives have said that they prefer security and certainty in the pattern of regional assistance rather than variation. However, the Government have certainly introduced a number of variations. In an intervention during the speech of my hon. Friend the Member for Great Grimsby (Mr. Mitchell) I said that the Bill will place a greater onus on civil servants to make judgments. I am not talking about most civil servants, who do a decent job. However, it is a fact that permanent secretaries and deputy secretaries at the Department of Trade and industry move swiftly out of their jobs to boards of companies. [AN HON. MEMBER: "It is a conspiracy."] It is not a conspiracy; it is a fact of life. Very few of those senior civil servants join charities when they retire on luxurious pensions or become advisers to the trade union movement. How many of those civil servants are lining up jobs when they are negotiating with companies and while they are employed on behalf of the public, supposedly keeping such firms at arm's length? I was at the Department of Industry for two years and I know what went on. Consider what happened when the industrial development advisory board was considering GEC. When Sir Kenneth Bond left that board for five minutes, it granted GEC, of which he was vice-chairman, £1·2 million in grants. John Lippitt disappeared to GEC. He was not supposed to have any dealings with that company, but he had been having secret meetings with it. On occasion relationships between senior civil servants — I emphasise that category — and companies become too intimate. The removal of the automatic grant status means that something that is dealt with by civil servants in a routine manner has diminished. Therefore, the opportunity for wining and dining, with promises of inducements and membership of the boards of companies, is enhanced. I am concerned about that, especially as the Government are so keen to draw the Civil Service and  industry closer together. To maintain a scrupulous relationship, they should be at arm's length to ensure that every firm is dealt with on a fair basis. The Bill sabotages industrial and service developments —it covers the service sector—in the north in towns and cities such as Bradford. The burden of unemployment in Bradford has massively increased under the Tory Government. Indeed, an inner-city project across the Bradford rail link has been sabotaged by the Property Services Agency. A Mr. D. Jones has said that the Courthouse proposal for the Bradford Exchange station site and the rail link cannot be accommodated. The man in Whitehall has told the passenger transport authority that he knows best. It is the same with the Bill. Whitehall is telling the regions that Whitehall knows best, whereas the regions are saying, "We still need jobs; we still need development." Factories are still empty, and anyone travelling through Yorkshire, Humberside, Wales and the north-east will still see the deserts where once there were scores of productive factories where thousands of people were employed in a productive capacity. That situation has not been remedied by the Government. The Minister said that automatic grant was a waste of public resources, but it gave security of application to firms moving to the regions in the knowledge that they would receive the money and they could calculate their investment on that basis. The Government are spending almost £2 billion on Sizewell B. Last night, we passed an order to make it easier to give planning approval for nuclear power stations so as to get Hinkley B into construction. There is a political will for nuclear power generation and the lack of safety and the nation's technological inability to deal with nuclear waste are cast to one side. There is a political will to spend billions of pounds of public money on nuclear power stations, yet a relatively small amount of money is spent on providing proper jobs in the manufacturing and service industries in the regions. This pettifogging little Bill will remove even that degree of support and certainty from the regions. The Government are once more attacking ordinary men and women and the manufacturing industries which have already been so badly cut by the vicious attitudes of the Tory Government.

6.31 pm

Mr. Rhodri Morgan  (Cardiff, West)
It is always a pleasure to follow my hon. Friend the Member for Bradford, South (Mr. Cryer). I believe that he would have made a good auditor. I want to refer to the National Audit Office and its report on the regional development grant and regional selective assistance system. Auditors are often described, sometimes unfairly, as people who go round the battlefield when the battle is over bayoneting all the wounded, with a particular predilection for bayoneting those on their own side. The auditors who work for the National Audit Office have produced a comprehensive report, published recently in an up-to-date manner, on the RDG and RSA scheme. Paragraph 4.13 of the report states: "The study by consultants of industry's early reaction to the revised regional incentive scheme was confined to RDG2"— that is what is being abolished tonight, although we are also dealing with the tail end of RDG I , going back to 1984— "and was completed in August 1986. I found that, overall, the new scheme was being well received by the business  community and was an important factor in the investment decision making process. However, although less than one quarter of the companies surveyed said that RDG2 had no influence on their investment decisions only one-third considered that it had been a critical factor." The report also stated that RDG2 influenced the qualitative aspects of projects. Paragraph 4.14 stated: "While the Department of Trade and Industry did not cover the revised RSA in the 1986 evaluation, they had commissioned a similar study on the original RSA and RDG schemes which was published in 1986. The findings of both schemes were remarkably similar and about 20 per cent. of the companies rated the two forms of grant as having no influence on their decision to invest in the project under consideration and a little over half rated them as important or crucial to the decision." We must ask ourselves whether regional development grant is being abolished because it was a bad scheme or because it was too successful. Let us consider the figures published in last year's White Paper on public expenditure, and let us take Wales as a typical example. Next year, the Government expected to spend £27·6 million on regional development grant. Their more up-to-date figure given for next year's expenditure on RDG is £63 million, so the scheme will cost the Government 130 per cent. more than they had estimated. Does that make it a bad scheme or a successful scheme? Opposition Members contend that that is the sign of a successful scheme. Although there have been peripheral problems of fraud in the service industries, which are extremely difficult to monitor, they could have been tackled by tighter monitoring and a minor amendment. However, the Government are terminating the scheme because, in Wales, it is costing them 130 per cent. more than they had estimated and evidently, the Treasury does not like that. There are therefore two reasons for scrapping the scheme — first, the minor aspect of fraud in the service industries, and, secondly, the excessive costs in Treasury terms. RSA can be made cash-limited, but RDG1 and RDG2 cannot. That is the key to the issue. The scheme is being scrapped because it is too successful, but we who represent assisted areas in the outlying regions will fight for the scheme, as we have fought for it from the beginning. We still consider it an act of hypocrisy on the Government's part to terminate RDG and to pretend that they will make so much more money available under RSA that it will make up the difference. We know that that is not true. In the absence of any Government estimates, I have attempted to produce my own estimates as to how much RDG and RSA would have cost the Treasury in Wales. Hon. Members can attempt to make their own estimates by converting the figures for other assisted areas. I have calculated that the scrapping of RDG will save the Government in Wales about £8 million in the next financial year. It will build up to £19 million in 1990–91 and to £26 million in 1991–92. In all, it will save the Government £53 million in Wales. I cannot provide an equally accurate estimate for assisted areas throughout the United Kingdom, but I estimate that the Government will save about £300 million in all. We are finally obtaining a large amount of investment in manufacturing, almost back up to 1979 levels, which would be entitled to regional development grant. The faster the pace of investment, the greater would be the number of firms likely to move into the region from the overcrowded regions of the south-east. There is also evidence of considerable inflation, at least in building  costs, due to the lack of skilled labour. As 20 per cent. of the costs of investment are usually associated with buildings, that will add substantially to costs. That would have been another concern for the Treasury if the scheme had not been scrapped. Let the Government come clean with the House and say that they could not monitor or amend the scheme because it was so prone to fraud, especially among the service industries. I estimate that, by scrapping the scheme, they will save over £300 million for the whole country over the next three years. I hope that they will not try to tell the country that less regional assistance really means more regional assistance.

6.37 pm

Mr. Richard Caborn  (Sheffield, Central)
The debate clearly outlines the fears of many Opposition Members for the deprived regions of our nation. It is unfortunate that the debate relates to a single part of the Government's White Paper, presented to the House a few weeks ago, and to the White Paper on the inner cities, about which we had to force the Government to make a statement earlier this week. We are dealing with the problems of our regions and of urban regeneration in a piecemeal fashion. Unfortunately, we are now dealing with the major part of the issue in isolation from the full debate. I wish to place on record our dissatisfaction with the contemptible and offhand way in which the Government have treated the House, the regions, Scotland and Wales with regard to the issue. Hon. Members could have guessed the Government's position on the White Paper only by listening to the debate in the House of Lords or reading Hansard of 19 February, when Lord Young opened the debate on the Department of Trade and Industry's White Paper. Alternatively, they could have listened to the evidence submitted by the noble Lord to the Select Committee on Trade and Industry. The Bill clearly shows the Government's attitude to the regions and the major changes of direction upon which they have now embarked. This directed policy has no support from independent assessment or analyses or from the Government's own reports. Conservative Members have shown complete ignorance of the problems of the regions and of our manufacturing industries. I shall submit two pieces of evidence to enlighten the Minister. First, I refer to the independent assessment report, which said in conclusion: "The conclusion that regional policy generated some 450,000 manufacturing jobs in the Development Areas which were still in existence in 1981 leaves out of account any secondary or multiplier effects on employment in service industries". The Secretary of State made great play of that in another place. "This project has not been directly concerned with these multiplier effects but, using a conventional medium term regional multiplier of 1·4, the 450,000 manufacturing jobs would generate a further 180,000 … making a grand total of … 630,000". Even more devastating was the Government's own report on regional incentives and the investment decisions of the firm. It said in conclusion, answering the point made by the Minister today: "In short, our evidence shows that a mixture of automatic and selective assistance, taken together, provides a powerful package. It appears that the regular receipt of RDG  encourages firms to become 'regional incentive conscious' and there is an increased likelihood that they will examine the range of other possible assistance available to them, including RSA. It is important to emphasise again in this context that a successful application for RSA forms an important part of a learning process for the company. The importance of the `automatic' nature of RDG as applied during our Study period suggests that any changes in the scheme should retain, as far as possible, clear and predictable eligibility criteria." That is the evidence. A previous Secretary of State for Trade and Industry, the right hon. and learned Member for Richmond, Yorkshire (Mr. Brittan) said when the White Paper was introduced on 12 January: "Will my right hon. and learned Friend also accept that, although there is nothing sacrosanct about previous methods of assistance, there were real advantages in a system whereby a business man was aware that, if he satisfied a published criterion, he was entitled as of right to regional assistance instead of having to go cap in hand to civil servants or Ministers asking for discretion to be exercised?"—[Official Report, 12 January 1988; Vol. 125, c. 151.] So much for what has happened inside the United Kingdom. Internationally, almost all our major industrial competitors support their poor and deprived regions, many of them automatically — for example, Italy, the Federal Republic of Germany and Denmark. Every Minister seems to have been off to look at Boston in the United States, but the one thing that never emerges clearly when they return, although they bring back a number of examples of it, is that the major regeneration of that city has been public sector-led, and the rate of success has been proportionate to that development. We cannot ignore the example of France. In Committee, we discussed what was happening in northern France, and I single it out because the development around Pas de Calais has serious implications for the United Kingdom. When the Channel tunnel comes on stream, which is likely in the early 1990s, the type of development in that area of France, which was spelt out to the House several times during the passage of the Channel Tunnel Bill, shows the tremendous advantage of the new investment there. The argument will not be about whether to go into the northern regions or the south-east of the United Kingdom — it will be between northern France and the United Kingdom. The removal of regional development grant will have a profound effect on the attitude of those who would have invested in the north, and the Channel tunnel development could be a major drain on the resources that should be invested in the north of England. I want to answer some of the criticisms that have been levelled and show the Government's hypocrisy. In Committee we accepted that there might be a need for some revision of RDG and we challenged the Government by tabling an amendment saying that RDG should be applied only to companies employing fewer than 250 people. The argument about BSC and ICI does not really apply, because those companies do not come under the second phase of RDG. But what if the Government agreed to give automatic grant to small and medium-sized businesses which do not have the financial structure to be able to carry out the sort of investigation and form filling that is necessary for RSA? The Government gave us no answer when we tried to ensure that RDG should discriminate in favour of small and medium-sized businesses. That shows the Government's hypocrisy about such businesses. When we last discussed the changes to be made in RDG, the Government at least had the courtesy to go out and consult industries in the regions. More than 500 representations were made about alterations to RDG. On this occasion, however, it is being abolished with no consultation with the regions, industries or local authorities. So what is the Government's regional policy? The booklet accompanying the White Paper contains 25 pages, of which only two or three deal with regional policies. Twenty pages adopt the blanket approach and extol the virtues of the consultancies. They have been dealt with adequately in the debate already. Over the next three years, £370 million will be spent on those consultancies, an amount equal to the annual pay-out of regional selective assistance during 1986–87. Most of that money will go to the south-east This is not regional policy; it is making business more efficient and effective. We are not against that or against the consultancies in the south, but the regions should not be robbed to pay for it. If consultancies are needed, that is fine—we want to ensure that businesses are more efficient and productive. Ministers have told us that the extension of regional selective assistance is to be streamlined. But when challenged, Ministers from the DTI could not tell us how they would move a fivefold increase of capital from RDG into regional selective assistance, or what mechanism they would use to do that. Much has been said this evening about certain aspects of the efficiency of the DTI team in administering RSA, which is now to increase fivefold—if the Government are on target. I do not think Ministers have even convinced their Back Benchers. They have certainly not convinced us. This is a cynical move by the Government, to ensure that RSA now comes under the diktat of the DTI. The Treasury will now dictate when to turn on and off the financial tap. I challenge the Government to tell us whether they will maintain the same sort of expenditure on the regions under RSA as they have under the two grants that have operated hitherto. We do not believe that they will, and we shall say, "We told you so," in three years' time, when the regions will be so much the poorer. The Opposition have to look at the real situation in the regions, and we did that in Committee. We must encourage and not discourage the partnerships that have developed in the major urban conurbations and in the major cities. We need to look seriously at the areas of high unemployment and target RDG to them. That was rejected by the Department of Trade and Industry team in the Committee. In a speech only yesterday, the right hon. Member for Henley (Mr. Heseltine) challenged the Government on that very point. I hope that if the right hon. Gentleman is in the House he will vote with us, because the removal of RDG goes to the centre of the very points that he made in that speech. There is no doubt that the Bill will have an adverse effect on inward investment. The hon. Member for Pudsey (Sir. G. Shaw) has much experience of this subject. He said: "The speed and clarity of decision and the commitment which the United Kingdom Government can show in providing international investment will be seriously damaged by the current proposals." — [Official Report, 25 January 1988; Vol. 126, c. 71.] That was said by an hon. Member who was in the Department of Trade and Industry. Will the Government say to him, "Come hack, all is forgiven"? The need to  move Government Departments out of London was also suggested. At least such a development has started, but its slowness shows the national and multinational companies that they do not have to move their headquarters in that direction. We asked for a positive Government approach to the regions, but that was dismissed in every single amendment that we tabled about it. We challenged the Government, on all the reasons that they advanced for the abolition of the regional development grant, and they entirely rejected our arguments. The Committee has been a sham. We put an alternative strategy and tried to develop a new policy. The Government should at least have looked at that. My hon. Friend the Member for Bassetlaw M r. Ashton) asked a question about manufacturing. He said that a manufacturing trade surplus of £5 billion in 1978 was reduced to a deficit of £7 billion last year. He asked the Minister how the Government proposed to improve that situation. The startling reply by the Secretary of State for Trade and Industry which I gather has been carried (extensively) on radio was: "Because I am not concerned with manufacturing industry as such." That was what the Secretary of State for Trade and Industry told the Select Committee. The regions and manufacturing industry have a bleak future. The Government have no policies for the regions. They are bankrupt and have no vision for the future. The Bill should be decisively defeated.

6.52 pm

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Robert Atkins)
We have heard an uncharacteristic and churlish attack by the hon. Member for Sheffield, Central (Mr. Caborn) on many Conservative Members. He suggested that only the Labour party speaks for the regions. That attack was particularly unfortunate, as the debate was opened by my hon. Friend the Minister of State, Scottish Office, who is clearly a Scottish Member. I am a Lancashire Member. We have had contributions from my hon. Friends the Members for Langbaurgh (Mr. Holt), for Stockton, South (Mr. Devlin) and for Darlington (Mr. Fallon), to name but three. That is surely an indication that there is a good Conservative representation in the debate from the north-east of England. We heard from the hon. Member for Great Grimsby (Mr. Mitchell) who his hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) said in Committee was the man who put "grim" into Grimsby. [Interruption.] I did at least do the hon. Gentleman the credit of telling him that he invented it. The hon. Member for Great Grimsby rehearsed tired old canards and I shall deal with them only briefly because I am conscious of the pressure of time. The first matter is consultation. Consultation was exhaustive in 1984 when the map was considered. That point was made clear in Committee. Some hon. Members referred to the map. I reiterate that it is not set in concrete. There is a need for an element of stability for the purposes of future investment, and we have said that we are not prepared to consider changes during this Parliament. There are always matters to be considered and my hon. Friend the Member for Darlington spoke about one such matter in relation to development areas and intermediate areas. I give the undertaking that we shall consider those when the map is reviewed. Hon. Members also spoke about the funding for regional development grants. There is an increase in funding from £694 million to £900 million over the period up to 1990–91. In addition, there is a further £274 million over the whole of the country for consultancies. By definition, the contribution of two thirds rather than 50 per cent. in assisted areas and urban improvement areas will mean that the regions will get a higher proportion than could perhaps be expected in normal circumstances. I emphasise again that this funding is additional and not a substitute for action.

Mr. Morgan
rose—

Mr. Atkins
I shall not give way, because, as the hon. Gentleman knows, I am under some pressure of time. Some hon. Members spoke about the published criteria. I spoke about that in Committee to the hon. Member for Gordon (Mr. Bruce), who I notice is not in his place.

Mr. Beith
rose—

Mr. Atkins
I do not seek to provoke hon. Members. I merely record the fact that the hon. Member for Gordon raised the matter in Committee. The criteria have been published and have been available for many years, and business men know that. I emphasise again that only decisions involving £500,000 or more will be referred to Ministers, and that is nothing new. The vast majority of the decisions involve amounts of under £500,000. Indeed, most of them are under £100,000 and those matters will be considered by the regional industrial development boards whose members include active and retired business men as well as a fair sprinkling of active trade unionists in the regions. All those people are involved in industry on a daily basis. The other consideration mentioned was the speed at which applications should be considered. That is a fair point and some hon. Members will recall that I mentioned it in Committee. It is improving radically, but it is always in need of further improvement and I reiterate a commitment to improvement. The fifth point was about inward investment. It is our understanding from countries throughout the world that are interested in investing in Britain, that it is not just regional development grants such as those that we are discussing that matter. Other factors such as infrastructure, a low rate of corporation tax, good communications, and a successful and booming economy. Not least, our culture and, above all, our English language are important. The hon. Member for Tyne Bridge (Mr. Clelland) spoke about a letter that he had written to the Secretary of State. I have checked on that and I understand that the letter arrived this morning. Perhaps he knows that the Secretary of State is presently in Japan, but I undertake to draw it to his attention and to make sure that the hon. Gentleman receives a reply as soon as my right hon. Friend returns. My hon. Friend the Member for Harborough (Sir J. Farr) spoke about a constituency matter. I am grateful to him for his comments, because he was kind enough to say that the DTI had dealt with it as quickly as possible,  although I know that it was not dealt with to his entire satisfaction. My hon. Friend's point adds weight to the Government's case. My hon. Friend the Member for Wyre Forest (Mr. Coombs) spoke knowledgeably and eloquently on matters about which he knows a great deal. I am grateful to him for his comments and I think that the House will appreciate that he speaks with knowledge, as does my hon. Friend the Member for Ludlow (Mr. Gill), who spoke in a similar vein. The hon. Member for Cardiff, South and Penarth made an uncharacteristic attack on Welsh Ministers. It was answered in part by my hon. Friend the Member for Cardiff, Central (Mr. Grist). I repeat that the Secretary of State for Wales is committed to the regions and, as my hon. Friends from Welsh constituencies know, he is committed to the valleys initiative that is shortly to be announced. That is evidence of his commitment to the Principality. The hon. Member for Bolton, South-East (Mr. Young), who has probably rushed to catch a train, spoke about the problems as he perceived them in Bolton. I am to visit Bolton tomorrow, and I can tell him that my hon. Friends the Members for Bolton, North-East (Mr. Thurnham) and for Bolton, West (Mr. Sackville) have made an entirely different case about the success of Bolton. A similar success is to be seen in Preston. They are both now boom towns in the north-west and the hon. Member for Bolton, South-East does his town and his region a disservice by suggesting that somehow things are bad in Bolton. Of course there is always room for improvement, but both towns are doing well at the moment. I emphasise again that under the Bill spending in the regions will continue to be as it has been in the past. Good projects coming forward from the north, the west or any other part of the country will get attention as they have before. The emphasis must be on viability, cost-effectiveness and whether the project merits approval. I conclude by suggesting to Opposition Members that they do what their own campaign has suggested, which is to listen. Only recently, the TUC, in its statement on regional development and planning, spelled out that, to make regional and local planning bodies effective, "The amount of selective assistance … would be progressively increased until all assistance became selective." Opposition Members should hear what the TUC says and vote with us for the Bill

Question put:—

The House divided: Ayes 246, Noes 174.

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|Braine, Rt Hon Sir Bernard         |Coombs, Anthony (Wyre F'rest)|
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|Devlin, Tim                     |King, Rt Hon Tom (Bridgwater)|
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|Field, Barry (Isle of Wight)    |Lord, Michael                |
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|Forsyth, Michael (Stirling)     |MacKay, Andrew (E Berkshire) |
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|Fowler, Rt Hon Norman           |McLoughlin, Patrick          |
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|Fox, Sir Marcus                 |McNair-Wilson, M. (Newbury)  |
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|Franks, Cecil                   |Major, Rt Hon John           |
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|Gardiner, George                |Martin, David (Portsmouth S) |
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|Gill, Christopher               |Maude, Hon Francis           |
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|Glyn, Dr Alan                   |Mawhinney, Dr Brian          |
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|Goodson-Wickes, Dr Charles      |Meyer, Sir Anthony           |
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|Greenway, Harry (Ealing N)      |Mitchell, Andrew (Gedling)   |
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|Greenway, John (Ryedale)        |Moate, Roger                 |
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|Gregory, Conal                  |Montgomery, Sir Fergus       |
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|Griffiths, Peter (Portsmouth N) |Moore, Rt Hon John           |
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|Grist, Ian                      |Morrison, Hon Sir Charles    |
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|Ground, Patrick                 |Moss, Malcolm                |
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|Grylls, Michael                 |Moynihan, Hon Colin          |
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|Hamilton, Hon Archie (Epsom)    |Needham, Richard             |
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|Hamilton, Neil (Tatton)         |Neubert, Michael             |
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|Hanley, Jeremy                  |Nicholls, Patrick            |
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|Hannam. John                    |Nicholson, David (Taunton)   |
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|Hargreaves, Ken (Hyndburn)      |Nicholson, Emma (Devon West) |
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|Haselhurst, Alan                |Oppenheim, Phillip           |
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|Hawkins, Christopher            |Page, Richard                |
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|Hayhoe, Rt Hon Sir Barney       |Paice, James                 |
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|Heathcoat-Amory, David          |Patten, Chris (Bath)         |
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|Heddle, John                    |Patten, John (Oxford W)      |
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|Heseltine, Rt Hon Michael       |Pattie, Rt Hon Sir Geoffrey  |
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|Hicks, Mrs Maureen (Wolv' NE)   |Pawsey, James                |
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|Hicks, Robert (Cornwall SE)     |Peacock, Mrs Elizabeth       |
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|Higgins, Rt Hon Terence L.      |Porter, David (Waveney)      |
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|Hill, James                     |Portillo, Michael            |
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|Hogg, Hon Douglas (Gr'th'm)     |Price, Sir David             |
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|Howarth, Alan (Strat'd-on-A)    |Redwood, John                |
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|Howarth, G. (Cannock & B'wd)|Renton, Tim                  |
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|Howell, Ralph (North Norfolk)   |Rhodes James, Robert         |
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|Hughes, Robert G. (Harrow W)    |Rhys Williams, Sir Brandon   |
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|Hunt, David (Wirral W)          |Riddick, Graham              |
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|Hunt, John (Ravensbourne)       |Ridley, Rt Hon Nicholas      |
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|Shaw, Sir Michael (Scarb')    |Tredinnick, David                |
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|Shephard, Mrs G. (Norfolk SW) |Waddington, Rt Hon David         |
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|Taylor, John M (Solihull)     |                                 |
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|Tebbit, Rt Hon Norman         |Tellers for the Ayes:            |
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|Thompson, D. (Calder Valley)  |Mr. Mark Lennox-Boyd and         |
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|Marshall, Jim (Leicester S)       |Short, Clare                    |
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|Martin, Michael J. (Springburn)   |Skinner, Dennis                 |
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|Martlew, Eric                     |Smith, Andrew (Oxford E)        |
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|Quin, Ms Joyce                    |Tellers for the Noes:           |
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|Radice, Giles                     |Mr. Frank Haynes and            |
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|Randall, Stuart                   |Mr. Ray Powell.                 |
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|Richardson, Jo                    |                                |
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Bill accordingly read the Third time, and passed.

Statutory Instruments, &C

Libraries

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.). That the draft Public Lending Right (Increase of Limit) Order 1988, which was laid before this House on 4th February, be approved.

Social Security

That the draft Social Security (Contributions, Re-rating) Order 1988, which was laid before this House on 9th February, be approved.

Social Security

That the draft Social Security (Treasury Supplement to and Allocation of Contributions) (Re-rating) Order 1988, which was laid before this House on 9th February, be approved.

Social Security

That the draft Social Security (Contributions) Amendment (No. 2) Regulations 1988, which were laid before this House on 16th February, be approved.

Veterinary Surgeons

That the draft Veterinary Surgeons Act 1966 (Schedule 3 Amendment) Order 1988, which was laid before this House on 22nd February, be approved.— [Mr. Durant.]

Question agreed to.

Consolidated Fund Bill (No 3)

Order for Second Reading read.

Question, That the Bill be now read a Second time, put forthwith pursuant to Standing Order No. 54 (Consolidated Fund Bills), and agreed to.

Bill accordingly read a Second time.

Question, That the Bill be now read the Third time, put and agreed to.

Bill accordingly read the Third time, and passed.

Motion made, and Question proposed, pursuant to Standing Order No. 54 (Consolidated Fund Bills), That this House do now adjourn— [Mr. Durant.]

National Dock Labour Scheme

7.12 pm

Mr. Michael Fallon  (Darlington)
I am grateful for this opportunity to debate the national dock labour scheme. I am particularly glad to see so many of my right hon. and hon. Friends present in the Chamber, because over 200 of them, as the Patronage Secretary will have observed, have signed early-day motion 275. In initiating the debate, I have three purposes. First, I want to put forward the case for abolishing this scheme in its entirety. Secondly, I want to argue the potential that will flow from abolition for job creation, urban regeneration and fairer competition between all the ports of the United Kingdom. Thirdly, I want to explore the position of my hon. Friend the Minister and his Department with regard to the development of Government policy on the national dock labour scheme. The case for abolition should hardly require a speech from me in the ninth year of a Conservative Government. Since 1946, the dock labour scheme has been widely criticised. First, it is monopolistic—I thought that we were against monopolies. Registered dock work, once classified, must be done by registered dock workers. It is a criminal offence to employ any other person to do it. Secondly, the dock labour scheme, which was drawn up in 1946, dates from an era when there were not the measures of employment protection that we have today, and when there were problems with casual labour and instant dismissal. Thirdly, it is discriminatory. It distinguishes between different classes of workers in an invidious way. How many of my hon. Friends realise that in many ports there are more people employed by the ports who are not registered dock workers than who are? Yet the minority enjoy special privileges with regard to discipline, job security and employment protection, thus causing resentment and envy. It is an entirely invidious distinction between different classes of workers. Fourthly, and fundamentally, the dock labour scheme is anti-business. It prevents ports from deploying their manpower in the most economic and efficient way. It prevents ports from diversifying into other activities, which means that management cannot manage. The ultimate decisions about the allocation of resources are left to the local joint dock labour boards. I should like to give an example of the problems involved from the port of Leith in Scotland, where the Transport and General Workers Union is claiming that the positioning and manoeuvring of certain grain conveyors, troughs and ramps should be dock work. One might say that it is entitled to bid for that work, but it is  other people's work. The dispute arises from the folding of a previous firm of stevedores. That union is trying to take work for itself away from other people. The stevedores who previously did that work will no longer be able to do so if that claim succeeds. The average age of a registered dock worker in the port of Leith is 53 and his average wage is £12,000 a year. If that example does not impress my hon. Friends, I shall quote the events of last weekend in Boston, Lincolnshire, where registered dock workers — a registered dock worker in Boston earns £25,000 per year—refused an offer of £450 per man for a two-day cargo unloading job, a subsequent offer of £600 and a final offer from the owner of the wharf of £1,200. The trade union official in Boston explained why they did not want to earn £1,200 for two days work. He said, "We wanted a proper hourly rate." We know what that means — he wanted the ship tied up for three, four or five weeks so that they could earn as much money as possible. On Sunday, that ship left that port and was unloaded at Dover, which is a non-scheme port. That is absurd, and one of the principal reasons why we should abolish this scheme is the potential that abolition has for creating new jobs. The ports say that, once they are freed of this scheme, they will he recruiting again. Tees and Hartlepool port authority, which is not in an area of high employment growth, would recruit 20 men a year for the next 10 years without the restrictions of a registered dock labour scheme. The dock labour scheme is not only destroying jobs—my goodness, it has destroyed jobs—but is preventing new jobs being created. We are entitled to ask the Labour party whether it thinks it is morally right for a scheme to pay a man £350 or £400 a week for not unloading nonexistent ships, thereby destroying other jobs that might be created? If that argument is not accepted by the Opposition, they should look at the non-scheme ports and see how their share of the market has risen from some 8 per cent. in 1965 to some 30 per cent. in 1986 and that they now employ some 4,000 men in dock work. The second great benefit of abolishing the scheme would be the potential growth in areas of very high unemployment and the urban regeneration that would result. Some two thirds of the scheme ports are in assisted areas in Scotland, the north-east, the north-west and Wales. They are riverside areas, areas of urban decay and areas into which we are trying to attract new businesses. If scheme ports receive inquiries from companies that want to set up some manufacturing, assembly or warehouse activities on a renewed quayside inside the port, the companies suddenly learn that such activities could well be classified as registered dock work and they instantly go away. There are some 20,000 acres of prime industrial land inside scheme port areas that are crying out for regeneration and business renewal.

Mr. Neil Hamilton  (Tatton)
Is my hon. Friend aware of the paradox that in some of those areas where there is urban devastation, we have one set of laws which removes all restrictions from enterprises setting up within them because they are enterprise zones, yet at the same time, cheek by jowl with that, enterprise is being snuffed out in zones under the dock labour scheme?

Mr. Fallon
That is a very powerful reinforcement of my argument. There are some 20,000 acres of prime  industrial land in the scheme ports. That is a huge amount of land waiting for development. It is equivalent to some 300 Canary wharves—if I can put it in those terms—waiting for development, trying to attract new businesses and hoping to create new jobs. The final effect of abolishing the scheme would be to establish much fairer competition between our ports. How can it be right for those ports involved in the scheme in the north of England to be expected to compete with ports such as Dover and Felixstowe in the south which are not in the scheme? How can the scheme ports possibly hope to compete on an equal basis with ports in the south and along the south-east coast?

Mr. Eddie Loyden  (Liverpool, Garston)
Taking the hon. Gentleman back to the point he made about the extension of registration in the ports, when other industries take over, is he not aware that a free port has been developed in Liverpool and none of that work is registered work? As for the registered dock workers, in the port of Liverpool, from the mid-1960s to the present day, the reduction in RDWs has been from around 12,000 to 15,000 at that time, clown to less than 2,000 at present. That makes a complete nonsense of his argument about protectionism in the national dock labour scheme.

Mr. Fallon
That proves my point—that not only is the scheme non-job creating, but it has not been efficient in protecting the jobs which have been lost anyway. Those jobs have not been replaced by the new jobs that we should be attracting to those riverside and port areas. I hope that I have made my case for the potential that should arise from abolishing the scheme. I turn with some reluctance to the position of Ministers in this matter. The case for abolishing the dock labour scheme is so overwhelming that the inertia of my hon. and right hon. Friends is all the more puzzling. In all fairness, I should exempt my hon. Friend the Under-Secretary of State for Employment from that criticism. I know that he at least understands the case against monopolies, even if he is not prepared to do anything about it. At least he is aware that he is running a scheme that discriminates between different classes of workers, even if he is not prepared to end that discrimination. I know that my hon. Friend understands how the dock labour scheme restricts job creation, even though he works for a Department that is supposed to be stimulating job creation. I know that he understands the extent to which business in the riverside areas of the north is being blighted, although he and his Department are supposed to be playing their part in the inner-city initiative. I also know that my hon. Friend is a student of history and that he is aware that some of his Conservative predecessors failed to remove this blight from our ports. I know that he has no wish to see his silence interpreted as some kind of conspiratorial agreement so that, after Aldington-Jones, we are not going to have Connolly-Nicholls enshrined in our history as some conspiracy of inaction to rid us of that scheme. I have to say to my hon. Friend that there could be two explanations for the inertia of his Department It is possible that the Minister thinks that this is a minor matter and that, as there are now only 10,000 dock workers, it is not the problem that it once was. I hope that I have argued that, not only is it a very serious problem, a major restriction on those scheme ports, but it is blighting the future development of our ports. Secondly, it is possible that my hon. Friend thinks that the problem will disappear because the registered dock workers are aging. The average age of a registered dock worker is 47, but that does not mean that the problem will disappear. Sooner or later, the scheme ports will have to start recruiting. They will have no option but to start recruiting younger registered dock workers and to continue all the monopolistic practices of the dock labour scheme to which I have referred. I must urge my hon. Friend to re-table the future of the scheme with his right hon. Friend the Secretary of State and to go back to his ministerial colleagues in other Departments such as the Department of Transport, which is trying to promote fairer competition among our ports and to ensure that all ports are free fairly to compete against each other. He should go back to the Department of Trade and Industry, which is trying to stimulate urban regeneration and attract fresh industry to our urban areas and which is committed to lifting such burdens on business as the dock labour scheme represents. I hope that my hon. Friend will be able to convince all his ministerial colleagues of the potential for stimulating fresh employment in those ports if the scheme were finally lifted.

7.27 pm

Mr. Eddie Loyden  (Liverpool, Garston)
First, I should refer the hon. Member for Darlington (Mr. Fallon) to the reasons why the National Dock Labour Board was introduced in the first place. That happened long before the hon. Gentleman came to the House, and probably long before he knew anything about the docks industry. The hon. Gentleman knows the history of the docks and he will be aware that the docks used to be a labour-intensive industry. It employed casual labour, indeed sweated labour. There was no organisation and there was exploition of the highest level. Dock workers and their families lived in abject poverty in every port in the United Kingdom. It was not until Ernie Bevin examined the whole question of the dock workers and the port industry in general that some order was brought to the chaos that existed in the docks industry. The docks have gone through several transitions and changes in the way in which ships are loaded and unloaded and there has been a dramatic change in the system of loading ships. All those changes took place in negotiations and modernisation committees in every port and have been accepted by dock workers. That is why there are fewer than 2,000 registered dock workers in the Liverpool docks today, compared to 10,000 to 12,000 in the late 1960s. There has been co-operation from registered dock workers. It is a fallacy to suggest that the development of the non-scheme ports has been responsible for the decline in the scheme ports. The development of the non-scheme ports in natural deep-water berths was a consequence of the changes in trade with Europe, as opposed to the rest of the world. Those ports were seized on as an opportunity to move trade away. The hon. Member for Darlington paid no regard, apart from a passing comment, to areas of decline such as the north and north-west. In my area, the entire local economy was port-orientated. Nearly all the industries were adjacent to and related to the docks. Now those jobs have  gone, and we have suffered from mass unemployment ever since. Although there has been no restriction on the movement of new industries into those areas, and enterprise zones and free ports have been developed in Liverpool, employment in the port transport industry is still in decline. It is typical of Conservative Members to argue purely on the basis of competition, and to ignore the social consequences of what has been happening. We should be grateful to those who had the vision to bring in the National Dock Labour Board. They brought order where there was chaos; humanity where it was lacking; dignity where it did not exist. They brought a decent life to men who worked hard to make their contribution to the wealth of the nation. Many Conservative Members had nothing to do with that. When Conservative Members condemn schemes such as this, they do so on a single basis: they hate them and want them removed because they gave protection, for the first time, to workers. For the first time in history, the working class of this country was protected by law, and that really galls Conservative Members. They approve of protection for the City and for big business, but it is another matter when it comes to protecting working-class men against the hyper-exploitation that was a centre of their casual labour, and ending a system of hiring that treated them worse than animals. Men were herded into a pen like Cattle, and threw their books in, hoping that they would get them back along with work. That is the system that ended with the National Dock Labour Board. I am not arguing that there will be a requirement for such a board for ever and a day, but I can see no reason for dismantling it at this stage. If it is to be ended, it should be ended after negotiation with the trade unions involved. I hope that the Minister can assure us that, whatever the future of the board, a decision will be made not in the House, but in full consultation with the industry. We have seen a blatant example of the nausea of Conservative Members when they see protection for workers. Tonight, the hon. Member for Darlington has been clearly seen as an example of Toryism at its worst. I am sure that dock workers throughout the country will recognise the consideration of the Conservative party for the mass of working people in this country.

7.34 pm

Mr. Jacques Arnold  (Gravesham)
We have just been treated by the hon. Member for Liverpool, Garston (Mr. Loyden) to a highly emotional history lesson on the national dock labour scheme. In my view, this historic House should be concerned not with preserving men in history books, but with the employment of those who now work in the docks, and who will do so in the future. I was the hon. Member who tabled early-day motion 275. I did so because of my concern over the wharves and riverside in my constituency. I was somewhat surprised at the rapid upswell of support in the House: 209 of my colleagues supported the motion, which amounts to the highest support among Conservative Members that an early-day motion has received in this Parliament. That upswell of support is no accident. We in the Conservative party are concerned with developing the assisted areas, and it is no coincidence that the scheme ports by and large fall within those areas. There is an odd  combination at present: the dock scheme, which is killing jobs and stunting development, is slap bang in the areas about which we are most concerned. I come from a borough that is not an assisted area. It is in the so-called plush south-east. Thirty years ago, Gravesham had a maritime and shipping tradition in Gravesend and Northfleet, but today our waterfront is known for inactive wharves, dereliction and unemployment that was until recently the highest in Kent. I have visited the wharves up and down the River Thames in my constituency, and time and again it was the same old story: they move only their own goods to avoid the conditions of the dock labour scheme. A large amount of business could come through if only that did not involve the application of the scheme in all its worst aspects. Those wharves have done their sums. They know that they cannot do the business because of the cost, the inflexibility and the lack of control over the direct work force that would arise—and that is not to mention the levy payable on the scheme. They know that business is not viable under such conditions, so they do not bid for it, so new jobs do not come to my borough of Gravesham. Who exactly are the beneficiaries of the national dock labour scheme? They are the non-scheme ports, and, far worse, Rotterdam, Antwerp and other major continental ports. The dock labour scheme is a killer of British jobs, and a developer of jobs on the continent. A company that used to unload bulk goods at a local wharf in my constituency found that, by unloading the very same goods at a continental port and then bringing them over to the south-east of England, it could exactly halve its costs. Moreover, the speed at which the ships could be turned round meant savings of thousands of pounds—or francs, or guilders—which made a major impact on business. What was the consequence? Yet another wharf in my constituency went to the wall. What happened to the people who worked there? The 55 registered dockers all marched to Tilbury to go on the payroll there—thus compounding the problems of Tilbury, which is itself closing docks because it cannot compete for business. Twenty-seven of my local people who were the second-class workers of that wharf went straight on the dole. The result of the scheme is a tragedy. We know that there is more business, but we cannot get it, yet that is at the very time that Kent county council is opening up our waterfronts with brand new roads through the Thames-side industrial route. We could have thriving wharves, with much heavy goods traffic coming off the major roads through the south-east of England. The scheme is iniquitous. It has already cost British industry more than £450 million. It has done for dockers' jobs. In 1947, in the golden years of which the hon. Member for Garston spoke, Britain had 73,000 dockers. This magnificent scheme has worked its will and there are fewer than 10,000 registered dockers today—quite a success. Elderly men, who will be gone in 10 or 20 years, are left in the industry. Nothing of our dock industry will be left if it is allowed to continue to wither. The consequence for those who work in the docks is a class structure. The upper class consists of those members of the Transport and General Workers Union docks section, who get all the best conditions and arrangements. The second-class citizens in the docks are also members of the TGWU. They resent what the docks section gets away with. Let me give an example of another wharf in my constituency which considered starting up. It held discussions with the TGWU clocks section, but it was told that if it went ahead the workers would have to be sacked and cleared away. The workers who would be slung on the dole are fellow members of the TGWU who do not happen to be the princes of that particular section. We must set our docks free. We need to deal fairly with the 10,000 dockers remaining in the scheme, either by making a settlement that guarantees them a job for the remainder of their working lives—I mean a job, not a skive — or a one-off compensation payment to individuals after which they can compete for jobs like anybody else, in my borough, Liverpool or anywhere else. The Government should have the courage of their convictions and tell the port employers and the union that it is now time to negotiate the abolition of the scheme. I hope that my hon. Friend the Minister will he earning the title of St. Patrick of Teignbridge by slaying this particular dinosaur.

7.42 pm

Mr. Michael Foot  (Blaenau Gwent)
I hope that the Minister will continue to resist the pressures that are being brought upon him by whatever number of hon. Members. The hon. Member for Darlington (Mr. Fallon) said that he was backed by 200 Conservative Members. I am glad to see that quite a number of them have evaporated and I hope that all the rest of them will lose their enthusiasm for the proposition as time goes on. It is interesting when Tories come before the House and say that we should forget the history of the subject. It is natural that they should do so. With some honourable exceptions, most Tories resisted any attempt to introduce any form of proper control over the docks and industrial relations and to establish a proper system for working the docks. In the old days, the fight was against casual employment in its most scandalous form. It was, as my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) said, Ernest Bevin and some others in the TGWU who led the campaign to establish a dock labour scheme to overcome that in the first place. Later on, we were faced with a serious problem in the rundown of the docks. Everybody knew that there would be a pretty big reduction in the number of people employed in the docks because of the technological changes. The problem was whether that could be done in an orderly manner or whether a series of industrial actions and strikes would accompany that serious change that had to be undertaken. Faced with that problem, what happened? In those days, some Conservative Members had a slightly better approach, certainly than Conservative Back Benchers today. Lord Aldington was the spokesman for the employers and the Aldington-Jones agreement was an honourable agreement whereby the rundown was enabled to take place in an orderly way with consultations between employers and trade unions throughout. That was a proper form of industrial democracy for dealing with the problem. [Interruption.] It is all very well for Conservative members to sneer. They are sneering not only at Jack Jones, who made the agreement on behalf of the TGWU and the trade union movement, but at Lord Aldington, who saw the wisdom of trying to make an agreement which would be held to. Agreements are not there to be torn up at the convenience of one party. Apparently, Conservative Members are asking that all the undertakings made by Lord Aldington on behalf of the employers and the employers section on the board should be abandoned now that the rundown has taken place. In many of the ports the number of dockers has been considerably run down. I do not say that there have not been any disputes. There have been a few, but there would have been far greater industrial trouble and disturbance in the docks if it had not been for the existence of the scheme and the determination of people on both sides to keep their word and to abide by their undertakings. Having agreed that procedure, they carried it through. If changes are required, there are appropriate methods by which questions can be raised on the board running the scheme. That was all agreed. For anybody to come before the House and say that the scheme should be torn up unilaterally is a recipe for industrial trouble of the first order. Quite apart from that, it is a most dishonourable proposal. I imagine that one reason for the alleged inertia of the Department of Employment may be that it retains some remnant of a sense of honour in these matters and feels that it should be helping to protect the scheme which has made a considerable contribution to industrial peace in Britain in a place where, for many years, there were great dangers. Without it, changes in the way in which dock work was done would have been highly disorganised and accompanied by appalling strikes and industrial action of one kind or another, which would have wrecked our commerce at critical moments in the past 10 or 20 years. Therefore, I hope that the Government will stand by the agreement. If change is required, the proper way, as my hon. Friend the Member for Garston said, is to discuss how amendments or alterations can be made. No doubt the TGWU and others involved will, in turn, put forward other propositions. I know that that is contrary to the way in which the Government try to deal with matters. They think that the way to deal with industrial relations is to say, "This is what we want. This is what workers must take and this is the way in which the whole change should be carried through." That is the way in which they try to run industrial relations in Britain, but they are gradually discovering that they come up against bigger obstacles. I was glad to see that the Government were taught a lesson in the Ford dispute the other day, and there have been other instances. Other cases may arise in other areas too. [Interruption.] It is all very well for hon. Members to laugh. The agreement was very different from the one the Government expected in the first place, and that is very healthy for our industrial relations. I hope that the Government will take no notice of the plea of the hon. Member for Darlington. I hope that the Minister will tell his hon. Friends—in private, if it is too difficult to do so in public—that it would be utterly dishonourable to have a unilateral breach of the scheme which has benefited Britain's dock industry for many years. It would be especially dishonourable because that scheme, among its many assets, gave people guarantees of employment. I know that guarantees of employment stick in the throats of modern Tories. It did not stick so much in the  throat of Lord Aldington and some of the other Tories of 20 or 30 years ago who made the agreement. They did not object on such grounds. A major part of the scheme was to ensure that dock workers should have guarantees of employment over a long period. If the Government were to yield to pressure from Back Benchers, one consequence would be that the jobs of many dock workers would be under threat, and once dock workers knew that, there would be industrial trouble.

Mr. Neil Hamilton
Does the right hon. Gentleman accept that if dockers in the scheme have guarantees of employment and other benefits as a result of the protection, they enjoy those benefits only as a result of guarantees of unemployment to others who would otherwise secure employment in the docks and enjoy the benefit of being in work?

Mr. Foot
The hon. Gentleman is talking absolute nonsense, particularly given the unemployment that we have had to endure over the past five or six years. Under the scheme, the dockers have a better guarantee of their employment than many other sections of the community, so it is a very good scheme. A similar industrial democracy system should have operated in many other trades, occupations and industries, so that better industrial relations would have been preserved. Many industries have not had that protection over the past seven or eight years. I hope that the Government will resist any pressure in this respect and will recognise that if they are to seek change they should raise the matter under the provisions of the scheme. They cannot make changes arbitrarily and unilaterally without bringing dishonour on themselves and perhaps much greater industrial trouble. I urge the Government to reject—although they may have to do it politely—the nonsense from their Back Benchers.

7.51 pm

Mr. Nicholas Bennett  (Pembroke)
I congratulate my hon. Friend the Member for Darlington (Mr. Fallon) on selecting this topic, as it is a subject which many Conservative Members are keen to debate and on which they would like to see the Government take some action. The hon. Member for Liverpool, Garston (Mr. Loyden) spoke about history. I have a family interest in the docks, as my maternal great-grandfather, Tom Mann, was one of the three leaders of the 1889 dock strike and led the fight to get rid of the casual system, which was abolished as a result of the 1946 agreement. We have moved on 100 years since then.

The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls)
Not all of us.

Mr. Bennett
My hon. Friend is quite right; many Opposition Members are stuck in the 19th century. The more progressive of them are in the 1930s, but the rest of us have had to move on to consider the effects of the scheme today, not 100 years ago, 1946 or even 1976, when the right hon. Member for Blaenau Gwent (Mr. Foot) introduced the Dock Work Regulation Bill. The Aldington-Jones agreement was referred to by the right hon. Member. What agreement took place with the people in the cold store warehouses in Tilbury, who were told that their jobs would be handed over to the dockers? The people who worked in the container places were not consulted by Jones or Aldington, or by the right hon.  Gentleman, before the proposals were made. It was proposed that the definition of "port" in the Dock Work Regulation Act 1976 should be extended to cover a radius of five miles, but that never came to fruition because of opposition from the workers in those stores. We are entitled to ask the right hon. Member for Blaenau Gwent what we should learn from his experience. In the Jones-Aldington report one sees the corporate state mentality which underlay all their recommendations. I quote from page 8, headed Container Groupage: "It can thus be said with fair assurance that a good proportion of groupage containers are now being dealt with either by registered dockworkers or by other workers under acceptable conditions. But some container groupage work is still being done, sometimes close to the ports, under bad conditions." The committee recommended that if other workers were carrying out the work, apart from registered workers, it should only be under proper conditions, and all the undertakings which handled groupage containers should satisfy themselves that the requirements were being met. The Aldington-Jones agreement wanted to hand over to the dock workers the container work. The report went on to say—this is a lovely sentence which is worth savouring: "In making this agreed recommendation the Committee feel it right to record that the trade union members of the Committee firmly believe that the Dock Labour Scheme should be extended to all ports and wharves." You bet your bottom dollar they did. They would like to have a monopoly control over what happens in the docks. I am delighted to say that common sense has prevailed and since then the number of registered port workers has declined, but the number working outside the scheme has increased because employers have seen, as have employees, that there are benefits to be gained from not being a registered port worker. I should mention the working practices in the dock labour scheme. The first is ghosting. If an employer needs to bring a specialist worker on to the dock, such as a crane driver, he must be paired with a docker, who in theory stands and watches but in practice goes home or goes to the pub at 10 o'clock in the morning. Then there is bobbing. A set number of dock workers are assigned to the job—half of them do the work and the others bob off. Moonlighting means that clockers are guaranteed fallback pay when there is no work for them to do, earn extra work driving minicabs or running market stalls. Then there is disappointment money. Employers pay compensation in return for lost bonuses when a ship fails to dock or a cargo is cancelled. There is not much disappointment for the workers, but there certainly is for the employers. The Spanish customs have meant, according to page 82 of the National Dock Labour Board annual report of 1986, that unemployment of dockers in the scheme is 21 per cent. With regard to discipline under the scheme, I refer to an answer given to my hon. Friend the Member for York (Mr. Gregory) on 19 February. In every year since 1981, every employee who has been summarily dismissed under the dock labour scheme has been immediately re-employed —some discipline! If workers know that they will be reemployed immediately, they might as well be undisciplined in the first place. As for the administrative costs of the board, a parliamentary answer on 14 January showed that a levy of some £4 million per year is imposed on employers,  which has meant that the profit and loss of the scheme for the five major ports has varied between a loss of £1·5 million in London and profits of £2·4 million in Medway ports, £2·4 million on the Mersey and £2 million in the Manchester ship canal. There is a discrepancy between the best and worst ports in the scheme. In order to find out the costs of the hoards, I asked my hon. Friend the Under-Secretary whether he would tell me what the administrative costs of local dock labour scheme boards were. The answer was that the information was not made public. I then asked why it was not made public, and the answer was: "I regret that the information is not held centrally and could only be obtained at disproportionate cost."—[Official Report, 3 February 1988; Vol. 126, c. 644.] That does not tell me why it is not made public, just that it would cost a lot of money, so we do not know how much the boards are charging their clients for the use of the scheme. My hon. Friend the Member for Gravesham (Mr. Arnold) referred to costs to the users of ports and mentioned Rotterdam and Antwerp. It is interesting to note that the average cost per tonne in Rotterdam and Antwerp is between £2·50 and £3·50. In the United Kingdom, the average cost per tonne is between £7 and £15. Only a very patriotic cargo vessel owner would choose the United Kingdom if he had a choice between unloading in Europe or in the United Kingdom. I want to examine the costs that the scheme imposes on users in the United Kingdom and I take as my example the unloading of fish. In Aberdeen, which is a scheme port, the cost is £3 a box of fish. In the non-scheme port of Grimsby, the cost is £1·44 a box. That means that the trade in Aberdeen is gradually declining, while trade in Grimsby is beginning to increase. I want also to consider dockers' pay. We have come a long way since 1889 when Mr. H. H. Champion said: "The Dock Labourer has no; unaptly been described as 'a man who always lives with only half-a-crown between him and starvation'." That starvation is a long way away today. The average pay of a dock worker in the dock scheme today is £309·78 a week. However, that is only an average. In Port Talbot in south Wales—and south Wales has the second lowest wage rates in the United Kingdom—the gross wage of a dock worker is £472 a week. That is almost £300 a week more than the average wage in Port Talbot. People must be queueing all the way to Swansea to get a job in the Port Talbot docks. However, the number of people wanting to send their ships there is another matter. According to the National Dock Labour Board the maximum severance pay in 1986 was £25,000. I could continue to cite the costs of the scheme to employers and the people who use the ports. However, I want to consider the scheme's effects. I have received a letter from Mrs. Eleanor Laing, who stood at the last general election for the Conservative cause in the constituency of Paisley, North. She has had discussions with business men who want to operate a new dock in Port Glasgow. She states: "They are required to apply to the Clyde Port Authority for an Operations Licence, which they have duly done. The Clyde Port Authority has stated that one of the conditions of the granting of an Operations Licence is that they 'shall employ Registered Dock Labour at the said location on all activities falling under the definition of "Dock Work" and shall further adhere to the decisions laid down from time to time by the Clyde Port Authority and the National Dock Labour Board.' Negotiations have taken place with the Clyde  Port Authority and it appears that the Company who intend to operate the Dock would be obliged to employ Registered Dock Labour which they calculate would add to their operating costs by approximately £4,200 per week. Such an added expense would make their business unviable and consequently they would be unable to put the Dock into operation and to provide the employment opportunities which they had hoped would result from their venture." That is an example of the effect of the scheme on a company which wants to move into the dock labour scheme. I suggest that the scheme is a restraint on trade. It prevents the creation of jobs in the inner cities. As my hon. Friend the Member for Darlingtion said, the derelict land in the port areas is equivalent to 300 new Canary wharves. That is five times the area of Paris and that land is lying vacant and waiting for an inner city initiative. That initiative will work if the scheme were abolished. I now want to consider the attitude of mind operating in the National Dock Labour Board that underlies all its operations. Paragraph 19 of the National Dock Labour Board annual report is entitled "Definition of Dock Work." It states: "Definition of dock work issues continued to be a problem and 12 cases were dealt with during 1986. There is growing concern over the increasing number of non-Scheme projects which have been and are being developed, often in close proximity to existing Scheme ports. This has been particularly noticeable on the Ouse and Trent rivers, and in the vicinity of the Wash. In some cases, the National Board took the unusual step of expressing its concern to the local authorities which were involved in the planning applications. In one case, Sutton Bridge, the matter was referred to an Industrial Tribunal. Unfortunately the Tribunal's decision went against the Board and in consequence, the development of this new facility, with its potential for adversely affecting the traffic and employment of registered dock workers at the nearby Scheme ports is the cause of anxiety both locally and to the National Board." I could not give a better example of the corporate state monopoly attitudes embodied in the whole idea of the dock work scheme and the workings of the National Dock Labour Board. What effect has the dock work scheme had on the ports in this country? My hon. Friend the Member for Darlington told us that in 1970 nearly 40,000 people were employed as registered dock workers. There are now fewer than 10,000. In 1967, 92 per cent. of the total non-fuel traffic entering the ports went to registered docks. Today only 70 per cent. goes to registered docks. That clearly shows the effect of the scheme on the employees within the scheme and on their livelihoods. We should be taking action. We should not simply let the scheme wither away. My hon. Friend the Member for Darlington mentioned the average age of dock workers in the scheme—only 46·3 years. There would be dockers in the scheme for nearly another 20 years even if not one more docker was recruited; and we are aware that new dockers are being recruited to the scheme. Some 22 per cent. of registered dock workers are under 40, about 40 per cent. are between 40 and 50 years old and 36 per cent. are between 50 and 60 years of age. The scheme will not wither away. It will go away only if Government action is taken to end the scheme. A policy based simply on allowing the decline to continue cannot create the conditions in which the industry can flourish and in which we can provide new jobs. I believe, therefore, that we should take the advice provided by my right hon. learned Friend the Member for Richmond, Yorks (Mr. Brittan). We should give employers and the unions six months to get together to reach an agreement to get rid of the scheme. If at the end of that time they cannot agree, the Government must act to end the scheme. There would be sensible severance arrangements and retirement with dignity. I accept the promise made by the employers that they have no wish to return to casual employment. They recognise that the only way forward for the scheme is through the provision of fair competition. We know that Labour Members have doubts. Only 44 Labour Members backed an amendment to the early-day motion tabled by my hon. Friend the Member for Gravesham. Most Labour Members did not sign the amendment. Many people who work in the ports that are not registered want to see an end to the "jobs for life" provided by the Aldington-Jones agreement. They believe that the significant amounts of idle time, high earnings and high severance payments enjoyed by employees in the scheme cannot be allowed to continue. Deregulation of Britain's ports would do more than anything else to help increase the prosperity of the areas and provide the vital regeneration that they need. I urge the Government to have the courage to grasp the nettle and end one of the last Socialist legacies of the .Attlee Government.

8.8 pm

Mr. Gavin Strang  (Edinburgh, East)
The hon. Member for Pembroke (Mr. Bennett) is mistaken if he believes that the number of Labour Members' names to the amendment to the early-day motion to which he referred is an accurate reflection of the views of Opposition Members on these matters. He is well aware of the rather casual way in which people approach most early-day motions. The hon. Member for Darlington (Mr. Fallon), who opened the debate, is well known for his opposition to the scheme, and he rehearsed the arguments that we have heard before in his usual articulate way. We do not accept his arguments, and I hope that the Government will take this opportunity to reaffirm their support—support that has existed under successive Governments — for the continuation of the scheme. It was right that my right hon. Friend the Member for Blaenau Gwent (Mr. Foot) and my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) should remind us briefly of the origin and history of these arrangements. There was enormous exploitation in the docks, and the casual labour system involved enormous hardship and poverty, not only for those who worked in the docks, but for their communities. There can be no doubt, not only that the scheme has dramatically changed that situation, but that major elements of it still provide benefits for dockers and the communities in which they live. We believe in job security and in the dignity at work that the scheme has given dockers. Those important benefits should not be thrown away. If the scheme were abandoned or repealed, as Conservative Members suggest it should be, there would be a risk of deterioration in the conditions in which dockers work. It is true that employers have expressed reservations about, and opposition to, the scheme. Undoubtedly, employers often wish to have complete control over their  labour force and resent the role of the trade union. We believe that the arrangements have provided a well-trained, skilled labour force for the ports and docks. Conservative Members seem to think that the reduction in the number of dockers shows a weakness in the scheme. Conservative Members know better than I do that there has been an important change in the pattern of Britain's trade. Entry into the European Community involved a major shift in the relative importance of various ports. A reduction in the labour force is often a consequence of investment and the increased productivity associated with greate efficiency.

Mr. Neil Hamilton
Can the hon. Gentleman tell me which of the ports are in decline and which are growing? Can he see any distinction between the two, based on whether they are in the scheme or out of it?

Mr. Strang
I am making the point that we recognise that there has been a change in the pattern of trade. It is true that the proportion of our trade that goes through scheme ports is lower than that through non-scheme ports, but a very substantial amount of our trade goes through scheme ports. Conservative Members would make a great mistake if they thought that that trade could easily be diverted elsewhere or that we should not be concerned about the enormous disruption that would occur if there were a breakdown in the relationship between the dockers' trade union and their employers. I hope that no hon. Member would want such a breakdown. Nothing in this world is sacrosanct. Of course there must be changes and developments, but surely we all want them to be reached on a proper, sensible and agreed basis. This Government, like previous Governments, have provided valuable financial assistance in recent years in helping to meet the severance costs for registered dock workers. This scheme, which, as the Minister would be the first to point out, is separate from the dock labour scheme, is due to be extended because it ends this month. The Government are considering this matter. I assume that agreement will be reached on the continuation of some financial assistance from the Government. These severance arrangements are viable factors in the scheme's operation and are important for the employers. I do not believe that they contravene the EEC's provisions. I want to encourage the Government to maintain a responsible approach to these matters. It must not be forgotten that the scheme is of great benefit to many people and that it should not be terminated, but must be adjusted and developed. All the aspects can be negotiated. I hope that the Government will make it clear that the position is as the Prime Minister reiterated only a couple of months ago in the House—that the Government have no plans to scrap the scheme.

8.14 pm

Mr. Ian Bruce  (Dorset, South)
I should like to sound a slightly different note in the debate. Conservative Members have put well a solid case on the harm that the dock labour scheme does. The Opposition have expressed solid support for the dockers who are trying to preserve their jobs. Conservative Members do not believe that the scheme is appropriate in today's climate to preserve jobs. One need only look at my port as an example. When I was selected as a candidate to fight Dorset, South, there were 25 dock workers in my port. By the time I became  a Member, there were 19. The last time that I spoke on this matter I thought that there were 16 but, apparently, there were only 15. I have not checked to find out how many there are now, but one can see that there is a terminal decline. I do not have a dock employer in my constituency —the dock employers are outside it—and there are 15 dock worker votes, a number which is rapidly decreasing. I am interested in preserving those dock worker jobs. I know what my hon. Friend the Minister may be thinking about the scheme—that perhaps one day there will be sufficient legislative time for the Government to get around to scrapping it — but we must do something before we talk about scrapping the scheme. We must look at our docks and consider how to go forward. We had legislation 15 years ago, and we can argue about whether it was good or bad. There were 50,000 dockers then. There are fewer than 10,000 now, and the number is constantly decreasing. We need to consider what we do in our ports and how we organise our docks for the future. It would be right for my hon. Friend the Minister to say clearly that the Government are not satisfied with the status quo and that they wish to hear from the port employers and the dock workers their proposals for the docks' future. Not long ago, I had a meeting with my dockers. They said that, although they wanted to preserve the scheme —to me it may be a sacred cow—they were willing to negotiate. The Government go about all these matters sensibly. We have built up industrial relations. The jibe about Conservative industrial relations not working in the Ford dispute could not be further from the truth. Clearly the Ford dispute was solved by using Conservative industrial relations. We should send to the dock workers and dock employers the message that we want to hear their proposals, that we shall find time in our legislative programme next Session to get the scheme changed — perhaps abolished, but certainly changed—and that that is our commitment.

8.18 pm

The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls)
I should like first to summon up all my sincerity and say how grateful I am to my hon. Friend the Member for Darlington (Mr. Fallon) for giving us the opportunity to debate this issue. I praise him for his good fortune in ensuring that we can discuss these matters at a reasonable hour instead of early in the morning. I should perhaps be even more enthusiastic about having the first debate this evening if I were not fairly certain of having the last as well. May I also say to those of my hon. Friends who have spoken — all of them with considerable force and eloquence and with a fair degree of knowledge about the issues involved—how much I have appreciated their contributions. I have in mind particularly my hon. Friends the Members for Gravesham (Mr. Arnold), for Pembroke (Mr. Bennett) and for Dorset, South (Mr. Bruce). Even if I may not entirely agree with their conclusions, I can certainly appreciate the way in which they have put their argument. Since the beginning of this new Parliament, the future of the dock labour scheme and the question whether it should be abolished have assumed some prominence. A number of hon. Members have asked questions about the scheme and I understand that early-day motion 275, which  seeks Government action towards abolition, has attracted 210 signatures rather than the 209 claimed for it this evening. Ministers can therefore be in no doubt as to the significance of the scheme to Conservative Members as well as to the ports industry at large, and we are well aware that the issues raised by it are highly emotive. However, the more one studies the issues involved, the more one becomes aware of the complexities. It is one thing to allege that the scheme is completely outmoded and a hindrance to flexible development of ports but quite another to assess the true weight of the impediment. It is yet another thing to conclude that repeal would solve all the industry's problems or that no progress can be made while it still exists. The Government's position has been made clear throughout the various exchanges. It is only right for me to repeat that that position remains unchanged. There are no present plans to abolish or amend the scheme, although, as with other important statutory arrangements, its workings are kept under review. As critics and supporters alike point out, the scheme derives from early post-war legislation designed to remedy the ill effects of the old-style casual working and the chaotic conditions of employment that existed in the docks before world war 2. The concept of joint regulation of relations between port employers and registered dock workers was held to be in the interests of both. Rightly or wrongly, that has led to a large body of legislation down the years. So it was that the first national dock labour scheme was established in 1947 under the Dockworkers (Regulation of Employment) Act 1946. There followed the 1967 dock labour scheme, reflecting the 1965 Devlin inquiry into industrial relations, which essentially continues in operation to this day. Devlin marked an important turning point in the history of manpower arrangements in the docks. Before then, dockers were employed by the National Dock Labour Board and allocated to employers on a daily or half-daily basis. As a result of the 1967 scheme, dockers for the first time became permanently employed by specific employers, thus finally putting an end to casualism. A system of licensing, to reduce port employer numbers, was embodied in the Docks and Harbours Act 1966. Finally, the Dock Work Regulation Act 1976 was an attempt by the last Labour Government to introduce a new and even wider scheme, but Parliament, in its wisdom, refused to approve their 1978 draft. A statutory employment scheme necessarily entails some administrative on-cost. Hence we have the statutory National Dock Labour Board which runs the scheme, supported by a network of local boards, all consisting of an equal number of employer and union members. The board maintains registers of dock works and employers which have a statutory monopoly over dock work as defined by the scheme as it applies at each individual port. It also regulates recruitment and discharge from registers and the allocation of registered dock workers to individual employers on a permanent basis. It administers the RDW severance and pension scheme on behalf of the industry, as well as medical, training and welfare facilities. I have tried to describe the history of the scheme in the least emotive way possible. That history has been referred  to not only by my hon. Friend the Member for Pembroke, who, through his family, has a direct knowledge of how the scheme first came about, but by the right hon. Member for Blaenau Gwent (Mr. Foot) and the hon. Member for Liverpool, Garston (Mr. Loyden). As I have said to the hon. Member for Garston on previous occasions, I do not for one moment doubt the sincerity with which he speaks about these matters. However, when he refers to the forties, it is difficult to know whether he is talking about the 1940s or the 1840s. Time moves on, and as politicians we try to derive the ability to learn from history and develop our ideas from it. I do not know what I have done to deserve it, but I have had to listen to the right hon. Member for Blaenau Gwent making speeches on many occasions. I always envy him the style of his speeches. He has a Celtic eloquence which, as someone who is at least half Celt, I can wholly admire. However, once I have got behind the undoubted skill of the right hon. Member's delivery and can concentrate on his approach to the history of these matters. I find that he makes the ancient mariner look like the epitome of yuppy modernity. Again, one can never doubt the sincerity with which the right hon. Gentleman speaks, but he sems to be completely unable to realise that times move on, decade succeeds decade and century succeeds century—[Interruption.] Does the right hon. Gentleman wish to intervene?

Mr. Foot
I am very gratified, because at the beginning of his speech the Minister said that he was going to keep the scheme in being. Anything that he says about me after that I can easily take.

Mr. Nicholls
I have tried to say the nicest things that I can about the right hon. Gentleman. I had hoped that I might be able to embarass him, as he may have been able to embarrass me, but perhaps he has been at the trade we both pursue for so long that he is unembarrassable. We shall see. Let me deal with some of the most frequent criticisms levelled against the scheme. Perhaps the main criticism is that it gives registered dock workers the unnatural privilege of a job for life. Events have shown that there is rather more to it than that. Job security really owes more to the industry's own Jones-Aldington agreement than to the scheme itself. The ports industry cannot be immune from today's competitive pressures and technological changes. The 1960s container revolution, the advent of roll-on/roll-off traffic and other advances precipitated a truly drastic rundown in labour requirements. The switch of trade from west coast ports to those on the east and south coasts, stimulated by our membership of the European Community, also affects the distribution of manpower to a considerable extent. Adaptations have taken place, the dock labour scheme notwithstanding. Overall, from a peak of 81,000 in 1955, the number of RDWs declined to 27,000 in 1979 and to under 10,000 today. As my hon. Friend the Member for Dorset, South suggested, it may even be declining at this very moment. Admittedly, because of the way in which the scheme and the associated Jones-Aldington agreement work together, severances of RDWs from scheme ports are effectively made voluntarily. In these circumstances, some large financial inducements have been needed to ease the industry's transition to proper manning levels. Currently, the normal severance offer amounts to a maximum of £25,000 per man, after 15 years' service, of which the Government and the port employer concerned each pay 50 per cent. This is undoubtedly generous, but the fact remains that the industry has gone a long way towards eliminating its manpower surpluses in most ports. Manning is now much tighter and everyone involved can take much credit for that. Questions have been asked about what arrangements will apply after the end of this month when the Government's present agreement with the port employers comes to an end—a particular concern of the hon. Member for Edinburgh, East (Mr. Strang). The employers are of course responsible for setting the severance terms offered to registered dock workers. They have said that they cannot determine future arrangements until they know what Government financial assistance will be available. For the moment, however, the Government cannot make any specific pledge, as any further assistance has to be cleared in principle with the European Commission under its state aids regulations. That process is likely to take a few weeks yet, but of course that in itself has no implications for the future of the dock labour scheme. A related criticism of the scheme is that it weakens management's ability to manage and reinforces union attitudes that make for inefficiency—a point made by a number of my hon. Friends. Certainly, there is no shortage of reports of disreputable working practices. Scheme or non-scheme, these can only lead to a loss of trade to overseas competitors and must indeed have contributed to the loss of jobs over the years. That must be bad for all whose work and future are bound up with the industry. However, it has to be said that local managements seem to vary considerably in their ability to run successful cargo-handling operations. Despite the constraints, many scheme ports are profitable and, as I have already suggested, the industry has adjusted and responded successfully to enormous technological changes over the years, and that could not have been achieved without effective management. The same arguments present themselves when considering the related position that the scheme militates against enterprise, competitiveness and development of the ports. Those were some of the concerns mentioned by my hon. Friend the Member for Darlington and echoed by my hon. Friend the Member for Gravesham. The history of the past 20 years has shown that the ports have, in fact, worked through a profound revolution in their methods and operations, which has required enormous investment and a readiness to adapt. Some may say that that has been achieved in spite of the scheme, rather than because of it, but clearly some managements have been able to succeed better than others. None of this is to deny, however, the perennial need to remain competitive, and to the extent that dock workers and their unions abuse the scheme, rather than use it constructively, they do, indeed, hamper their own prospects. On that point, recent press articles have highlighted some of the so-called 'Spanish customs'. My hon. Friend the Member for Pembroke has referred to 'ghosting' `bobbing' and 'moonlighting'. Obviously, such practices ultimately have the effect of undermining the employment prospects of those who indulge in them. Hon. Members can probably think of similar practices. Such practices are  far cry from the maxim, "A fair day's work for a fair day's pay," to which trade unionists have traditionally subscribed. Finally, it is said that the scheme is anachronistic and no longer necessary for its original purpose. I suppose that it would be true to say that, starting from now, nobody with the industry's well-being at heart would design something so rigid and bureaucratic. However, that is not the same as pressing ahead at once with repeal. In my view, all those who wish to preserve the scheme, including Opposition Members, have a duty to show how it can be made to assist the industry and how abuses can be stopped. I repeat that it is remarkable that we hear tales about how the dock labour scheme came into practice and the undoubted miseries under which dockers were made to work in the previous century from Opposition Members, when the leader of the Labour party was able to make a joke at his own party conference about dock workers, saying that it was not entirely realistic to say to a man who has a villa in Marbella, "Come on, brother, let me take you out of your misery." Perhaps to that extent, the leader of the Labour party is slightly in advance of some of his hon. Friends to whom we have listened tonight. If the speeches of my hon. Friends tonight are taken at their face value, mere abolition of the scheme would mean that all the problems of the employers could be removed at a stroke. It is heartening to think that that could be so, but, despite the considerable eloquence and enthusiasm that my hon. Friends have shown tonight, I cannot believe that the mere abolition of the scheme would have all the desirable effects that they seem to believe.

8.32 pm

Mr. Harry Ewing  (Falkirk, East)
I apologise to the Minister, to Conservative Members and to my right hon. and hon. Friends for the fact that I have not heard much of the debate. Therefore, out of courtesy to the Minister, because I know that he would not seek to come back on what I say, I shall not take any great issue with the points that he has made. However, from the debate that I have heard, and from all my experience of the dock industry — not as an employee, but as a Member of Parliament representing the port of Grangemouth over a fairly large number of years — my experience is that the National Association of Port Employers has sought for several years to have the national dock labour scheme terminated. I do not accept that the future of our ports depends on whether that scheme continues. My hon. Friends may he surprised at my saying that. I do not believe that the future of the ports in the United Kingdom — especially in Scotland, and even more especially on the east coast of Scotland — depends primarily on the attitude of the National Association of Port Employers, or even on the attitude of the Transport and General Workers Union. It depends primarily on the owners of the vessels. From the debate that I was able to hear, I noticed that there was little or no reference to the shipowners. For the benefit of my Scottish colleagues who are present, I shall relate the stark reality of what is happening in the Scottish ports at the moment and has been happening for a considerable number of years under a scheme called the grid scheme. Simply explained, if one takes as an example the whisky industry in Scotland, one could put a load of whisky on  to a lorry in the city of Perth, where much of our whisky is made, and have it transported free of charge down to the non-scheme port of Felixstowe. The road haulage costs would be paid for by the shipowner, on the basis that it is much cheaper to pay those costs than to have the vessel steam the additional distance to Grangemouth or Neath, which is near the constituency of my hon. Friend the Member for Edinburgh, East (Mr. Strang), or to any of the east coast ports of Scotland. That grid scheme has had interesting results in Scotland during the past 10 years. Ten or 12 years ago, 75 per cent. of all goods manufactured in Scotland for export were exported from ports in Scotland. That is a significant figure, but that 75 per cent. has now been reduced to 25 per cent. I agree that in a sense that is because Scotland is exporting less, but it is primarily because of the grid system, whereby the shipowners pay the road haulage costs from the point of departure to the non-scheme port of Felixstowe. The scheme is having a devastating effect on the port industry in Scotland, both east and west. The port of Glasgow has closed down almost completely. It was a busy, thriving port until about 10 years ago. When I first went to Grangemouth to represent that constituency, there were 800 dockers. On hearing the Minister talk about technological change, I was reminded that Grangemouth was the first port in Scotland to be containerised. Our dockers in Grangemouth did not put up any opposition to the advent of mechanisation and, as a result, we are left with the most obsolete equipment. By that I mean that, if one wants to load a vessel eight containers across in the port of Grangemouth, despite its deep water for 24 hours a day, one can load the vessel only four across. One must then take the vessel out, turn it and bring it back in so that it is then possible to load the other four containers from the other side of the vessel. That is because the arm of the gantry that loads the containers on to the vessel is 17, 18 or even 20 years old and is now out of date. Because of the lack of investment in the port, we in Grangemouth, having accepted containerisation in its early days, have been left behind in terms of  mechanisation. As a result, the work force in Grangemouth has declined from about 800 dockers when I first went there to under 300 dockers now. In all honesty, I should point out that many of those 300 dockers are, as we say, "sent up the road" almost every day of the week because there are not sufficient vessels coming into Grangemouth to employ them full-time. I urge the Minister to take on board my comments about the future of the port industry in Britain. If he thinks that there is anything to answer in what I am saying, perhaps he could drop me a note. The future of the port industry in Britain is not really tied up with the national dock labour scheme. I could advise the National Association of Port Employers that the national dock labour scheme will be broken over my dead body. I do not want to go into history, but I can remember what happened in the days of casual labour. I do not want to recite the incidents that took place then, because that would not do any of us any good. We all have our own memories of what happened in the days of casual labour. The National Association of Port Employers has got it completely wrong. The future of Great Britain's port industry will not he decided by that association or—I hesitate to say it, but it must be said—by the Transport and General Workers Union and the national dock labour scheme. The future will be decided almost entirely by the attitude of shipowners. If the grid system, which has prevailed in Scotland to our serious disadvantage, is allowed to continue, the net effect will be the continuing closure of Scottish ports. Once the ports have been closed, the national grid system will be abolished and the road haulage costs will be added to the costs incurred by the company that is exporting goods. The company will have to pay for the transport of goods from cities such as Perth, Glasgow or Edinburgh down to Felixstowe or any other port from which the goods will be exported. I hope that the Minister and his hon. Friends will give some thought to the part that will be played by the shipowners in deciding the future of our port industry. I believe that the role of the shipowners will, in the months and years ahead, become central to the issue that we have had the good fortune to debate tonight.

Inner Cities

8.40 pm

Mr. Sydney Bidwell  (Ealing, Southall)
I am grateful for this opportunity to open this debate on the inner cities. As recently as Monday, the House heard a statement by the Chancellor of the Duchy of Lancaster, who is also a Minister at the Department of Trade and Industry, on the Government's project for the inner cities. That statement was made on behalf of "She who must be obeyed". We understand that, as a result of that remark, a previous Leader of the House found himself in disgrace and ultimately departed from this House. Nowadays, he is to be found in the other place. Monday's statement and the Minister's response to questions is best illustrated by the observation of my hon. Friend the Member for Newham, North-West (Mr. Banks): "Why does the Minister not just come clean and tell us that the statement is part of the process of dismantling Labour-controlled local authorities in the inner cities…and turning them over to Tory business men to take decisions behind closed doors?"—[Official Report, 7 March 1988; Vol. 129, c. 43.] My hon. Friend should know about the inner cities because he is a former distinguished member of the Greater London council. We still have bitter memories of the abolition of the GLC. It was a major planner of London's affairs and it faced the difficulties encountered by Londoners in a progressive manner. Its work was appreciated by Londoners on the western fringes, such as those in the London boroughs of Ealing and Hillingdon, and those living in the inner city which is the substance of this debate. My constituency is in the borough of Ealing. In a recent speech during the debate on rate capping, I said that my borough had the characteristics of an inner-city area. Those characteristics are especially apparent in the Southall end of the borough—the west end if one likes —as well as in other parts of the borough, including the area represented by the hon. Member for Ealing, Acton (Sir G. Young). I am glad to note his presence this evening, and perhaps he will explain how his right hon. and learned Friend's statement will substantially benefit Acton, an area which he zealously represents. It is well known that Southall has the country's biggest community from the Indian sub-continent. I am not claiming that everyone is poor—far from it—but the area is overcrowded. There is a desperate housing shortage, largely due to the fact that the area has a low-average-age population. It also has a high level of youth unemployment. There is grave traffic congestion in the streets. The area is in desperate need of Government financial assistance channelled through the local authority. That local authority, as the elected representative of the people, knows more than anyone where that money is needed. The Labour-controlled authority has struggled to meet the problems, but all that the Government have offered is rate capping. Such action has been taken instead of making money available to offset the need to increase the rates that raise the money to pay for the much-needed improvements throughout the borough. The ruling Labour party of the authority, which had such a handsome victory at the last municipal elections, was elected on a manifesto to carry out progressive work,  and it proceeded apace. Since 1979, the Government have reduced the total grants to local authorities from 61 per cent. of total spending to 46·4 per cent. in 1987–88. The effects in Ealing have been even greater. In 1980–81, the last year of the old rate support grant system, 52·4 per cent. of council spending was met by the rate support grant. In 1987–88 only 25·5 per cent. of its spending will be met by block grant. Those are significant figures. They demonstrate how central Government have pulled out of the borough and, in particular, their attitude towards a Labour-controlled local authority. Ealing leapt from being the lowest rated area in west London to the highest because the local authority was intent on carrying out progressive change. In cash terms, the council is receiving less this year than it did in 1980–81. In 1987–88 Ealing has lost £48·5 million in rate support grant from the Government. That money could have been invested in providing essential services for the borough. The particular social needs of the borough were outlined in a submission made by Ealing to have its rate-capped limit raised. The Government have consistently refused to accept that Ealing has inner-city characteristics. That is our major complaint. For example, using the Z score to measure urban deprivation, Ealing, as at 10 December 1986, ranked tenth out of the 23 authorities granted programme status. Ealing has repeatedly been refused that status. In other words, it has been victimised because it is under Labour control. Since its election in May 1986, Ealing council has attempted to meet the area's needs. It has housed 1,000 homeless families, appointed 140 teachers, and negotiated with the private sector to provide more than 600 new homes for letting to families in priority need. It has started making improvements at the Acton end of the borough that had been held back for many years. Plans are well advanced for the development of Southall town centre and much-needed car parking space has been introduced. The Fenner Brockway centre, an imaginative leisure centre in a disused superstore, has been built. Lord Fenner Brockway was born in India and was a distinguished Member of this House for many years. He has been in the forefront of the struggle for racial harmony in this country. Labour was elected to provide the services that the people need and to tackle the problems, characteristic of inner cities, of the London borough of Ealing. Those needs were not addressed by the Government. The Government's action in rate-capping the council was specifically designed to force the current administration to adopt the spending policies of the previous council. That was a backward administration and that was why it was soundly defeated and turfed out at the municipal election. Ealing council has been faced with the dilemma of how to reconcile the needs of the area and the wishes of the electorate for better services with the Government's spending limit with which, as a responsible authority, it felt it had to comply. In very difficult circumstances, the council has managed to set a proper and legal budget while minimising the reduction in the level of service to the community. The council has stated that there will he no compulsory redundancies. It is determined that no one will be sacked, although those who leave voluntarily are a different matter. None of the measures taken are affected by the recent announcements of the Secretary of State for the Environment. Ealing's budget remains totally lawful, even  after the later statement aimed at further limiting the options of those authorities which are trying to tackle inner-city needs, but are being prevented from doing so by the Government's rate-capping and grant-reducing measures. If the Government are serious about improving the quality of life in the inner cities, they will work with local authorities instead of taking away millions of pounds which they should be spending on maintaining essential services. The Under-Secretary of State's responsibilities include planning matters. I do not know what will be the outcome of the proposals in the "Action for Cities" document, or what it proposes to do by giving powers to urban development corporations. I do not know whether the Minister will be made redundant as a result of that, because it bypasses local authorities and the time-honoured traditional duties imposed upon them in the realm of planning. That document is a hotch-potch and does not have the characteristics of a White Paper. It is simply a propaganda statement made down the road at the Queen Elizabeth II conference centre, which is a very agreeable place. I recently went there in connection with matters relating to Cyprus. It is astonishing that the architect of the document was not present when it was launched in the House of Commons, and complaints were made about that. Let us imagine a conversation that might have occurred between the Prime Minister and her husband, who said, "Now, look here Margaret. You made specific promises after your election success about tackling the problems of the inner cities. Six months have passed and it is about time that you did something about them. If we retire to the home that we have lined up in Dulwich, you could say that you did your best to carry out your promise in the flush of electoral success." The document has all the hallmarks of such a scenario. It is unspecific and, for such a major matter, that is not good enough. There was a good deal of substance in the complaint of the Leader of the Opposition, my right hon. Friend the Member for Islwyn (Mr. Kinnock), about the absence of the Prime Minister at that important launch.

Mr. Tony Banks  (Newham, North-West)
Does my hon. Friend remember the old comics, the penny plain and the tuppence coloured? He has the penny plain comic; I have the tuppence coloured. I do not know whether he has seen this one. There is a very fetching picture on page 2 of the right hon. Lady whom he is describing—Mama Doc with soft lighting.

Mr. Bidwell
I have been known to put the right hon. Lady in some of my cartoons. I shall not go into graphic details, but no doubt she will be a future subject when we have our art exhibition in July. I do not stick simply to brilliant oil paintings. I dabble in the art of cartoon production as well. The Prime Minister has one of my works, but I shall not go into all the details. Margaret and Sid are already known to each other. My picture caused her to laugh heartily. I did not know that she could laugh heartily, but she did so on that occasion, which showed that I had scored a hit. When the Minister replies, I hope that he will deal with the problems of the London borough of Ealing. I invite him to come and look at both ends of Ealing. It is a phenomenal place and has a phenomenal Member of  Parliament for Ealing, Southall. It is well known that most Members of Parliament are exceedingly modest, so perhaps that will be acceptable. The Minister knows all about the role of local authorities in planning. We are taken aback by the substance of the proposals. The civil engineers involved with the proposals probably do not live in the inner city. They probably live in the countryside or on the coast. Heads of companies will get together to co-operate in the programme. Some of them are well-known donors to the Conservative party. That will have an effect. I do not know whether a monopoly will result, but sometimes civil engineers are known to get on the telephone and to carve up the situation between them. Sometimes that is done on the golf course. I shall not suggest other ways in which there can be collusion and collaboration to sustain a high profit level. Certainly there will be no public accountability in the paraphernalia of "Action for Cities". There is a real fear that planning and consultation with those who know about town planning and landscaping to make things pleasant will not take place. On that score, the House might be interested to know that I received a letter from a Mr. Woodrow, secretary of the Association of Consulting Engineers. It comes from an address in Westminster: "I note with interest that you will be introducing the subject of inner cities for consideration during the Consolidated Fund Bill tomorrow Thursday 10 March 1988. The Association of Consulting Engineers is pleased to see that such an important issue is to be debated and would like to draw your attention to the contributions of UK consulting engineers in this area. We noted the Government's statement at the Press Conference held on Monday 7 March of its intentions regarding 'action for cities'. However, we are concerned that in this process of regeneration of urban areas construction should be appropriate to the longer-term benefit of the community and that temptations of short-term thinking in cost cutting exercises are not considered. I enclose for your information and use a copy of our paper 'New Images for Cities' which sets out the critical part consulting engineers expect to play in the revitalisation of the nation's cities." Of course, these engineers may be after a quick buck —I do not know—but there is a great deal of substance in what they say. There is also a certain amount of fear about what is proposed in "Action for Cities". It will land us in difficulties because it will not take into consideration the time-honoured planning system in which the feelings of local people are of prime importance. The proof of the pudding will be in the eating. The hon. Member for Acton said that Labour-controlled authorities would be queuing up to get in on this scheme and obtain financial assistance. Of course they will if it develops into anything of substance, but we are sceptical about it, set, as it is, against the massive needs of London. There are depressing things all over London. The other day I travelled to the TUC demonstration in Hyde park, where worries about the National Health Service were expressed. I went on the Central line from Ealing to Marble Arch. I am sure that the track on which that train travels — I speak as an ex-railway worker — is long overdue for replacement or renovation. The vehicle lurched badly, and I do not know whether the rolling stock  requires renovation too, but that sort of thing will not be done under "Action for Cities". It is sorely needed. London's cluttered roads and desperate housing problems will not be solved by it, either. In my part of London there is a rising generation of young people whose mums and dads came from the Punjab and who stand no hope of getting decent housing as things stand, and the proposals will not help them. The Chancellor will shortly make a speech. I do not know what money he will allocate to this scheme or how he will face the enormous problems that are developing, especially in London. One of the leading members of the Prime Minister's Cabinet at the launch of the scheme was the Home Secretary. The crime rate has been rising ever since the Tories came to power in 1979, and that certainly has much to do with the high rate of unemployment and enforced idleness among young people. Crime and unemployment go together, yet time and again the Prime Minister has denied that there was any connection —until she was finally forced to agree that perhaps there was some connection. The whole country — inner cities, outer cities, urban areas and villages — needs extra public expenditure. "Action for Cities" is trivial compared with the gigantic problems that exist. We shall see whether the Chancellor goes for tax relief for high incomes and befriends the rich, or makes proposals that will lead to a real solution of the great problems that beset the people of the capital.

9.4 pm

Sir George Young  (Ealing, Acton)
I congratulate my parliamentary neighbour, the hon. Member for Ealing, Southall (Mr. Bidwell) on his success in the ballot and on choosing this important subject for debate. I endorse his invitation to my hon. Friend the Minister to come to the London borough of Ealing. My hon. Friend will find a confident west London suburb emerging fast from the recession. In my constituency he will find a new confidence in investment, the Park Royal estate bustling with activity, and plans for two shopping centres, one of which will be wholly funded by the private sector. He will find the streets covered with skips and buildings covered with scaffolding, showing that the construction industry has work under way. The renewed confidence in the borough owes nothing to the Labour-controlled local authority which last year put up the rates by 58 per cent. In spite of its recruitment, the authority is taking an unprecedented time to process the planning applications that will generate even more jobs in the borough. My hon. Friend will find the incidence of squatting going up on local authority estates and he will see delays in dealing with maintenance and management of those estates. If my hon. Friend the Member for Ealing, North (Mr. Greenway) catches your eye, Mr. Deputy Speaker, he will wish to speak in more detail about the activities in the borough of Ealing. I reiterate the invitation to my hon. Friend the Minister, and hope that he will visit some of the successful and expanding firms in my constituency as well as those in Ealing, North. I shall be brief, and if I cannot stay in my place after I have finished my speech, it will be because I have duties upstairs in the Committee examining the Local Government Finance Bill. The statement on inner cities made on Monday was a confident one and, for three reasons, is likely to prelude regeneration. First, the statement was made against a  background of economic recovery. Many of the previous initiatives on inner cities were made against a background of recession and, inevitably, had to swim against economic tide. Inner-city economies have been vulnerable and exposed to that recession. That has now changed. There is a real appetite for investment in the inner cities and as I have travelled around the country, I have been enormously encouraged by how much of the investment is in industrial activity as well as in commerce and services. The background to Monday's statement is far more positive than the background to similar initiatives in previous years. Secondly, the basis of partnership is now much better developed. When we started on the whole process of partnership in the inner cities, there were two cultures that did not understand each other. One had the private sector looking for quick decisions, looking at profit-orientated projects and trying to relate to the rather slow, leisurely six-week cycle of the local authority dealing in a partisan, political atmosphere with socially responsible projects. It has taken time for those two cultures to get to know each other and to understand better each other's needs. The whole regime introduced by the Department — urban regeneration grant, urban development grant and the urban programme—has forced the two sides to work together and to climb the learning curve together. Partnership is no longer an aspiration but a reality. The third reason for greater confidence relates to the local authorities. Here, one has to distinguish between the rhetoric and the reality. The reality is that, in 1979, the mainly Labour-controlled local authorities thought that the Conservative Administration were here for about four years and that then it would be business as usual. In those days, such authorities had a real ability to obstruct Government initiatives in the inner cities. Now the balance of power has swung the other way. The metropolitan county councils are no more, and urban development corporations have been established. The local authority empire is faced with competition from housing action trusts, opted-out schools, urban development corporations and so on. The morale of the far Left in the inner cities was destroyed by the result of the last general election. It has been virtually disowned by its own party and is quite happy to deal with the Government and to work with them on their own terms to regenerate the inner city.

Ms. Diane Abbott  (Hackney, North and Stoke Newington)
Rubbish.

Sir George Young
Opposition Members may say that that is rubbish, but local authorities such as those in Manchester and Islington are quite prepared to talk to the private sector and to put in joint applications for development grants in order to get worthwhile projects going in their areas.

Mr. Tony Banks
Is the hon. Member aware that in October the Association of London Authorities sent a delegation to see the Secretary of State and offered a partnership between the boroughs and the Department of the Environment, and that it was rejected out of hand by the Secretary of State? Does the hon. Gentleman really welcome more and more local authority functions being taken away from democratically controlled councils and handed over to appointed bodies and the services run by Tory business men?

Sir George Young
I do not think that the hon. Gentleman was at the meeting. I certainly was not. My hon. Friend who is to reply to the debate was there and it is probably best if I leave him to deal with that. The answer to the hon. Gentleman's question is that, yes, I welcome the opportunity for housing action trusts to turn round difficult to let, difficult to manage estates where the local authority has failed for decades to address itself to those problems. I welcome the opportunity of bringing in private sector capital to make faster progress, rather than simply leaving the local authority to do it out of its own resources. The most significant fact on Monday was that the Prime Minister staked her credibility and reputation on making progress in the inner cities. I am sure that the Prime Minister will want to go back this year and next year to the sites that she has been visiting over the past few months, and that she will want to see progress. The political imperatives for making progress in the inner city and getting projects going are far stronger than they have ever been. Given the number of Government initiatives in the inner city, we have to address the problem of how to coordinate them at the local level. There are likely now to be in the inner city MSC projects, some urban regeneration projects, some opted-out schools and some city technology colleges — a whole range of welcome initiatives. Some mechanism will have to be developed for managing these and it strikes me that the Thamesmead trust and the Stockbridge village trust may provide the model for getting local participation in the management of these new initiatives. Even greater efforts than have been made so far are needed to win the confidence of the local people. I see the hon. Member for Newham, South (Mr. Spearing) in his place, and he may wish to develop the theme of the London Docklands development corporation. New UDCs are being set up in areas that are more heavily populated than the docklands, and I am sure that they will wish to involve local people as much as possible in the discussions about the progress of the area, the direction it is to take and, where possible, the management of change. The final point that I want to make relates to the whole business of getting private capital. This Administration have much to boast of in getting the private sector to invest in projects which hitherto have been the responsibility of the public sector. The extension of the docklands light railway to the City is being funded privately. The Dartford river crossing is being funded privately. The Channel tunnel, which 10 years ago was to be a public sector project, is now being funded privately. But I think that even more progress can be made in getting the private sector to fund more of the infrastructure in the inner city. I know that there is a long and somewhat theological debate with the Treasury on what is and what is not public expenditure. Progress has been made by the Department in housing, where the housing associations can now borrow privately without the whole amount spent on a project scoring as public expenditure. I hope that we can make even more progress in getting the private sector in renovating the infrastructure in the inner city. I say to my hon. Friend the Member for Rossendale and Darwen (Mr. Trippier), whose appointment has been so warmly welcomed by all those who interest themselves in the inner city, that if we can complement the resources that the Government have made available by even more  from the private sector, there really will be an opportunity to make such fast progress in transforming the inner city that the whole debate about whether it should be public or private will be made redundant. So I regard Monday's statement as a positive one, against a background of growing confidence built on real partnership and, in spite of the rhetoric, with many local authorities willing to collaborate. At the end of the day those who live and work in the inner city will be grateful for what was announced on Monday.

9.14 pm

Mr. John Fraser  (Norwood)
I listened with great care to the statement made on Monday about inner-city policy, and I do not rise to rubbish everything that the Government are doing. The statement was characterised by bringing together many of the things that the Government intended to do anyway and trying to dress them up as an inner-city policy, rather than being an original initiative to deal with the deep-seated and intractable problems that we face. I spent four years going to virtually every inner-city partnership area in the country, from Gateshead to Brixton, Islington, and so on. The more one looks at the problem of the inner city, the more one realises that it is an intractable problem and that there are not solutions that are common to all areas of the country. One must look carefully at the problem because there is not a single solution to it, and one must choose between one project or another. I am becoming convinced that the only way to make progress is by means of a partnership. Having looked at the matter in great detail, I do not believe that local authorities on their own are capable of creating the same amount of wealth as a partnership. We must devise projects in the inner cities that create wealth as well as consume it. In some London boroughs, if a developer wants to develop a site and sends out a local search to find out whether there are any planning restrictions on the site, it may be 20 to 26 weeks before he receives a reply saying whether he can buy the land. That is not a very good start if one is thinking of setting up an enterprise in an inner-city area. If someone makes an application for planning permission to build—this is the case in Tory boroughs such as Wandsworth and Westminster as much as it is in boroughs such as Lambeth or Southwark—which itself creates jobs and which may create permanent jobs afterwards, he may have to wait six or nine months for the result of his application. Those are examples of schemes that are within the scope of local authorities, which perhaps are not as geared as they should be to the creation of new jobs and enterprise in inner-city areas. Often, business and commerce take no account of the needs of the local population. Therefore, there must be a partnership between local authorities, Government, industry, trade unions, and sometimes academic skills, to serve the needs of the community, realising that each has an appropriate part to play. I said that the problems are intractable, but some of the main problems that I experience in my constituency are concerned with poverty. If we were to eliminate poverty, there would not be any inner-city problems. For all that is said about extending the A13 and so on, there are mixed  races and cultures in St. John's Wood, but there is no poverty. In consequence, St. John's Wood is not a programme authority. It does not experience problems with housing, behaviour and so on, because it has wealth. What distinguishes the inner-city problem more than anything else is poverty, which is the creation of the Government. In my constituency, unemployment has trebled since the Government took office in 1979. One quarter of the population are on social security benefits, two-thirds of them are on housing benefit and about 25 per cent. of the male population are unemployed. I use the male figure because it is often a more accurate reflection of unemployment than the female figure. Poverty is at the root of the problem. If the Government stopped creating poverty, as they have by the changes in housing benefit rules, some contribution would be made. There is the most intolerable housing shortage in inner-city areas, which has been made deliberately worse by the Government. The problem in areas such as Brixton, Islington and Hackney is not that people want to leave the areas, but that many people want to move into them. Those people who want to move into them have a lot of money and are forcing the price of houses up beyond the reach of ordinary people. The only way to provide for the 20,000 people on the housing list, the thousands that are homeless and the hundreds that are in bed-and-breakfast accommodation in my borough, is for the Government to restore the levels of investment in the housing investment programme to allow homes to be built to rent. This would allow people to Ike in dignity, which would eliminate another element in the inner-city formula for deprivation, deep unhappiness and distress. The problem of the inner city, particularly in London, is often characterised by appallingly high levels of crime, and high levels of alcohol and drug abuse. Any metropolitan, cosmopolitan area is difficult because of the conflict in people's values. It is clear from some estates that some people think that graffiti is an art form. Indeed, the Greater London council spent money on encouraging graffiti—[Interruption.] If it did not, I apologise. Some people think that graffiti is a great art form, but others do not. Neighbours often have conflicting values about the nature of their environment, and when there are conflicting values it is difficult to get a cohesive community working together. People have conflicting ideas and attitudes towards the police. I am not condemning any view; I am simply describing a conflict. There is also a conflict about people's attitudes towards litter and so on. In the inner cities, in addition to investing money, we must try to establish a cohesive and stable community working together. The Government do nothing to encourage that. My borough gives 40 or 50 per cent. of its inner-city money to voluntary projects which try to bring the community together and give it a sense of dignity, self-respect and self-reliance. The Government accompanied their great announcement by cutting our inner-city partnership money in Lambeth by 10 per cent. year on year. We have lost about £1·25 million in inner-city partnership money as a result of the Goverment's attitude. All our efforts to build a cohesive community and a common set of values are being destroyed by rate-capping inner-city policies. As many other hon. Members wish to speak, I shall make just one more point. The Government have tended to concentrate their fire on the development of land, not on people. It is very easy to take an empty area such as the  docklands and say that it is a raging success. It is a raging success, but it is not such a success for the people who live there. If we took any inner-city area within two or three miles of the City of London and drove out all the people from the centre of Islington, Brixton or Hackney and said that the land was for sale to those who are rich and want to be a few miles away from the City of London, we could make a raging success of those areas. However, we would have exploited the land and the people. It is all very well to take riverside land that has a high value and, if enough money is spent, has a high amenity value, and say that it is a success. I regard an inner-city policy as a success if it addresses itself to improving the dignity and wealth of the people, instead of the value of the land and those who are not deprived and who settle upon it.

9.22 pm

Mrs. Maureen Hicks  (Wolverhampton, North-East)
I welcome the debate and start by congratulating the hon. Member for Ealing, Southall (Mr. Bidwell) on his choice of subject, although I regret that we might part company at that point. Having listened to a rather depressing introduction to the subject, I have to ask, where is the hon. Gentleman's vision, imagination and initiative for the inner cities? When I heard the announcement by my right hon. Friend the Prime Minister on the night of the general election, I was overjoyed by the fact that she was singling out the inner cities as a problem that we should pinpoint, highlight and alleviate. I am afraid that too much of the debate so far has concentrated—as so many Opposition Members choose to do on these subjects—on money. I should like to take us back to the problem of people and their lives. Essentially, that is what we are discussing. On Monday, the Prime Minister initiated a situation whereby she has taken the strands of inner-city life, housing, education, employment and law and order and brought them together under one umbrella with the overall aim to improve the quality of life of those people who hitherto have often felt abandoned. I see "Action for Cities" as an exciting initiative. We have to provide hope, initiative and leadership in those areas. Financial backing of £3 billion and the establishment of 57 inner-city centres are no mean achievements; however, such initiatives demand leadership. The heart has gone out of the people, and the hope that they once had has been replaced by despair. Even if we do nothing else, we as a Government must inspire those people to want to help their community. Opposition Members may say that it all started on Monday, but they know as well as I do that our attention was drawn to the inner cities a long time ago. Without a healthy economy, it is impossible to take any initiatives. In my constituency, I have had the benefit of a task force, and an inner city area grant of £5 million this year. The urban development corporation has been extended, with another £15 million, and we also have the £160 million urban development corporation in the black country. On top of that, the Government agreed on Monday to a £50 million injection into a black country spine road. Without the roads, the business cannot be brought in, and unless the business is brought in, the jobs cannot be created. Those strands all depend on one another, but for too long they have worked in isolation. I see one barrier to our progress, and I speak from experience of my constituency. That is the problem of law and order. Unless we tackle that underlying problem, some of our initiatives will not achieve the success that they deserve. In my area, which has had 16 years of Labour control, people who live in high-rise flats feel abandoned; they feel like prisoners. They view their homes as no-go areas, because they have experienced deplorable estate management. The hon. Member for Norwood (Mr. Fraser) talked of homelessness. We have thousands of empty council houses and flats in my area, which we cannot give away. No one wants them, because they have been allowed to run down to such a degree that it would take a considerable sum to return them to being habitable. The area has become unpopular. It is a disgrace, when thousands are on council waiting lists, that there should be properties available which they will not consider renting. I welcome schemes such as Estate Action and the housing action trusts. The Government are bringing in new money and initiatives to return properties to use and find homes for the people who need them. It is deplorable—here I revert to the problem of law and order—if, having provided homes, we allow the mindless minority to come in and ruin those areas by vandalising them. The wheel has turned full circle, and we have found no solution.

Mr. Nigel Spearing  (Newham, South)
The hon. Lady is describing a phenomenon of which many of us would disapprove. But does she deny that one of the major purposes, hidden or obvious, of the housing legislation now going through the House is to increase the cost of housing on the open market? The hon. Lady started by saying that it was not a matter of money, but surely that is what it is all about.

Mrs. Hicks
I think that the hon. Gentleman is getting away from the point. We are talking about homelessness and the problems of inner-city areas, and about the need to give those who cannot afford to buy the opportunity to rent properties which they can guarantee will be well managed. If the local authorities have not been able to provide the necessary management of estates and finances, we cannot criticise the Government for coming in to assist. The safer cities initiative, involving eight inner cities in the next 12 months and 20 over the next three years, seeks to combine the efforts of the police, the community, businesses and voluntary groups, all working for a safer and better community. We shall get the concierges and entry phones into the high-rise flats, and we shall do all in our power to deter the offenders. But what is the point of all that if we cannot inject pride into a community? It is difficult to restore pride in anyone who has lived in a high-rise flat or who has been scared to go outside the home or to let the children play in a nearby park. We have 330 neighbourhood watch schemes in my area and 420 business watch schemes. They are partnerships, and the safer city scheme will also be a partnership whereby each of the groups involved will work for a common end. That initiative will be funded by the Government but run locally to bring those strands together. Some people rubbish some of the initiatives in "Action for Cities". I see that it is compulsive reading on the Opposition Benches—almost a best seller, except that it is free, unlike some Labour publications. I for one have put in my bid for a safer city initiative for Wolverhampton. We must give heart and hope. It would be wrong for the Opposition to be destructive. There are initiatives after initiatives, which never existed years ago. I ask the Opposition to join me at least in having the honesty and vision to welcome these measures. We should all welcome the togetherness that we are trying to foster between schools and industry and the voluntary sector and the police. We should welcome the efforts to try to give our young people a sense of pride. One of the nicest things that has happened to me since I came to the House last June was when 14 young people from Wolverhampton visited me last week. As the hon. Member for Brent, South (Mr. Boateng) knows only too well, Wolverhampton suffers from a great deal of bad publicity, but those 14 young ladies were here to receive their Duke of Edinburgh gold awards. I told them that they were showing an initiative in their local community. Too often we hear about the glue-sniffing parties and truancy. We almost have a down on our young people. We should capture such initiative in our inner cities. If we lose such people when they are young, we lose them for life. The wheel turns full circle and they contribute to the sort of problems we are now experiencing in our inner cities. If we get the opportunity to encourage the police to visit their schools, we should do so. I know that some Labour Members disagree with that philosophy, but we must start educating people for future life in the inner cities so that they will respond and appreciate the environment in which they live. I hope that all hon. Members will join me in welcoming the initiatives. I hope that they will try to foster togetherness and leadership in our community, and try to get people back to work. The west midlands has the highest success rate in getting people back to work. We should welcome the training initiatives and the initiatives that seek to provide skills for the young unemployed in the community, to help improve the quality of life, and, above all, to help make inner cities a safer place to live. It is no good just throwing more policemen in. We have 19,000 more now than in 1979. That is no solution. Money and people are not always the answer. No matter how much money and people are thrown into the inner cities, unless attitudes are improved and hope and motivation restored to create a sense of pride, we might as well forget the problem in the first place. I ask hon. Members please to join me in welcoming the initiatives and let us get to the roots of inner city deprivation.

9.35 pm

Ms. Diane Abbott  (Hackney, North and Stoke Newington)
I listened with great attention to the Minister's statement on "Action for Cities" on Monday. Since then I have read the document many times and believe that it would be better called "Inaction for Cities". It contains no proposals for new money for the communities; it contains no new proposals. As has been said, a bunch of initiatives that would have taken place anyway have been grouped together into what is fundamentally a PR initiative. On Monday the Minister challenged Labour Members to say what we disagree with in the document. The thrust  of our disagreement is with the omissions from the document, which are manifold. After the Minister's statement and the questions on it, I came away with a strong sense of insult. In the morning, the Prime Minister and six Ministers held a press conference to launch the document, yet in the afternoon we got a statement only because of pressure from my hon. Friends, and the Prime Minister was not here. That reflected the lack of seriousness about the democratic process and was an insult to the House. If the statement was important enough to warrant the presence of the Prime Minister and six Ministers in the morning, it was important enough to warrant the Prime Minister's presence in the House that afternoon.

Mr. Spearing
Conservative Members have lauded the quality, availability and free access to the document "Action for Cities", but the document—superficial though it may be—would not have been available in the House on Monday afternoon if it had not been for the action of a Labour Member.

The Parliamentary Under-Secretary of State for the Environment (Mr. David Trippier)
That is not right.

Mr. Spearing
It is true.

Ms. Abbott
I am able to confirm that I was present when the Labour Member took the action which made the document available. The initiative was an insult to the House, first because of the manner of its launching and secondly because of the lack of availability of the document. The document is an insult to the inner cities because it is almost entirely a PR initiative. If Conservative Members and Ministers were serious about tackling the problems of the inner cities, they would be talking about cash. If it were anything more than hypocrisy, they would be giving London its money back. Since the Government have been in office, London has lost £7,000 million in rate support grant. The initiative is nothing but cant and hypocrisy, designed to delude no one. The Government shed crocodile tears about the inner cities but money has been systematically drained from them and given to the shires. Since 1979, some £8,000 million has been lost by London for spending on housing, which is the equivalent of 150,000 new homes. How can the Government talk about their concern for the inner cities when millions and millions of pounds have been drained away? The amounts of money talked about in the document do not begin to compensate for the money lost as a result of the Government's policies. The initiative was an insult not only to the House and inner cities but to the black and ethnic minority communities of the inner cities, who make up a large part of the population. We have made and are making a valuable and important contribution to inner-city life, but Conservative Members think that we are invisible. I have read the document three times and I can see only one mention of black and ethnic minorities in a reference to the need to recruit more black and Asian police officers. It appears that, far from taking a constructive, positive attitude to the inner cities, the Government see at least one segment of the population purely as a law and order problem. With regard to the inner cities, the document contains no mention of the black and ethnic minority communities, of multiracial communities, of the contribution made by  the black and ethnic minority communities or of the importance of guaranteeing fair access to social services and housing to black and ethnic minority people. How can the Government talk about a stable and flourishing community in the inner city if black and ethnic minority people do not believe that they get fair access to housing and social services?

Mr. Trippier
Will the hon. Lady give way?

Ms. Abbott
Perhaps the Minister will allow me to finish making my point. All kinds of documents and research show that the black and ethnic minority communities are not receiving fair access to services in the inner cities. A Government who talk about rebuilding the inner cities, about flourishing inner cities and about a serious inner-city programme, yet believe that black and ethnic minority people can be ignored cannot believe that their initiatives will be taken seriously.

Mr. Trippier
The hon. Lady's remarks are quite scurrilous. She is well aware of the responsibility of project Fullemploy. I hope that she has heard of Linbert Spencer and indeed she has probably even met him. She will be well aware that Project Fullemploy concentrates on the black community. I hope that she will also be aware that it is actively sponsored by major Government Departments. Has she counted the number of times that project Fullemploy is mentioned in the document?

Ms. Abbott
I can only go by what is written. As I say—

Mr. Trippier
It is written in the document.

Ms. Abbott
I hope that the Minister will allow me to continue, as I gave way to him for some minutes. I can only go by what is written in the document. The attention in the document to the multi-ethnic communities in our inner cities is entirely derisory. The black and ethnic minority communities outside the House have taken note of how we are perceived as invisible by the Government. The document contains no mention of fair access to services and there is no serious mention of black business and enterprise. What will the Government do about black business and enterprise? What are they going to do about the well-documented problems that black and ethnic minority business people have about access to capital? What will they do to give practical help and support to black business enterprise? I see nothing in the glossy 32-page document about that.

Mr. Trippier
I am now convinced that the hon. Lady has not read the document carefully. If she had, she would have seen that as a result of changes made by the Department of Employment to the loan guarantee scheme, only in the 57 programme authorities, there has been an increase in the Government guarantee part of the small loans guarantee scheme which is a clear recognition of the problems facing many small businesses run by black people in getting loans from the bank. That is a specific measure designed to help those people. It is in the document.

Ms. Abbott
If the measure is specifically designed to help black and ethnic minority business men, why was it not spelt out in the document. Are you telling me—

Mr. Speaker
Order. I apologise for interrupting the hon. Lady, but she continues to use the word "you". That is me.

Ms. Abbott
I apologise, Mr. Speaker. If the measure is aimed specifically at black and ethnic minority business, why is that not spelt out in the document? This point seems to have got under the Minister's skin. The treatment and references to the black and ethnic minority community in the document are derisory and run contrary to the whole trend of inner city and urban policies of the past 20 years. That appears to reflect a complete lack of seriousness on the Government's part when it comes to inner city problems. Black and ethnic minority communities want to know what the Government will do about issues like contract compliance. What will the Government do to ensure that local jobs and local contracts go to local people including black and ethnic minority people? The Government cannot talk seriously about the problems in the inner cities unless the issues affecting black and ethnic minority people are addressed seriously. That is a gaping omission in the document. Conservative Members, especially the Minister, should be ashamed of themselves. The document was an insult to the House and the inner cities and a calculated insult to the black and ethnic minority communities who, inasmuch as the inner cities have flourished, developed and made money, have contributed to that. They deserve to be respected and treated properly. The document is also an insult to everyone with intelligence. We should get behind that glossy PR document, with its picture on page two of "Mama Doc" in soft focus—as my hon. Friend the Member for Newham, North-West (Mr. Banks) described it—and think just for a few minutes about the Government's real programme for the inner cities. In a sense, the document is irrelevant because, to find out the Government's real programme for the inner cities, one need only look to the city of Westminster, a local authority of which I have some experience because I was fortunate enough to serve as a member for four years. Conservative Members have told us about the Government's housing proposals about how they are designed to help the people of the inner cities and to introduce choice and about how the Government's new Housing Bill, with its housing action trusts, will help people in the inner cities. Hon. Members may not know what Westminster council does or know about its current housing policies — the kind of policies that the Government wish to introduce throughout the country with their housing action trusts. Westminster council is selling off between one third and one half of its council properties to anyone who can prove the most tenuous connection with the city of Westminster. That is what it is doing in an area where it has not housed anyone on the waiting list for many years and where house prices are so high that no person on an average income has access to housing on the private market. For the ordinary person, council housing offers the only hope of getting a home. The council is selling off its council houses to anyone with cash in hand. What are the council's proposals for the poor and homeless of the inner city? The answer is to build prefabricated housing on the outskirts of London. Westminster's housing policies for its poor and homeless  amount to bringing yuppies in and shipping the poor and homeless out. That is the reality of the Government's housing policy for the inner city. Buildings may be built and renovated, but the Government will not help people. To see the real face of this Government's initiative for the inner city one should look at Westminster's cemeteries. Burying the dead has been a basic function of local authorities since time immemorial, but such is the humanitarian and caring face of Conservative local authorities that there is the appalling spectacle of a local authority selling off three cemeteries for a total of 15p. That has been a disgraceful, squalid episode. Councillors have had to resign. The fraud squad has been brought in and Westminster council has been forced to try to buy the cemeteries back. We hear a lot from Conservative Members about the failings of local authorities. We want just one Conservative Member to condemn Westminster for peddling the dead. Westminster's actions have caused shock and outrage not just throughout Westminster but throughout London. The Government's policies do nothing for the poor of the inner cities and everything to line other people's pockets. Overall, the Government's policies focus on taking powers away from people through their local authorities and giving more power to central Government. They take as their theme the development of buildings and not the development of people. It has been said that the heart has gone out of the people of the inner city. To the extent that that is true, the reason for it is to be found in the way in which the Government have systematically drained money and resources away from the inner cities and stripped people's representative bodies — their local authorities — of powers. It has to do with the callousness and lack of concern that the Government have shown for the people of the inner city. What could be more symbolic of that callousness and lack of concern than this wholly superficial, cynical and calculating PR exercise, which will do not one jot of help poor people in my constituency of Hackney? It ignores many of the most pressing problems such as public transport and the problems of black and ethnic minorities. This PR exercise will do nothing for my people and I only hope that in the months and years to come the Government will put some real work into the inner cities.

9.51 pm

Mr. Harry Greenway  (Ealing, North)
If the hon. Member for Hackney, North and Stoke Newington (Ms. Abbott) would like to know how 18 Conservative Members stand on the question of the Finchley, Mill Hill and Hanwell cemeteries, perhaps she will look at early-day motion 737, which shows our determination to ensure that these cemeteries are properly looked after. A number of my former constituents are buried in Hanwell cemetery, and I am deeply concerned about its sale. I remind the hon. Lady, with respect, that in the winter of discontent of 1979, during the dying months of the Labour Government, the dead were left unburied, sometimes for weeks on end. What a terrible and wicked thing that was. No one in that Government seemed to care or to do much about the problem for a very long time. I congratulate the hon. Member for Ealing, Southall (Mr. Bidwell), my neighour, on securing this debate and on his choice of subject. If I cannot stay for the whole of the debate, it is because this very evening I shall be helping  a number of constituents to set up an enterprise in my constituency. I missed the hon. Gentleman's speech in the debate on rate capping because I had to attend two public meetings in my constituency — one seeking to raise £120,000 to keep a scout facility going, and the other concerned with traffic in the Perivale hospital area. I know a difficult area when I see one. I believe that Ealing council would do much better for our borough if it spoke positively about the area rather than in the depressing terms adopted by the hon. Member for Ealing, Southall this evening. I fought three general elections in east London, and I taught and lived in east London for a time. I know the area well. I also lived in a difficult part of Birmingham for a time, and I know that area well. I was deputy headmaster of a boy's school of 1,100 pupils in King's Cross. I taught there for 12 years before going on to Lewisham to a mixed school of 2,200 pupils. At the King's Cross comprehensive we had pupils of 65 nationalities, and in Lewisham we had pupils of 95 nationalities. I am very accustomed, therefore, to seeing people from many backgrounds, and I know the problems and opportunities that arise in such a situation. We all respect the hon. Member for Ealing, Southall, but when he talks in such a depressing manner about the borough of Ealing—as Ealing council does — I am prompted to say to him that he should talk up Ealing, as I always will. We have easy access to the M1, M25, M4 and M40, and a wonderful infrastructure of roads. We are near Heathrow and Gatwick airports. We have excellent rail and bus services. Ealing has all the infrastructure that any thriving community, or potentially thriving community, should look for. The hon. Member for Southall did not mention my constituency, where unemployment is 6 per cent. below the national average, and would have been a great deal better if we had not suffered the imposition of a 57·1 per cent. rate increase on our industry in the current financial year. In such an area, there is no limit to the growth that can be achieved by the enterprise of our own people. Ealing has a wonderful community of people, who are hard-working, industrious and determined. However, Ealing needs a council that will enable them to go ahead, because with that they would do so.

Mr. Bidwell
I do not want to be unkind to the hon. Gentleman, but he knows as well as I do that one of the most pressing problems that we meet in our local surgeries is housing. The situation is desperate throughout the borough of Ealing. It is all very well having easy access to motorways and the employment available at London airport, which these days is a major employer, but there is considerable misery and gross overcrowding in both the hon. Gentleman's constituency and mine. Those problems must be tackled. The Government have been in office for nine years, but what have they been doing for those nine years if they now need to introduce an innovation of this kind? Where have the Government been for nine years?

Mr. Greenway
I was coming to the very point that the hon. Gentleman has raised. It is kind of him not to be unkind to me, but he is not normally unkind to people, which is much appreciated. The hon. Gentleman raised the question of housing. I had every intention of saying some words about that. When the present administration in Ealing, which has been in office for nearly two years but is still pleased to call itself  "the new council", came into office in 1986, there were 30 families on the homeless families waiting list. One of the first things that the council did was to abolish residence points and to suck people on to the Ealing homeless list, from far and wide. Those people are given the same priority for access to housing as those who have lived locally all their lives and been born and bred in Ealing, or who have lived there for a considerable time. That fact causes tremendous local resentment, which I understand. We now have a homeless list of 1,000. Ealing is the soft touch of the country, and everybody knows it. Expenditure on homelessness has increased from £300,000 in 1986 to £14 million in the current year. Why does the hon. Gentleman not talk about that imposition? It was imposed by Ealing council on our borough. Why does he not talk about the difficulties presented by that for the local scene that must finance it? One could build on every blade of grass in the London borough of Ealing—indeed, I am not sure that the council would not like to do that—but that would not solve the problem caused by the number of people who are being attracted into the borough by that extraordinary policy of open house and, "Come here, whoever you are, and we will house you." Ealing council is seeking to build on 16 acres of superb playing fields at Cayton road in Greenford. That land is needed for pupils' recreation. People have to live, and they must have land. That policy is wrong; it is gross vandalism. There are 208 allotments left in Northolt, but Ealing council seeks to build on many of them. The people's way of life is being destroyed. Every year I go to different shows, such as flower and vegetable shows, at which all the produce comes from people's allotments. This way of life is important. If inner-city regeneration is to do anything, it must give people access to such land, not take it from them; otherwise, the people's way of life will be destroyed. Last Friday, after my long surgery, I took the chair at a spontaneous public meeting at the Hanwell community centre. The meeting was absolutely packed to the doors. Labour councillors attended and at times they were roundly attacked because they want to remove a complete lung from that community—in an already over-built area. We must have a rational approach towards housing policy. The miles of docklands and other similar areas are ideal places on which to build the necessary extra new housing. Suitable infrastructure could be provided so that people could travel to work. That is far better than building on every blade of grass in Ealing, the "queen of the suburbs." Housing policy is important, and I believe that the council should be much quicker in letting empty properties. The other week some people came to my surgery and told me that a flat down the road had been empty for 14 months. They have asked for that flat six times, but have been refused. That is terribly wrong. The hon. Member for Southall spoke of the need for more cash. Is he aware that on 26 February the council issued a job advertisement for part-time assistants for the gay and lesbian rights officer, at a salary of £8,000?

Mr. Paul Boateng  (Brent, South)
We had all that last night.

Mr. Greenway
It is no good running away from the facts—that council is still recruiting. The hon. Member for Southall spoke of 600 new council homes in Ealing. He did not mention that those  houses are part of housing developments that were established by the Conservative council under private enterprise. Those houses have now been taken over by a housing association scheme—250 of those homes are in my constituency. Such a scheme would now be illegal. The tenants will never have the right to buy, yet people cherish that right. The council has taken that right away, and that deals a massive blow to inner-city regeneration and people's sense of ambition.

Mr. Boateng
Rubbish.

Mr. Greenway
I have no doubt that the hon. Gentleman owns his own home. Why are other people to be denied that right? The council is spending millions of pounds a year on its own publicity. It regularly publishes a magazine called "Voices"; no one likes it, and it is full of Labour party propaganda. Currently, the council is sending out "Ealing Housing News". The Minister for Housing and Planning recently said that this paper would not pass the new code for truth that is being established. It is designed to put the shockers on every council tenant, and it is mendacious. No council tenant need cease to be a council tenant if he or she does not wish to do so, but that paper states the opposite. I note that the hon. Member for Brent, South (Mr. Boateng) is holding aloft the Government document "Action for Cities". Obviously he is trying to develop his muscles, and good for him. My hon. Friend the Member for Ealing, Acton (Sir G. Young) spoke about the delays that industrialists face when trying to get approval for new building schemes, but, he did not quantify that delay. Last week one of my constituents came to see me. He wants to build a new facility at his factory that will employ 100 people. His application will not see the light of day at the council for six months. He needs to get that planning approval within six weeks at the outside. The money is there, the jobs are there, and the work is there. What he needs is a council that will wake up and approve that plan. A council that increased the rates on the Lyons Group of companies by £600,000 in the current year cannot be surprised that between 60 and 70 people may become redundant as a result in the next few weeks. The group cannot put up its prices any more. Sales of its products are not increasing, so the extra rates will have to come from employment.

Mr. Fraser
The hon. Gentleman will know that Ealing's expenditure went up by about 20 per cent., but the result of the withdrawal of rate support grant exaggerated that increase to one of about 60 per cent. The Government were therefore responsible for 40 per cent. of that increase and the local authority for 20 per cent. Which does the hon. Gentleman condemn more—the Government, or the local authority?

Mr. Greenway
That is a totally false argument. The council deliberately increased industrial rates by 57·1 per cent. That put £450,000 on Taylor Woodrow's rates. To stand still, Taylor Woodrow has to generate another £15 million-worth of work. It will not make a penny out of that. It will not gain one extra job, but, to pay the rate increase, it will have to find an extra £15 million-worth of work from somewhere. The Labour party claims to care so much about the Health Service, as we have heard from the Leader of the Opposition, the right hon. Member for Islwyn (Mr. Kinnock), yet the council increased Ealing hospital's rates by £00B7;5 million. At the other end of the spectrum, a small company up the road from my office faced a rate increase of £5,000, which meant that one job out of five was lost. Rate increases cost jobs, and people concerned with the inner cities and partnership schemes must face that. An area will lose its resilience and its purchasing ability if the council increases ordinary people's rates by 65 per cent. If people have to pay their money to the town hall, they cannot make purchases from shops or factories to keep employment going.

Mr. Robert B. Jones  (Hertfordshire, West)
Does my hon. Friend agree that there is a correlation between the problems caused by rate increases in such places as Ealing and the fact that firms are driven out to the surrounding shire counties and cause problems by exerting pressure for development on green belt land, which leads to the overheating of local markets? Therefore, bad news for Ealing is bad news for other places, too.

Mr. Greenway
My hon. Friend makes his point very well. I had the foresight to initiate the Ealing enterprise agency. This is a superb institution, financed almost entirely by the private sector with a very small donation from Ealing council. It is an enterprise scheme at the centre of which is an individual who has a great understanding of industry and has handled several hundred inquiries in the two years since the agency was set up. My hon. Friend the Minister was central to that initiative. He took the trouble to come to Greenford to help me establish the agency. It has gone from strength to strength and, by now, thousands of jobs have been generated as a result. Without those jobs, the borough would look pretty sick, having suffered so much as a result of the council's actions. Finally, I warmly welcome the link between schools and industry. It is overdue and must be the way forward for more jobs and better motivated pupils. If pupils can leave school with a proper work ethic, generated by knowing what industry expects of them, and having seen that by visiting factories, they will be much better contributors to industry. That is a vital leg of the Government's excellent programme.

10.9 pm

Mr. Simon Hughes  (Southwark and Bermondsey)
The title of the now much-quoted document issued on Monday was "Action for Cities" but I fear, having read it, that it is action that risks communities—and that is how I would criticise it. People in my office have been through it today to see how many times local authorities are mentioned in it. They are mentioned four times. Page 5 says: "This does not mean leaving it all to the local authorities". That is a mention that merely excludes them. They are mentioned again on page 15, on which Tyne and Wear county council appears. Page 14 mentions them again in a negative way: "National land registers have been introduced by the Government to highlight unused land owned by local authorities and other public bodies." Lastly, they are mentioned on page 18 which refers to "Home Office demonstration projects", and lists a few places—Bolton, Croydon, North Tyneside, Swansea and Wellingborough—where the projects brought together "police, probation, local authorities, voluntary organisations and the private sector." Local authorities are not mentioned at all in the index. That is clear evidence of how local councils are ignored in "Action for Cities", and that is its first and major flaw. My second criticism is that the document confirms that local elected government is ignored, but unelected replacements proliferate. There are to be another development corporation, two more city action teams and other variations of those of a lesser type. So local government is excluded, quangos are increased and there is no mention of what we in London would welcome and have asked for for a long time—parish or community councils like those we used to have and which the rest of the country has. We regularly give the Government an opportunity to legislate to allow parish or community councils in London, but that opportunity has once again not been taken. If the Government really wanted to give power to local, natural communities, they could start to allow us that power by amending the law. I ask the Minister seriously to consider that. It would greatly help people to feel that they had power again instead of suffering from the exclusion of power which the document makes it clear is more likely. Not only hon. Members such as I criticise the document. It has not had a very good press. The Financial Times is hardly a Left-wing newspaper, yet it said: "On inspection," "Action for Cities" "turns out to be one of those cases in which the fatness of the prospectus is in inverse proportion to its contents… Taken as a whole, however, the package is shallow." The article ends with an important last paragraph: "Other Government policies, not counted in the inner city balance sheet are likely to do more damage to the immediate interests of many of the worst—off inhabitants of the inner cities than yesterday's measures are to do good. The new community charge or poll tax will be payable by every inhabitant, however poor; the maximum remission will be 80 per cent. The new social security regime, due to come into force at the end of the month, will leave some of those at the very bottom of the pile with less income than now. The new housing policies will lead to sharply increased rents accompanied by a ceiling on rebate expenditure. Some may be 'rescued from dependency' by the combination of such sticks and the 'Action for Cities' carrots, but many will become more dependent than ever." Ministers will have read Tuesday's comments in the press and will be aware that there was much other criticism. I shall quote one such criticism. It is about the Prime Minister going to her press conference accompanied by six Cabinet Ministers and rattling off the breakdown of the programmes. They totalled £3 billion and the Government claim that the money is already being spent. The press comment says: "at this point the sheen began to look scrappy. How much new money was there? She couldn't say. Why hadn't a figure been produced? Well, there was not much new money. It would all have to to be found within the existing public expenditure totals already announced,… Yes. Slowly, the Empress said farewell to most of the new clothes her advisers had provided." The "Action for Cities" was not all that it was heralded to be. It was not only the press which gave the document a hard time. In this building last night, the right hon. Member for Henley (Mr. Heseltine) made a widely reported speech and I should like to quote three of the headlines that the speech was given in today's press. One of them was, "Heseltine calls for more jobs". Another was, "Heseltine urges action on jobless", and a third headline says, "Heseltine accuses Ministers". I have the full speech which I copied in the Library and if there is any doubt I can confirm it verbatim. An article in The Independent says: "Michael Heseltine last night accused ministers of deceiving themselves and great number of the unemployed by holding out hope of significant improvement. He warned that if determined action was not taken, lawlessness and potential political violence could be added to the despair and intolerable human waste already generated by the problem." The press criticised the document, and the right hon. Member for Henley, who started working for the inner cities in the first of the three Conservative Governments, has within two days said that the serious problem of unemployment is not being seriously dealt with. The hon. Members for Newham, South (Mr. Spearing) and for Newham, North-West (Mr. Banks) will confirm that, if people living in the areas in which the Government have taken initiatives are asked about it, they will confirm that the Government plans are not working. The hon. Members for Newham, South and for Newham, North-West are in the Chamber and they and colleagues who represent London docklands constituencies attended the launch some days ago of a report from the London Docklands consultative committee. The facts in it are incontrovertible and have been accepted and confirmed. The facts and views in that report confirm that the people within the area of this pilot scheme for all inner-city renewals, the flagship for the Government's policies on inner cities, do not believe that it has been a substantial improvement for them. The evidence shows that in terms of new jobs, new opportunities, new homes and improvements, there is no great advantage for most people. Indeed, there is a deficit measured over the eight years of Government interest in London docklands. That is the evidence from all three of the boroughs that are affected. As the hon. Member for Norwood (Mr. Fraser) said, one can put glass and concrete buildings on derelict land and bring jobs from elsewhere to a new and better site, but that does not necessarily generate community spirit, community activity or enterprise or true community regeneration.

Mr. Spearing
I endorse the hon. Gentleman's remarks 100 per cent. Is he aware that this afternoon, in a Select Committee on a matter which I shall not mention relating to this area, a witness said in his acute summing up that most of the people feel that there is a party going on next door but that they are not invited and are not part of it?

Mr. Hughes
That does not surprise me. It is what my constituents tell me all the time. They self-evidently manifest the fact that the opportunities are open for those who have money, but for those who do not have money the opportunities are not open. The Minister should talk seriously to people in the inner city in my part of the world about the issues that really matter to them. If I gave hire a list of what they would say, it would show that they are all critical of Government policy. About education they would say in London that the Government are proposing to destroy something that, although far from perfect, none the less gives many  advantages: special education, adult education and commitment to special needs in a multiracial and multicultural capital city. They would say about employment that all the promises of last year about employing local labour have so far come to nothing. The legislation that we have just been dealing with in Committee and last night finished dealing with in the House positively precludes local labour from being advantaged in terms of employment in the inner city. They would say that finance is being reduced, not increased, in real terms for the local authorities in the inner cities with the hardest problems and the greatest stress. They would confirm that there have been real cuts in the Health Service—and I mean real cuts, in real terms, in cash—for districts such as Lewisham, north Southwark and Camberwell, which have led nurses who have never been on strike before to take to the streets with patients and others. They would confirm that social security which they desperately need is about to be taken away and that social services which they desperately need are no longer going to he available. I want to mention something that was excluded and that I hope that the Minister will consider again. The voluntary sector should be one of the key partners with local authorities in the inner city and its regeneration. People who are willing to contribute voluntary effort and who have the experience to do so should be invited to the table, not kept outside the door. Only this week, the Archbishop of Canterbury's advisory committee on urban priority areas, planning for the launch of the Church urban fund next month, made it quite clear that its members want, in all local, district and borough areas, on behalf of Churches of all denominations, to invite the leaders of public authorities to join them in a dialogue on how best to help the communities which they serve. The Government seem to believe, unlike 100 years ago, when city and local councils were regarded as vital to regeneration, that now they know all the answers and have all the solutions. The tragedy is that they will not be lasting solutions or proper answers unless the people and their representatives are listened to, their needs are registered and their representatives are involved all the time in the partnership in solving them.

10.23 pm

Mr. Paul Boateng  (Brent, South)
In some ways, the less said about "Action for Cities" the better. It is a high-colour gloss on the truth. Its hallmarks are hype and hypocrisy. It is a shameless deceit. What we need to talk about is the opportunity missed on Monday. The Government had an opportunity to say something that might have sparked some hope in the inner cities. They had the opportunity to make an announcement that would really have opened doors for people of all races in the inner city, and for the poor, those on the verge of poverty seeking a way up and people trapped in a nightmare world in which no sooner has one door opened for them than another is shut. The Government might on Monday have given those people a ray of hope. Instead, they chose the other way; they chose a way characterised by a complete inability to grasp the challenge of the inner cities. The challenge of the inner cities is, first and foremost, one of investment — investment in the infrastructure, investment in industry, investment in people. What we want in the inner cities is investment, not high-gloss brochures. The borough in which my constituency is situated is the eighth most deprived borough in Britain. Unemployment in my constituency has risen by 273 per cent. since 1979. When I consider that rise, I know, and Conservative Members must know, that the only way forward is investment. We looked for investment from the Government on Monday, but we did not get it.

Mr. Keith Mans  (Wyre)
Will the hon. Gentleman say what has happened to the rate of unemployment in his constituency in the past year?

Mr. Boateng
I have no hesitation whatsoever in sharing with the House what has happened to the rate of unemployment in my constituency over the past year; it has gone up, particularly on the inner-city housing estates. The hon. Member for Wolverhampton, North-East (Mrs. Hicks) rightly highlighted that as a major problem which must be tackled by the Government, but which so far has not been. Unemployment has gone up on those inner-city estates, particularly among black people between the ages of 16 and 25. It is a problem that exists throughout the community, black and white, but it is felt particularly by young black inhabitants of inner city estates. That is what has happened in my constituency over the past year. Only investment, not glossy brochures, will tackle that problem. I should like to raise with the Minister a number of specific problems that we face in Brent, but which I am sure are shared elsewhere up and down the country. First and foremost is infrastructure. The hon. Member for Wolverhampton, North-East rightly mentioned housing. Last year the Government allowed Brent to spend £22·2 million on council house repairs. The amount needed was £146 million. Are Conservative Members surprised that there is hopelessness, vandalism, isolation and bitterness on those housing estates? The housing needs of our people are not being met. It is not only people living on council estates who are suffering. Many owner-occupiers in my constituency, some of whom are old or unemployed, are experiencing increasing difficulty in meeting their mortgage repayments. They are finding it increasingly difficult—this applies particularly to older residents who rely on a fixed income—to afford repairs to their houses. What response did the Government give to that? None. The infrastructure is under strain, but the Government are doing nothing to ameliorate the problem. There are opportunities for the creation of investment and jobs on estates such as Stonebridge, if only the Government would give us the money to do it. We need to be using local people to do work locally because they have a stake in the estates on which they live. It is much better to use local people than to have to contract out to people from the outskirts of the cities who do not know the area, do not know the problems or challenges and are unable to rise to them. What was the Government's response to those problems? It was to make it much more difficult, through the Local Government Bill, for authorities to hire local labour. Conservative Members should understand that that simply is not good enough. We ask the Government to address the issue of the infrastructure of our inner cities.

Mrs. Hicks
rose—

Mr. Boateng
I shall give way in good time. With regard to infrastructure — I hope that the Minister will listen—we have a particular problem in Harlesden in my constituency of which he is aware. He knows about it because a group of residents and employers there have written to him and his Department on numerous occasions asking exactly what is to happen to the centre of Harlesden and the development proposals for that area that have been with his Department for many years. I pay tribute to the local small business men, the larger enterprises, Woolworth, the building societies, the banks and local residents who are involved in the Harlesden Centre Group. They have no axe to grind, but a stake in the prosperity of the centre of Harlesden. They have asked year after year for a response from the Department of the Environment to the proposals that have been put forward by the local council and by a consortium of public and private money. I can tell the Under-Secretary of State for the Environment that they mean business. We look to the Department of the Environment for an early answer to their problems. We also look to the Department of the Environment to answer letters more quickly. Those residents and business people are still waiting for answers to their letters. They meet on cold winter nights upstairs on the second floor of Woolworths and they ask questions, collect signatures and attempt to see the Minister. They invite him to look at the problems in Harlesden, but answer get they none. They are entitled to better. When, within the next month, I go to the next meeting of the Harlesden Centre Group, am I to show them "Action for Cities"? What comfort will it bring those men and women? They want public and private investment. That group of people—local residents, local ratepayers, local taxpayers and local business people—have had no response from the Government. This document and Monday's announcement represent a deceit. The Government are not addressing the real problems of the inner cities.

Mr. Trippier
I am not trying to be clever, but when the hon. Member for Brent, South (Mr. Boateng) looks at Hansard tomorrow or on Monday he may be surprised to discover that he has not explained to the House what these people are asking. It may well be that one of my colleagues within the Department is dealing with the matter, but I am not absolutely clear about what they are asking.

Mr. Boateng
They are asking for an answer to their last letter to the Minister. They are asking simply when the Department of the Environment will release the money that the council is currently awaiting to enable that development to start. That is what they are asking for. I had imagined that because the Minister has received numerous letters to that effect from the Harlesden Centre group and, only a couple of months ago he received a letter from me, he would have been aware of the issues in Harlesden.

Mr. Trippier
The hon. Gentleman specifically referred to me. That is not correct. I am not the Minister for Local Government.

Mr. Boateng
With due respect, I know exactly to whom I am referring. In my office I have a letter signed  by the Minister specifically in response to a letter that I sent him about the problems of the Harlesden Centre Group. When the Minister looks at Hansard tomorrow, or more importantly, when he looks in his own filing cabinet, he will find that that issue has been raised with him by the people of Harlesden time and again. We want an answer. I hope that tonight the Minister will give an undertaking to seek an answer to my question. Aware of the onward march of time, I should like to examine two other issues. The first is investment in industry. A local borough such as Brent does not have the resources of the GLC or of central Government that will enable it to bring about the industrial rejuvenation that it really wants in industrial estates such as the Park Royal estate. I am glad that the hon. Member for Ealing, Acton (Sir G. Young) is present, because many of his constituents seek work or have work on that estate and have a vested interest in its future. We want Government support for the kind of initiatives that the London boroughs of Ealing and Brent are seeking to develop together for such estates. That proposal has its origins not in any sectarian alliance but in a bipartisan approach to industrial rejuvenation, of the kind that existed between Ealing and Brent for many years.

Sir George Young
Perhaps we can build tonight on the partnership between Ealing and Brent. Is the hon. Gentleman aware that in his constituency Guinness wished to expand and to provide more jobs by developing its car park but that the London borough of Brent is trying to place a compulsory purchase order on it for a gipsy site? How will that provide new jobs?

Mr. Boateng
I am well aware of what has happened, and I welcome the hon. Gentleman's interest. I hope that he will join me in ensuring that the Department of the Environment does everything in its power to facilitate the creation of proper sites in London for gipsies and that he will join me in ensuring that Guinness and other local employers have sufficient land available to them when expansion is able to take place. I have heard and seen nothing connected with the debate about the Guinness site that the creation of a gipsy site there would impair in any way. That is not the issue, as I fancy the hon. Gentleman well knows, in relation to the borough's proposals for that land, which has lain fallow for many years. I, too, should like it to be used for socially and commercially useful purposes. It ought to be possible to achieve genuine consensus rather than mischievous political points over the development of the Park Royal industrial estate. We need the Government to say that money will be forthcoming for the work that must be done there to create roads and factory sites, if new companies and new jobs are to be attracted to the area. Is the Minister willing to discuss with the London boroughs of Brent and Ealing how the Park Royal industrial estate might be further developed by building on the engineering and food industries that are already there and making it into a place of growth, hope and prosperity? Two Labour-controlled councils are willing to work with the Department of the Environment. We must also invest in people. We have seen in the glossy document "Action for Cities" pretty pictures of people, but there is no recognition of the fact that economic growth needs to be generated. The hon. Member for Acton referred to economic growth and to the new  climate of prosperity, but it rang hollow in my ears. Even where there is growth and development, Conservative Members must realise that the inner cities lack people with specific skills. On Tuesday last I visited a factory in my constituency that is owned by Heinz, and I spoke to the senior management. It is seeking to shed labour, but at the same time it is seeking to increase productivity and capital investment in that plant. Tens of millions of pounds are to be invested there, but the company is having to import skills from outside London because they cannot be found in London. The London Docklands development corporation is much vaunted in this glossy document, but when one looks further one finds that none of the £400 million that has been pumped into docklands is earmarked for training. There is a mismatch of skills which is addressed nowhere in the document. Before we hear the trumpeting of promise and success for the Government's inner-city proposals, let us have some content. In the United States, they are asking about one of the candidates, "Where's the beef?" That is what we are asking about this document. When we have the answer, perhaps we, too, will bring out the trumpets—but that will not be for a long time yet.

Several hon. Members
rose—

Mr. Speaker
Order. I understand that the first Front Bench speaker will seek to rise at 11.15 pm. Three hon. Gentlemen have been sitting for most of the time during this debate. Would they divide the time equally between them?

10.40 pm

Mr. Nigel Spearing  (Newham, South)
The truth of the debate was revealed by the non-reply that the hon. Member for Wolverhampton, North-East (Mrs. Hicks) did not give to my intervention in her speech—with a great deal of which I would agree. That was the challenge that it was the intention of the Government, through legislation going through the House, to increase not only the cost of land but the general level of rents. That will clearly be to the disadvantage of the inner cities and all who live in them. Much of this glossy document describes what I regard as a conduit for capital. The Minister dissented when I informed my hon. Friend the Member for Hackney, North and Stoke Newington (Ms. Abbott) that even this glossy, although available to the press, would not have been available to the House but for the action of an hon. Member. I can assure the Minister that I know more about the matter than he does, because when I attempted to get the glossy from the Vote Office last Monday, I was informed that it was not available. On further inquiry, however, I was told that the Vote Office had contacted the Minister's Department and would endeavour to deliver it by 3 pm. I was also told that, but for my questioning, the Vote Office would not have known of the document's existence. For once, I think that the Minister can take it that the Government's PR apparatus failed dismally in not permitting Members of Parliament to see it. Perhaps after tonight we shall be able to say, "No wonder." Perhaps the Government had something to hide. One of the things that they hid was the Prime Minister. In her opening words at the press conference, which will go into the annals and the history books, she said that she wished to encourage civic pride in Britain: that, from someone who destroyed the Greater London council almost single handed, and who wishes to take away some of the civic powers of the cities of Leeds and Sheffield in extending the urban development corporations. Civic pride — a subject to which I shall return — is something with which we should all be able to agree, and which we should all have. We should cherish and enhance the civic amenities and commonly owned civic facilities which alone make life inside the inner city tolerable and even fruitful. The problem is that the present Government are doing the opposite. I challenged the Minister on Monday about the London Docklands development corporation. Before it came along, he said, there had been trivial developments. Not so. Lord Rippon, when he instituted the docklands joint committee, set up a co-operative structure of local authorities that put together packages of programmes. I have here "The Years of Growth", the London joint committee operational programme. In the back of the document, we find a host of developments, including the London docklands strategic plan and the Beckton development plan, adopted by the London borough of Newham and now nearing completion. In addition, that document set out many civic facilities. It mentioned the East Beckton primary health care premises in my constituency. That document was published 10 years ago. Those premises in Tollgate road, Beckton, were opened by Lady Shearman, the retiring chairman of the Newham district health authority, at midday yesterday. It has taken 10 years, but we have now got it. It should have been funded entirely by the Newham health authority. In fact, it has had to rely on some funding from the LDDC. That is the wrong way round. Why should not the health authority in some cases, and the borough in the case of education, provide full funding? We look with distrust upon the LDDC, particularly in the light of the spectacular resignations that have occurred recently and the letter from the auditors, Robson Rhodes, on aspects of consultancy contracts and the way in which the board was unaware of certain things that were going on. Recently, I asked the Secretary of State how the LDDC was going to respond to that letter, and he said that the matter was still under consideration. Indeed, the Public Accounts Committee may, as we know, be receiving a report from the Comptroller and Auditor General about the LDDC. Therefore, it would be wiser to await that report before extending the principle of the UDCs to other areas. As a visiting Austrian said recently when interviewing me, "It strikes me that we have a colonial situation here. They are coming on you like a colonial power." I could only agree. My hon. Friend the Member for Newham, North-East (Mr. Leighton), in the Adjournment debate tomorrow, will refer to some of the needs of our borough, but I wish to use the second part of my time to talk about the Health Service in Newham. I have already said that it is not entirely funded, as it should be, by the district health authority, and we have to rely on the munificence and patronage of the LDDC for proper facilities. After visiting the health centre yesterday, I went to the local district and general hospital, where some nurses and auxiliary workers had been busy collecting signatures from  passers-by in an effort to obtain proper facilities for that hospital and for the NHS in Newham. I have the 17 pages of signatures in my hand, given by over 200 passers-by in less than an hour. Newham is an inner-city area. Our in-patient numbers have risen by 8·5 per cent. since 1982, out-patients by 5·4 per cent., elderly day patients by 24 per cent. and maternity in-patients by 30 per cent. Cost-efficiency savings have been computed and agreed by the RHA and DHSS as £5 million between 1982 and 1987. Next year, depending on whether the Chancellor coughs up for pay, our income will go down by between 1·5 per cent. and 3·5 per cent. as our needs go up. That is being done by a Prime Minister who, in commending a package which she claims was part of her election mandate, dared not face the House. She dared not face the House with this inner-city package because she knew that it was essentially a fraud, just like her policy for health. I said that I would emphasise the civic pride which the Prime Minister emphasised at the beginning of her press conference on Monday. Civic pride concerns not just our local community, Newham—important though that is— the nation, or even Westminster perhaps. It is something larger. The vast majority of people look upon themselves as members of the Health Service. Civic pride will enable people to obtain the services for which they have paid and which are their due. At the moment, too few are doing too much for too many for too little in the Health Service. I was torn by the descriptions given by the staff of Newham hospital yesterday of the feeling of anguish they have in not being able to provide what they know is necessary, because there are not enough staff. The dedication of those people who stay in low-paid jobs is beyond all praise. I received a letter not long ago from a person who works in the blood transfusion service. There can hardly be a greater emergency service than that. The people who work in that service are outside the usual pay negotiations for scientific staff and are working hard to keep the service going, but only just. The Government have taken Newham's land through the UDCs and are not providing the wherewithal for Newham to supply a blood transfusion service for those in need. Through the legislation before us and through the Housing Action Trust, the Government may well take our homes as well.

10.51 pm

Mr. Tony Banks  (Newham, North-West)
I should like to be fair to the Government and to the Minister and say that the Government have not been responsible for creating all the problems of the inner cities; just most of them. Certainly the Government have been responsible for exacerbating all of them. I do not see how the Minister can pretend that taking some £20 million in rate support grant from the inner cities and £7 billion in rate support grant from London, as well as doubling unemployment and poverty since 1979 have nothing whatsoever to do with the problems of the inner cities. That is where the problems of the inner cities are most deeply rooted. As my hon. Friends have said, one cannot solve problems merely by throwing money at them, but taking away funds and resources as the Government have done  has made the problem much worse, so the crisis of the inner cities is essentially created by the policies of the Government. The Prime Minister has made great play of the inner cities because they have become a fashionable subject, rather like her campaign to clean up Britain. She appointed Mr. Branson as the overlord for clearing up the litter, but we do not know what has happened to that initiative. She also chaired the working party to deal with football hooliganism, because it was fashionable at the time. She takes up those things, then throws them down as it suits her. The inner-cities initiative has been full of nonsense, hype and glossy documentation. The Prime Minister, sitting there flanked by six Members pretending to be Cabinet Ministers, all nodding away as she clucks around them, is lamentable and pathetic, but it is typical of the attitude and style of the Government. I have looked at the document "Action for Cities". We keep hearing from Conservative Members that local authorities should co-operate. I have already said that some members of the Association of London Authorities went to the Department of the Environment and wanted to do a deal with the Secretary of State for the Environment. My God, that must have stuck in their throats, but the Minister was not prepared to accept, and they were thrown out of his office. He said that he was not interested, because the Government are not interested in a partnership with Labour local authorities. The document "Action for Cities" has a picture of the agricultural hall in Islington. This is all trumped up. There is not one mention of the fact that Islington was able to get this going by co-operation and funding. There is no mention of Islington, because the Prime Minister and Ministers cannot bear to mention that one Labour local authority is prepared to co-operate and to work in partnership with private enterprise. That level of small-mindedness is appalling. So when one hears the hon. Member for Henley (Mr. Heseltine) talking about the crisis and conflict to come in the inner cities, at least on this occasion we can join hands with him and say that we are in agreement. Yes, there will be problems in the inner cities. There is the possibility that there may be civil commotion in the inner cities. All the glossy pamphlets in the world will not avert that crisis. I can think of one very useful thing to do with this glossy pamphlet — that is, add it to a large bonfire. Frankly, that is all it is worth. The Government's inner-city policies so far have involved taking resources from local authorities. They have then attacked the authorities in a most vile fashion, assisted by the rabid right-wing Tory press. They have removed the authorities' functions and handed them over to unelected, unaccountable quangos made up of Tory business men who take decisions behind closed doors, unaccountable to the public whom they are supposed to support and whom they are supposed to be looking after. They are totally unaccountable to Parliament as well, because the Minister simply will not answer questions. In the few minutes that I have left I want to say a few words about the London borough of Newham. We can be sure that the three hon. Members who represent Newham will never allow the case for Newham to pass by default. We make no apologies for continually bringing to the  attention of Ministers and the House the problems that we face in the second most deprived local authority area in the country. I want to show the Minister a very good document—one that is much better than the hyped glossy that the Prime Minister launched the other day. It is called "A Fair Deal for Newham" and a copy is winging its way to the Minister at this very moment. I hope that he will look at it. It even includes some graphs. Any Tory Member who wants to discover how unemployment has affected the London borough of Newham since 1979 need only look at a graph to see how dramatically it has risen. Indeed, it has risen even more dramatically than the wave on the Minister's head. There has been a dramatic increase in unemployment in the London borough of Newham and that has brought all the usual problems. Capital allocations are a great problem for Newham. They have plummeted in real terms. The housing investment programme allocation dropped from £47 million in 1979–80 to £17 million this year. Most other allocations have dropped by a similar degree. As a result, the urban fabric in our borough is crumbling. There are still many Victorian schools in the borough. Twenty-three of Newham's 62 primary schools were built before the first world war, and some still have outside toilets. There are 108 tower blocks in the borough. A Conservative Member referred to tower blocks. The tower blocks in Newham are appalling places for people to live. I do not blame the Government for the fact that the tower blocks were built, but they are there and we do not have the resources to deal with the problems that they create. The problem of housing in the inner cities is reaching a crisis point equivalent to that in the National Health Service, and it deserves the same level of parliamentary attention that is given to the Health Service. Let me tell the Minister about homelessness in Newham. Housing the homeless is an inescapable statutory obligation, as the Minister is aware. However, the costs have soared in my borough. In 1983–84, we spent £52,000 on bed-and-breakfast charges. In 1984–85, that had risen to £138,000. In 1985–86, it had risen to £605,000, and in 1986–87 it rose to £1·9 million. The projected figure for 1987–88 is £5·4 million. How does the Minister think that we can deal with the problems in the London borough of Newham when charges for bed-and-breakfast accommodation have risen from £52,000 in 1983 to £5·4 million? Next year, the figure is expected to be about £8 million. However, the Government do not take homelessness levels into account when determining the council's block grant. That is a shameful scandal that "something should be done about", as we say in this House so often. I want to refer to the revenue expenditure needed to compensate for past penalties. Newham's revenue support from the Government has dropped substantially, despite the fact that the Minister and the Department of the Environment have acknowledged the levels of need in the borough and recognise Newham's position as the second most deprived area in England and Wales. Newham's block grant dropped from 60 per cent. of revenue expenditure in 1985–86 to under 46 per cent. in 1987–88. Although the Minister is not responsible for that, because it is an environment matter, it has a knock-on effect in the inner city. It is impossible to say that reducing rate support from about 60 per cent. to 46 per cent. has no impact on jobs, services and facilities in the inner city. The council is trying to construct a balanced budget for 1988–89, limiting rate rises to an absolute minimum, but the effect of the soaring cost of homelessness, which I mentioned, means that real cuts will be imposed in nearly all service areas. Newham borough council has adopted throughout a responsible approach to regeneration. It is reaching major agreements with the London Docklands development corporation on ways of achieving revitalisation of the area, and it is ready and willing to work with the private sector to boost the local economy and help to create new jobs. The council's essential capital spending in docklands means that we are having to ignore the remainder of Newham where the worst inner-city problems exist. The investment currently made in docklands by Newham and the LDDC needs to be matched across the borough, and at the moment we simply do not have the resources to do that. I warn the House that Newham is in danger of becoming a divided society, with docklands taking all the resources, while the rest of the borough is even more deprived of investment. We must avoid turning Newham into a divided community. That is the essential problem that we face in our borough. I hope that the Minister will take these problems seriously. We want a partnership with Government, but we have the feeling that there is so much vile opposition to Labour local authorities and so much hatred from the Conservative Benches towards authorities such as mine that this plea will fall on deaf ears. If it does, the responsibility for the chaos and the aggravation that will follow will rest entirely with the Government and the Minister.

11.1 pm

Mr. Hugo Summerson  (Walthamstow)
It is a great pleasure to follow the hon. Member for Newham, North-West (Mr. Banks). I do not admire the content of his speeches, but I admire the delivery. I should like to pick him up on some of his comments. The hon. Gentleman mentioned the royal agricultural hall in Islington. I have lived in Islington for the past 11 or so years, and I know that Islington council bought the hall in, I think, 1974. Why it did so no one knows, including I suspect, Islington council. Had the council been going to do something with the hall we could have understood that action, but the council did nothing, let it deteriorate and the hall became worse. All the time the ratepayers had to pay interest charges. The hon. Gentleman tries to give credit to Islington council for what it did with the royal agricultural hall. There should be no credit to the council, but a lot of credit to the Government, who made urban development grant available to the business men who ultimately took over and developed the hall. It is entirely due to the Government and to that private enterprise that the royal agricultural hall is thriving. The hon. Gentleman also mentioned quangos. He spoke in emotional terms about operating behind locked doors. It might interest the hon. Gentleman to know that my local Labour-controlled council had a meeting of its finance committee the other day, and the first item on the  agenda was a motion to exclude the press and the public. There is another example of a Labour council operating behind closed doors.

Ms. Abbott
If the hon. Gentleman were knowledgeable about local authorities, he would be aware that it is usual for finance committees to exclude the press and the public when they discuss matters to do with contracts and other confidential matters.

Mr. Summerson
If the hon. Lady could see the way in which my Labour council runs its affairs, it would not surprise her in the slightest that it wants to exclude the public. I am glad to see the hon. Lady here, because I pass through her constituency on the way to mine. I get on my bicycle and pedal through Stoke Newington. I give the hon. Lady a warning: Stoke Newington is getting more prosperous. She should see the danger signs. Front doors are being painted. New cars are appearing on the streets. The worst sign of all for the hon. Lady—she will not like this — is that there is a delicatessen in Stoke Newington. It may be a truism to talk about buildings in the inner cities. Of course, there are buildings in Regent's park, which one might call the inner city, and splendid buildings they are, too. They look splendid, but they were all badly built and have had to be renovated. No building is permanent. If we want to keep buildings in good condition, they must be maintained constantly. I agree with what the hon. Member for Newham, North-West said about tower blocks. Some system-built tower blocks in my constituency are falling to bits. I am convinced that they breed crime, vandalism and despair. They are sinks, and they should never have been built, but they are classic examples of what happens when those in power—I make no party political point on this—believe that something will be good for people. They impose those things on people. It was a fashionable idea at the time, but Le Corbusier has done more harm to people in Europe and in America than almost anyone else. I am sure that he and everyone involved in building those tower blocks had good intentions. We heard all the nonsense about streets in the sky and cities in the air, but they did not have to live in them. One of my great ambitions is to see those tower blocks come down. I have no doubt that the Labour Government passed the Housing (Homeless Persons) Act 1977 with the best of intentions, but it has been a disaster. If a council has a duty to house homeless people, people will make themselves homeless. That adds terribly to the problems of a mature city, as London is. It is all very well for Labour Members to say that we need more money to build more houses, but where will they build those houses? We cannot build them in parks and open spaces. We cannot cover London's green lungs with buildings. Those open spaces are what make London a partly civilised city. Waltham Forest council has calculated that it would have to cover Wanstead Flats—an area of 140 acres—with bricks and mortar to house everyone on the waiting list. That is simply not possible. Another factor is the divorce rate, which is increasing by leaps and bounds. It means that there are more households and more people looking for somewhere to live. The problem is becoming worse. If we make it easy  for people to get divorced, and if we put it in statute that local authorities must house homeless people, there are bound to be more homeless people. Infrastructure is badly needed in many inner cities. Infrastructure is the catalyst for new development and for bringing inner cities to life. Local authorities should look at this in a positive way. Instead, I am sorry to say, too many of them have acted in a negative way and imposed massive rate increases. We have heard much about rate increases. In my own borough, there was a rate increase of 62 per cent. last year. The biggest local employer in my constituency tells me that it has had to increase its turnover by about £2 million to generate the increased profit purely to pay its extra rates bill. My local hospital has had to find an extra £250,000 a year in rates. Merely soaking local people by increasing rates goes nowhere towards solving the problems. The problems of the inner cities are multifarious and diverse. They have been with us for many years. I hope that the Government can work in a positive way, in harmony with local authorities—I should like to see that happen—but local authorities must change their attitudes. I hope that the Government will motivate and inspire local people and perhaps — who knows? — through them the local authorities; and then the inner cities will be made better for us and for future generations.

11.12 pm

Mr. Roland Boyes  (Houghton and Washington)
I congratulate my hon. Friend the Member for Ealing, Southall (Mr. Bidwell) on being fortunate in the ballot and on his choice of subject, which is both topical and timely. A great deal has been said this week about the Government's "Action for Cities" and Mrs. Thatcher's post-election flagship. We had been led to expect a cruise liner at least, but all that we had was the Prime Minister and half the Cabinet in the same old leaky rowing boat. Yet again the Tories are trying to persuade us that the private sector and the Government alone can cure the ills of the inner cities, and they are using this dogma as an excuse to destroy local government. Since 1979, almost 50 Acts have been passed that affect local government and diminish its powers, and that has gone hand in hand with the rubbishing of its activities in many sections of the gutter press—or perhaps I should say in the press, because it is sometimes difficult to differentiate between the Murdoch papers. There has been a persistent and deliberate withdrawal of local authority finances, amounting to a net loss of £8 billion from inner-city authorities alone. "Action for Cities" gets 10 out of 10 for presentation, but zero for content. I am not alone in saying that, because the Financial Times in its editorial of 8 March, under the heading "Flawed plan for inner cities", said: "On inspection, this turns out to be one of those cases in which the fatness of the prospectus is in inverse proportion to its contents." Even the Evening Standard was not satisfied when it said in its editorial: "Our rundown inner cities can be made competitive and entrepreneurial again — but it requires a greater Government commitment than we have seen so far." This is a public relations exercise rather than a White Paper, which suggests that there is simply not enough Government policy to fill one. The bottom line is that  there will be almost no new cash. Instead of providing much-needed strategic public investment and the proper co-operation with local authorities that is needed to breathe new life into our inner cities, the Government have given us a collection of so-called solutions, all of which are based on the mythical power of private sector money. These solutions range from the trickery of streamlining grants by simply changing their names, to the Chancellor of the Duchy of Lancaster's breakfasts, which have become a joke before they have started. We are all too aware of Mrs. Thatcher's fervent desire to win votes in the inner cities. There are few Conservative constituencies in the targeted urban development corporation areas. The Government's cheap jibes at inner-city Labour local authorities and the repression of their activities at the expense of concerted urban renewal betray this electoral motive. On 8 March the Financial Times said: "Taken as a whole, however, the package is shallow. The principal reason for its shallowness is ideological. The Goverment has a profound distaste for local authorities." "Action for Cities" is simply part of the longest-running and most expensive election campaign—paid for by the taxpayers—that this country has ever seen. On a more sinister note, if the Prime Minister does not succeed in changing the electoral complexion of inner-city areas, we should remember what happened to the GLC and the metropolitan counties in 1985. The Government's continuing and calculated undermining of local authority efforts to generate jobs, industry and services, and their blind faith in the private sector—cash winkled out of some of their best supporters—are appalling mistakes that are likely to exacerbate many of the problems associated with the inner cities. Only yesterday the right hon. Member for Henley (Mr. Heseltine)—no longer Mrs. Thatcher's golden boy—

Madam Deputy Speaker (Miss Betty Boothroyd)
Order. That is the third time in two minutes that the hon. Gentleman has referred to the Prime Minister in that way.

Mr. Boyes
He is no longer the right hon. Lady's golden boy. The right hon. Gentleman recommended that the Government should provide at least £500 million more for the urban programme as that would increase inner-city employment and prevent social disorder. On 10 March, Today, under the headline "Jobless will riot, warns Heseltine", said: "Tory rebel Michael Heseltine last night warned of full-scale riots unless unemployment was drastically reduced. Even two million jobless will still mean too many families `deprived, underprivileged and firmly enmeshed in an environment of hopelessness, as they are today.' That would lead to 'possibly explosive' anger which could erupt on the streets in a few years' time, claimed Mr. Heseltine." It is vital for inner-city regeneration that co-operation is established between central Government, local authorities, the private sector and local communities, and for them all to be involved in the decision-making process for an integrated, strategic programme. That would result in the achievement of real, meaningful success. The goals to be attained must be set by local authorities for the good of the community and not be determined by the profit motive. A couple of days ago, an article in The Daily Telegraph about potential investing companies said: "at the end of the day they have a responsibility to their shareholders as well as to the community and should not allow the charity element to overshadow the case for profitable investment." I am sure that the residents of our inner cities, many of them unemployed, poor, homeless, disabled and old, living in what the right hon. Member for Henley described as, "an environment of hopelessness" will appreciate being considered a "charity element" in inner-city regeneration. If "Action for Cities" is the compassionate face of Thatcherism, I hope that we never see it in vindictive mood. It is certain that market forces, left to their own devices, will repeat the errors of the 1960s and put bricks and mortar, property and land values, before people and communities. Only democratically elected local authorities can exercise the appropriate sensitivity to the needs and aspirations of communities that is necessary for successful urban renewal. The Government's main tool for encouraging private sector money into the inner cities is the urban development corporation. "Action for Cities" imposes another UDC on another local authority—Don Valley in Sheffield. These corporations are funded by cash controlled by Whitehall. They are undemocratic and unrepresentative and can operate outside the democratically determined objectives of local authorities. The London Docklands development corporation is an example of that major failing. It is a concentration of private affluence, surrounded by public squalor, yet it is heralded as the Government's biggest success story. In his speech yesterday, the right hon. Member for Henley said: "Children are growing up in the pincer grip of their own deprivation but live just a stone's throw away from a more affluent society whose benefits they see but cannot share". Local authorities will of course continue to work with urban development corporations. They have little choice but to do so when there is money available, and the examples of Cardiff Bay, Teesside and Tyne and Wear urban development corporations show just how local authorities have felt compelled to be involved in UDC work, even though many of the UDC ideas came originally from the localities, and councils could complete the job themselves, given the cash. The Government's policy is totally inflexible. A Coopers and Lybrand report specifically recommended that there should not be a UDC in Sheffield, yet this week's proposals sees one imposed. It is therefore difficult to see the UDC as other than an element in the struggle against local authorities. UDCs can work only in a very limited sense. They suck resources, public and private, into a demarcated zone, while the surrounding area is starved of capital. They cannot achieve the regeneration of the inner city, never mind the whole city. We have recently seen the introduction of the mini-UDC, as yet an unknown quantity. Large amounts of cash will be pumped into relatively tiny areas. Clearly, as well as assisting the regeneration of small areas, they have an important political role to play. So far, the Government have made attacks on Labour-controlled local authorities the main focus of their inner-cities policy. It is, however, unquestionably spiteful and divisive to starve local Labour authorities of resources and then complain that they are incapable of doing a job properly themselves. Tory councils can act irresponsibly too, as my hon. Friend the Member for Hackney, North and Stoke Newington (Ms. Abbott) said. The selling of three cemeteries on land worth between £7 million and £9 million for just 5p each by Westminster city council is a particularly topical example of that. The Conservative leader of the Council, Lady Porter, was rightly accused by Labour councillors of total incompetence and irresponsibility. In my opinion, as a Westminster ratepayer, she should have resigned immediately. The whole episode is squalid and a disgrace, and I regret that the suggestion of my hon. Friend the Member for Copeland (Dr. Cunningham) for an extraordinary audit was not taken up. However, I hope that the district auditor, when he completes his investigation, will mete out the same treatment to the Westminster councillors as he has to some Labour authorities. In addition, I understand that the fraud squad is investigating the matter, and that the courts might yet have a part to play. The Government's perception of the problems of the inner cities is as narrow as the so-called solutions that they have presented to us this week. These problems are numerous and by no means restricted to inner-city areas in particular. All over the country we are faced with high unemployment, poverty, had housing, environmental degeneration, crime, racism and poor transport, but not only those matters will receive attention. For example, in an article in The Guardian today, about the winding up of the new towns in the north-east, Peter Hetherington says: "inner cities are fashionable. The old industrial areas, such as south Durham, are not … While the cities offer hope to Mrs. Thatcher, for many Conservatives the Durhams of this world would appear political no-go areas." The phrase "inner cities" is a Thatcherite code word, designed to focus the nation's attention on the purpose of winning votes, while ignoring the real reason behind our social and economic problems. Nine years of incompetent Conservative Government have left our inner cities in the tragic mess that they are in at the moment.

11.23 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. David Trippier)
I wish to congratulate the hon. Member for Ealing, Southall (Mr. Bidwell) on being fortunate in bringing forward this subject for debate. He has done the House a great service, and we have had a wide-ranging debate. My great sorrow is that there have been comparatively few speakers who represent constituencies north of Watford, as I do. I am glad to see that the hon. Member for Houghton and Washington (Mr. Boyes) has contributed to the debate, as he represents a distinguished constituency in the north-east. I am also grateful for the contribution of my hon. Friend the Member for Wolverhampton, North-East (Mrs. Hicks) who represents an important seat in the west midlands. In the short time that I have, I want to deal in as much detail as I can with some of the specific points raised in the debate. I begin by discussing the general point made by Opposition Members, about partnership. It is perhaps significant that few hon. Members representing constituencies north of Watford have attended. That is strange, given that, of the 57 programme authorities upon which the Department of the Environment concentrates, the vast majority are north of Watford, and about 53 of them are controlled by the Labour party. Yet the hon. Members who represent those areas are absent. Do they perhaps approve of the document? It is interesting to note that the photograph on the cover is of an area—Salford—which is controlled by Socialists on the council and represented here by Labour Members, who work extremely well with various Government Departments.

Mr. Simon Hughes
It is only fair to point out that the Minister knows why the debate is less well attended than it would usually be. Unusually, the Consolidated Fund debate is being held on a Thursday, so many hon. Members who would normally be here are not.

Mr. Trippier
I agree that there was short notice of the subject matter, but that is not a matter for me. I accept, of course, that some hon. Members have left London to get back to their constituencies in the midlands and the north. Nevertheless, this is an important debate on the inner cities. The Government have said that they should be top of their agenda—not as a passing phase, but for the whole Parliament—so I should have thought that more attention would have been paid to the debate by hon. Members from north of Watford. The hon. Member for Southall referred to rate capping. He will recall that a delegation was sent to see my hon. and learned Friend the Minister for Local Government, who listened carefully to the delegation's special pleading. Having considered all the circumstances described to him by Ealing borough council, my right hon. Friend the Secretary of State substantially increased the council's rate limit in recognition of the problems it faced. We did not hear about that from the hon. Member for Ealing, Southall. The Government have been reasonable and responsible. The hon. Gentleman would probably have preferred to leave ratepayers in his constituency to face a rates bill even higher than the one they faced the year before. That increase, mentioned by several hon. Members, was about 65 per cent. The figures mentioned by Opposition Members to describe what has been lost to London and their mconstituencies as a result of Government action are bogus. At best, they are hypothetical. There is no way in which any Opposition Member could put a figure on what a Labour Government — had the country had the misfortune to have one—would have done in the period that has elapsed since 1979.

Mr. Boateng
The Minister really is a bit rich. Talk about brass! Richness and brass characterise the Department of the Environment, which has taken our brass and grown rich at our expense. It has taken about £21 million from Brent in rate support grant since 1980–81. We know what we got out of the urban programme in 1987–88—£4·5 million. Those are not bogus figures: they are facts.

Mr. Trippier
That is the interpretation that the hon. Gentleman wants to put on the facts. They are clearly speculative. He has no way of knowing how any Labour Government, had they been in power since 1979, would have dealt with rate support grant for local authorities. Many of my hon. Friends can remember the horrific economic mess that the Labour Government left. They had to bang on the doors of the IMF to borrow money. When the drastic cuts were made, they resulted in the so-called winter of discontent, a winter that we have not had since 1979. It is clear that the hon. Gentleman does not  know what he is talking about. Alternatively, he thinks that Conservative Members have forgotten. They have not forgotten. The hon. Member for Southall spoke about the powers given to urban development corporations. Of course powers for land assembly, compulsory purchase and vesting are given to those corporations, but only in areas where we think that local authorities have been ineffective in bringing about the urban regeneration that we all wish to see. The vast majority of the 57 programme authorities on which my and other Departments concentrate our resources work well in a form of partnership not only with central Government but also with the private sector. I am grateful to my hon. Friend the Member for Ealing, Acton (Sir G. Young) for bringing to the attention of the House the fact that a few more local authorities controlled by the Socialists have changed their tune since the last general election. We still have some way to go, and we are not yet at the stage of banging the cymbals.

Mr. Bidwell
rose—

Mr. Trippier
I am sorry, but I am not giving way. The hon. Gentleman knows that everybody has had a fair crack of the whip and I have less time to reply than any hon. Member has had to make a speech. I do not think that the hon. Gentleman would wish to be unfair.

Mr. Bidwell
The Government always have the last word.

Mr. Trippier
Of course we still have the last word on planning. Even though the power of planning and vesting are given to urban development corporations, the power of appeal lies with my right hon. Friend the Secretary of State for the Environment. There is no question about that. As my hon. Friend the Member for Acton said, it is time for us to speak with confidence about the positive side of our inner cities and the great strengths of the people in them, our indigenous resource that we need to encourage and develop, particularly in enterprise. Opposition Members have said that there is no new money. That is a silly comment. The vast majority of people who know anything about how Government work know that the public expenditure survey round is normally completed by November, prior to the beginning of the Government year, which in this case has not yet started. Extra money has been made available by various Government Departments. In my budget in the Department of the Environment, what is known as the urban block has been increased from about £541 million to £594. [Interruption.] Let us not be silly. Even the hon. Member for Brent, South (Mr. Boateng) will be able to calculate that that is slightly more than the rise in the retail price index or inflation. There has been an increase in money coming from various Government Departments. We were not going to keep it all back until the announcement on Monday. Our inner-city document has made it abundantly clear that we now have clear co-ordination within Government Departments. It is led by my right hon. Friend the Prime Minister and co-ordination and presentation of the policy is in the capable hands of my right hon. and learned Friend the Chancellor of the Duchy of Lancaster. That is new,  and it is also new that there will be an increase of £120 million in my Department's targeted spending programmes on inner cities and estates in 1988–89. That includes more resources, not only for urban group programmes, but for Estate Action. That was not mentioned at all by any Opposition Members. That is additional money going into most of their areas. The hon. Member for Brent, South might forgive me if I doubt some of the statistics that he gave the House. When he was asked by my hon. Friend the Member for Wyre (Mr. Mans) whether unemployment had been reduced in his constituency, he said that it had not. Yet the figures are perfectly clear; I have them here, published by the Manpower Services Commission. The hon. Gentleman does not seem to know what is going on in his own constituency. In January 1987, the figure for Brent, South was 15·4 per cent. In January 1988, it was 13·1 per cent.

Mr. Boateng
rose—

Mr. Trippier
I am terribly sorry; the hon. Gentleman has had a fair crack. The figures are here. He can read this again in Hansard. I will happily debate the matter with him in correspondence. The Manpower Services Commission figures are here. He sought to deny them in his speech 20 minutes ago.

Mr. Boateng
Since the Government have been in power, there have been 19 changes in the way these figures have been calculated. If those changes are disregarded, the real unemployment trend is up. Will the hon. Gentleman not recognise that I referred him specifically to the levels of unemployment on the priority estates, which have consistently risen over the last nine years? That is a fact, that is also in Hansard, and that is game, set and match.

Mr. Trippier
It is not game, set and match; that is a very silly comment for the hon. Gentleman to make. He has probably forgotten that in my former incarnation I was in the Department of Employment, where I had a shared responsibility for statistics, and I can say with complete conviction that the statistics which have been presented by the Department of Employment are correct. The hon. Member for Kingston upon Hull, East (Mr. Prescott), who at that time was shadow spokesman for employment, acknowledged that those statistics would have been presented in exactly the same way had a Labour Government been in power. That is a matter of record, which the hon. Gentleman may care to check. We would have regarded this interesting and exciting debate as a little more creditable if the hon. Member for Southwark and Bermondsey (Mr. Hughes) had said at some point that there were either some things in the presentation document that he welcomed or something that the London Docklands development corporation had done that he welcomed. He fought shy of that. The hon. Gentleman told us that his research assistant had spent some time counting the number of times that local authorities had been referred to in the document. He should have looked at the photographs, in which there are several mentions of local authority schemes that are very good examples of partnership in action. All of us in government believe that the best possible partnership is a tripartite partnership—ourselves, local government and the private sector. The difficulty that I have with the speeches of the hon. Members for Southwark and Bermondsey and for Brent, South is that they seem to be concerned only about Government or public sector investment.

Mr. Boateng
Will the hon. Gentleman give way?

Mr. Trippier
No, I will not. They totally ignore the fact that, for every pound of taxpayers' money that we inject into these schemes, particularly under urban development grant, and that is on average. In the scheme at Salford Quays, portrayed on the cover, the leverage is six to one. But I heard not one word from any Opposition Member about private sector investment. The reason for that is that hon. Members do not understand it. They do not understand enterprise or the importance of the private sector taking the lead. That is what is different about this. We have shown the House this evening that we have indeed increased the amount of public finance that is made available for these new initiatives, as a result of which we are now going to have the multiplier effect, attracting that much more  capital from the private sector. It is possible to achieve a leverage far in excess even of four to one. If one can get six to one in Salford, one can get it anywhere else. What is more, Salford has approached these matters in a sensible way and in a form of partnership which we welcome. The criteria we set down for our grant regime are flexible. If certain Labour authorities cannot comply with them, there is something seriously wrong with those authorities. And most of those Labour authorities, which are the great defaulters, are represented by Opposition Members who have spoken tonight. The representatives of the vast majority of decent Labour authorities are not here tonight, because they, like my hon. Friends, will welcome the publication of this document. This will be an exercise in self-help. It will bring pride back to the inner cities. The form of co-ordination we shall see will bring about the vitality that is needed in these areas. As my hon. Friend the Member for Wolverhampton, North-East said, the people in these areas will no longer be part of a forgotten army. We shall make these areas strong and vigorous once again.

Student Unions (Funding)

11.41 pm

Mr. Allan Stewart  (Eastwood)
I am delighted to have this opportunity to initiate a debate on the important subject of the financing of student unions, a subject which has been of concern for some years to hon. Members, to the Government, to students, indeed to everyone interested in the proper use of public funds and individual rights. Concern has focused recently, perhaps particularly, on the compulsory membership of the National Union of Students. I draw the attention of the House to early-day motion 449 sponsored by my hon. Friend the Member for Thurrock (Mr. Janman) and endorsed by 213 other hon. Members. That motion welcomes the Employment Act 1987 with its measures to "reverse closed shop arrangements, but notes that hundreds of thousands of students will still have no choice over whether or not they join the National Union of Students; and hopes that the Secretary of State for Education and Science will take steps to rectify this anomalous position as soon as possible." My hon. Friend the Member for Hertfordshire, West (Mr. Jones) raised this issue during business questions on 25 February last and the Leader of the House said it would be appropriate for hon. Members to table an amendment to the Education Reform Bill. My hon. Friend the Member for Thurrock and others have done just that, tabling a new clause to the Bill to move to a system of opting into membership of the NUS or other national student bodies. It would be premature to expect the Minister to leap to his feet tonight and announce that the Government intend to accept that new clause; we shall have to wait for the issue to be debated for him to do that. I was a voluntary member of a students' union at the university of St. Andrews, where I was also president of the students' representative council, a separate organisation. That structure has some attractions, to which I will come later. Students' unions north and south of the border began as voluntary organisations, as private clubs giving facilities to members. But as the concept of the student grant developed, membership dues were increasingly paid for most students by grant-giving bodies. Those bodies, the Scottish Education Department and local authorities in England and Wales naturally questioned those payments as not being strictly necessary. The response to that was to make membership compulsory. When that happened, of course there was automatic payment of fees for those who wished to join the students' union, and the union had the bonus that membership was compulsory for those who did not wish to join or were indifferent to joining. That change had two inevitable effects. First, it made the students' unions much more free of any real need to satisfy their membership. Secondly, the fee, in effect, was negotiated by the union and the university or college authorities. It was paid for by the taxpayers and ratepayers. Inevitably, the fees went up. Change was inevitable, and in 1980 the Government announced that in future the unions would be financed from the general funds of the university or college. That meant that the student union allocation was competing with other demands from departmental budgets. It was  hoped that financial realism and the need for the universities and colleges to provide proper institutional oversight would lead to wholly satisfactory arrangements. It is my contention that that was a fundamental mistake by the Government because it broke the link between the membership of students' unions and their income. One of the books on the subject noted the consequence that "The responsibility that should be at the root of any democracy has been entirely removed. Members have no financial responsibility for what the union spends or how it spends it." The income of the National Union of Students, which in 1986–87 amounted to about £1·84 million, was from the taxpayer through block membership by student unions. That means, as the early-day motion of my hon. Friend the Member for Thurrock points out, that perhaps hundreds of thousands of students who have no wish to do so are forced to be members of the NUS, but, on the other side of the equation, many individual students may wish to be members of the NUS but if their student unions have opted out they cannot join because there is no longer the possibility of individual membership. A fundamental point in relation to Government legislation in other areas is that, since membership of those unions is compulsory, and is a closed shop, in effect students are forced to join two closed shops. It may be thought that the consequences of compulsory membership are not a matter of concern, or that any concern is purely theoretical. People may say that students will be students, nothing is ever perfect, and does it really matter in practice? I must tell my hon. Friend the Minister that I believe that it does really matter. It matters to one of my constituents who was a full-time treasurer of his students' union. He was sacked because he refused to sign a cheque for students' union funds to go to the fighting fund for the striking miners. He argued that that was wrong, he refused to do it and he was sacked. It is not a matter of theory to him; it is a matter of real concern. It is a matter of real concern to Mr. Paul Soden who refused to join the students' union at Manchester polytechnic. Although he was willing to pay the money, he was expelled from the polytechnic. It was a matter of real concern to Mrs. Patsy Fry who was expelled from her course at the Queen's road polytechnic in Bristol solely because she refused to join the students' union. It matters that at Strathclyde university my right hon. Friend the Member for Henley (Mr. Heseltine) was unable to address a meeting; it was disrupted and had to be abandoned. Conservative students have been refused the right to speak at student association meetings solely on political grounds and have been physically attacked by their political opponents. It is a matter of general concern to society that students may pursue a so-called no-platform policy under which those who profess views with which student union leaders do not agree are refused the right to speak. That goes right to the heart of academic freedom and democracy, whatever the views of the people concerned.

Mr. Derek Fatchett  (Leeds, Central)
The hon. Gentleman says that he supports academic freedom. When the Education Reform Bill reaches its Report stage and the Opposition table an amendment relating to the definition of academic freedom for academic staff, I assume that the hon. Gentleman will support it.

Mr. Stewart
I am not sure whether the hon. Gentleman's concept of academic freedom and mine are the same. However, I speak as a former university teacher and I have been in touch with my hon. Friend the Minister about that Bill. He gave a very helpful reply to the point that I raised with him.

Mr. Fatchett
I am interested in the intellectual conclusion that the hon. Gentleman draws: that our definitions of academic freedom are different. I suspect that the evidential basis for that conclusion is very weak, and it might be helpful if the hon. Gentleman were to define academic freedom.

Mr. Stewart
Academic freedom is fundamental to our society. If people are invited to give their views to a particular institution, they should have the right to do so. That fundamental right has been denied by student unions from time to time. I have alredy mentioned my right hon. Friend the Member for Henley. Lord Joseph also suffered such attacks when he was Secretary of State for Education and Science. I am not making a general attack on student unions or on the National Union of Students, but there are matters of general concern about the NUS. There are longstanding links with, and on some occasions there has been explicit support for, the IRA. At the 1987 NUS conference, Sinn Fein members called for the intensification of the anti-Unionist campaign. It matters that taxpayers' money has been used by the NUS to campaign against the Abortion (Amendment) Bill. Hon. Members may hold widely differing views about that Bill, but why should taxpayers' money be used in that campaign? My hon. Friend the Minister ought to be concerned about the fact that there was a national demonstration against the Education Reform Bill, not because there was a demonstration, or because students were there, but because subsidised tickets were available from, for example, the students' union at Bristol university — I have a report about it in my hand — to attend the demonstration. Why should my hon. Friend be in charge of handing out taxpayers' money for people to come on subsidised bus trips to oppose the Government's legislation? That is an example of what can happen. What is the answer to these problems of individual freedom and potential abuse—the problems, in effect, of two closed shops?

Mr. Robert B. Jones  (Hertfordshire, West)
My hon. Friend has been talking about two closed shops, referring to the local students' union and the National Union of Students. He should also bear in mind the affiliation of the National Union of Students to the International Union of Students. There is therefore a third closed shop.

Mr. Stewart
My hon. Friend has added a new dimension to the debate. I had thought that two closed shops were good going. What, then, is the answer? I do not think that it is any good tut-tutting, or blaming Left-wing students; after all, they are just taking advantage of the opportunities that the system offers them. I think that the answer is to apply the principle that the Government have applied elsewhere, especially the returning of trade unions to their members. The Government should recognise that we are talking about three different functions: first, the services for students, which require to be paid for—usually, under  the present system, via the taxpayer; secondly, local representation on the individual campus, and the need for a channel of communication between students and the university or college authorities; and, thirdly, a national trade union. In regard to the first function, I feel that it would be preferable if the Government simply increased the grant under the present arrangements, and gave students the choice whether to spend the money on being members of a student union. After all, students are by definition intelligent people capable of making a rational choice. As for the local representational function, there is a case for a direct grant from the university authorities for that limited function. As for the third function — the financing of a national trade union—it is absurd, that that is currently compulsory and financed by the taxpayer. As my hon. Friend the Member for Thurrock has suggested, let individual students opt into membership of a national union, and let the Government give direct grants to such a body if they wish to do so, for specific and agreed purposes. There are various possible methods of achieving those objectives. I hope that my hon. Friend the Minister will recognise that there is a genuine problem, and that he will agree that the Government should apply their general principles to the problem of what have been called the forgotten closed shops: the same principles of individual choice that have been so successfully applied by the Government to other areas of national life.

11.58 pm

Mr. Robert B. Jones  (Hertfordshire, West)
I should like to declare an interest, as a life member of St. Andrews university students' union. I am grateful to my hon. Friend the Member for Eastwood (Mr. Stewart) for initiating a debate about this important issue. I have felt passionately about it ever since I was a student, and, indeed, ever since I was a student union official. My hon. Friend the Member for Eastwood was a very distinguished president of the student representative council, but I think that I go one beyond him in that I was not only an officer of the student representative council, but also an officer of the students' union. I think that the traditional pattern in the Scottish universities of separating the services role of providing food and cheap refreshment from the political representative system is quite a good one. My most vivid memory is of the seemingly interminable debates that took place in the students' representative council at St. Andrews when I was there about its membership of the NHS. When I first went to St. Andrews — I imagine that the same was true when my hon. Friend the Member for Eastwood was there—we were affiliated to the Scottish Union of Students, an entirely separate body. The NUS had ambitions, as trade unions do from time to time, and sought to take over the SUS. In order to do so, it offered free membership of the NUS to the student unions presently within the SUS. We tried that and about two thirds of the way through the year the student representative council in St. Andrews decided that it would vote to disaffiliate from the NUS because it felt that it had had rather bad value for money. It was also concerned about the extremist political image of the NUS. Despite the fact that St Andrews had a year's trial membership, the NUS said that we could not leave  without giving a year's notice and paying the affiliation fees for that period, so we were unable to disaffiliate. It took several years before a referendum of the students decided to pull the university out of the NUS, a model that was followed subsquently by a number of other Scottish unions. The clear point that came out during the course of that debate about membership of the NUS was not just the value-for-money one but the moral one. The NUS was clearly recognised at that time as an extremist political body. Its political stance on Northern Ireland, for example, was unconditional support for both wings of the IRA. As a delegate to the NUS conference in Birmingham in the early 1970s, I attended the debate at which that motion was passed. I found it deeply offensive, as I know did the students at my university. Many of the students at St. Andrews come from Northern Ireland's unionist community. There has always been a close relationship between the Province and Scotland. It was intolerable for them that their money, through their subscription to the NUS, should be used to support a body which was actively bombing, maiming and killing their friends and relatives in Northern Ireland. But the issue was not just the NUS's policy on the IRA; there were many other policies that were equally unacceptable, either to large groups of students or to individuals with views on particular matters. I cite, for example, the religious views of Jehovah's Witnesses, which do not permit them to join such bodies; they must therefore decide whether to go to university and be obliged to compromise their religious views, not to go to university, or to find one of those few universities that are not affiliated to the NUS. That is an intolerable infringement of people's conscience and religious freedom. In recent years there have been many examples of intolerance practised by local student unions and the NUS. I do not know whether my hon. Friend the Minister will refer to this, but one that sticks in my mind is the discrimination against Jewish students that has been specifically practised over the years. The student unions have taxpayers' money and money from their individual members and they dole it out to societies affiliated to the union. They pick and choose the causes that they want to support. A body of which they approve might receive a large grant and one of which they do not approve might get no grant at all. Jewish society after Jewish society was denied any funding out of allocations in individual universities because of the pro-PLO stance of the local student union, and that is intolerable. I said in an intervention in my hon. Friend's speech that he had overlooked — I am sure unintentionally — the third closed shop, the International Union of Students, which is closely identifed not just with the far Left but with the Soviet Union and its satellites. Almost every hon. Member, whatever his or her political affiliation, would find the motions passed by the IUS at its conferences deeply offensive, yet students are forced to subscribe through their funds, or through taxpayers' funds, to those causes. This is a moral issue. The Government should not stand aside and say that the matter is for the students to decide and that they can vote extremists out of office, because  even quite moderate student unions would not in any way satisfy the point of conscience raised about Jehovah's Witnesses. As my hon. Friend the Member for Eastwood said, unions which have compulsory membership grow lazy and unresponsive to their members, because they know that they will get the same amount of cash whether the service they provide is good or bad. My hon. Friend touched only lightly on possible solutions. I agree with him that in the long term it is perfectly proper to separate the political representative functions — the trade union functions — of student representative councils from the functions of providing services, but both functions should be voluntary. In the short term, there is no case against the membership of the National Union of Students being made voluntary. I recommend to my hon. Friend that students who wish to become members of the NUS should have to choose to become members. That would not cause any administrative problems. It is possible at present, and it has always been possible, for students of colleges which are not affiliated to the NUS to join it, and many students do. In my days as a student at St. Andrews, before we affiliated to the NUS, many students belonged to it, although they did not have to. It could also provide a choice of unions—that is a theoretical possibility, but one that should be encouraged — because different unions with different objectives could be set up. That would provide students with a choice, which would be beneficial to them as it would enable them to shop around and obtain better concessions on items such as travel and insurance. This is the last great closed shop. It is a moral affront to anybody who believes in democracy and it is a moral affront to taxpayers who are forced to pay for this absolutely extraordinary farce. What other trade union has its subscriptions paid for by taxpayers? Not one. That is why the model should be outlawed by my hon. Friend when he gets a legislative opportunity. Some of us have stayed up late tonight because we remember all too vividly the intolerance of the National Union of Students and Left-wing student unions. We have been acquainted with far more modern instances of that by our constituents, and I hope my hon. Friend will be able to give a positive lead today.

12.8 am

Mr. Gerald Howarth  (Cannock and Burntwood)
I am grateful for being called in this important debate, and I congratulate my hon. Friend the Member for Eastwood (Mr. Stewart) on his great success in coming third in the ballot.

Mr. Fatchett
A great deal of skill.

Mr. Howarth
The hon. Gentleman is very familiar with the matter and will appreciate that the ingenuity of my hon. Friend has allowed his name to come so high in the ballot. The hon. Member for Leeds, Central (Mr. Fatchett) will appreciate that, although many of my hon. Friends are here tonight at this late hour, we represent but the tip of the iceberg. As the hon. Gentleman ought to be aware, nine tenths of the iceberg appears below the surface. If my mathematics are correct, I would imagine—

Mr. Fatchett
It is nine tenths of the iceberg, only if the hon. Gentleman has 45 supporters, or should we say 50?

Mr. Howarth
It may well be 45 in total. It would be 46—

Mr. Tim Janman  (Thurrock)
From the number of signatures to my early-day motion, I suggest that each of us represents one iceberg.

Mr. Howarth
My hon. Friend has made an extremely important point by showing the strength of feeling on this issue. More than 200 of my right hon. and hon. Friends signed the early-day motion, which has now been incorporated in an amendment to the Education Reform Bill. I hope that my hon. Friend the Minister will acknowledge the strength of feeling and bring proposals forward when the Bill reaches its Report stage. Like my hon. Friends the Members for Eastwood and for Hertfordshire. West (Mr. Jones), I must declare an interest. I was also a pressed man in the National Union of Students when I was at Southampton university in the great, heady days of the late 1960s, when all was turbulent. The hon. Member for Blackburn (Mr. Straw), who sadly is not with us tonight to share in these important proceedings, had been elected as chairman of the NUS. Of course, he was a more moderate gentleman then, and by comparison with the rest of the Labour party he is almost one of us now. That shows either that wisdom comes with old age, or that the Labour party has moved dramatically to the Left. I suspect that the latter is probably the case—[Interruption.] The hon. Member for Leeds, Central will have to speak up if he wants to intervene from a sedentary position. I was at university at a turbulent time. I managed to become a member of the students' representative council and participated in the affairs of the union. I am delighted that a newspaper has taken a potted look at what it calls "a random harvest" of the latest political leanings and activities in various universities around the country. I see that Southampton university is described as "apathetic and very Tory". They strike me as excellent things for a university to be. One of the problems that arose when we were all pressed men in the union was that we had to fight constantly against a certain degree of apathy and deal with professional student agitators.

Mr. Robert B. Jones
I cannot let my hon. Friend get away with calling this apathy. Rather, it involves other priorities. There is nothing wrong with a student having enjoyment or work as priorities rather than mucking around with Left-wing politics.

Mr. Howarth
That illustrates the passion with which my hon. Friend views these matters. He is so concerned that he has anticipated the very comment that I was about to make. At the time of the great troubles, Professor Max Beloff asked why students who had gone to university to study and learn, and to make friends, should, as part of their wider education, become involved in grotesquely trivial political matters. He said that to play a game of cricket or pursue a young lady were equally valuable pursuits. In the light of yesterday's debate in the Chamber, that seems to be a wholly honourable thing for a young man to do at university. It was a feature of the times that, to preserve a moderate balance, in Southampton we tried to get the entire engineering section to vote at lunch time for some common  sense. The trouble was that, unlike the social scientists, who kept gentlemen's hours, the engineers had to work and engage in a certain amount of discipline. They would pitch in at 5 minutes past 1, having come straight from lectures, vote down all the political nonsense from the Left, and disappear at 2 minutes to 2 to get back to lectures, and at 5 minutes past 2 the die-hard Lefties, who did not have to go back to lectures, would reverse everything that was a genuine reflection of the views of the normal students at the university.

Mr. Robert B. Jones
At least engineering students could spend their lunch time voting. I spent my lunch time quaking because at 2 o'clock I was due to have an economics lecture from my hon. Friend the Member for Eastwood (Mr. Stewart).

Mr. Howarth
I am delighted that my hon. Friend was quaking. It clearly illustrates that my hon. Friend the Member for Eastwood was doing an extremely good job. As a result of it, my hon. Friend the Member for Hertfordshire, West is now in the House, and we are all, therefore, beneficiaries. My hon. Friend the Member for Hertfordshire, West told me that I could not go home but should join in this debate. It is a very important debate and, of course, I postponed my departure to be here to demonstrate my concern rather than be with my wife and family and my constituents. My hon. Friends have made strong points about the fact that the fee that is paid to student unions is in no way negotiated by the student concerned. It does not come out of the student's pocket, and therefore there is no connection between the fee that is paid and what goes on in the students' union. I think that we would all accept that much of what goes on in student unions, and what went on in the 1960s and the early 1970s, is unexceptional. Student unions should provide social and sporting facilities for the better education and enjoyment of students, but after Fred Jarvis became involved — I understand that he was one of the early NUS presidents after the war—the students' union became politicised. Much has happened to the trade union that he now heads. Everyone is now looking back on that period, as it is 20 years since the great problems of 1968. The unions were thrown into turmoil. I am one of the few hon. Members who were in Grosvenor square in March 1968 for the great Vietnam demonstration.

Mr. Fatchett
I was there.

Mr. Howarth
The hon. Gentleman was there as well.

Mr. Fatchett
And the Minister.

Mr. Howarth
Well, there were three of us. I suspect that I am unique among those of us who were there in Grosvenor square on that horrifying and frightening occasion in so far as mine was the only banner in support of the Americans. I took the precaution of ensuring that there was a thin blue line of men from the Metropolitan police between me and the hordes, and very wise I was, too. Half an hour before, we had heard these people coming down the streets. There was a roar. They entered the square and I saw them tearing up the square with their bare hands and tearing down palings and jabbing the policemen's horses with them. It was a frightening  experience — all the more frightening because of the politicial pusillanimity of the Government of the time, who allowed all that to go on. Subsequently, I went to the London School of Economics. I ruffled my hair, tried to look shabby and said that I was a comrade from Southampton who had come to try to help. It shows the naivety of the Left-wing students at the time that I was posted to security. I was completely unknown to them. I merely said that I was a comrade come to join them. They played the BBC news over the loudspeaker system at the LSE, and they all sat there wondering what to do. They were the first item on the news — this massive demonstration in Grosvenor square—and none of them had managed to fathom the magnitude of what they had done, or what they would do thereafter. The whole thing was what I could call, "Kicking against the pricks." I must be careful how I continue, but I believe that that expression would not be wholly inappropriate to our political leaders at the time, who allowed themselves, supinely, to be dealt with in that way. Time is pressing, and I know that some of my hon. Friends and the hon. Member for Leeds, Central wish to speak. I have three principal anxieties. The first is about freedom of expression. I went through that experience in the 1960s and was vilified. I tried to organise a meeting for Patrick Wall, the former Member of Parliament for Haltemprice, and he was howled down despite the fact that we had installed extra 50 W amplifiers. My hon. Friends who knew Patrick Wall in the House will know that he is an extremely mild-mannered man, yet he — an elected Member of Parliament—was denied the opportunity of speaking about the defence of our country, which should not be controversial. To try to defuse the problems, there was a joint declaration from the Committee of Vice-Chancellors and Principals and the National Union of Students. It was a disaster—

Mr. Robert B. Jones
It was not worth the paper it was written on.

Mr. Howarth
It certainly was not. That is why I am so angry about the NUS. It is not a principled bunch of people, and it never has been on such matters. It has never been prepared to guarantee freedom of expression, and that is why my right hon. and hon. Friends were forced, two years ago, to introduce the Education (No. 2) Act 1986, section 43 of which deals with freedom of speech in universities, polytechnics and colleges. That is not only an indictment of the NUS; it is a heavy indictment of the supine men and women who have been responsible for running our universities. At Southampton, when we wished to organise a meeting to which Enoch Powell had been invited and the student union refused to allow us to have a room in the union, the vice-chancellor said, "You are asking me to take your hot chestnuts out of the fire for you." The man was not prepared to stand up for freedom of expression. My hon. Friend the Member for Eastwood mentioned the no-platform policy, which is still very much in existence. Let us not forget that in the past few months my hon. Friend the Member for Luton, North (Mr. Carlisle) has been subjected to assault and battery. In Manchester, three years ago, the former Home Secretary, my right hon.  and learned Friend the Member for Richmond, Yorks (Mr. Brittan), was subjected to the most grotesque attack. I say to the hon. Member for Leeds, Central, and I should be interested to hear his response, that those who espouse his brand of politics tend to attack those who espouse our brand of politics, and those who espouse our brand of politics tend not to attack those who espouse his brand of politics. That fundamental difference needs to be remembered. My second anxiety is about the ultra vires payments. For as long as I can remember, student unions, given this funding, which does not even pass through students' pockets, have attempted to divert it into unworthy causes—causes outside the remit of any student union, either for the funding of demonstrations or for the funding of strikes and strikers. During the National Union of Mineworkers strike, outrageous attempts were made in universities to fund the strikers or to send people to support the picket lines. What had that to do with learning? Absolutely nothing! Even the president of the National Union of Mineworkers was incapable, and remains incapable, of learning anything, so there was no value in that action. My third point relates to the concept of accountability by opting in. The fact that the National Union of Students says that it speaks for 1·2 million people, or however many it is, gives to it a spurious authority, when its membership is entirely press-ganged. My hon. Friends have mentioned what is happening nationally and on the international scene. The NUS is used as a political vehicle when it has no right to be hijacked. Like the Scottish Labour party, the system is an anachronism. It is out of date and serves no useful purpose. Therefore, I hope that my hon. Friend will be able to give us some indication tonight that the commitments given by successive Front-Bench Conservatives, notably when they were in opposition, will become robust. I hope that he will translate into Government action that which tripped so easily from the tongue when in opposition. We hope that the Minister will be able to send us home to our constituencies tonight full of encouragement and joy.

12.27 am

Mr. Graham Riddick  (Colne Valley)
I, too, add my congratulations to my hon. Friend the Member for Eastwood (Mr. Stewart) on winning the ballot, which is the easy part, and also on raising such a sensible subject. My hon. Friends have identified the problem. I believe that there is a problem, first, with the method of funding and, secondly, the related problem of the closed shop, which leads directly from the method of funding. As my hon. Friends rightly say, three closed shops operate. I should like to talk about two of them. The first is the National Union of Students. Any student who belongs to a students' union that is affiliated to the NUS finds himself automatically affiliated to the national union as well as to the individual students' union. It is absolutely right that my hon. Friend the Member for Thurrock (Mr. Janman) should have tabled an early-day motion, and he has secured the support of well over 200 Conservative Members for it. There is no justification for dragooning thousands of students into the NUS. I must gently admonish my hon. Friend the Member for Thurrock, although one has to be very careful before doing so as he is one of the "driest" Members of the House,  for concentrating his motion and, indeed, his amendment to the Education Reform Bill upon the closed shop of the NUS. There is another closed shop, of individual students' unions, which I believe is a more serious problem. The situation is such that, if one wishes to study at any university, polytechnic or college in this country, one has to belong to a students' union. I cannot see how that situation can be defended in any way. The Government abhor industrial closed shops and the most recent Employment Bill, currently going through another place, will effectively neuter their effect. However, the Government allow the closed shop of the students' unions to continue. The Government must now concentrate their minds on that issue. I am sure that my hon. Friends will agree that there should be no step-by-step approach. We must deal with the NUS and the student union closed shops.

Mr. Janman
I am grateful for the gracious way in which my hon. Friend has admonished me. Does he agree that the fact that the student closed shop—irrespective of how one wishes to define it — is funded by the taxpayer means that it is far worse and less defensible than industrial closed shops?

Mr. Riddick
I agree. There is no defence for a closed shop that is wholly funded by the taxpayer. It is extraordinary that the Government are prepared to allow this situation to continue. I hope that the Government will now grasp this important nettle. The money for students' unions is passed directly, as a block grant, from the parent institution to the compulsory membership union. The individual student does not see his contribution. In many cases he has no idea that that money has passed over to that union. There is no accountability. Each union therefore has a guaranteed income without the need to attract a single customer for its services. Generally, the services comprise bars, cafeterias, refectories and a varied range of sporting and welfare services. Entertainment events are also organised throughout the terms. However, the block grant also helps to fund a rag-bag of special interest and political groups. The money also funds the payment of sabbatical officers — people who, by and large, are Left-wing political activists. It is a classic case of jobs for the boys. It is bad enough that any Government should be funding such things, but it is extraordinary that a Conservative Government should do so. It is estimated that about £40 million of taxpayers' money is handed over to an extraordinary assortment of Trotskyists, Marxists, Maoists and other Left-wing activists. There is scope to introduce a market mechanism to ensure that the services provided are subject to the same economic laws that have led to dramatic improvements in other parts of the state sector. The Government have already grasped the difficult nettle of nationalised industries. They are more effective, efficient and market-orientated. We are now trying to effect such changes in Government Departments and agencies, and that is absolutely right.

Dr. John Marek  (Wrexham)
I am interested to hear the hon. Gentleman's comments. Will he tell us in what way British Telecom is now more efficient?

Mr. Riddick
I am not sure whether I should be taken down that road, but, in my experience, British Telecom  was the most appalling monolithic nationalised monster in the 1970s. One had to wait months, in some cases up to six months, to have a telephone installed. That situation has now been completely reversed. Of course British Telecom is not perfect, but is improving. Furthermore, investment in British Telecom today is far higher than it was when it was a nationalised industry.

Mr. Fatchett
Will the hon. Gentleman give way on the subject of British Telecom?

Mr. Riddick
I do not want to give way to the hon. Gentleman on the subject of British Telecom. I shall happily give way to him, but not on the subject of British Telecom.

Mr. Fatchett
I shall deal with the hon. Gentleman's comments about British Telecom later. He might be interested to hear my comments.

Mr. Riddick
I shall look forward to that. Student unions are featherbedded, unaccountable and excessively wasteful. Often they are loss-making, scruffy and down-market and provide only limited or poor quality services in an atmosphere of shabby, political agitprop. Leeds university is a good example of that. My hon. Friend the Member for Taunton (Mr. Nicholson) went up to Leeds only last week and I am sorry to report to the House that his speech was interrupted by a load of militant Socialists and Trotskyists who did not like what he had to say. There is no justification for such behaviour. The students' union at Wolverhampton polytechnic is £70,000 in the red, yet the union prefers to spend its lime persecuting members of the Conservative association and spending large sums of money on far Left political causes. The majority of students at Wolverhampton polytechnic wholly ignore the seedy and unpleasant students' union and instead use the facilities in the nearby city centre. The pattern of far Left political control is replicated throughout the country. I wish to turn now to the possible solutions to the problem. One involves the facilities which students' unions currently provide for their members. Those facilities, including bars and cafeterias, should have to stand or fall on their own efforts. They must be made market-orientated. If Labour Members were to say that that was not possible, I have no doubt that breweries would be only too happy to supply beer at very advantageous prices to the students' unions. We all know how much beer students can consume. Furthermore, the breweries would be only too happy to lend money at very generous rates of interest. Other solutions could be found if university and college authorities retained a certain amount of the block grant to provide, for example, sports facilities. The money left over should then be allocated to individual students so that no money went directly to the students' unions. If left to individual subscriptions, the National Union of Students would wither on the vine. The Government have a duty to grasp the nettle. They must take away the money and power which they are inadvertently giving to those Left-wing agitators and militants.

12.39 am

Mr. Derek Fatchett  (Leeds, Central)
These are interesting times for the Secretary of State for Education and Science. He has already been ambushed by the right hon. Members for Henley (Mr. Heseltine) and for  Chingford (Mr. Tebbit) and forced to change his mind about the abolition of the Inner London education authority. That defeat did his political stock no good. He has now been in open disagreement with the Prime Minister about the provisions of the Education Reform Bill. It is interesting to see what today's Financial Times has to say on the subject. It mentions the increasingly authoritarian style of the Prime Minister and the powers of the Secretary of State: "As to the Education Reform Bill, there are at least 184 new powers. You may think, 'So what?'"—

Mr. John Battle  (Leeds, West)
Is that all?

Mr. Fatchett
I am sure there will be more by the time the Bill reaches Report stage in another place."You may think, 'So what?' But it means that the Secretary of State for Education, Mr. Kenneth Baker, can set a national curriculum for schools, by order. He can set attainment targets, by order. As this week's disclosure of a letter from an official in No. 10 Downing Street to his counterpart in the Department of Education indicates, the order is as likely to reflect the views of the Prime Minister as those of her Education Secretary." So the Secretary of State is having some difficulty winning his way on crucial issues such as assessment, and it is clear that the real Secretary of State is the Prime Minister. Tonight, the Secretary of State faces his third major political ambush—the St. Andrews mafia have come for him. They are here to persuade the Secretary of State to change his mind yet again. They may be on to a winner, not because of their intellectual arguments but because we know that the Secretary of State is desperate for a few friends. When one's stock is as low as the Secretary of State's, even the St. Andrews mafia may comfort him. Conservative Members may find some support, but I warn them in advance that I have had the pleasure of seeing the Parliamentary Under-Secretary of State in Committee, where he said no every time. I suspect that he will say no again tonight. He was christened Stonewall Jackson by my hon. Friends in Committee. I am sorry to disappoint the Minister's hon. Friends, but I can forecast what he will say.

Mr. George Robertson  (Hamilton)
On the subject of the St. Andrews mafia, I went to that organisation — that is the operative word—too, but before certain new hon. Members made it unrespectable. I was at Queen's college, Dundee, and we used to suggest international visits to St. Andrews from Dundee. In those days, the students' union and representative council were run by a blue mafia — they were extremists. One of them was called Duncan Pirie, but has since changed his name to a posher version—Manson Pirie. He now runs one of the eccentric Right-wing organisations that writes the manifestos that people such as the Minister must stand up and defend with the stonewall expression that my hon. Friend the Member for Leeds, Central (Mr. Fatchett) has described. However, hon. Members should not be put off; some decent people came out of St. Andrews, even if they are under-represented in the House.

Mr. Fatchett
My hon. Friend proves that at least one decent person came out of St. Andrews. Clearly, my hon. Friend's experience of travelling from Dundee to St. Andrews has made him a suitable candidate to be a foreign affairs spokesperson. The hon. Member for Eastwood (Mr. Stewart) talked of academic freedom. It might be useful to return to that theme because one or two of his hon. Friends spoke about it. I intervened in the speech of the hon. Member for Eastwood. We all know him to be consistent, and if we can show him at a later stage in the passage of the Bill that we can come forward with a definition of academic freedom for academic staff that is agreed by the Committee of Vice-Chancellors and Principals I have no doubt that he will support it. Perhaps I could suggest to the hon. Gentleman a little background reading of the reports of some of the debates that have taken place. He might be interested in today's issue of The Independent or, in the context of this debate, yesterday's issue of The Independent. In that there is a review of the proceedings in Committee on the Education Reform Bill. With some perception, the author says that on the question of academic freedom the Secretary of State was somewhat embarrassed and found his position difficult to maintain. The journalist said of the Under-Secretary of State for Education and Science, the hon. Member for Wantage (Mr. Jackson), that there was no such embarrassment. May I ask the hon. Member for Eastwood and those other hon. Members concerned about academic freedom to forget what the Under-Secretary may say in that context, but to support the Secretary of State and fight for academic freedom for individual staff? Some hon. Members have spoken about freedom on the campus. I have always supported freedom of speech on the campus and it must be supported as long as it is within the law. If hon. Members look at the record of the debates on the Education Act 1986 they will see what I said on that occasion. I have always argued that the no-platform policy causes the National Union of Students a great deal of difficulty and is wrong in much of its implementation.

Mr. Robert B. Jones
Does the hon. Gentleman hold that view on principle?

Mr. Fatchett
Yes. My view is on the record and there is no attempt to fudge the issue. I make the point clearly to the hon. Gentleman that that principle of freedom of speech within the law must be maintained. Those who break the law are not exercising the right of freedom of speech; they are abusing it. In terms of student union politics I have always held that position. I should like to turn to two aspects of the hidden agenda before coming to the real agenda. That hidden agenda has become clear because of the failure of Conservative student politics. The Conservative student movement has been an incredible embarrassment to the party and to Conservative Members. It is not surprising that Conservative Members now look slightly sheepish. The record of the Federation of Conservative Students is a catalogue of abuse. Those who need the press reports about the Young Conservative conference at Eastbourne just a few weeks ago will know about the behaviour of the former Federation of Conservative Students and the way in which it tried to use physical and political violence to make sure that it could impose its views. We saw the behaviour of the FCS when its members damaged the students' union at Loughborough. Was that two years ago? We have seen the intervention of the right hon. Member for Chingford when he was chairman of the  Conservative party. He had to intervene because the FCS had become such an embarrassment to the Conservative party. All that is not surprising, because the politics of the far Right clearly has some influence in the Conservative party, but it is an influence that the party wants to hide. The right hon. Member for Chingford is not known for niceties and acted when it became known that the FCS was becoming a political embarrassment. It talked in many contexts about legalising drugs and intervening in central America. It produced the scandalous draft of the newsletter at Aston university after the Bradford City football club fire. After those events, the political wing of the Conservative party in student organisations was in disgrace and the right hon. Member for Chingford was right to close it down.

Mr. Janman
Will the hon. Gentleman accept that there is a fundamental difference between a student organisation that is part of a political party that is not funded by the taxpayer and a national student organisation that is undemocratic, has a dragooned membership, has extreme policies and is funded by the taxpayer?

Mr. Fatchett
I am very interested in the hon. Gentleman's intervention. I wonder why he does not answer my point. My question is, very simply: is he embarassed by the behaviour of the former FCS, or did he support it and its policy? I should be happy to give way to the hon. Gentleman, because I think that he would like to answer that question. It is not about taxpayers' money. What I want to know from him is whether he stands by the old FCS and what it stood for. Will he tell us?

Mr. Janman
It is totally irrelevant to the debate, Madam Deputy Speaker. What we are debating tonight is the funding of student unions and the funding of the National Union of Students. It seems to me that it is about time that the Front-Bench spokesman for the Opposition started to address that topic.

Mr. Fatchett
Again, Madam Deputy Speaker, the weasel words of the hon. Gentleman will be noted with great interest. What the hon. Gentleman will not do—I suspect that it comes out of that same stable of views—is condemn the Federation of Conservative Students.

Mr. Robert B. Jones
On a point of order, Madam Deputy Speaker. I understood that this debate was about the finance of student unions. The hon. Gentleman, so far, has talked about the Education Reform Bill and his views on that, and about the FCS and his views on that, and we have had 11 minutes of it. We have yet to hear from him about the finance of student unions. Is the hon. Gentleman entitled to use all this debating time on material which is unrelated to the subject?

Madam Deputy Speaker (Miss Betty Boothroyd)
In my view, the hon. Gentleman is not out of order; nor has he been on his feet yet for 11 minutes. Mr. Fatchett.

Mr. Fatchett
I could make progress, Madam Deputy Speaker, if there were not so many interventions. It is not my fault; I am not trying to delay the House. I can understand the hon. Gentleman wanting to get the subject away from the Federation of Conservative Students. This is one part of the hidden agenda — the failure of the Conservative party to recruit among students in our universities and polytechnics. There is only one saving grace as far as the Conservative party is concerned in terms  of recruitment, and that is the alliance. It does worse, but only just, and if the FCS has more influence the Conservatives will do worse than the alliance. The other part of the hidden agenda is the clear authoritarianism of the Conservative party. My hon. Friend the Member for Leeds, West (Mr. Battle) has said how interesting it is that Government Members defend freedom of speech when at the same time we have the language of the Prime Minister about her desire to "extinguish" Socialism—the language of violence and eradication. The real authoritarianism of this Government stretches to the press, to the BBC and to all those institutions that offer alternative views. We know, and it has been clearly stated, that every student union that disagrees with the Conservative party is a target for that authoritarianism. If it disagrees with the Conservative party, it is in danger of being closed down. When it comes to the argument about the closed shop, I feel that I am on very safe ground indeed. I rely on the former Secretary of State for Education, Lord Joseph. It seems to me that Lord Joseph came out of the Right-wing political stable of the Conservative party. He differs, I suspect, from a number of hon. Gentlemen here tonight in that he is a thinking man, a sensitive man. In October 1983, at the Conservative party conference, he said of student unions: "a wrong impression has been given by the phraseology we use, we use the words of industrial trade unionism. In fact the student union is not the same—mercifully—as an industrial union.The only work it can stop is by itself, by its own members, to its own harm. What we have in the student union is provision that enables automatic membership, automatic access to be given to students at a polytechnic to the facilities such as libraries and sports facilities provided by the public and I do not see how we can therefore make membership voluntary." Lord Joseph was right in October 1983 and I suspect that some Conservative Members present tonight supported him at that time. He clearly said that the student union was not a closed shop on the basis of an industrial closed shop. The student union is of the nature of a providing body, whereas the closed shop is in essence part of an economic collective relationship. Because Conservative Members have failed to relate their arguments on this issue to the points made by Lord Joseph, their argument falls. The student union provides a range of services which are among the opportunities available in student life. They extend beyond the political. While the Conservative party does badly on the political side in that context, there are sporting and cultural facilities and many of us have benefited from them. I remember Grosvenor square in 1968. Although I was there, I hope it was not I who allowed the hon. Member for Cannock and Burntwood (Mr. Howarth) to be responsible subsquently for security. I recall, too, when at the London School of Economics, having the advantage of playing for the LSE cricket club, which was subsidised through the student union, of being elevated to the dizzy heights of vice-captain and secretary of the cricket club, and of performing those tasks using all the skill with which I have run my subsequent political career. We won many matches, including the Universities Cup. My only mistake as secretary was to have three teams playing on two pitches, an occasion when Socialist planning did not work. Within the political process at local and national level we have the opportunity for individuals to express their views. The hon. Member for Cannock and Burntwood spoke of his time at Southampton university and of activating the silent majority. That is all part of the democratic process, and I respect his efforts in that matter. But what I suspect the hon. Gentleman and many of his hon. Friends regret is that the Conservative party cannot find a substantial majority among student bodies, and that that is the reason for their attack tonight. We believe in student bodies. There is a role for the NUS as a voice that can represent the interests of students to Government. That is why we want to maintain the system as it is and why I hope the Minister will reject tonight's Right-wing monetarism—this Right-wing free-market force from St. Andrews—and will recall what my hon. Friend the Member for Hamilton (Mr. Robertson) said about better forces having come out of St. Andrews. I am sure that those better forces would recommend the continuation of the student union arrangements as they now exist.

12.58 am

The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Jackson)
The debate has been interesting and useful, and may well be pregnant with consequence. We are grateful to my hon. Friend the Member for Eastwood (Mr. Stewart) for raising the matter. Following the precedent set by my hon. Friend the Member for Hertfordshire, West (Mr. Jones), I declare my interest as a former president of the Oxford Union, a student union which happily conforms to the model prescribed by my hon. Friend the Member for Eastwood. Two different but related sets of issues have been raised in the debate: that of local unions—unions at the level of the institutions—and that of the NUS; and I wish, first, to register the significance of the debate. Hon. Members have shown an impressive commitment by their eloquence and arguments. There was of course the impressive commitment reflected in early-day motion 449 put down by my hon. Friend the Member for Thurrock (Mr. Janman), which has now attracted about 214 signatures. By the standards of parliamentary icebergs—if that is what early-day motions are—that is a major iceberg. All that constitutes at least a significant expression of opinion. I believe that it should cause heart searching on the part of those who find their stewardship under such formidable criticism. I must also register what might be called the propriety of the debate. Local unions and the National Union of Students derive the bulk of their finance from the taxpayer. They are not, they cannot regard themselves, and they cannot be regarded as simply private bodies. The words of the Attorney-General's guidance on expenditure by student unions in 1983 underline that point. I do not believe that it would be wise policy for us, as Members of Parliament who represent the taxpayer, to press the principle of accountability too hard. We may pay the piper, but experience often shows that the piper will play best if he chooses his own tunes. My hon. Friends are right to insist that hon. Members have a proper interest in how several tens of millions of pounds of taxpayers' money is being disbursed by student unions and the NUS. Having said that, I now advert to some of the difficulties that I consider to be in the way of some courses of action that have been proposed this evening. With regard to local unions, I remind the House that we are considering organisations that are part of the structure—often the constitutional structure — of institutions—universities and polytechnics — which are autonomous, and whose autonomy all Governments, especially a Conservative Government, are bound to respect. As recently as 1983 the Attorney-General, in his guidance to student unions, to which I have already referred, remarked: "It is clear … that if a college is to function properly, there is a need for the normal range of clubs and societies so as to enable each student to further the development of his abilities, mental and physical. Equally, it is likely that the college will gain from the fact that the students hold meetings to debate matters of common concern and publish some form of campus newspaper. Reasonable expenditure on such purposes is, in the view of the Attorney General, plainly permissible for a Student Union." That was not only the view of the Attorney-General in 1983; it is embodied in the statutes and charters of many autonomous universities and colleges, each of which has found its own way of giving expression to the view. The Government feel that Parliament should act to override such a view only when very powerful considerations of public policy are at stake. That is the first difficulty in some of the proposals put forward in the debate. Another set of difficulties are less of a practical than of a philosophical order. The great principle that has been hovering over the debate is that of freedom of association. This was referred to by my hon. Friend the Member for Hertfordshire, West when he spoke about a moral issue. I think that he is right about that and that the hon. Member for Leeds, Central (Mr. Fatchett) fell below the level of the debate when he failed to recognise that important dimension of it. The principle of freedom of association is complex. On one side, it imposes a requirement on an individual to be associated with a body whose activities are abhorrent to him. That was the case made by my hon. Friend the Member for Hertfordshire, West. The other side of the argument is that the principle of freedom of association defends the right of corporate associations to associate freely together, as, for example, a student union will affiliate to the National Union of Students. My hon. Friend the Member for Thurrock will acknowledge that he came upon that difficulty when he was framing subsections (3) and (4) of his draft clause, which could appear to permit a local union to purchase services, but would make it unlawful for a national student body or the National Union of Students to be paid to provide such services. That is a somewhat paradoxical limitation of the principle of free contract. I have alluded to some of the difficulties with which this question is fraught, but I do not intend to stress only the difficulties. It is clear from the debate and from the early-day motion that there is a strong current of concern in the House that focuses particularly on two questions. The first relates to safeguards for individual students who reject compulsory affiliation, especially to the National Union of Students. The Government must take note of the concern that has been expressed on that point. The second relates to the extent to which student unions, and especially the NUS, distinguish, or fail to distinguish,  between services that directly support the position of students as students and their overtly political campaigning. These campaigns are often on matters that are far removed from the interests and concerns, to use the words of my right hon. and learned Friend the Attorney-General, of "students as such" or of their "colleges as such." Hence the concern that has been expressed tonight by my hon. Friends. There is a case to answer, and the National Union of Students must be allowed to answer it. How thereafter the matter should be taken forward remains to be seen. My right hon. Friend the Secretary of State for Education and Science is conscious of the strength of feeling in the House, as shown by the number of signatures that the early-day motion has attracted. He will therefore wish to make a statement at an appropriate moment. In the meantime, I know that he will want to pay careful attention to all that has been said during the debate.

1.6 am

Mr. Tim Janman  (Thurrock)
This subject has been well covered tonight. The basic principle is that each student should he able to decide whether he or she joins the National Union of Students above and beyond automatic membership of the local students' union. It is important to differentiate between the Socialist definition of choice, which is collectivist—that students should be bound by the decision of a student union general meeting— and our more correct definition of choice, which leaves the individual to decide. The current means of arriving at NUS membership depends upon the taxpayer, by a very tortuous route, funding the organisation rather than those individuals who decide to join it. I shall concentrate on the NUS and  set out a few of the views that are held by that organisation which the taxpayer is funding. Before doing so, it is worth pointing out that my early-clay motion was signed by Conservative Members, by three Ulster Democratic Unionist party Members and by one Social Democratic party Member. There was also a supportive amendment to my early-day motion that was signed by six official Ulster Unionist party Members. The NUS supports the African National Congress in South Africa and SWAPO. It supports the statement that South Africa should be made ungovernable and that its system should be made unworkable. On economic policy, the NUS supports positive discrimination for the working class, women, blacks, other ethnic groups, lesbians and gay men, the disabled, young people and those who are classed as too old to get a job. I am not quite sure who is left out. It supports non-privatised industry and the scrapping of all the Government's trade union laws. In December 1984 the NUS voted to donate £1,000 to the striking miners. It is encouraging a campaign of civil disobedience against the community charge, a campaign that is to be funded by the taxpayer. The NUS intends to support and pay the legal fees of those students who will not pay the community charge. On defence, the NUS supports CND. On drugs, it supports legalising cannabis. An article in the national student magazine, which is funded to the tune of £ 24,000 a year by the NUS, gave instructions on how to make "crack" — a particularly virulent form of cocaine — describing the drug as "staggeringly pleasurable", and went on to say that it would "get you as high as you are ever going to get". On Ulster, the NUS has never condemned the action of the IRA, and supports British withdrawal and a united Ireland.

Hong Kong

1.10 am

Dr. John Marek  (Wrexham)
I am pleased to be able to open this short debate on an important topic, which concerns what happens to our largest remaining colony. With Hong Kong, we have not been able to do what we have been able to do with many of the other countries which were colonies but which, through self-determination, achieved independence and were able subsequently to look after their own affairs. In 1997, Hong Kong will again become a part of China. Governments of both parties in the United Kingdom have not sought to introduce any form of democracy in Hong Kong, certainly in this century. The reason is probably that it was not expedient to do so. The Administration were more capable, and had an easier time, governing the colony if there was no problem of democracy — because democracy always causes problems. It is not necessarily as efficient as a benevolent dictatorship, and in recent times it was not encouraged because of what might happen on the mainland of China. Whatever the reason, democracy was not the number one priority for the British Government. All that has changed, or ought to have changed, in the past few years — not because we do not want Hong Kong to be transferred peacefully, properly, efficiently and optimally to China in 1997, but because we should recognise, belatedly, that we owe the people of Hong Kong some democracy. We should leave them with that legacy—a legacy that can be provided by the Basic Law that will be promulgated by the People's Republic of China in two years' time. The Prime Minister went to China in the early 1980s with a flea in her ear. When she came back, following the new realism, she had realised what was necessary: diplomacy, negotiation and consultation. The result was the joint declaration, which everyone in the House probably agrees is a remarkable document, principally because of what China was prepared to allow. It is clear that, if China wanted Hong Kong back tomorrow, there would be no question but that the United Kingdom would say anything other than "Certainly. Give us three hours to leave." But China has not said that. China was able to negotiate with the present Government and produce a joint declaration. If the next nine years go the right way, that declaration ought to allow Hong Kong to be transferred in the best way possible to become a special autonomous region in China. Many results flow from the joint declaration, but I want to deal principally with the constitution, the legislature and the elections in the first part of what I have to say. In the second part, I should like to deal with the draft Basic Law, of which I have a more or less up-to-date copy. The White Paper produced by the Hong Kong Administration said that direct elections for the legislature were to be introduced not this year but in 1991. For the life of me, I cannot understand why that should be the case. On page 12 of the White Paper, it says: "Nevertheless there is a strong argument against moving too quickly in this direction." Then it talks about there not being enough official members in the Legislative Council but it really does not give a logical argument why there should not be direct elections introduced for some of the members of the Legislative Council in 1988. One has to square that with what is in the joint declaration. Paragraph 3(2) said: "The Hong Kong Special Administrative Region will be directly under the authority of the Central People's Government of the People's Republic of China. The Hong Kong Special Administrative Region will enjoy a high degree of autonomy, except in foreign and defence affairs which are the responsibilities of the Central People's Government." That is absolutely right. I do not think that any hon. Member would dissent from that. It goes on: "The Hong Kong Special Administrative Region will be vested with executive, legislative and independent judicial power, including that of final adjudication." I mention that now because it is an important part of the joint declaration. It talks about the Hong Kong special administrative region being vested with executive and legislative power. It can do that only if the legislature has some of that power. Of course, there will be a chief executive who will propose, but there must be checks and balances. They may be there now but they must be seen to be there by the people of Hong Kong when the Basic Law is promulgated. Paragraph 3(4) says: "The Government of the Hong Kong Special Administrative Region will be composed of local inhabitants. The chief executive will be appointed by the Central People's Government on the basis of the results of elections or consultations to be held locally." Annex 1, paragraph 3, says: "The legislature of the Hong Kong Special Administrative Region shall be constituted by elections. The executive authorities shall abide by the law and shall be accountable to the legislature." I hope that hon. Members will bear in mind that the chief executive and the other executive authorities, besides abiding by the law, "shall he accountable to the legislature." In particular, the previous sentence says: "The legislature … shall be constituted by elections." It does not specify how the elections will take place and what type of elections they will be, but it would be to misconstrue the meaning in the joint declaration if the definition is such that those elections will be constrained so that only a few people in Hong Kong will be able to partake in the election of the legislature or if those who elect the legislature require certain qualifications. No system of representative democracy is perfect and it is a matter of seeking the optimum that can be achieved. That would be 100 per cent. direct elections based on the principle of one person, one vote. There should be no quarrel with that. It is amazing that the Government have shown such reticence about that, saying that 1988 was not the time but perhaps they might be achieved by 1991. Indeed, the White Paper says that in 1991, 10 directly elected members will be introduced into the Legislative Council. There may be various reasons for that reticence. One could be that the Foreign Secretary wishes to hand over Hong Kong to Beijing as quietly as possible and at as easy a time as possible. If there was too much discussion about what elections should be held in Hong Kong and there became a desire in Hong Kong to have elections, that might create difficulties. Another reason could be that the Foreign Secretary is afraid of what China will say. I accept that China has a say in this and that under the joint declaration the Basic Law is solely China's responsibility, but we can try to get the legislature of Hong Kong as close as is possible to the  ideal expressed in the joint declaration before 1997. There will he not any direct elections to LegCo this year, but having 10 elected members in 1991 is making haste slowly. That is not understood by many people in Hong Kong. Even the Hong Kong chamber of commerce said in its submission to the survey office that 80 per cent. of the people who replied wanted some form of direct elections to the legislature. The White Paper suggests merely 10 members in 1991 and no more than that afterwards. Those 10 are in advance of what will be in the Basic Law. I hope that the Basic Law will say that many more directly elected members will be in LegCo in 1997. I have another disappointment with the White Paper relating to the balance of power. Even in 1991 the number of appointed and official members in the Legislative Council will outweigh those members who are directly elected, or elected from functional constituencies. I know that democracy is inconvenient, but it is carrying it too far for the Government not to allow a majority membership in LegCo in 1997. The White Paper clearly says that it is not envisaged, but the balance will be 30 to 26. It will be at least 1994 before we have a majority of elected members who can speak because they are elected by a functional constituency, or elected directly. At present the appointed members are not just toadies of the Governor, who put up their hands whenever the Governor suggests something. Of course, they know their own minds and speak independently, so it is no slight on appointed members, but democracy must be seen to exist, and it is not being seen to exist when there is a majority of appointed and official members in the Legislative Council of Hong Kong. Why the timidity? I can only think that the Foreign Secretary either wants a quiet life and thinks Hong Kong is asleep, that the people who arc questioning are very few and far between and, although they may make a lot of noise, most people in Hong Kong are not listening to him; or perhaps he is scared of what the People's Republic of China might say if he were bold and introduced too much democracy.

Dr. Jeremy Bray  (Motherwell, South)
As my hon. Friend has just returned from Hong Kong, and so has been there since the White Paper was published, I am sure that the I louse would be interested to hear his view of the reaction of people in Hong Kong to the White Paper.

Dr. Marek
It is difficult to gauge accurately on a short visit the feeling in Hong Kong, but one thing that came through was that the survey by A. G. B. McNair has been largely discredited. There is nothing intrinsically wrong with asking people, "Do you want direct elections?" and asking them to tick "yes" or "no". The second question is, "Do you want direct elections in 1991 or 1998?" and they are asked to tick "yes", "no" or -abstention". That would have been clear. However, I do not want to take up too much time as other hon. Members want to speak. The question was very convoluted and it was clear to me that opinion in Hong Kong was such that if the questions were phrased differently and were clear the chances are that a different result would have been achieved. While I was in Hong Kong I also felt that there was a greater demand for direct elections. People were thinking and talking about that and the subject appeared more and more frequently in the Chinese press as well as in the English language papers. There were fewer objections to  direct elections. In fact, I did not read any objections in the letters columns of the English language Hong Kong press recently. The people to whom I spoke were very receptive to a substantial measure of direct elections in Hong Kong. I want to consider the Basic Law about which I have some concerns. First, I must repeat that the Basic Law is a matter for China to promulgate. What I have to say is in no way intended to detract from that. However, I am sure that the People's Republic of China will be interested to hear what hon. Members of the British Parliament and indeed, more importantly, what the British Government have to say about their view or the Basic Law, not because the Government or hon. Members want to tell China what to do or because they want to be destructive in their criticism, but simply because we want to help. After all, the British Government have many years' experience of administration in Hong Kong and should be able to help not just through discussions in the joint liaison group—that is perhaps not quite the place where the discussions should take place—but directly, openly and in front of the people of Hong Kong so that they know exactly what is happening. One of my criticisms at present is that the people of Hong Kong do not really know what discussions, if any, are going on between the British Government, the Hong Kong Government and the People's Republic of China. I have a draft of the Basic Law. It is not an absolutely up-to-date draft. I believe that it is an English translation dated 5 January.

Sir Russell Johnston  (Inverness, Nairn and Lochaber)
Hon. Members may be slightly puzzled by the fact that copies of the Basic Law are floating round. We were all given to understand that it would not be available in any final draft to the public until May. Is this generally available, and, if so, why is it not available to the House?

Dr. Marek
I received the draft when I was in Hong Kong. I have no reason to believe that the draft is in any way secret. Perhaps the Minister can tell us about that when he replies. The title of the draft reads: "Collection of draft articles of the various chapters prepared by the sub-groups of the Drafting Committee compiled by the secretariat of the Drafting Committee for the Basic Law, December 1987. Translated by the secretariat of the consultative committee for the Basic Law. 5 January 1988 draft." I suspect that the draft is available if hon. Members require it. However, we will have to wait and see what the Minister says. The Minister is shaking his head. If it is not available, it should be because the draft affects the future of the people of Hong Kong. It vitally affects how they will be governed for 50 years after 1997. I am not saying that there is anything underhand here or that we are trying to interfere in the Basic Law whose promulgation is the responsibility of the People's Republic of China. We want to help the process so that we achieve as good a Basic Law as possible and ensure that the Basic Law drafting committee has the best possible advice. I make a helpful criticism: I am not sure that the Basic Law drafting committee has the best advice. Are the British Government in a position to provide advice, which can be considered and, if necessary, cast aside? One cannot ask for more. The Basic Law drafting committee would probably welcome the British Government's advice and experience on administration in general and on Hong Kong in particular. Article 64 has three options for the election of the legislature of the Hong Kong special administrative region. Option one provides for 50 per cent. to be elected by functional constituencies, 25 per cent. to be directly elected by geographical constituencies and 25 per cent. to be elected by a grand electoral college. That option does not satisfy my interpretation of the draft declaration. In some ways, the draft declaration is vague, but it is clear that the Hong Kong legislature will be composed by election. That must mean that all the people of Hong Kong must have a not too unbalanced say in its composition. I do not believe that it satisfies the joint declaration to have 25 per cent. directly elected. Fifty per cent. have to be elected by functional constituencies. Such constituencies exist at the moment in Hong Kong. One million or 2 million people may have one seat in a functional constituency and a few hundred accountants or doctors another seat. That would not be accepted by the British people or by the people in any democracy in the world. There is no logic in saying that the people of Hong Kong are different and that their idea of democracy is not the same as ours. The second option is better—50 per cent. elected by general and direct elections, 25 per cent. by functional constituency elections and 25 per cent. to be selected by regional authority elections, such as elections by the district boards, the urban council and the regional council. Subjectively, that would just about satisfy the joint declaration. The third option—a dismal one—is for 30 per cent. to "be selected by an advisory board from non-advisors, of whom at least one-third shall be principal officials while the rest shall be members of the Executive Assembly or members of the public; 40 per cent. shall be elected by functional constituencies; and 30 per cent. shall be directly elected by geographical constituencies." I hope that the Basic Law drafting committee understands how other legislatures in democratic countries are elected. The joint declaration says that the Hong Kong special administrative region shall enjoy a high degree of autonomy. It can do that only if the people of Hong Kong have that autonomy and give it, through their democratic votes, to the legislature. Options one and three certainly do not do that and I have great reservations about whether option two is the best. Article 69 refers to the powers of the president of the legislature of the HKSAR. The proposals are that the president shall either be elected by the legislature or shall be the chief executive. The chief executive will have a difficult job because he will have a duty to Beijing and to Hong Kong. Article 69, to which there is no option, gives to the president of the legislature, first, the power to preside over meetings of the legislature and, secondly, the power to decide and control the agendas of the meetings. What would hon. Members say if we gave you, Madam Deputy Speaker, the power to control and decide the agendas of our meetings? No hon. Member would accept that. Thirdly, the president has the power to decide the times of suspension, adjournment and commencement of meetings. Many hon. Members will be flabbergasted to read this. Fourthly, he can call special meetings between sessions. There are no checks and balances. If the chief  executive may also be the president of the legislature, the legislature will be unable to control the executive in any meaningful way. Article 70 states that the Hong Kong special administrative region legislature shall examine and pass the budgets and final accounts as proposed by the executive authority. In most legislatures, it is not open to individual members to propose new legislation for increasing taxes. However, this House can alter and refuse to pass Budgets and final accounts as proposed by the Executive. But that is not what the draft Basic Law says. The legislature can approve taxation and public expenditure. It should say that the legislature should consider proposals for taxation and public expenditure and pass them if it agrees with them. It will receive the administrative reports of the executive authorities and debate them. It cannot ask for or require reports. It can simply receive them. What a toothless legislature so far. The legislature can question the work of the executive authorities. That does not go far enough. Annex 1 of the joint declaration states clearly that the executive shall be accountable to the legislature, and I have yet to see any power that will give any accountability to the legislature. The sixth function is to debate any issue relating to the public interest—not to decide anything, but to debate. Anyone can debate, but in a democracy we must be able to decide at the end of the day. Finally, the legislature can assent to the appointment or removal of judges in the court of final appeal and the chief judge of the supreme court. Article 71 deals with what the members of the Hong Kong special administrative region may do. It states that they "may, in accordance with the provisions under this Law and legal procedures, separately or jointly present any bills, save for the following three areas which will require the prior written approval of the Chief Executive." The first is "Bills relating to taxation and government expenditure." It is clear that the legislature will be toothless in relation to taxation and Government expenditure unless the chief executive has given written approval. The second category—this is a sweeping restraint on the legislature—is "Bills relating to Government policies." After 1997, the legislature will be unable to debate anything that relates to Government policy unless the chief executive has given his written consent. The third category is "Bills relating to the structure and operation of the executive authorities." I could mention many other matters, but I think that I have given the flavour of my serious worries, some of which I hope are shared by my hon. Friends and perhaps even by Conservative Members—although I know that there are not many Conservative Members on the Benches at the moment. There is no doubt that in any democracy there must be an executive that is accountable, and at present the draft Basic Law does not allow for that. I hope that the Government will take on board and will talk to the People's Republic of China offering friendly criticism. Let me repeat this, as I do not wish it to be misunderstood in Hong Kong or in Beijing. Rather than being criticism and interference, I offer this as helpful comment upon the way in which democracies have worked in this country, which has been reflected in the way in which we have administered Hong Kong. Perhaps we have not  administered Hong Kong in quite the most democratic way when we should have done so, but the principle has been in place. I believe that the present Government of Hong Kong pay much attention to what goes on in the Legislative Council. However, it is not codified and written down in standing orders, and that needs to be done. One of the problems is that the Basic Law drafting committee, which by and large comes from the People's Republic of China and from Hong Kong, does not perhaps have the breadth of wisdom and the experience that its members could have. Certainly, from the Hong Kong side, I suspect that many members have the experience of the Legislative Council in Hong Kong, but not that much more experience. Again, that is not a slight or a criticism of those members, because I am sure that they are doing their best. However, as a result of the meetings to draft the Basic Law, there are many problems with it, and one cannot help feeling that it has been drafted by a committee of 50 people. I wish the people of Hong Kong well in the traumatic journey that they must undertake in the next nine years. I know that even now in Hong Kong there is a brain drain because people there do not have confidence that everything will go well. They are wrong, because things can and should go well. With the help of the British Government and the Government of the People's Republic of China, I have every confidence that things will go well, especially if the executive authorities of both countries take the people of Hong Kong into their confidence and discuss with them openly what should be done. They should sample public opinion, and that action should anticipate how public opinion will develop in Hong Kong in the next nine years. Above all, it is most important that there should not be a feeling in Hong Kong that the British Government do not care about the territory and that they want 1997 to come as quickly as possible. The British Government must do their best to stop this feeling from gaining ground. I have every hope that things will go well. In the next two years there will be much discussion about the Basic Law, which is the most important aspect to be considered in the next nine years. It will govern what goes on in Hong Kong during the next 50 years. The discussions should take place openly. I hope that this debate will arouse inquisitiveness among more people in Hong Kong and will lead them to ask, "What exactly is in this Basic Law, and how does it affect me? Is there anything that I can put into it, or are there representations that I can make to the British authorities or to the Basic Law drafting committee?" If that happens, this debate will have served some purpose.

1.44 am

Dr. Jeremy Bray  (Motherwell, South)
The House is indebted to my hon. Friend the Member for Wrexham (Dr. Marek) for raising this matter again soon after our last debate. In the intervening period the White Paper has been published. Therefore, we can now debate the plans as set out for Hong Kong over the next three years. My hon. Friend has been helpful in setting out some of the proposals in the draft Basic Law. A number of the basic assumptions that the Foreign Secretary made in our last debate need to be spelt out, clearly understood and largely agreed. The first proposition is that Hong Kong has prospered best when  China and Britain have been in harmony, and that is undoubtedly true. The second proposition is that there has to be a degree of consistency in the Basic Law that will govern the future of Hong Kong after 1997. It is true, as my hon. Friend said, that the Basic Law is a matter for the People's Republic of China. To judge from some of my hon. Friend's remarks, it appears that he was asked by some representatives from the People's Republic of China what on earth this House was doing debating the Basic Law when the matter was solely for China. Indeed, I was telephoned and asked that question. I said that it was a matter for China, but that the House—in common with other free, democratic assemblies—can debate what it likes. It is not dictated to, least of all by the Government, as to what it can or cannot debate. We must reaffirm that the Basic Law is essentially a matter for China, and any comments that we make should be frank, friendly, I hope outspoken, and, as my hon. Friend said, a reflection of our domestic and constitutional experience here and elsewhere throughout the world. If the essential objectives of our Government and, more important, of the People's Republic and of the people of Hong Kong are to safeguard the future interests of Hong Kong, further thought must be given to the Basic Law. The White Paper proposals are extremely disappointing. Hong Kong must be governed in a way that works in three essential respects. First, the integrity of the Government must be maintained and free from corruption. The Government must be vested with authority that is respected by the people of Hong Kong. Secondly, that Government must be socially responsible. They must care for the social well-being and welfare of the people. They have already demonstrated that care in a number of ways, and their housing policy, health policy and, to an extent, education policy are quite extraordinary. Thirdly, the Government must be efficient. They must deliver. When one visits the various departments of the Hong Kong Government, one cannot but be impressed with their efficiency. We would look with envy at certain efficiencies. From our experience and the role of British people in the government of Hong Kong, it is clear that the maintenance of those three characteristics of integrity, social responsibility and efficiency requires constitutional developments of a nature that have not yet taken place. Those characteristics have been safeguarded by the long stop of the responsibility that our Government have had for many years for the government of Hong Kong, during which time Hong Kong has established itself as a community. We have had a democratic tradition that has been brought to bear in the appointment of the Governor, the terms within which he is expected to operate and the tradition that people from this country have gone out to govern Hong Kong. It is right that that should be changed after 1997. The traditions will then stem from within China, and it is right that that should be so. The great strengths and resources in the history and tradition of China will give new strength to the Government of Hong Kong. Again, if one considers the history of government in China, there must he an awareness of the difficulty, in such a vast continent of peoples, of maintaining the relationships between the centre and the many provinces in a way that preserves the authority of the centre, but enables the special administrative regions, of which Hong Kong will be one, to function efficiently. Hong Kong is a unique animal which the People's Republic of China will be inheriting. It will have characteristics which, at present, other special administrative regions do not have. It will have overseas links. It will have vast financial and economic power, which will be vested in the hands of some very powerful and rich individuals, who will have a powerful incentive to seek to influence decisions, not only in Hong Kong, but stretching back to Beijing. In the past it has been easy for corruption to seep into the system. One asks the People's Republic of China what defence it has in Beijing to stop corruption from being generated in Hong Kong and spreading back into the Republic. In our experience, incomparably the best safeguard against corruption in the long term is democracy and a law firmly rooted in the democratic procedures and support of the legislature. That needs to be established in a mode that can cope with the characteristics and complexities of Hong Kong society. If one considers the behaviour of the stock exchange and of the enormous infrastructural developments that are going on in Hong Kong — for example, the huge contracts that are let — one sees that there is an administrative structure that needs to be monitored, kept in check, and watched by the proper political machinery. That is not yet in place in a way that can survive after 1997. I say most seriously, not out of any particular respect for the Government or the House, but out of concern for the well-being and good government of China, that it is in the interests of the People's Republic of China to think carefully about how to safeguard its integrity by a proper democratic base within Hong Kong. The other point that needs to be made, not only about Hong Kong, but about the People's Republic of China itself, is about the quite extraordinary pace of change in the Republic. The rate of change politically, economically and socially is huge. In parts of China it is at least as fast as it is in Hong Kong, and the China of 1997 will be very different from the China of 1988. If we find that Hong Kong is frozen in a mode because it is stuck with the Basic Law which represents a view which, perhaps, has been drawn more from the past of China than from China's future needs, China itself will not be well served. There is considerable diversity within the present arrangements for the government of provinces and special administrative regions in China. They continue to develop. It is quite wrong to suppose that development will stop in 1997 in China or Hong Kong, or in the way in which China governs Hong Kong. But Britain and the House would not be fair to the people of Hong Kong or the People's Republic if we left things as they are now. We need, rather, to point a way ahead in which developments in Hong Kong and in its relations with China can continue, so that up to and beyond 1997 developments will continue in a way that will give Hong Kong a splendid future and bring China much more fully into touch with the rest of the world. That is something in which Hong Kong has a special role to play. It would be helpful if the Minister could underline the point about continuing development. The 1997 proposals are by no means the last word on the direction in which things are moving or the distance that we shall travel in  that direction. Probably the most important thing that the Government can give now is confidence in continued development.

1.51 am

Sir Russell Johnston  (Inverness, Nairn and Lochaber)
Like the hon. Member for Motherwell, South (Dr. Bray), I congratulate the hon. Member for Wrexham (Dr. Marek) on raising this debate, which we can view as an extension of that on 20 January. My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) was in Hong Kong at the same time as the hon. Member for Wrexham, but, unfortunately, because of a long-standing previous constituency engagement he cannot be present tonight. Were it not for that appointment, I am sure that he would have been here, as is his natural wont, at 1·50 am, if only for the pleasure of observing how bright and bushy-tailed the Minister is. This is a natural hour at which to discuss anything. My hon. Friend told me about his visit, and what he said confirmed me in the views that I expressed in the debate on 20 January. First, there is concern about the delay in securing an elected element in the legislature, as the hon. Member for Wrexham said. The Government have let the people of Hong Kong down in that respect. The shortness of the half-day debate on 20 January prevented a full exchange of views on the many issues involved, but some hon. Members on both sides of the House found the statement that the Foreign Secretary made at the end of the debate unsatisfactory and not entirely accurate. He said: "We"— by that he meant hon. Members on both sides— "agree upon the proposition that in due course we need an element of direct elections — a modest proportion, but certainly not going all the way." That would certainly not be the view of the hon. Member for Wrexham. "Thus far there is agreement on both sides of the House." —[Official Report, 20 January 1988; Vol. 125, c. 1017.] That is not quite accurate. The hon. Member for Motherwell, South spoke of the need for the Government to work and be efficient, and of course that is true, but it might be read into the hon. Gentleman's remarks that he was, in a sophisticated way, further putting off the idea of elections. He said that it was absolutely right—an expression I always hesitate to use in any aspect of politics—that China should have a complete say in the Basic Law, but it is not absolutely right. This House and people in Hong Kong have a valid democratic entitlement to express views. I do not accept that because a power is great and powerful it is always absolutely right. Secondly, there was always worry about the ambiguity that it is possible to derive from the word "elected". The hon. Member for Wrexham made this very clear. When I spoke in the debate on 20 January I quoted the Foreign Secretary's response to me on 25 October 1984 in an exchange on the draft Basic Law, when he said: "The agreement provides for the Legislature of Hong Kong in the future to be on an elective basis and for the Executive to be accountable to that legislature."—[Official Report, 20 January 1988; Vol. 125, c. 991.] There is little doubt that the use by the Foreign Secretary of the phrase "in the future to be on an elective basis" was presumed to mean, and was intended to convey, that it would be on a different basis from the present one; in  other words, that there would be direct rather than functional elections on the corporate state basis—sort of Mussolini lines—that already exists. There was no real suggestion of the related device of an electoral college. Thirdly, I think that we are impeded, naturally enough, in this debate because we do not know what the Basic Law will contain. The production by the hon. Member for Wrexham, calmly as if out of a hat, of the draft copy of the Basic Law was something of a coup. I thought that it was under wraps until May, but the hon. Gentleman produced it with a sort of casual, ingenuous amiability, virtually expressing puzzlement that it was not available in the Vote Office.

Mr. George Robertson  (Hamilton)
Like the Liberal/SDP joint declaration.

Sir Russell Johnston
The hon. Gentleman is being flippant, which is not entirely unexpected at this hour. What is the status of this document? Perhaps the Minister will tell us. He was making facial, if not verbal, comments during the hon. Gentleman's speech. The Government must know that there is a fear that there could be no directly elected element carry over from before to after 1997. Fourthly, and lastly, there is already a drain of people from Hong Kong. The hon. Member for Wrexham spoke about that. There is probably nothing that one can do to halt that at this time, but assurances about elections and the protection of the legal people's system would prevent its increasing. I do not suppose that we can affect those who are set on leaving, but we seem to be placing obstacles in the way of their coming to the United Kingdom. That leads to many of them going to Canada, for example. Why should we place barriers in the way of people of talent and resource? My hon. Friend the Member for Berwick-upon-Tweed told me that his general impression was of a community "anxious but not despairing." If we are to ease that anxiety and fulfil our enduring responsibility to the people of Hong Kong, we must make certain that there is a determining group in the legislature that is directly elected. It does not have to be 100 per cent., but it should be a determining group. The House should never forget its reponsibilities, and that must be reflected in the Minister's reply.

2.3 am

Mr. George Robertson  (Hamilton)
One piece of advice that could be unanimously offered to the future legislature in Hong Kong is that it must not have a Consolidated Fund Bill. I can think of no more perverse legacy to leave to the people of Hong Kong or to any other country than the prospect of debating matters of crucial importance to people in Hong Kong or elsewhere at 2 o'clock or 4 o'clock in the morning. The sooner we adopt civilised hours so that we can consider these matters at a more appropriate time of the day, the better it will be for all of us.

Sir Russell Johnston
Hear, hear.

Mr. Robertson
An air of unanimity has characterised this brief debate. My hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) is, of course, the Opposition spokesman who normally deals with these matters, but owing to the coincidence of this debate with the annual conference of the Scottish council of the  Labour party, on whose executive committee he sits—I was once its chairman, but I have now been elevated to higher things—I have replaced him at short notice. But, of course, it is a nostalgic trip back for me, because for a very long time I was the Opposition spokesman on Hong Kong matters. Indeed, I was around at the time the joint declaration was signed. I believe that that period was a model of bipartisanship. There was a common objective, which was that the steady negotiation towards the joint declaration should take place in secrecy and without party political points interfering with the process, and that occurred. When the joint declaration came forward, we quite rightly recognised the success that it represented for both China and the United Kingdom. I believe that the people of Hong Kong appreciated what happened. Those of us in this Parliament charged with responsibility for their future took that responsibility very seriously indeed. It is therefore all the sadder that that bipartisanship has to some extent broken down, because I do not believe that it was necessary. My hon. Friend the Member for Wrexham (Dr. Marek), who obtained this debate in the lottery that goes along with the Consolidated Fund, has returned recently from Hong Kong and he underlines the concern at the delay in progress towards direct elections which was all too apparent in speeches in the debate on 20 January when we were predicting the contents of the White Paper, and indeed in the exchanges that took place in the Chamber on 10 February when the Foreign Secretary brought the White Paper to the House. Therefore, there is this breakdown in the bipartisanship between the Government, who move forward at a snail's pace, and many other people in the House, who believe that a bolder movement towards direct elections is more appropriate. I recall only too well, at the time of the joint declaration, commenting on and endorsing the idea of a legislature that would be "constituted by elections". At that time, of course, a deliberate vagueness built into that: expression because the people in Hong Kong, Beijing and London did not know precisely where the evolution of that discussion would take us. However, we all knew that eventually we would see a system of representative government in Hong Kong that reflected the intrinsic desire for democratic institutions that lies beneath the surface of all the debates that take place on stability and prosperity. I believe very strongly that since then the timid approach adopted by the Hong Kong Government, as reflected in the White Paper, has not done much to revitalise Hong Kong or to underline the inherent self-confidence that has been the key to its success in the past. Perhaps that lack of boldness, that timidity, has been one of the reasons why the so-called brain drain, to which my hon. Friend the Member for Wrexham referred, has become a phenomenon. After years of studying and visiting Hong Kong, I have concluded that this is not a permanent brain drain. People are hedging their bets. They are, rightly, taking out an insurance policy, as it were, against what will inevitably be an uncertain future. Because their talents are marketable and they are mobile in a way that many other people in the world are not, they are able to exploit the opportunities available of alternative citizenship in countries as visionary as Canada and Australia. But it is possible, indeed probable, that they will return and remain in Hong Kong so long as that insurance policy is available to them. The trouble is that a lack of confidence can be infectious and can arise from simple issues, including fears about the way matters are being handled. That is why these debates, at whatever bizarre time of the day they take place, are important. We may not be large in number. Indeed, the Minister is the only Conservative in the Chamber—

Mr. Tristan Garel-Jones  (Watford)
Really!

Mr. Robertson
—involved in this debate. I appreciate that the hon. Member for Watford (Mr. Garel-Jones)— perhaps I may call him the hon. Member for Madrid, Central — and the Parliamentary Secretary to the Minister of Agriculture, Fisheries and Food are present, but I question whether their attention was focused directly on the amazing document that my hon. Friend the Member for Wrexham produced earlier. I do not draw any conclusions from this lack of interest by Conservative Members. Were we having this debate at a more appropriate hour, I am sure that the Government Benches would be as crowded as they were when this matter was raised on 20 January and 10 February. I am sure that the House will continue to take its responsibilities towards Hong Kong with great seriousness. But the pace of change in that country troubles hon. Members. Conservative Members tend to stand loyally by Ministers when they discuss these issues. But we know that privately many of them also feel that a bolder movement forward would be appropriate in the present circumstances. I remind the House that, in the exchanges on the statement and on 20 January, the suggestions made by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) were modest in the extreme. An additional two directly elected members to the Legislative Council is hardly a revolutionary idea, yet the Hong Kong Government seem unwilling to contemplate such a change; and as that Government is a function of Her Majesty's Government, we must look to the Minister here to defend that view, even if we are critical about it. My hon. Friend the Member for Wrexham questioned whether we should be discussing the Basic Law. He produced what he said was a copy of the draft Basic Law. We look forward to seeing further copies being made available in the Library or the Vote Office. My hon. Friend did not reveal from where he obtained his copy or whether a supply of copies exists. Those who are charged with the responsibility of drawing up the Basic Law are also involved in the debate on direct elections, and that is the great dilemma. We are in the proverbial Catch 22 situation, for the Chinese Government can rightly say that the Basic Law is a matter for them, not for us. The Basic Law was always to be a matter for the People's Republic of China; under the joint declaration, that is their responsibility. We know that the Chinese Government have a view about the pace of change, especially the proportion of direct election. They do not shirk from expressing that view in private through the people in Hong Kong who speak for them. Yet it is logical, if not politic, for those who say that the Government are responding to the views of Beijing on the pace of change during the period up to 1997 to suggest that, because of that, the Basic Law should be a matter for discussion by the organs of the existing setup there. I noticed that the right hon. Member for Blackpool. South (Sir P. Blaker), who is the chairman of the all-party Hong Kong group, was recently in Hong Kong and was criticised for what was perhaps an off-the-cuff suggestion that it might be possible for the Legislative Council to give consideration to the draft Basic Law, the document which my hon. Friend the Member for Wrexham has been discussing tonight. We are caught on the horns of a dilemma, and as one former great Labour Member of Parliament said, "When you are on the horns of a dilemma, sometimes it is wise to stay there." The Government must take account of the paradox that is involved. There will be a natural inclination to debate, as my hon. Friend the Member for Motherwell, South (Dr. Bray) has this evening, what is gradually becoming known about the terms of the draft Basic Law even before May when it will be published, and even before the four-month consultation period that has been laid down. That is inevitable, and indeed is healthy. Although there will be a change of landlord in 1997, the people of Hong Kong remain the same. What is being discussed in terms of the pace of change is minimalist. Those who articulate it in Hong Kong are sometimes regarded as agitators by an establishment that want as little change as possible, but by any standards in Britain they would never be described as revolutionary. The movement towards direct election—something that we take for granted in Britain — is modest by any standard. If it is seen to be bold and to break frontiers, that is only because it is judged against the timid pace proposed in the White Paper. In considering a part of the world that is renowned for its experimentation, its commercial flair and for the fact that it is willing to take risks, we should be looking for a political system that reflects that. The experiment that is being embarked upon is fraught with risks—we know that, as do the Chinese and the people of Hong Kong—but it also has unique opportunities. If its works, for the Chinese perhaps there is the tantalising prospect of Taiwan coming back into mother China. There is the prospect of an example of peaceful coexistence being enshrined in the world as never before. Risks are not new in Hong Kong. The whole commercial future of Hong Kong is built on risks of great wealth, which many people have, and risks of poverty and despair. The recent collapse of the stock market in Hong Kong made a few paupers out of the great millionaires. The joint declaration is a blueprint for the future, and it would be well within the traditions of Hong Kong if the Government were to look closely at the way in which people in Hong Kong are talking, thinking and believing and reflected some of that challenging attitude in the political framework that they bequeath to the people of Hong Kong for the future. They have given themselves commercial freedom and a highly regulated infrastructure of housing and education, and we should bequeath to them a political system within which they can exercise democracy with the same flair and success as they deploy in other aspects of life. That is the challenge that faces them and the British Government.

2.20 am

The Parliamentary-Under Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar)
I join hon. Members in thanking the hon. Member for Wrexham (Dr. Marek) for giving the House the opportunity again to  debate Hong Kong. It is understandable that hon. Members should wish to refer to the Hong Kong constitution and the draft Basic Law. Some hon. Members have asked about the version of the Basic Law to which the hon. Member for Wrexham referred. All versions of the Basic Law that are available to the hon. Gentleman and to others are best described as of uncertain authenticity. They are subject to further revision and elaboration. Versions have been published in the Chinese press in Hong Kong, but the only reliable version will be that which appears in early May, in accordance with the terms of the understanding. The draft Basic Law is intended to implement the policies that are contained in the joint declaration that forms part of a solemn and internationally binding treaty between the People's Republic of China and the United Kingdom. That treaty was debated in the House. Therefore, it is right that the House should wish to give its views on the implementation of the treaty in the draft Basic Law. The hon. Member for Wrexham will recall that the debate in this House on 20 January took place following the publication of the 1987 annual report on Hong Kong. It was, by common agreement, a very good debate. It demonstrated yet again that many hon. Members on both sides of the House continue to take an active and informed interest in the future of the territory. The debate also aroused a good deal of interest in Hong Kong. On that occasion the debate was broadcast live in Hong Kong. Many people in the territory sat up until the early hours of the morning to hear what Westminster had to say about Hong Kong. They would be very pleased to know that it is now our turn to sit up until the early hours to discuss Hong Kong. It is important to set the debate in the context of the progress that we are making with the Chinese in implementing the terms of the Sino-British joint declaration on Hong Kong. The joint declaration must be the starting point of any consideration of Hong Kong's future development. It is widely recognised that it provides the essential framework for the development of our policy and for our contacts with the Chinese over Hong Kong. I make no apology for joining the hon. Member for Wrexham in reminding the House of what a remarkable document that joint declaration is. It represents a unique and historic achievement by the British and Chinese Governments. It also marks a degree of bipartisanship on a very important foreign policy issue, which is to the credit of both sides of the House. The joint declaration represents the determination of both sides to resolve a problem that is deeply rooted in history by producing an agreement, ratified by both Governments and by this Parliament, that is lodged at the United Nations in New York and is internationally binding. It is an agreement that gives to the people of Hong Kong a realistic hope and, I venture to say, a realistic expectation of continuing stability and prosperity after 1997. We are working now to realise that goal through the full and faithful implementation of all the provisions of the joint declaration. We are collectively undertaking a new and truly unprecedented task. This task requires a spirit of co-operation and good will between Britain and China. It requires a fair measure of flexibility and mutual understanding in overcoming specific problems as they arise, and—as the hon. Member for Motherwell, South  (Dr. Bray) said—in responding to developments both in the People's Republic of China and in Hong Kong, and, indeed, in the United Kingdom. It also requires the proper involvement of the people of Hong Kong in the process, to ensure that their views are fully taken into account at all stages. The Sino-British joint liaison group set up under the joint declaration is the forum in which our consultations with the Chinese take place. Its task is a daunting one. It has to cope with a plethora of technical and practical detail, all of which needs to be satisfactorily covered before 1997. I am glad to report that the group has made substantial progress since it began to meet in 1985. We have reached agreement with the Chinese on a number of important matters: for example, on Hong Kong's membership of certain international organisations, such as GATT, on air services and on certain nationality matters. The group is currently holding its ninth plenary meeting in Hong Kong, and has again made useful progress. From 1 July this year the joint liaison group will have Hong Kong as its principal base, although plenary meetings will continue to take place in rotation in Peking and London, in accordance with the provisions of the joint declaration. The move to Hong Kong will none the less be an important step forward and will signify further intensification of our working contacts with the Chinese on Hong Kong. Another important step forward took place on 10 February, with the publication by the Hong Kong Government of their White Paper on the development of representative government, which has been referred to in the debate. The House had an opportunity to express its views on 11 February, and the Government have taken very careful note of those views. While some hon. Members took the view that the White Paper should have gone further, many others recognised the major importance of the decisions that it contained. I thought that the hon. Member for Hamilton (Mr. Robertson) exaggerated slightly the differences that that discussion revealed across the House. The hon. Member for Wrexham referred, slightly dismissively, to the A.G.B. McNair survey. It must be repeated that that survey represents only one aspect of the review of opinion. The hon. Gentleman asked why direct elections were to be delayed until 1991, and said that the survey used the phrase "delay". Opinions on the timing of direct elections were sharply divided; we believe that the Hong Kong people's views suggested a preference for a continuous and gradual approach. We must remember that there was a major change to the LegCo as recently as 1985.

Sir Russell Johnston
Is the Minister saying that the decision was wholly determined by the estimate of the views of the people of Hong Kong, and was in no way influenced by any possible attitude of the People's Republic?

Mr. Eggar
Obviously, the decision and the publication of the White Paper had to take into account all the various factors. It would be extraordinary if that had not been the case. The people of Hong Kong had considerable opportunities to express their views. I do not want to go over the debate last month, but the reaction of people in Hong Kong to the evaluation of the views that led up to  the publication of the White Paper was considerable in terms of the number of people who responded, the degree of the response and the opinion as revealed by opinion polls of one form or another. It is also fair to say that the general reaction to the White Paper by people in Hong Kong has been most encouraging. There are, of course, some who are critical of it, just as there are some who think that it is right. If one were to try to make a judgment, it appears that the majority of people have welcomed the White Paper as a balanced response to the wide-ranging consultation process that went on. The reaction in Hong Kong reinforces my view that the White Paper represents a balanced and reasonable response to the views of the community. The White Paper will serve to maintain an enhanced confidence in the future because it offers the clear prospect of continuity in the development of Hong Kong's system of government up to and beyond 1997.

Dr. Marek
That was not the view that I formed in Hong Kong. There was much more apprehension about the White Paper. People in Hong Kong are prepared to accept it, but there is a movement towards the introduction of direct elections. Next time the Minister visits Hong Kong, I hope that he will listen without prejudice. If he does, I think that he will come back with a feeling closer to that which I got when I was there.

Mr. Eggar
I respect the hon. Gentleman's view, but he himself said that it was difficult to form a judgment during a brief visit to Hong Kong. One cannot for a moment pretend that anybody can make an entirely accurate prediction of exactly what the views are at any one point in time. After all, I suspect that on the night of the hon. Gentleman's count after the general election he would not have been able to make an accurate prediction of his majority, despite being a distinguished mathematician and statistician. In other words, there is bound to be an element of subjective judgment. None of us should be under any illusion about that. I have tried to make a fair and reasonable assessment, although I take account of what the hon. Gentleman said. The next important date for Hong Kong will occur in early May. It is a date to which people in Hong Kong are looking forward with understandable interest, and which has, I suspect, prompted the hon. Gentleman's wish to raise this subject at this time. In early May the Chinese Government will publish the first draft of the Basic Law of the Hong Kong special administrative region. The Basic Law is the legal instrument whereby the People's Republic of China will implement the policies for the Hong Kong special administrative region as set out in the declaration. As such, it will enshrine the fundamental principles of the joint declaration — that Hong Kong's capitalist system and lifestyle will remain unchanged for 50 years, and that the special administrative region will enjoy a high degree of autonomy, including executive, legislative and independent judicial powers. The method by which the Basic Law has been drafted reflects the concern of the Chinese Government to ensure that it meets the concerns of the Hong Kong people and for it to provide for a smooth transfer of government in 1997. The Basic Law, as is well known, is being drafted by  a Basic Law drafting committee set up the Chinese Government. Almost half the members of the committee come from Hong Kong, which has ensured that the people of Hong Kong have been involved in the drafting process from the start. We have welcomed the extent to which their views have been scrupulously taken into account. The first stage of the drafting committee's work is nearing completion. The committee will meet in plenary session in Beijing in April. Shortly afterwards, in early May, a first draft of the Basic Law will be published in Hong Kong. Thereafter there will he a period of five months for consultation, to give the people of Hong Kong an opportunity to comment on the first draft and to make their views known. The views will be collected by the Basic Law consultative committee, which has already been established in the territory. The procedure will give the people of Hong Kong the means to influence the content of the second draft of the law, which will be published in the autumn, before the final version is promulgated in 1990. The House will agree that this demonstrates a meticulous regard for the views of Hong Kong people. I know that hon. Members will join me in welcoming the opportunities for repeated consultations provided by the Chinese Government. Dr. Bray It would be helpful if the Minister would make it clear that the drafting is not the same as the consideration that would be given to legislation in a Committee of the House, with amendments voted on and agreed. The drafting is done by a secretariat and is then discussed and taken away, and it may or may not be changed, but it is difficult to say that it has the endorsement of a drafting committee.

Mr. Eggar
Almost half the members of the committee are from Hong Kong, and there are at least two clear stages on two different drafts where the Basic Law will go out for wide consultation. If the Basic Law bears a resemblance to what the hon. Gentleman claims it will bear a resemblance to, people in Hong Kong will make many points, some of which may or may not be similar to the points made by the hon. Gentleman. At the end of the elaborate consultation process we will wish to see—and I am confident that we shall see—a Basic Law which fully implements the terms of the Sino-British joint declaration. The drafting of the Basic Law is the sovereign right of the Government of the People's Republic of China, but the implementation of the joint declaration through the Basic Law is a matter in which we and the House have a legitimate interest. My right hon. and learned Friend the Foreign Secretary assured the House in the debate on 20 January that it was the solemn responsibility of the British Government to administer Hong Kong up to 30 June 1997 in the best interests of its people. We shall discharge the responsibility to the utmost of our ability. There is no question of Her Majesty's Government in any way letting Hong Kong down. We shall also seek to ensure that the Sino-British joint declaration is fully and faithfully implemented, so as to preserve confidence in Hong Kong and to create a firm basis for Hong Kong's future stability and prosperity. Those are objectives to which the British and Chinese Governments are firmly committed. I am sure that the House will wish to join me in endorsing those objectives and the policies that we are pursuing in order to achieve them.

Rare Breeds

2.39 am

Mr. Colin Shepherd  (Hereford)
It is enormously pleasurable to see my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food in his place. He is a rare breed in the House. He is the only hon. Member with personal knowledge of the meat trade. No one can gainsay the importance of that. I am certain that he will share my feelings of nostalgia and heritage when listening to the roll call of cattle and pig breeds that are now threatened with extinction. The cattle breeds facing extinction include the Irish Moiled, the Kerry, the Gloucester, the Shetland, the white park, the British white, the longhorn, the beef shorthorn, the Dexter, the red poll and the Chillingham. The pig breeds facing extinction include the middle white, the large black, the Berkshire, the Tamworth, the British lop, the British saddleback and the Gloucester old spot. What marvellous names they are and how sad it would be if they were to disappear into the mists of antiquity. The achievement of today's livestock producers in terms of food and sheer fecundity is quite remarkable. However, one regrets the homogenisation and rationalisation of the breeds, and I say that as a stalwart defender of the Hereford herd. I firmly believe that in terms of reliability, predictability and adaptability that breed has no equal as a pure bred beef animal and as a beef bull to put to a commercial dairy cow. The Hereford is not a rare breed today because the breeders have been able to respond to the market place as that has changed, although they can in no way become complacent about that as it is always under threat. It is true to say that the beef animal market is highly competitive. Feed conversion to weight is carefully analysed. Growth rates, killing out ratios and fat to lean ratios are all carefully displayed with pride at shows such as Smithfield and the Royal Show as the figures surpass one another. That is all very competitive. Similarly, dairy cattle are judged by their ability to respond to feeding in respect of milk volume output. The changes brought about by quotas have served only to increase the fine tuning. Butter fat is no longer particularly wanted; the maximum output from the least number of cattle is the prize. It was remarked to me the other day that it was sad to see on the Sunday night veterinary soap opera on the BBC that such great attention is paid to getting precisely aged calves as props, but that all the cattle were black and white and of the same breed. That was very disappointing. What of the various and varied breeds that were so prevalent at the time that the series sets out to portray? It is a sobering thought that between 1900 and 1973 at least 20 breeds of British farm livestock became extinct.

Mr. Tristan Garel-Jones  (Watford)
Good heavens.

Mr. Shepherd
My hon. Friend is absolutely right to say "Good heavens." I am worried by the fact that there are two trends in the countryside. On the one hand, there is the ever-increasing pressure on developing breed uniformity. I have been guilty of advocating that in another context. To witness that we only have to look at the uniformity of shape of lambs displayed for show at Smithfield market—and the New Zealanders are particularly expert at that. One could take the rear or hind quarter of one lamb and shove it on  to the front of another and they would match up precisely. There would be no way of telling whether they came from the same beast. That is inimical to the maintenance of a wide variety of breeds. On the other hand, the countryside itself is changing as we try to come to grips with our excellent technical expertise and so get more out of less. There are two ways in which we can proceed. We can continue intensification of output, producing better and better yields from a narrowing base of breeding stock choices, or we can go back down the road to extensification. Too far down the former road, with no attention paid to maintaining a wide variety of breeds, and we would find ourselves in a blind alley and when we realised that the whole system could possibly be destressed by the use of breeds that are more tolerant of indifferent feed or calve more easily, the alternatives might not be there. Surely the merit of so many of those threatened breeds is that they are the product of a peasant economy. When the breeds were evolved, they were evolved not with maximum output from maximum input in mind, but when economy of production was the yardstick. With the current reappraisal of farming practice, it is those presently rare breeds that will play a vital role when the emphasis of production changes. When I look to see who is looking after this future, I see a dedicated band of enthusiasts — not wealthy or hobby farmers, but those who generally have small acreages and who are not particularly flush with cash. I hand it to them for their persistence and prescience. These are the very people of the countryside—country men—whose gut feeling is that proper insurance should he taken out now to be ready for the day when, or if, change is needed. The scale of their operations generally is such that in today's fiercely competitive scenario they will never make a profit from their activities in respect of rare breeds. They are not keeping rare breed animals to make a profit, and I do not believe that they ever want to, but they are playing an invaluable part in providing the means of developing a more balanced agriculture, as this shift in emphasis in the countryside progresses. In recognising the credit due to these people, one recognises in full the dedicated work of the Rare Breeds Survival Trust. Its track record since inception in 1973 has been enviable and most encouraging. The way in which the owners of rare breed animals have been co-ordinated by this tightly run and effective organization—

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

Mr. Shepherd
I am delighted that my hon. Friend agrees. That co-ordination must have kept in being many outposts of rare breeding which would otherwise have been lost. It is a first-class example showing how a small contribution from many people can be harnessed to good effect for the benefit of all. I have remarked how rare breeders are not in the game for profit, and I hope that l have demonstrated what an invaluable insurance policy a spectrum of rare breeds makes in a changing agricultural environment. It is a pity, therefore, that the activities of these people and their contribution should have been accidentally blighted by the imposition of charges for the approval of bulls and boars under the Artificial Insemination (Cattle and Pigs) (Fees)  Regulations 1987, basically in consequence of the Agriculture Act 1986. I must shoulder a fair share of the blame. I participated in the Committee on that agriculture legislation and this dimension escaped my notice, as it did all the other Members of both Houses who were involved. That is not to say that this is set in stone. It is time to recognise that an error has been made. I should also like to think that it escaped the Government's awareness, too. I hope that my point will be viewed in that light. The effect of the regulations is that these rare breed owners have to pay the full £204 for their bulls to be approved, just the same as the owner of a commercial dairy bull. The difference is that, although these charges are quite high, they take no account of the use that is to be made of the semen from the bull or the boar; thus the cost per straw is bound to be higher for organisations such as the Rare Breeds Survival Trust or for people who just breed rare animals whose sires are relatively little used and which are not normal commercial breeders. The rare breed bull may have as few as five straws sold and used each year compared with the more than 3,000 — I have heard figures of 5,000 quoted — from a commercial bull. That is a big difference in cost per straw. It is not surprising that a longhorn breeder, who, by the terms for breeding longhorns applying within the Council of Longhorn Breeders, is permitted to sell only 25 straws a year, can recover £25 a year against an outlay of £204. In addition, recognising that the semen may not be capable of being frozen, the farmer may be prudent enough to ask the Milk Marketing Board to come in advance, at a cost of £50 plus travelling expenses—say, a total of £80—which means that he is investing £280 in the bull for a return of £25 a year. Although the semen may be sold for several years afterwards, it is not a big return, and he will never recoup his approval fees. The fact that the farmer continues to keep longhorn bulls shows that it is a labour of love and a recognition of the desirability of sustaining a breed against a time when it might be more useful in the countryside than today's breeds. As part of the retention of rare breeds, and the work of the Rare Breeds Survival Trust, 50 per cent. of the semen drawn off bulls is retained by the Milk Marketing Board in its bank of genetic variation. That is a magnificent contribution to the cost of the insurance policy that I have described. About 12 months ago, correspondence between the Ministry of Agriculture, Fisheries and Food and the Rare Breeds Survival Trust was terminated. It was terminated disappointingly and, I thought, less than satisfactorily. I have read it all, and it relates to the requests of the trust that special consideration be given to its specific needs in carrying out its work and incentivising — that horrible word—or making it reasonably attractive for the small rare breed owners to continue their invaluable work for posterity. The Ministry's attitude was inflexible and disappointing. I know that it costs the same to approve every bull or boar regardless of the use that the owner makes of it, but the system is rough justice on rare breed owners and on the trust, which is trying to provide a genuine public service and which has no chance of passing the extra costs on to a relatively limited number of potential or actual users. I also appreciate that another problem for the trust in making its case is that, although there is a need for gene  banks or pools such as those for some rare breeds, it could be said that with the ready availability of techniques such as genetic engineering, multiple ovulation and embryo transfer the need is not as great as it was. The trust could be described as a luxury in an environment generally hostile to such marginal activity. It is regrettable that cattle and pig breeds have become so homogenised. It is an inevitable and sad consequence of modern methods of livestock breeding and production. The Ministry has been intransigent in its attitude to the trust's case on behalf of itself and its members. The trust believes that it has had no reasonable explanation of why the Ministry is so intransigent and why it does not recognise the rough justice. I have looked through Hansard and I see no record of the statutory instrument which imposed the fees for artificial insemination being debated. It probably went through with a plethora of other statutory instruments when the attention of the House was concentrated more on the end of a Parliament. The issues as they affect this case have not been publicly explored before. I cannot help but wonder how these charges are made up. There is considerable dissatisfaction and distrust within the livestock industry as to the way in which dairy inspection charges are made up. I am sure that my hon. Friend is aware of the controversy surrounding those charges, and I believe that the Minister intends to instigate a review of the charges to see whether the charges reflect an accurate recovery of the costs actually incurred in making the inspections. Certainly £204 and £145 for the second charge are very accurate pricings. All of the other charges on the schedule in the order are precisely annotated. I hope that my hon. Friend will be able to say this evening how those charges are made up, or write to me later to explain how the figures are derived. I hope that my hon. Friend will press the Minister to look again at this problem as it affects rare breeds. The cost of ameliorating the charges in respect of the work of the Rare Breeds Survival Trust would be about £7,000. I venture to suggest that that is a mere bagatelle to the Ministry, although it is a fortune to the trust. If it is not deemed desirable to amend the order, which I do not believe would be difficult to do, perhaps thought can be given to how a grant could be made available from funds within the Ministry's budget. There was at one stage a considerable element of research involved with the use of rare breeds, and I should like my hon. Friend to bear that factor in mind. There is a good case for supposing that a programme of research would enable these breeds to help to deal with nutritional problems in the Third world by providing livestock for use in environmentally hostile circumstances, bearing in mind the fact that many of these breeds were brought about by a peasant economy when there were not today's lush circumstances for harbouring livestock. It is difficult for rare breed owners to understand the Ministry's reluctance to help. They point out to me that the Ministry is going to pay not inconsiderable sums to farmers to manage fallow land or perhaps to start alternative enterprises in the countryside. A grant of, say, £7,000 is just not enough to facilitate the continuance of an important initiative. I put it to my hon. Friend in this way. He might go along with the suggestion that each rare breed owner should register his agricultural holding with the planning authority as a rare breed park. In that case,  he might qualify for a grant under the rural diversification plans under the Agriculture Act 1986. I pressed for that provision, and I was delighted that it was eventually incorporated in the Act. I make the suggestion in jest, but many a true word is spoken in jest. Perhaps we can take it a little further. Either way, I look to the day when we begin to de-homogenise our livestock—what a ghastly phrase that is — and then perhaps, in the words of a rare breed devotee, we can have from the Vale of Gloucester double Gloucester cheese from an old Gloucester cow. That is our heritage, and our rare breeds surely form part of our heritage every bit as much as Parliament or Hereford cathedral. I very much hope that my hon. Friend will have listened sympathetically to what I have said, and will be helpful.

2.59 am

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Donald Thompson)
I listened sympathetically to my hon. Friend the Member for Hereford (Mr. Shepherd) and I am delighted that he was able to secure this debate. The time is irrelevant, because the breeds under discussion stretch back to before the 1800s. As my hon. Friend said, the needs of the market cannot always be paramount. I am sure that my hon. Friend has read Surtees' "Hillingborough Hall" and all those marvellous tales of farming in the 1840s and 1850s; the same complaints were heard then as now. I am sure that my hon. Friend will remember the squire in "Hillingborough Hall" saying, "There is too much land taken up in corn, we ought to have more in trees." Indeed, only last week I heard my hon. Friend say that. As my hon. Friend said, we cannot always have clone animals — peas in the pod. That is desirable for the supermarket shelf and may look pretty in some fields at some time. The other day I was lucky enough to see a man's Cambridge sheep. He was trying to develop a more prolific strain of sheep. The last thing on his list was to get those animals cloned—animals must be made efficient first. My hon. Friend read a list of some rare breeds and there is no doubt that they were bred especially to fit exactly the area they came from. Exmoor ponies, Dales ponies, Clydesdale ponies and Cleveland bay ponies bear the name of their homes. Indeed, one only has to look at those areas to understand why those animals were bred. Developments in modern agriculture coupled with the ease by which international transport of livestock, of semen and of embryos can be carried out has led, as my hon. Friend said, to a rapid decrease in the number of breeds of domestic livestock in commercial use throughout the world. The move towards uniformity inevitably results in the loss of genetic material that could be required for use in future farming systems here, in the Americas or in the Third world. An awareness of that problem led to the formation in this country of the Rare Breeds Survival Trust in 1973. The trust, which is a registered charity, carried out a census which identified those breeds most in need of assistance. Breeds were then arranged in groups and graded on a priority basis. My hon. Friend said that he was unable to discover a previous debate on this subject. Therefore, I hope that the  House will bear with me if I go into a little detail—not tedious detail—so that, in future, people can check the record of this debate. Rare breeds are graded on a priority basis. Priority one means criticial; priority two means rare; priority three, vulnerable; priority four, below numerical guidelines; priority five, just above numerical guidelines; and priority six, feral—wild animals. All rare breeds are graded into those six sections. By 1983 a census revealed a healthy increase in the population of the breeds on the trust's list suggesting that the trust has been successful in conserving rare breeds of British livestock. That position has held good up to the present day with the exception of the pig breeds, a number of which are still at risk due to the lack of profitability in the industry and the difficulty of keeping breeding pigs as a hobby. Not every pig is as lucky as the Tamworth pigs that are kept in the backyard of our ex-colleague, Lord Cranborne. The argument that rare breeds contain genetic material which may be of value in the future cannot be denied, but perhaps it is less probable than is sometimes imagined. It is much more likely that the basis for future improvement will be the best material already available from modern breeds. Of course, genetic engineering techniques are being developed all the time, where a single gene can be cloned or inserted into another. The technology of gene transfer is already available on an experiemental basis and may soon be available as a routine practical procedure, but I do not wish to travel down that avenue tonight. However, the technology of identifying suitable genes to be transferred lags far behind and geneticists are not at present able to identify any genes in a rare breed that have the merit to justify transfer into a modern breed, but, as genetics expand and improve, that may not be the case for ever. The trust deals in a number of activities. It operates an approved centre scheme, covering both private breeding centres and farm parks open to the general public. All approved centres are regularly inspected by the trust's officers and must comply with detailed regulations governing registration, breeding policy, management arid husbandry. There is a monthly magazine called The Ark published by the trust. It is intended to publicise the trust's activities and inform members about matters relevant to rare breeds. Circulation of The Ark is about 7,000 copies. There is an annual rare breed show and sale which is held in September at the National Agricultural Centre and provides an organised event at which keepers of rare breeds can obtain fresh stock and newcomers can obtain foundation animals. That is now a successful event with an attendance of approximately 10,000 people over two days. There is also an embryo storage study. If the concept of total breed conservation is to be meaningful, consideration must be given to the establishment of embryo banks in which freshly fertilised eggs are stored. That would enable whole breeds in all known lines to be preserved. A feasibility study is being undertaken, supported by a grant from Shell International Chemical Co. Ltd, to examine that area. There is a breed structure analysis. With very small breeds, it is essential to avoid unnecessary inbreeding. To do that, it has been necessary to research relationships within breeds and to calculate how to make the best use of the existing blood lines in sound breeding strategies.  Computer technology has been used to produce essential and accurate guidance for many of the breeds on the trust's priority lists. There is, of course, a semen bank. In any breed of cattle whose numbers are small and kept in widely separated herds, it is economically unrealistic for most owners to maintain their own bulls. The availability of a reliable artificial insemination service is vital to the continuation of such herds. It is the policy of the RBST to make available supplies of semen from numerically small breeds and the aim is to provide at all times a choice of sires within each breed. To that end, the trust arranges for selected bulls to be used for semen supply, 50 straws of semen from each being made available to breeders and a further 100 doses being deposited in the RBST semen bank for long-term storage. The possibility of extending the service to pigs, goats and sheep is kept constantly under review. The trust maintains a flock of North Ronaldsay sheep in Orkney, performs a breed liaison function, runs demonstrations and workshops for members, registers congenital defects, gives grants to breed societies, provides registration facilities for breed societies and funds research and investigations. The Ministry has been involved with and interested in the work of the RBST since its inception in 1973. It is most satisfying that considerable progress has been made in putting many of the rare sheep breeds on a more stable footing and many of the rare cattle breeds are now in a much safer position. We are aware that a number of pig breeds are threatened and the trust, supported by advice from ADAS, is making progress in this area. It is self-evident that rare breeds contain genetic material which may be of value in the future, and the availability of genetic engineering techniques whereby a single gene can be taken from one animal and inserted into another brings closer the possibility of being able to use  such material. The Ministry will continue to take an interest in such developments, to determine when and how they may benefit the industry and what help and encouragement the trust needs to achieve its objectives. The trust tells me, through my hon. Friend the Member for Hereford, that what it really needs is help with the £204 veterinary testing of bulls.

Mr. Colin Shepherd
rose—

Mr. Thompson
I ask my hon. Friend not to intervene until I have finished — I can see that he thinks that I may have missed the point that he made, or that I may not come to that at all. The charges were introduced in accordance with the Government's long-standing policy that costs of services should be recovered when there is clear benefit to the consumer. The principle that charges should be levied on all those using the service applies across all ADAS charges. Charges are kept to a minimum to ensure that animal health standards are maintained. My hon. Friend made his point about the £204 and £145 clearly. He also suggested a number of ways in which the Ministry might be able to help, although I do not propose to discuss dairy inspection tonight. He mentioned grants and research; I mentioned "adopt-a-bull". I suggest that, as we have now made our respective positions on rare breeds clear for all to see, my hon. Friend should continue the debate with me in private, to look for ways in which to surmount this difficulty and discover how long it will continue. I appreciate what he said about a small cost to MAFF and a large cost to him, but the small costs line up outside my door, down the steps, around Whitehall, up past the Horse Guards and right back to Downing street every day. So we must select the best course of action. I have listened carefully to my hon. Friend. I now suggest that he comes to my office as soon as he likes and we shall discuss his suggestions—and any that we may add—in more detail.

Poverty And Low Pay

3.14 am

Mr. John Battle  (Leeds, West)
I understand that there was some discussion about which would be the appropriate Minister to reply to my debate. It was not clear whether the topic was a matter for the Treasury or the Department of Health and Social Security. The difficulty seems to be that Britain's poor are not considered to be the concern of the Chancellor of the Exchequer who handles the large economic issues such as inflation trends, the exchange rate and the balance of payments. The Secretary of State for Social Services is primarily concerned with managing the Department of Health and Social Security budget with a brief to reduce that budget as a percentage of public expenditure. It is precisely that dislocation of function which perpetuates the exclusion of Britain's poor from real consideration in the Budget discussion. In advance of next week's Budget, we ought at least to try to raise the question of the relationship of taxes to benefits. There is a connection this year between two dates. Obviously, the first date is 15 March which is Budget day. There is speculation that there will be large tax cuts. The other date is a few weeks after that, 11 April, when the poor in our society will have their budgets cut with the introduction of the social security reforms. Mr. Malcolm Wicks, the author of the book "A future for all", makes a specific link when he says: "consider, for a moment, the fate of two families … Family A comprises a married couple, with a single earner — a company executive on £30,000 a year, with fringe benefits and a substantial mortgage and pension contributions. Family B are an unemployed couple with two children, aged 4 and 6. Examples then from the two ends of two nations. Yet Family A receives each week from the 'welfare state' more than Family B — £103·41 as against £101·98. But whereas the poor family derive their income from the complex world of social security entitlement — supplementary and housing benefits, free school meals and welfare milk — Family A draws from a quite different pool of official beneficence—the privileged world of tax allowances and reliefs on mortgage, pension contributions and company cars." The context of the relationship between those two families is wealthy Britain. The Chancellor of the Exchequer regularly comes to the Dispatch Box, as he did today, to tell the House that Britain's economy is booming. We are advised by the economic commentators that he has about £4 billion to £5 billion to spend. On 15 December the Prime Minister announced to the House: "These are the times of the highest standard of living that this country has ever known." — [Official Report, 15 December 1987; Vol. 124, c. 920.] Recently it was proclaimed in the press that Britain has 20,000 millionaires. The difficulty with such announcements is their utilitarian exclusivity, because not everyone in Britain participates in these high standards of living or in the booming economy. The greatest good of the greatest number takes no real account of the minority—substantial though it is—that is excluded and in the worst circumstances in our society. I should like to attempt to spell out something of the reality of the poverty in which a substantial number of our people live in modern Britain. This week when asked about the percentage of ethnic minority people living below the poverty line, the Under-Secretary of State for Health and Social Security replied: "This Government, like previous Governments, do not accept that a poverty line can be drawn."—[Official Report, 7 March 1988; Vol. 129, c. 56.] Perhaps it was that remark that spurred me to choose this topic for debate. His answer seemed to be that poverty was indefinable. But surely that is not a new argument from the Government in response to poverty in our society. I recall that the Green Paper "The Reform of Social Security", which provided the basis for the Fowler reviews, stated: "there is now no universally agreed standard of poverty." Even earlier, just before Christmas day 1983, the Prime Minister told the House: "There is no Government definition of poverty … the fact remains that people who are living in need are fully and properly provided for." — [Official Report, 22 December 1983; Vol. 51, c. 561.] It is certainly not my experience as the Member for Leeds, West that people are all fully and properly provided for. That is demonstrated by the letters that I receive every day and the advice surgery sessions that I attend every weekend when I return home from the House. I put it to the Minister that the Government cannot make poor people disappear by claiming to have rubbed out the poverty line. If a poverty line—I would argue that one was recognised by Governments in the past—is no longer to be acknowledged, I am forced to ask whether the measure of people's real needs will be based on what the state decides that it can afford at the time or will be according to what people need to live on in our society. The difficulties of defining poverty are not denied and have been discussed at great length throughout the history of our country. But surely we owe it to the poor in our society at least to attempt to define it in our own times and circumstances. There have been helpful attempts. A report that provides as good a starting point as any for a definition of poverty is the "Faith in the City" report which says: "Poverty is not only about shortage of money. It is about rights and relationships; about how people are treated and how they regard themselves; about powerlessness, exclusion and loss of dignity. Yet the lack of an adequate income is at its heart." Indeed, the right hon. Member for Wallasey (Mrs. Chalker), who, I understand, is a former Minister at the Department of Health arid Social Security, said in November 1979: "it is not sufficient to assess poverty by absolute standards: nowadays it must be judged on relative criteria by comparison with the standard of living of other groups in the community … beneficiaries must have an income which enables them to participate in the life of the community." — [Official Report, 6 November 1979; Vol. 973, c. 167.] I think that that phrase could do with underlining: "enabled them to participate in the life of the community." The findings of the London Weekend Television MORI poll published in the book "Poor Britain" suggested that there was general agreement in our society about what constitutes the minimum standard of living. Two out of three people questioned thought that the following items were necessities: self-contained damp-free accommodation with an indoor toilet and bath—but many in our society do not have that; a weekly joint for the family and three daily meals for each child — many have not got that; two pairs of all-weather shoes and a warm waterproof; sufficient money for public transport; adequate bedrooms and beds; heating and carpeting; refrigerator and washing machine; enough money for special occasions, such as birthdays and Christmas; and toys for the children. That almost sounds like a checklist for the people who come to my advice sessions and write to me. There is one other comment that I want to put before the House. It was made by an unemployed worker, who said: "People should be given enough money where they can actually live a life that's reasonably comfortable—that they can do things they enjoy. And not just survive— because everybody has a right to more than survive." I believe that living on the breadline is not just doing without things—and perhaps that is an approach that some would say is in the Lenten tradition—but about experiencing poor health, isolation, stress, stigma and exclusion, when life in society ought to be about enjoying and participating. A quotation which defines that view comes from Peter Golding's booklet "Excluding the Poor": "Poverty curtails freedom of choice. The freedom to eat as you wish, to go where and when you like, to seek the leisure pursuits or political activities which others accept; all are denied to those without the resources … poverty is most comprehensively understood as a state of partial citizenship." It is the nature of that exclusion which needs addressing when considering the issues of poverty. The Government vaunt their commitment to freedom of choice as a kind of flagship phrase for their free market policies. Yet that freedom is denied to a substantial minority in our society. Over 8 million people in Britain are living on supplementary benefit. In answer to a parliamentary question, the hon. Member for Kensington (Sir B. Rhys Williams) was told that between 15 million and 16 million people in Britain were dependent in one way or another on means-tested benefits. It is officially stated that between 5 million and 6 million people are eligible for those benefits but are not claiming them. It is estimated that 7 million people are in low-paid work, and that particularly concerns my constituents. Following the publication of a striking report by the West Yorkshire Low Pay Unit on the extensions of low pay in our region, my hon. Friend the Member for Bradford, West (Mr. Madden) asked in a parliamentary question whether jobcentres are under instruction to display jobs the wages for which were covered by wages council orders. He was told that they should not be advertising jobs that were below the recommended minimum rates for that work. Yet the flouting of such minima is taking place in our region. What enforcement action do the Government propose? It is clear from what is displayed, for example, in the Bramley jobcentre window that there is a shift in my constituency from traditional manufacturing industries such as printing, engineering and textiles to temporary, part-time and low-paid work in the service sector. People are asking for their living standards to be properly protected with a legal minimum wage so that they do not fall behind the rest of society. For the 2·5 million who remain unemployed in Britain, the Government's response — to the effect that rising employment prospects will resolve any residual poverty — is calculatingly misleading. A recent report by Professor Brown of the University of Stirling entitled "Taxation and Family Labour Supply in Great Britain", which was commissioned by the Treasury, said that of those in work, four out of five were unable to work longer hours in their main jobs; that only 3 per cent. had a second  job and that only a quarter of those could work longer hours in those second jobs; and that of the 97 per cent. without a second job, only 12 per cent. had the potential to take one on. It was found that among non-workers, nearly half were unable to work under any circumstances, three out of five because of having dependants and one out of five because of poor health. Of those non-workers who were able to work, two thirds, or 63 per cent., could not find jobs. I get the impression that in answering parliamentary questions Ministers try to create the impression that people are free to decide for themselves, without consulting their employers, whether to work overtime, whether to choose to enter the labour market or whether jobs are available for them. That is not the reality in Leeds, West. In recent weeks we have received from the Government an extension of social security disqualification clauses. The time period was first changed from six weeks to 13 weeks and more recently to six months. That is the reality that faces those who are unemployed. Those are the facts of life that are more apparent in constituencies such as mine. In political terms, the Government's strategy is to shift the poor in the direction of the low-wage economy. A Government report published in 1985 entitled "Employment: a challenge to the nation" included the sentence, "Jobs will be provided to the extent that people are prepared to work at wages that employers can afford." The markers were clear in the Green Paper on the reform of social security which provided the underlying intentions for the 11 April negative Budget for the poor. The Green Paper included the proposal to "increase the moral surveillance of the poor" by sinking the poverty line to develop a low-wage economy which divides those who are in reasonably-paid, full-time work from those who are in temporary, part-time, low-paid work. Last night the right hon. Member for Henley (Mr. Heseltine) addressed the Employment Institute and recommended once again that the American system of workfare, the pricing of people into work, be taken up in Britain. Underlying those proposals is the Government's refusal to acknowledge that individuals who are unable to work and save are full citizens in our society. In the Green Paper, the cost of social security was defined as a "millstone preventing general economic improvement." For the poor in our society, life is truly a millstone. As the report "Poor Britain" made plain, the poor are those who run out of money most weeks in the year. Recently, the Child Poverty Action Group published a report entitled "Single payments: the disappearing safety net". That report catalogued the impact of the cuts in the one-off grant for exceptional needs such as for furniture, chairs and tables, cookers, bedding, clothes, babies' cots, shoes and heaters. Those cuts were imposed by the Government in August last year. I cite a graphic summary of its impact: "This is Britain's welfare state today. A young girl is refused a grant for shoes—she has three pairs of socks and the DHSS official advises her parents that, worn together, they would make a suitable alternative to shoes. A young couple, the wife six months pregnant, move at last into a council flat, but they have no furniture; they have to sleep on the floor in a sleeping bag and eat out as they have no cooker. The official who refuses a grant says that they should obtain credit.A young mother's pushchair and her baby's coat are stolen. An official refuses to replace them as she 'did not take reasonable care'. A man with no bedding is instructed to keep warm by sleeping with his dog." A young man in my constituency was forced to make do with a dangerous second-hand gas cooker which blew up in his face. Will the Minister comment on those cases and tell us his view of those people's circumstances, the approach of the officials and the difficulties that they face because of the cuts in the single payments? We are entitled to ask what is the future prospect for the poor in Britain. In my constituency, the introduction of the social fund means a reduction in the projected budget of something like £500,000 in the incomes of the poorest. Yet the Government's social security advisory committee, in an official report last July, spelt out that weekly rates of benefit "leave little scope for saving towards major items." In other words, the weekly income from benefit does not provide enough money to provide for those special items, yet the special items are being taken away by the changes in single payments. The new Social Security Act will deepen and extend the poverty trap. Tax cuts will make little difference to those who are caught in the poverty trap. The new family credit and housing benefit that will come into force next April will result in benefits being withdrawn as net incomes rise. It will no longer be calculated on the basis of gross earnings. The Institute for Fiscal Studies estimates that about 2·5 million taxpayers on means-tested housing benefit or family credit — the pensioners and the low paid—will receive little or nothing. In the case of a couple, only one of whom is employed, who are living on £100 a week, a 2p tax cut will give them exactly 2p. It will no longer he possible to end up worse off after earning additional money, but those on low incomes will find that the marginal rate of tax means that the number of people who are caught by the poverty trap doubles from 270,000 to about 545,000. The social security reforms will reduce the extremes of the poverty trap but they will suck more people into poverty. I anticipate that at my advice surgeries there will be queues of people after 11 April asking me to explain why their income has gone down. There will also be increases in prescription charges. The Health and Medicines Bill will result in increased fees for dental treatment and eye tests. The price of electricity is expected to rise by 15 per cent. over the next two years. Child benefit is to be frozen. The breaking of the earnings link in 1980 has led to a reduction in pensions. The decision not to uprate child benefit will have the effect, as the hon. Member for Kensington pointed out, of putting another 40,000 people on to means-tested benefit. The introduction of the community charge may lead to an additional 2 million people being on means-tested benefit. We have to tackle such potential poverty by means of the Budget. The Budget options ought to be looked at from the poverty perspective. It is not good enough for the Secretary of State for Social Services to dismiss those who are on benefit as sufferers from, as he put it, "the sullen apathy of dependence." The benefits system and the taxation system are interlinked. The difficulty is that the poor are funding the rich. The poor regard the taxation changes since 1929 as an increase in the burden of taxation. They believe that the taxation burden is higher now, despite the fact that the Government claim that they have reduced taxation. People believe that they are paying more tax. The number of people in the classic poverty trap has trebled since 1979. Nearly 9 million households are paying more direct tax than they were in 1979. That includes 4 million single people who are earning between £65 and £150 a week. There are 3·4 million couples on joint incomes of between £137 and £370 a week, and 1·5 million couples with a single income of between £65 and £200 a week are worse off. There has also been a shift from direct to indirect taxation. Again that is a move that hits hardest those who are poor. The very poorest one tenth of the population has seen its indirect tax burden rise from 22 to 23 per cent. The low-paid household pays substantially more in value-added tax, domesic rates and other indirect taxes. The poorest households pay almost one quarter — 23 per cent.—of their income in indirect taxes. That has to he contrasted with the richest households. They pay only 16 per cent. of their income in indirect taxation. The low paid have seen their income tax cuts eaten up by the increase in national insurance contributions. The poor may well ask: why does a low-paid home help or nurse pay 27p in the pound, when a man earning £250,000 can avoid paying any tax at all? What the poor see in the Budget is the well off getting wealthier, because they know that most of the tax cuts have provided generous concessions to the highest income groups. The poor may well ask how on earth a tax cut helps the 10 million married couples and single people who pay no tax, while the top fifth of the tax-paying population have enjoyed more than half the tax cuts that have taken place since 1979. The richest households have received a weekly tax cut larger than the weekly gross wage of most full-time wage earners. Let me give a practical example. A family of lour among the poorest one fifth of wage earners saw their net real income rise by just 2·9 per cent. between 1979 and 1986, yet a similar family whose wage earner was among the best-paid one fifth would have found their living standards improve by 21 per cent. over the same period. In other words, the direct effect of tax changes since 1979 has been to widen sharply the gap between the bottom and the top of the pay scale—between the poor and the rich. How can it be, then, that the top taxpayers should be a priority in the coming Budget? It is the low paid who pay too much tax, and they should be tackled first. High income groups have enjoyed substantial increases in their net real incomes in recent years as a result of tax cuts and earnings increases. People on over £50,000 a year have already had income tax cuts worth £10,710 a year from successive Budgets. A two-earner married couple on five times the average earnings, £54,000, would gain three times more from a cut to 40 per cent. in tax than a single pensioner would receive in a year on income support. The other point that the poor would see in the Budget is that the tax leakages go to the better of. The relief on private pensions and on mortgage interest payments, and the new tax loopholes such as the executive share option schemes, the business expansion plan and the personal equity plans, are narrowing the tax base. All those schemes provide a hidden welfare state—perhaps what is now being called the "fiscal" or "occupational" welfare state. That, too, shows that more than half the personal disposal  income in our society is no longer even subject to tax. Tax relief and allowances are today worth billions of pounds. The Inland Revenue statistics for 1983–84 show that for directors earning £50,000 or above, tax fringe benefits alone were worth £3,430 a year. As the rich now enjoy a much larger proportion of the nation's income, why is the view so scorned that they should expect their proportion of the tax burden to increase? What is behind the Chancellor's appeal to the "moral basis" for tax cuts? Speaking in January to the Centre for Policy Studies, the Chancellor said that he would introduce a lower burden of taxation as an "essential element in developing the enterprise culture". There was, he said, a new acceptance of the "basic human instinct of self-interest." He referred to that as the moral basis for tax cuts. A point made in the Financial Times of 2 March cut against the grain of the Chancellor's advice: "The principle that taxes should vary according to 'ability to pay' should be heeded: high earners can well afford to pay a larger share of their income in tax than those at the bottom of the pile. Any cuts in top rates should thus be balanced by restrictions in other benefits to the better off." I hope that the Chancellor will take that advice. As a new Member of the House, about to participate in my first Budget debate, I urge the Minister to work with the Chancellor to use the 1988 Budget as an opportunity to grasp the connection between benefits and taxation in our economy and to introduce measures to redistribute the common wealth of our society and deliver justice to the poor. We know from the Institute for Fiscal Studies that the Government's receipts in the financial year 1988–89 will be some £9 billion higher than was forecast in 1987. The Treasury has already admitted that it seriously underestimated receipts in the current financial year. I know that there are £2 billion of national insurance receipts. I think that that was revealed in the Second Standing Committee on Statutory Instruments, &c. In other words, the resources are there to introduce a Budget that would stimulate public investment to generate jobs, and our top priority should be to support and develop the National Health Service. The Budget resources could also be used to introduce justice into the taxation and benefit structure so that the Social Security Act 1986 is not a crude and negative instrument that takes more from the poor on 11 April to underwrite the tax cuts for the better off. The Budget could be used to reduce the rate band for the low paid and to increase child benefit to take families out of poverty. A Budget could be introduced to broaden the tax base to ensure a fairer share of the tax burden. In response to the Chancellor's moral claims for tax cuts, I seem to recall that even Adam Smith, the high priest of the free market, in his "Theory of Moral Sentiments," stressed that economic individualism had to be founded upon a theory of social obligation. As W. A. Coates summarised: "Men could safely be trusted to pursue their own self interest without due harm to the community, not only because of the restrictions imposed by law, but also because they were subject to built in restraint derived from morals, religion, custom and education." In other words, the pursuit of individual responsibility and self-reliance must not undermine the collective  obligation and provision for those who have no choice or whose choices are at best forced ones. Nor can wealth creation be viewed in isolation from its just distribution. The Budget could be used to introduce the positive integration of income tax and social security as a step towards the development of a fairer tax and budget structue in our economy. To go for tax cuts to provide individual private reward will be socially divisive, ecnomically unjust and morally indefensible. Therefore, I appeal to the Minister to work with the Chancellor to use the Budget to deliver justice to the poor in our society and not to continue, through present policies, to drive them out into the margins of dehumanising poverty, leaving them with no bottom line while the well-off are publicly encouraged increasingly to enjoy the advantages of our common wealth.

3.49 am

Ms. Harriet Harman  (Peckham)
I thank my hon. Friend the Member for Leeds, West (Mr. Battle) for bringing the important topic of poverty before the House. It is an outrage that, although we are one of the wealthiest countries in the world, millions of people face a daily life of struggling with poverty. Of some 4 million children in poverty, about half are in families in low-paid work, families who earn their poverty—the working poor. The Government concentrate their comments on help for the low paid and claim to be concentrating their resources on that group, in particular through family credit. However, for those families, as for all claimants, we must consider the net effect of the poverty package which will be introduced in April, to which my hon. Friend the Member for Leeds, West referred, quite apart from the effect of the Government's low-wage policy on employment. The Government claim they are putting in some £200 million extra for those families. Family credit rates are obviously better than rates for family income supplement. Not only are there offsetting losses for some or all the family, but the Government arrive at such a high figure partly because they assume that the take-up of family credit will be at least 60 per cent., whereas take-up of family income supplement is only 50 per cent. Perhaps the Government could justify why they think there will be a 10 per cent. increase in family credit over family income supplement. When family income supplement was introduced, the then Secretary of State said that he expected a take-up rate of at least 80 per cent., which was obviously a misplaced hope. In any case, families will lose the right to free school meals or welfare food. Although the Government have built into the family credit rate, compensation for those losses in many parts of the country—some one third of local authority areas — councils have had their own concessionary meal schemes for low-paid families who are not getting family income supplement. The Government have removed the council's right to operate the schemes, so families who get free meals but are not entitled to family income supplement and may not be entitled to family credit are straight losers. Perhaps the Government would justify the position for those families. Child benefit is frozen this year. This is justified by saying that the Government needed to target help on the poorest families through family credit. The cuts made a couple of years ago, by failing to raise the benefit sufficiently to compensate for inflation, saved the Government £175 million per year, and the recent cuts  saved a further £120 million. Are the Government still saying that all the child benefit savings have gone to the poor, or have some of them gone back into the Chancellor's overflowing coffers for tax cuts? Although rates for family credit are higher, the lowest paid gainers from higher family credit lose on the roundabout of housing benefit what they gain on the swing of family credit. They may gain £19 per week on family credit, only to lose it all on housing benefit. There will be other losers among the low paid, whether now in full-time or part-time work, apart from those caught in the specific net earnings trap. Full-time work will be defined as 24 hours per week, not 30 hours as at present, and the partner of a low-paid, full-time worker who works more than 30 hours may still be able to claim supplementary benefit, weekly additions and so on, if the household income is below the supplementary benefit entitlement. In future the partner of anyone working more than 24 hours will not be able to claim income support, no matter how far below the poverty line their income is. For income support, housing benefit and family credit, common rules will apply in the treatment of savings. Benefit will be withdrawn on a sliding scale for savings above £3,000 and will be lost altogether on £6,000, so someone made redundant and later being lucky enough to find work, although low paid, could lose out. Another common feature is that the benefits are based on earnings net of tax and national insurance, so tax cuts are of little worth, as my hon. Friend the Member for Leeds, West pointed out. As he said, the Low Pay Unit calculated that a tax cut worth a nominal 92p to a typical low-paid household will give a net income gain of just 4p per week, when all the benefit losses are worked out. The families in any case face high marginal tax rates. The Government have scrapped the worst of the former poverty traps, where a wage increase could result in a lower income, when all the benefits have been recalculated. But some 500,000 more families will be affected by the new low-pay trap, where for every pound extra in wages they will lose 85p to 90p in benefit, with the worst affected losing 98p in every pound, which is the highest marginal tax rate, whereas the highest marginal tax rate for the highest paid is 60p in the pound. We suspect that that may be lower after Budget day next Tuesday. As my hon. Friend the Member for Leeds, West said, the low paid also contribute quite disproportionately to national insurance. The lower poverty trap hits more people. All earned income over £41 a week is subject to the full rate of contribution deduction, and that is about 10 per cent. of earnings at this level. Someone earning £1,600 would pay the equivalent of 2·6 per cent. of earnings and someone earning £100,000 would pay the equivalent of about 0·5 per cent. That disproportion is bad enough at any time, but it is especially outrageous this year when we expect tax cuts for the rich in the Budget while the Government are manipulating the national insurance arrangements so that they will make a profit of £2,000 million, which is roughly equivalent to between 1p and 2p off income tax. That is substantially more than the Government claim that they are adding to social security payments. Of course no contributions are paid on unearned income. Apart from the rates bill which everyone will now face, there are other costs that bear more harshly on the low paid. My hon. Friend the Member for Leeds, West mentioned the spread of VAT, and electricity costs are  expected to rise by 15 per cent. in two years, with possibly similar increases in water charges. They will all hit low-paid families harder than families on average incomes because those charges will represent a larger share of their budgets. We fear for the future for many families who receive low pay. The Government are apparently reeling from the outcry about the cuts in the National Health Service. We suspect that after April there will be a second front to that public outcry which will be centred on poverty in an increasingly unequal society.

3.56 am

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Michael Portillo)
I congratulate the hon. Member for Leeds, West (Mr. Battle) on obtaining this debate, albeit at this late hour. He began by saying that it was the duty of Ministers at the Department of Health and Social Security to reduce the proportion of public expenditure on social security. That is of course not true. It it were, it would be staggering how successive Secretaries of State for Social Security had failed in that respect. Since the Government came to office, the proportion of public expenditure spent on social security has risen from about 26 per cent. to rather more than 31 per cent. today. The budget for social security for the coming year is £48 billion. If the hon. Gentleman is concerned about the "collective obligation of society", as he called it, I can think of no better demonstration of how that presently stands than that enormous budget of £48 billion for the coming year. The hon. Member for Leeds, West and, to a lesser extent, the hon. Member for Peckham (Ms. Harman) dwelt for some time on the Budget about which I cannot say anything, not least because I do not know what it will contain. However, they both misunderstood the role of cutting taxation and what that can do to stimulate the economy. Has it not been the case that time and again the Government have cut taxation and time and again the revenue from taxation has risen? There was a somewhat familiar strain of envy running through the hon. Gentleman's remarks. For instance, his reference to the number of millionaires in the country has nothing to do with the debate except that by lowering the higher rates of taxation we have encouraged people with enterprise, who are creative and who are good at creating jobs, to stay in this country to the benefit of the economy and to the benefit of many thousands of people who have gained employment. Those people have, in turn, become taxpayers and have contributed to the higher tax revenues. The hon. Gentleman's speech and his remarks about the Budget were very much in terms of how much money my right hon. Friend the Chancellor of the Exchequer had to give away. The Budget has nothing to do with giving away; it is to do with raising the revenue that is required to finance the public expenditure decisions that have already been announced. The Budget is about taking away and removing in the form of taxation money that people have earned. There was another misunderstanding when the hon. Gentleman referred to the need to increase child benefit to remove people from poverty. The point which I have been at pains to make is that increases in child benefit have no  effect on the incomes of the people who are on income-related benefits, because child benefit is taken into account. As the hon. Member for Peckham (Ms. Harman) pointed out, the Government have ensured that in the reforms more money goes into the benefits that are directed towards families with children. The hon. Gentleman's remarks about taxation were all directed to the proposition that my right hon. Friend the Chancellor of the Exchequer will cut the rate of tax. I have no idea what my right hon. Friend has in mind for the future, but in the past thresholds have been increased well above inflation, by 22 per cent. during the Government's period in office, which means that 1·4 million people have been taken out of paying tax. Much of what the hon. Members for Leeds, West and for Peckham said concerned the undesirability of high marginal rates of tax combined with the withdrawal of benefit. I agree with that as a general proposition, but it is made up of two elements—the withdrawal of benefit as income rises, and taxation. For the hon. Gentleman not to mention the important factor that 1·4 million people have been taken out of paying tax showed a lack of balance. The hon. Gentleman displayed a similar lack of balance when he failed to mention that the reduced rates of national insurance contribution introduced by the Government mean that employees on low incomes and their employers now pay £1·5 billion less than they would otherwise pay. The hon. Gentleman made the point, which he rightly recorded had been made also in Standing Committee, that there is to be a surplus in the national insurance fund in the coming year. As I explained to the Standing Committee, that is an appropriate surplus given the number of uncertainties about the fund in the coming year, particularly relating to the new pension reforms. This means that the flows out of and into the fund are not quite as clear cut as usual. I remind the hon. Gentleman of another point made in Standing Committee. Surpluses taken together year after year become a balance in the fund. The hon. Gentleman's colleagues have levelled considerable criticism at the Government because, they say, the balance is too high. For the coming year it will be about 33 per cent. Much larger balances were maintained by the Labour Government, in one year reaching 40 per cent. of the fund. Those figures are considerably above the minimum recommended for the fund, but no maximum is recommended and it must be for the Government of the day to decide what should be a prudent surplus and prudent balance in any year. The Government's view for the coming year is that a balance of 33 per cent. is not inappropriate. The Labour Government believed that in almost no year was a balance of less than 33 per cent. appropriate. The hon. Member for Leeds, West spent some time wrestling with the question whether there should be a definition of poverty. In a throw-away line he said that he believed that previous Governments had recognised the poverty line. I am not aware that any previous Government have recognised the poverty line. If we establish poverty merely as a relative concept, no matter how much we increase the living standards of the population, there will always be a poorest 40 per cent. or a poorest 20 per cent., and it will be claimed that they are  living in poverty. For instance, if we take the poverty level that is sometimes peddled, but to which I give no credence, of 140 per cent. of supplementary benefit, that would include an average family man with two children who was earning £167 a week. According to such a definition, when supplementary benefit increases, the number of people involved increases, too.

Mr. Battle
Is the Minister suggesting that poverty is so relative as not to exist, or is he suggesting that people can get by? Does he refute the evidence that people who are trying to survive on benefits do not have enough money on which to live most weeks of the year? Is he prepared to say that that is unacceptable and unnecessary?

Mr. Portillo
I am prepared to say that income-related benefits have tended to increase year by year. Supplementary benefit is now about twice what it was in 1948, in real terms, and while the Government have been in office supplementary benefit has increased in real terms. The hon. Gentleman is right to say that Governments take a view from year to year as to the appropriate level of benefit, but the tendency has been to increase benefit in real terms. Another important indicator of poverty or of living standards is the real take-home pay of a family, and during the debate we have dwelt considerably on families in work. The real take-home pay for a family with two children on average earnings has increased by 23 per cent. under this Government, whereas under the previous Government it barely increased. Spending on benefits for the long-term sick and disabled has increased by about 80 per cent. in real terms under the Government. The supplementary benefit scale rates for children under five have increased by a quarter under the Government. The value of the scale rates has doubled since 1948 and increased by 6 per cent. since 1978. In 1980, the changes that we made meant that extra help was available after one year rather than two years for lone parents and for the sick and disabled, and we estimate that the real value of support for children on benefit is more than £150 million higher than if we had maintained the 1978 value and structure. The improvements in the adult scale rate for unemployed couples with children on benefit are worth £75 million, and for lone parents about £50 million. By August 1986, the extra help for families with children in benefit was worth over £250 million annually. The hon. Gentleman will be aware of the extent to which pensioners have benefited from the increase in living standards under the Conservative Government. Their average net incomes grew by 2·7 per cent. a year in real terms between 1979 and 1985—the most recent year for which we have figures. That is 18 per cent. over the period, compared with 0·6 per cent. a year between 1974 and 1979, or 3 per cent. over the period. Between 1979 and 1985, the rate of growth was twice as fast as for the population as a whole. Labour Members always talk about pensioners purely in terms of the state retirement pension and how it relates to inflation. They ignore the high inflation during that period, and the effect of inflation on pensioners' savings. That is why, despite the Labour Government's efforts to increase pensions ahead of prices, the living standards of pensioners were hardly increasing at all because of the heavy toll of inflation on their savings. That demonstrates  the folly of viewing the battle against poverty as being only about the amount of benefit that one pays out. There are other features, too, many of which can be impoverishing, and there is no better example than what happened with inflation under the Labour Government. Spending on the elderly in the United Kingdom is the third highest in the European Comunity as a share of GDP, at 9·6 per cent. in 1983. The partial figures that we have for 1984 show that United Kingdom spending was increasing in that year, whereas spending in some other states was going down. That basis of comparing the proportions of GDP that are spent on the elderly is the only measure of pensioner support that the European statistical bureau says that it can be happy with, and the accuracy of which it can confirm. I should like to say something about the reforms that will come into effect in April, because the hon. Member for Leeds, West referred to them as a cut. Almost anybody who has had dealings with the social security system would admit that it is time for a change. The system is regarded as far too complex and it is difficult for customers and claimants to find out what they should be receiving. It is equally difficult for staff to provide the sort of dependable quality advice that we all want. These are deep-seated complexities that reflect many years of incremental refinement and adjustments. It goes further than that and reflects an unwillingness to consider the structure of social security as a whole, with supplementary benefit, housing benefit and family income supplement, each of which has grown up separately and has its own detailed rules and procedures. Each benefit can be justified in its own terms, but the overall effect is inconsistency and complexity and a system that, despite the huge sums expended, cannot guarantee a proper level of help to all of those with real needs. The combination of separate schemes creates paradoxical and perverse results that have the effect of locking people, often against their will, into protracted dependency on benefits. The combined effects of housing benefit and family income supplement rules produce the absurd position of a parent working on low pay being worse off than if he or she worked harder or for longer hours and received a pay increase and thus boosted gross earnings. The lack of proper alignment between the benefits available to people who are in and out of work creates the risk that some may find themselves worse off by taking a job than by staying on benefit. These problems will not be effectively tackled within the present structure. We need a new structure that is based on clear and straightforward principles and that looks at the provision of help for those in need in a more comprehensive and wide-ranging manner. I was quite startled to hear the hon. Member for Peckham launching, as I understood it, an attack on basing benefits on net rather than gross incomes. The problem of using the measure of gross income has led to rates having a difference of well over 100 per cent. I think that we are united in the House in saying that we are very pleased to see the back of that sort of effect. The new structure of income-related benefits that is being introduced in April will be a major step forward in tackling the problems. The new income support scheme, for instance, will be based on clear-cut and straightforward criteria that everyone can understand. In addition to the basic personal allowances, there will be a system of premiums that will focus special additional help on the  priority groups whose needs are greatest, that is, pensioners families with children, the sick and the disabled, and single parents. At present, some of those categories of people benefit from the supplementary benefit structure, based on long-term and short-term rates, and weekly additions for diet, heating, laundry, and so on. But the present rules are somewhat hit and miss. Families with children never receive the long-term scale rate, however long they are on benefit. Under the new structure, they will receive family premium from the moment that they start on income support. Similarly, additions to heating allowances have become a kind of extra surrogate blanket for pensioners. The new structure will continue to focus extra help on pensioners but in a more clear-cut and explicit fashion. Despite all the criticisms that have been made, the new structure will be widely welcomed and will stand the test of time much better. We are also drawing a clearer distinction between the provisions for regular weekly income, particularly in the form of income support, and the special provisions that must always exist for exceptional one-off needs that the majority of income support families will face from time to time. One of the absurdities of the present supplementary benefit scheme—and I do not know whether the hon. Member for Leeds, West defends the scheme to the hilt—is that such exceptional help can be provided only where the need falls clearly within the bureaucratic framework that is laid down by regulations. In practice, although a small minority of supplementary beneficiaries have, in the past, done rather well out of single payments, the great majority have received nothing. By replacing this whole edifice with the social fund we will be able to respond rather more flexibly. We are also overhauling the housing benefit scheme so that, for the first time, it is aligned with income support.

Ms. Clare Short  (Birmingham, Ladywood)
I cannot bear this.

Mr. Portillo
The hon. Lady has only just entered the Chamber. For the first time the same level of help with housing costs will be provided for people on equivalent levels of income whether they arc in or out of work. That is a major improvement.

Mr. Battle
It is clear that there is no allowance in the public expenditure White Paper for any increase in housing benefit as a consequence of rent increases arising from the Housing Bill, currently under discussion. In other words, there is no allowance in the budget for housing benefit for people's rents to be met when they increase as a result of the Bill. Therefore, there will he a further cut in housing benefit on top of the one contained in the public expenditure White Paper.

Mr. Portillo
I do not understand the hon. Gentleman's argument. One of the features of the new housing benefit system is that, for people on supplementary benefit— by then called income support—their housing benefit will include 100 per cent. of their rent. At present the starting point is 60 per cent. of the actual rent. Therefore, people who are on income support will be fully protected against increases in their rents. That is different from the present position, and I should have thought that the hon. Gentleman would welcome it as an improvement.

Ms. Short
Those on supplementary benefit get 100 per cent. housing benefit already.

Mr. Portillo
The hon. Lady is wrong. The present basis is that 60 per cent. of actual rent is taken into account in supplementary benefit. The new basis will be 100 per cent. actual rent. Therefore, there will be absolute protection against rent increases. Let us consider how people will fare under the new income support system. The hon. Gentleman is not untypical of critics of the social security system in producing lists of people whom he believes will be worse off. Equally, there are many people who will be better off. I remind the hon. Gentleman that there is transitional protection for income support claimants so that their cash benefit will not go down in April. There are many striking increases that people will enjoy.

Ms. Short
The Minister will be aware that the Government are planning to introduce a scheme for the long-term unemployed in September that will pay them £10 on top of their benefit, although they will have to pay the first £5 of the cost of travelling to work. Will people who take a place on that scheme—we understand that it will, increasingly, become compulsory—maintain their transitional benefits or will they lose them? If the latter, they will be worse off when they leave the scheme.

Mr. Portillo
Obviously transitional protection is there for people who are current claimants. If, for any reason, a claim lapses, a person becomes a new claimant and transitional protection cannot be applied to a new claim. If someone continues to be a claimant, he continues to enjoy transitional protection until such time as inflation takes its effects.

Ms. Short
Will the Minister give way on that point?

Mr. Portillo
I cannot help the hon. Lady any further on that point at the moment.

Ms. Short
It is very important.

Mr. Portillo
I am sorry, but I cannot help any further at the moment. Let us take the example of a rent-paying, lone parent with two children aged four and 11 claiming for a period of three months. The present supplementary benefit gives such a person £62·02, and the new system will give £70·10. Under the old system a lone parent with a mortgage and three children who had been claiming for six months and who received attendance allowance, heating and laundry additions for one child would receive £97·78. The new system will give that person £103·65. Many people will benefit under the new system because, as the House will be aware, an extra £200 million will be put into family credit and an extra £100 million into help for families under income support. The hon. Member for Peckham asked about take-up. It is reasonable to assume that the take-up of family credit will be higher than that of family income supplement. After all, we are talking about a benefit which, as she acknowledges, is more generous. If it is more generous, it will benefit people more and it will benefit more people. For the people who claim it, therefore, it will be more worthwhile to claim. It will be better known because more people will receive it. If more people receive it, more people will talk about it and, therefore, it is fair to assume that there will be a greater take-up. The hon. Lady says that predictions of take-up in the past have been inaccurate. That was when family income supplement was being introduced as a new benefit with no experience of the past. We are introducing family credit which is based on family income supplement. We have a great deal of experience and, with a more generous benefit going to more people, it is fair to say that more people will claim. The hon. Lady also referred to school meals under family credit. She will know that the combined effect of paying £2·55 per week in the family credit rates for school meals will mean that 100,000 more children will be receiving that cash benefit than at present receive the combination of school meals under family income supplement and local authority discretionary systems. The reason for abolishing the local authority discretionary systems is to avoid double provision for the same children because, obviously, if one builds in a cash benefit and gives children free school meals, ratepayers and taxpayers are providing twice for the same child and that does not appear to be appropriate. The hon. Member for Peckham will know that, under family income supplement, only about 70 per cent. of the children who are entitled to free school meals were taking them. On the other hand, the £2·55 is automatic. It goes to anybody on family credit and, therefore, will be that much more adequately spread among those families. The hon. Lady claims that gains in family credit will be mopped up by losses in housing benefit. She is taking a pretty unusual example because the proportion of family credit families who receive housing benefit help with both their rents and rates is only about 4 per cent., or about one family in 25. It is only in those circumstances that the maximum deduction occurs. That is because the family credit rates are sufficiently generous to lift most families out of housing benefit altogether so that only a small minority of family credit families receive any housing benefit. Among those, it is only a further minority who receive housing benefit, both through their rent and their rates. It is only the combination of rent and rate tapers which gives those high rates of withdrawal. Equally, there has been a substantial misunderstanding about how family credit will affect families because of the nature of the distribution of tenure among family credit families. Among those on family credit, those with mortgages, outright home owners and non-householders will usually gain from the new structure. In some parliamentary questions that have been tabled, the concentration has been on selected hypothetical families who pay rent. That rather obscures the point that those people are not very common. Although rent payers are more likely to experience net income losses that non rent payers, about half of the rent payers eligible for the family credit stand to gain. In any case, those who have mortgages are in all respects similar to rent payers who have similar housing costs and they have the lowest pre-reform net spending power. For example, at present, at £100 per week of gross earnings, the net spending power of someone with a mortgage and two children and a net mortgage payment of £18·87 is £11·21 lower than that of a similar rent payer with a weekly rent of £19.12. After reform, their respective net spending powers are £99·60 for the rent payers and £100.11 for the owner-occupiers. A similar equalisation occurs for the larger family with three children, so that,  after reform, even rent payers who lose are still in broadly the same financial circumstances as those with mortgages with comparable earnings and housing costs. The pre-reform structure of marginal tax rates produced the bizarre result that the gross earnings, particularly of rent payers, could at least double, while their net spending power remained the same. They are therefore just as needy as people who, in gross earnings terms, are apparently a good deal worse off. People in the poverty trap, for example, on £120 a week are worse off than those earning £70 a week. As part of our reforms, targeting more efficiently on need means targeting not only on those on the lowest earnings but on those with the lowest pre-reform spending power. That is an important point. The make-up of tenure within the family credit population is that those who are rent paying tenants are about half, those with mortgages are 38 per cent., outright owners are 8 per cent., and non-householders are 4 per cent. The data from the family expenditure survey shows that under the family credit system there will be more gainers under than losers. The concentration in certain parliamentary questions on those with rents and those receiving housing benefit is artificial because such people are a small minority of the population. The hon. Members for Leeds, West and for Peckham referred to the social fund, but ignored past experience with single payments—except for the years 1985–86 and 1986–87. If they take the longer view of what was happening with single payments, they will realise that, had they been the party in government, they too would have been concerned about what was going on. Between 1979 and 1980, the amount spent on single payments was £40 million.

Ms. Short
The increase was due to unemployment.

Mr. Portillo
I shall come to that in a moment. Revalued in 1986 prices, that is £67 million. By 1985–86 it had grown to £346 million in 1986 terms. The hon. Member for Ladywood says that that was due to the increase in unemployment, but the connection cannot be established. Between 1980–81 and 1984–85 the costs of single payments increased by almost four times in real terms, and the number of payments by three times. Between 1983–84 and 1984–85 alone, costs increased by £75 million—by more than 40 per cent. But the total number of claimants receiving regular weekly help increased by less than three-fifths between August 1979 and August 1985, yet the number of single payments was more than three and a half times higher. The total number of unemployed was two and three-quarter times higher but the number of payments received was five and a half times higher. The number of other allowance cases nearly doubled, but the number of single payments more than trebled. What was particularly disturbing was that access to those payments was so uneven. Only one in five claimants on benefit at the end of 1984 had received a single payment. That is the background to establishing the social fund.

Mr. Battle
Will the Minister comment on the remarks made by the social security advisory committee, which said that people perhaps needed the single payments because the level of benefit neither provided for their needs nor enabled them to save to provide for them?

Mr. Portillo
I have already said that, whatever the level of benefit may be in real terms, it is twice what it was in 1948. It is 6 per cent. higher than it was in 1978, and the changes that have been made in benefit levels have been particularly concentrated on families with young children, especially children under five. The hon. Member for Leeds, West and other Opposition Members consistently concentrate on a single year of single payments and then deduce that the social fund will cause cuts. That leaves out of the calculation the extra £200 million going into family credit and the extra £100 million going to help families under income support. If Opposition Members want to make comparisons, they must add those amounts to the equation. They know that the single payment expenditure has been much lower during the year that will end in April. The amount of money being provided for the social fund is very similar to the amount being spent on single payments during the current year. About £203 million has been put into the social fund. It is too early to give an exact figure for the amount spent on single payments this year, but it will be close to £200 million. If we take, for example, the local offices in the Leeds area, we find that the amount spent on single payments from the beginning of April 1987 to the latest date that I have, 9 February 1988, was £767,000 in Leeds, North. That compares with a social fund allocation of £1,018,000. In Leeds, North-West the amount spent so far this year on single payments is £440,000. The amount being made available in the social fund budget is £497,000. In Leeds, West the amount of money spent so far this year is £412,000 and the amount being made available in the social fund is £469,000. I do not think that the situation is as the Opposition claim, and I say that for two reasons. First, the sums being put in are much the same as the single payments, and, secondly, the amount of basic help being put into income support and family credit has been increased during the course of the reforms by the figures that I have mentioned. There has been a great deal of debate about how the allocation was made between one office and another. We have taken some trouble to spell that out in a note that we have placed in the Library for hon. Members to consider. They will see that the basis of calculation has been that six sevenths of the money is distributed on the basis of the past single payments record, and that one seventh is distributed on the basis of the underlying need of the area. The underlying need has been defined in terms of the supplementary benefit case load and how that divides between elderly unemployed and other groups. Far from there being political bias as alleged by the Opposition Front Bench, the result is rather striking. It is that the allocation per head of case load—the number of people on supplementary benefit in the local office area—is, for example, in Bathgate £51 per head; Glasgow, Provan £106; Coatbridge £99; and Glasgow Springburn £92. None of those is a notably strong Conservative area. In Bristol the allocation per head is £30 in Bristol, Central; £24 in Bristol, East; £30 in Bristol, Horfield; £36 in Bristol, South; and £21 in Bristol, West. In Bournemouth the allocation is £21 per head, and in Epsom it is £16.

Ms. Short
What about Birmingham, Ladywood?

Mr. Portillo
If I had known that the hon. Lady would be here for this debate, I can assure her that I would have  had the figure. I shall be very pleased to supply it to her in due course. There is certainly no political bias, and I stress to the House that the figures that I have given are the amounts of social fund allocation per head of the population on supplementary benefit. They are not figures for the population as a whole. We are simply dividing the number of people on supplementary benefit into the social fund allocation. The House will appreciate that the allocation tends to be very much higher in Scottish cities and, as it happens, in Labour seats. The allegation that there has been any political bias in this matter is absolutely untrue. We have had an interesting debate that has given us an opportunity to think about the reforms. I believe that the reforms achieve the Government's objective. They provide a much simpler system and one that it will be easier for claimants to understand. It is also a much fairer system. In the past, the additional requirements have been used as sorts of surrogates to help particular groups of people, and the system has depended on individual claimants then making a claim for a dietary, heating or laundry addition, or whatever it might be. In future they will be automatically entitled to the premium that is appropriate to their group. If they are disabled, they will automatically qualify for the disability premium; if they are severely disabled, they will automatically qualify for the severe disability premium. That, I believe, is a great step forward. It must have been of concern not only to Government Members but to Opposition Members that the single payments regime meant that the way in which need was met was very patchy as between one part of the country and another and one sort of claimant and another, so that only a small minority of claimants were receiving single payments. Those single payments could, of course, be very large sums of money. That also raised a very important point of equity between those people who were on income-related benefits and those who were only a very short way above income-related benefits. All of that has an effect on the unemployment trap, because the more such very large payments are made available to people on benefit, the more the incentive for people to be in work is removed and the greater the sense of inequity felt by people who are in work and having to make provision for that sort of payment from a budgeted income. One of the strengths of the social fund as it will be introduced is that it will provide greater equity between one sort of claimant and another without in any way removing the support from the most vulnerable groups of people, who will continue to qualify for community care grants, for which there is a budget of £60 million.

Unified Training For Employment

4.37 am

Mr. Ray Powell  (Ogmore)
It is significantly coincidental that this debate on the proposed unified training for employment programme follows the debate on poverty and low pay. Recently in Wales I went to the jobcentre in Neath, looking not for a job but to see what jobs were available in the Neath area. There was on the notice board an advertisement for a person to undertake general labouring duties. It stated that he must be fit and active as the job would involve very heavy lifting, and it said that the job might attract a job-start allowance. The wage on offer for that was £50 per week. So when I listened to the previous debate I well understood why it was necessary for my hon. Friend the Member for Leeds, West (Mr. Battle) to ask for a debate on low pay and low income. At 4.38 in the morning, Mr. Deputy Speaker, I only wish that I could come to the Chamber in as sprightly a fashion as you when you jumped into that Chair a few minutes ago. I do not know whether it is my age, but I am not as sprightly as you are at this unearthly hour in the morning. I was very fortunate to draw a place in the ballot and I am pleased that this subject can receive the further consideration that is not only necessary but essential before the Government take steps on their proposals for a unified training for employment programme. I wish at the outset to declare my interest, personal and otherwise, in this matter. I am chairman of CATO—Community Activities and Training in Ogwr. Ogwr is the borough which spreads across two constituencies, Ogmore and Bridgend, the two areas I represented until the boundary changes in 1983. CATO was formed jointly by the trade unions and other public bodies in 1981 to develop an acceptable scheme to combat extensive unemployment in the borough brought about by measures introduced by the Government in 1979. In Wales in the last eight years the number of jobs in the steel industry has dropped from 52,000 to 18,000, and in the same period the number of miners has declined from 27,500 to 7,600. That means that we must create 54,000 jobs to put us back to the rate of employment opportunities that existed in Wales in 1979. A group of people got together and established CATO in view of the unemployment situation and demanning in the steel industry at Port Talbot—which is only five miles from the Ogwr borough — where 7,000 of my constituents were made redundant. The closure of five pits in the valley areas in my constituency meant a further 3,500 being made redundant. Whereas the rate of unemployment at the time of the Tory Government being elected in 1979 was 3·7 per cent. in the Port Talbot travel-to-work area, within two and a half years that had escalated to 23 per cent. We had to do something, faced with such a problem, so we started CATO under the MSC. I served as a member of the Select Committee on Employment at that time and persuaded a number of people in the constituency to establish the scheme. I was elected its chairman, a number of directors were appointed from the local community and we developed the scheme as a charity. No director is paid, all being volunteers. Gradually we built up the scheme to its present 525 places, with 425 now in employment. We  used to keep the number up to 500, but because of the Government's changed unemployment eligibility arrange-ments—from 12 months to six months—we cannot fill the 500 places that are available. Despite all these problems, this week we had the 2,000th employee since the scheme began, and a plaque has been prepared to commemorate that achievement. The trouble is that the continual changes introduced by the Government make the planning of future programmes virtually impossible. When such new rules are introduced, it becomes extremely difficult to complete the object of the exercise, which is to get people into jobs. The Government should listen to those with practical experience of running agencies such as ours, for the whole aim should be the provision of reasonable jobs, so helping the community and affording work experience for those who have been out of work for long periods or who have never worked at all. We also run a YTS scheme with 60 places and a staff of 10 and have been successful over the years, with a 95 per cent. placement rate into jobs for those completing their courses. Over the years we have made a major capital investment to improve the quality of training. We have purchased an 80-acre farm to employ 40 people training in animal husbandry, forestry, horsemanship and agriculture generally. We have purchased large office accommodation and we have secretarial, computers, office management. architectural and many other skills working there, and people training alongside the skilled workers. One of the dangers of the present proposals is that they put schemes such as the community programme scheme at great risk. Skilled workers will not be prepared to accept £10 on top of benefit to take up a job. Those whom we hope to train will achieve only a small measure of practical experience, whereas now we are able to provide both training and practical experience. For the record I shall say something about CATO. We have a training centre, large lecture rooms and a printing and photographic department. We have a rehearsal studio for the leisure department and for actors and drama students. A recent presentation on crime prevention was highly proclaimed and recommended by the police authorities. The drama presented by the welfare section of CATO makes available to the elderly information about crime prevention in their homes. Another drama was produced for schools called "Don't talk to strangers" which received similar praise from the education authority. We own the freehold of property and use it to the advantage of the scheme, the employees and the community in general. Recently, we acquired the lease of one of the hospitals that was closed by the area health authority and we are developing the grounds to provide a child clinic, a creche for working mothers—I am sure my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) is pleased to hear about that—a respite scheme for the elderly, to allow carers to have holidays and a laundry for those who care for incontinent patients in their homes. There are also proposals for an international youth centre in the grounds. The hospital is situated in the most picturesque part of the Ogwr valley and is ideal for all those activities. I have outlined these matters so that the Minister will understand the fears of those of us who during the past seven years have worked with the help of the Government and supported by the Manpower Services Commission.  The board members, the chief executive of the scheme, the 12 full-time employees and all those who work for the CATO organisation are afraid that these new proposals will eventually mean the end of a most proficient and successful employment agency that has always aimed for high standards, has provided jobs with a purposeful end product, and has had the will to find full long-term employment when the possibility of doing that seemed hopeless and indeed is still profoundly difficult. The Government should not treat such schemes with contempt. I ask the Minister to visit the scheme and listen to the views of those with experience before proceeding with his proposals. The preface to the White Paper "Training for Employment" mentioned: "The most immediate is how to ensure that unemployed people, particularly the longer term unemployed, fill t he job vacanices which are now available." He talks further about providing training for some 600,000 people a year and he concludes: "we need nothing less than a revolution in attitudes to training and retraining: a revolution which engages the commitment of employers and employees alike. As a nation we need to accept training through life and make it a reality." I share those opinions and I have tried to introduce them into the scheme. I warn the Government that their proposed scheme will not increase the number of people in employment; but it will substantially decrease the number of people who are now working. I read the Secretary of State's statement on 16 February and the questions that he was asked and found that the questions of both Opposition and Conservative Members expressed the same alarm that I feel. If the Secretary of State is not prepared to listen to what Opposition Members say, he should read what was said by some of his hon. Friends, who declared an interest in the employment training schemes in their areas, and consider the matter further. I know of your deep interest in the subject, Mr. Deputy Speaker, because of your past experience of such schemes. You have seen what has happened since you left office. You witnessed the development of MSC programmes. When I was a member of the Select Committee on Employment we visited the MSC frequently to discuss projects. During the debate on the White Paper the Secretary of State said that all the MSC members approved of the proposals, and that three members of the TUC shared his view. After my talks with members of the TUC it does not appear to me that the members of the general council of the TUC agree with the Secretary of State's proposals. I wonder how the voluntary sector will respond to the Government's proposals. The Government want it to make a major contribution to the new programme. It will be interesting to see whether the various agencies will take up the proposals. The programme offers various kinds of training to the unemployed. There is to be practical training, either with employers or in projects, and directed training—presumably by a training agency, such as a college of further education. There is a guarantee that 40 per cent. of every trainee's time will be spent in directed training. The Government hope that employers will provide many more places on that programme than they did on the community programme and that they sill also make a financial contribution. The Government expect the voluntary sector to provide project-based training, designed particularly for those who  have been unemployed for more than 12 months. Of the 300,000 places on the adult training programme, at least 170,000 are to be on such projects. We provided about 130,000 places for the community programme and the local authorities provided a further 100,000 places. It seems most unlikely that the employers, especially in Wales, will come up with the required number of places, at least in the short term. The local authorities for their part, increasingly subject to severe financial constraints and with many of their functions about to he privatised under the new Local Government Bill, will probably lack the incentive to participate as much as they did under the community programme—especially in Labour-controlled areas — if the TUC does not endorse the new programme, as seems very likely. In that case, initially at least, the voluntary sector will be under great pressure to provide project-based places, of which far more than the minimum of 170,000 are likely to be required. The details of how the programme will be administered are still unclear, even at the MSC's headquarters, but voluntary organisations have already identified a number of difficulties. The most important is whether the income that training managers will earn will meet their anticipate outgoings. Preliminary calculations made by the national task group, which are confirmed by the agencies in Wales, suggest that the funding will be very tight indeed, and that may well deter voluntary organisations at present involved in the community programme from participating. Another practical issue is how far voluntary organisations will be able to determine who they accept on to their projects. That is an important matter, because at present agencies can be selective to a certain degree about the people whom they employ, but if the employees are to be directed by agencies some of the new training programme organisers and managers will not have the opportunity to determine whom they will accept. That could make quite a difference to some of the projects that we have developed in the Ogwr borough. The cardinal issue, however, concerns the overriding question of principle that the programme should be voluntary. For the moment, that principle appears to have been safeguarded. The Secretary of State has stated that he has no plans to make the programme compulsory. "Training for Employment" also states that the Government have accepted in full the MSC's recom-mendations. That may well be, but the very strong endorsement that the MSC gave to the voluntary principle is nowhere echoed in the White Paper. There are grounds for scepticism about the Government's statement. Indeed, the TUC is already seeking a categorical assurance from the Secretary of State that the programme will remain voluntary, and will not be registered as an approved training scheme. The cause of the anxiety that the TUC and many voluntary organisations feel is clause 25 of the Employment Bill now going through Parliament. Under that clause, the Minister can register any training scheme so that, if someone refused to take a place offered on it, he would he penalised by losing for 26 weeks any social security benefit to which he was entitled. If that ruling applied, many trainees would be coming on the programme under duress and as pressed men on to projects run by voluntary organisations. As was stated in the petition that we presented to the Secretary of State for Wales in November, such compulsion would destroy the voluntary principle that it is essential for us to maintain, and would especially damage social welfare projects in which a personal commitment to the work is essential. This compulsion is more likely to be invoked if the financial inducements are not sufficient to persuade unemployed people to join the scheme voluntarily. Trainees will receive a supplement of £10 over their weekly benefit, together with travelling expenses over £5 a week. For most participants that will mean working for £5 extra a week. There is some doubt whether that will induce long-term unemployed people in particular to join the programme in sufficient numbers. If they do not, whatever the Secretary of State may say now, the Government may seek to oblige them to do so by threatening to withdraw their benefits. With all those anxieties and doubts, it is doubtful whether any of the voluntary organisations which have played such an important role in the community programme will be willing or even able to continue to do so in this new programme. The MSC will have to persuade voluntary organisations that such anxieties are unfounded if they are to participate as fully in the new programme as they did in the old programme. In the minds of unemployed people, there will be a transition period between the wage-paid community programme and the much reduced benefit plus of the new training programme. The Government must safeguard against that and ensure full financial support to their agents during the transitional period. The new scheme is based on filled places, whereas the community programme is based on approved places. The present scheme has budgeted for £440 per annum allowance per approved place. Therefore, provision must be made for a safety net. The MSC must guarantee a minimum number that it will fund. If that is not conceded, a number of well-established agencies will undoubtedly collapse. I hope that the Minister will consider my remarks and respond with the reassurances that I have requested.

5.1 am

Ms. Clare Short  (Birmingham, Ladywood)
My hon. Friend the Member for Ogmore (Mr. Powell) makes his case for scepticism about the new adult training scheme, which is due to start in September, very well indeed. The Minister has frequently heard my views and those of the Opposition during our consideration in Committee of the Employment Bill and I have no intention of repeating them. But the Minister should note that my hon. Friend's objections are stated from the perspective of someone who has struggled to work with existing Government programmes to seek to benefit the worryingly large number of unemployed people in his constituency, and came afresh to the new scheme hoping that it would be of benefit to those unemployed people. My hon. Friend's objections complement those that we previously put to the Minister when we examined the scheme from a national perspective. That demonstrates that whatever way one looks at the Government's proposal, it is objectionable in principle, complicated and difficult to work in practice and will cause great trouble and difficulty to anyone who approaches it on either basis. I remember well the replacement of the old community enterprise programme with the community programme which the Government are now seeking to abolish and to establish in its place the adult training programme. At that time I was the director of a pressure group called Youth Aid. We had not long before completed the study of the community enterprise programme, which provided mostly full-time places and paid a rate which, if it had been kept in line with inflation, would today be some £125 per week; much more than the Government are willing to offer today. Having completed the study, which was funded by the Manpower Services Commission, we called for an increase in training and more places on the programme, because of the high number of long-term unemployed and the relatively low number of places on the scheme. Instead, the Government gave us the community programme, which increased the number of places but massively reduced the income payable to the long-term unemployed. The Government stood by the unbreakable commitment demanded by the trade unions and the TUC commissioners on the Manpower Services Commission that the rate for the job should be paid by deliberately providing a high proportion of part-time places and insisting that the average rate for the job would be £67 per week: a rate that has not been upgraded in line with inflation since the programme was introduced. If it had been, the rate today would be some £85 per week. At that time there was enormous objection to the new scheme, because the income levels were so low and the Government had provided no facility for training, although it was pointed out that many long-term unemployed were unskilled workers and that training would give them a greater chance of getting into jobs. Since that time we have seen a continuing squeeze on funding for public sector jobs and a growth in the number of community programme placements, frequently replac-ing services that were provided by the public sector. Much of the work done through the community programme is valuable — caring for disabled and elderly people, providing nursery services for children, and other crucial services. Those services should be provided by workers employed permanently who are paid a decent rate for the job. Nevertheless, people have taken advantage of the community programme, as public sector and local government services have been squeezed, to try to provide services for the needy. We are now seeing a further squeeze. The Government are telling us that it is desperately important that the long-term unemployed should he trained, which is what we said when the community programme was introduced, but the Government would not listen. The Government say that the long-term unemployed with dependants have no incentive to go on the community programme, because the average wage is so low, so it is better to pay a small amount on top of benefit to ensure that everyone has an incentive to go on the programme. We do not agree with that argument. It would be easy for the Government to provide an incentive for everyone to go on to the community programme by making available more full-time jobs. They deliberately produce a higher proportion of part-time jobs to keep average wage levels down. The reason why there are such low incomes on the community programme and why such a high proportion of entrants are single and relatively young, long-term unemployed people without dependants is that the Government fixed the participants' income at a low level.  Having reduced the level of income paid to the long-term unemployed on special programmes by deliberately changing from the community enterprise programme to the community programme, the Government are now trying to reduce those incomes still further because they are so obsessed with the need to restructure our economy and cut the pay levels of the lowest paid. The Government have taken a series of measures since they came to power in 1979 to cut the wages of the lowest earners in our society. Indeed, the Government have been very successful in that. Instead of 8 million low-paid workers in our economy, we now have 9 million. That means that one third of the people in work are working for very low incomes — lower than the decency threshold of the Council of Europe. The Government now wish to move on from having a high concentration of low-paid work and from paying the rate for the job to paying the adult long-term unemployed £10 on top of their benefit. The long-term unemployed are not expected to work for £10 a week; they are expected to meet the first £5 of the costs of getting to work themselves. We are considering people who have been out of work for a considerable time and are being required to work for £5 a week on top of their benefits. We are very worried about that, partly because the income offered to the long-term unemployed is simply inadequate and an insult to them. We are also very worried because the Government are proposing that the new scheme should be private sector employer led and not projects of benefit to the community as was the case under the old community programme. It will he a kind of adult youth opportunities programme. That means inevitably—as we experienced with the YTS and YOPS—that there will be a great deal of job substitution. If free workers are offered to employers, they will sometimes take them on and not recruit as many full-time and permanent workers as they did previously. The Minister will be aware that his Department publishes statistics to show that that practice still happens in considerable numbers under the YTS. The new offer is insulting to the long-term unemployed because it offers them so little extra for working full-time than they would get on benefit. It will inevitably destroy some of the permanent jobs that the long-term unemployed might otherwise have aspired to. Inevitably—and I am sure that this was part of the Government's intention—it will act as a lever down on the wage levels that the long-term unemployed might expect to receive if they managed to get those jobs. If employers have free labour available, they will offer rather less to those they employ than they might otherwise have offered. The Government pretend that they are concerned to offer more training for the long-term unemployed. That is impossible to believe when we consider the amount of money available for training in the new scheme. This is like an Orwellian farce in which the rhetoric of the need for more training in our economy for the long-term unemployed is used to camouflage a low-paid work experience scheme that is more about reducing yet again the unemployment figures and the income levels of the long-term unemployed. Probably the greatest worry was that alluded to by my hon. Friend the Member of Ogmore. He said that the scheme will not be attractive to the long-term unemployed if they are left to volunteer tar it freely. Therefore, it will work only if people are put under pressure to enter the  scheme. That is why there is the ugly prospect of long-term unemployed adults being compelled to go on a low-paid work experience scheme. We understand that there will be two ways in which the scheme will be compulsory. There will be restart interviews. Those who have been out of work for six or more months will be called in for interview under the threat of losing benefit if they do not come in. They will then be subjected to a test of their availability for work. That test is constantly tightened, and will be tightened further, as we are told by a whole chapter in the White Paper. If the Government get away with their proposal, people will have no freedom of choice. The Government now threaten the unemployed with loss of benefit for not just six or even 13 weeks but for 26 weeks. Under clause 26 of the Employment Bill the Government have taken certain powers in designating certain new schemes as approved training schemes. The Government make it clear that that does not mean that a scheme must provide adequate training. The Secretary of State could designate, whenever he wishes, a work experience scheme. Anyone who fails to apply for a place, who fails to take up an offered place or who leaves a place early can be deprived of benefit for up to six months. Supplementary benefit will be cut by 40 per cent. for six months. With supplementary benefit set at the minimum necessary to keep people alive, such cuts will make people's circumstances impossible. A complicated set of falsehoods about clause 26 of the Employment Bill has been put before us. Employment Ministers know that there is enormous worry about schemes being designated, in additon to the worry about the restart interviews and the availability for work tests. In Committee and on Report questions were put to Employment Ministers to clarify the Government's intentions. I should like to put them again to the Under-Secretary of State. I know that the hour is late, but the issue is important. If there is one thing that I can say to the hon. Gentleman it is that he normally answers every question that is put to him.

The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls)
Satisfactorily?

Ms. Short
Not always, but the hon. Gentleman normally answers questions rather than evades them, which is the alternative adopted by some of his colleagues. The Secretary of State has said that he accepts the recommendation of the Manpower Services Commission that the new adult training scheme should be voluntary. We put it to the right hon. Gentleman that he should withdraw clause 26 from the Employment Bill. He said that that was out of the question. We asked him for an undertaking that he had no intention that the adult training scheme should ever be designated under clause 26. He refused to give it and said something like, "Never is a very long time and one never knows what may arise." When the Secretary of State made his statement following the publication of the White Paper, we asked him to give an undertaking that the adult training scheme would not be designated and thus be compulsory, with the threat of six months' withdrawal of benefit, in the lifetime of this Parliament. He refused to give that undertaking. He evaded the question and kept saying, "I have no intention of designating the scheme at the present time." I put it to  the Under-Secretary of State tonight, as I put it to the Secretary of State then: the undertaking that the right hon. Gentleman has no intention of designating the scheme at the present time will last only for as long as we all understand the present time to last. It would be possible for the Secretary of State to designate the scheme tomorrow, or next week or in a few months' time. Will the Under-Secretary of State be a little clearer about the undertaking? Will he go beyond the general assertion that the Secretary of State has no plans to designate the adult training scheme under clause 26 and give us an undertaking that the Government will not designate it during the lifetime of this Parliament? I shall listen with great interest to what he says. The Minister will know that it is far from clear whether the general council of the TUC will endorse the scheme, and that groups of people in the voluntary sector, local government and the trade union movement are deeply worried by the scheme. Great arguments are raging throughout the country. Anything that he can tell us about undertakings that the Government may give will help some of those who are agonising about it. I hope and wish that members of the trade union movement, people who have committed their lives to the voluntary sector and those who work in local government will unite to make the scheme unworkable. When I have said things like that before in noisier and more vigorous meetings of the House and in Committee, Conservative Members have criticised me and talked about my disgraceful attitude to the schemes. I say those things because I believe that this is an outrageously unfair offer to the long-term unemployed. The income that it offers is unacceptable, and freedom of choice is being removed. The scheme will inevitably reduce the income and the opportunities for work for those who are already in work or hope to obtain it. Something better could be offered to the long-term unemployed. We should offer them serious training. In a healthy democracy, groups of people are entitled to come together and resist Government programmes if they genuinely believe that they do not offer something worthwhile to the people whom they are supposed to help. It would be an expression of healthy democracy—something that is on the decline in Britain—if that combination of people came together to make this Government employment scheme unworkable. A similar combination of forces made the Government's job training scheme unworkable. That originally included the proposal that the young long-term unemployed should work for nothing on top of their benefits. The Government returned with a slightly better offer of £10 a week on top of benefits. I hope that all decent forces in Britain will combine to make the scheme unworkable. It is not a good enough offer. The Government will be forced to think again and come back with something better. I hope that we will then be able to combine and work for better opportunities for the long-term unemployed. The principle on which we can do that is that, whenever they are working in real jobs, they should be paid the rate for the job. When they are training, it is of course perfectly acceptable that they should be paid a training allowance. I wish to end by congratulating my hon. Friend the Member for Ogmore on his success in the ballot and on caring as much as he obviously does about his local scheme and his unemployed. He is willing to stay up all these hours of the night to put the case to the Minister and to appeal  to him to give us some serious answers, especially on the specific points that I have put about clause 26 of the Employment Bill, in relation to the Government designating the new adult training scheme.

5.25 am

The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls)
First, I congratulate the hon. Member for Ogmore (Mr. Powell) on having chosen this subject for debate and on the way in which he has introduced it. If I do not entirely accept his analysis of labour market trends towards the end of the 1970s, I applaud at once the way in which he has been involved in addressing the consequences of long-term unemployment, however that has come about. I wish that the debate he initiated and the way in which he introduced it had a wider audience. For preference, I should have been happy to yield my seven o'clock slot to the hon. Gentleman, to give him that platform. Unhappily, these things are not entirely in my gift, so we are debating the matter tonight, or perhaps it is this morning—I do not know whether we are up early or late. However, may I say in all seriousness, that it is a pity such a crucial debate, especially in view of the contributions that we have heard, has not had a wider audience. Perhaps there are people outside even now queueing for copies of Hansard to see what has been said! It might help the House if I set out briefly the background to the implementation of the new training programme and go on to deal as specifically as I can with the points raised by the hon. Members for Ogmore and for Birmingham, Ladywood (Ms. Short). At the time of the general election, there was a general feeling that more ought to be done to train the unemployed, especially the long-term unemployed. Underpinning that attitude was the recognition that the long-term unemployed in particular were not benefiting from the improvements coming to most people in this country as a result of the upturn in the economy. There was a perfectly proper desire to ensure that those members of our community could benefit as they had not done before. The improved economic situation means that unemployment has fallen for 18 successive months. It has decreased by about 600,000 since July 1986, and there is no immediate prospect of that decline slowing. In terms of vacancies, recent surveys have shown that only about one third of job vacancies are reported to jobcentres, and in any given month there are about 700,000 vacancies in the country. It is interesting that many seem to think that all of the vacancies must be concentrated in the prosperous south-east, but two thirds of them are elsewhere. The fall in unemployment figures, the increase in jobs created, and the number of vacancies together showed clearly that the time was right to put on a training programme to help those members of our community who had not yet had that opportunity, and to ensure that they could benefit from it. The model that has been essentially adopted is the community programme. The hon. Gentleman painted a graphic picture of the work of CATO within his constituency. He referred not only to the benefits of the programme to the community but also to the benefits for those who take part. One of the benefits of my job is not only being able to come to the Chamber at this time to reply to a debate, but to travel around the country looking at various types of  scheme. I have not had the pleasure of seeing CATO, but I have seen other schemes that sound similar and those are better than average. It can be extremely humbling to see what people can and will do for themselves. The hon. Gentleman's scheme, in common with schemes in my constituency, is not unilateral, imposed by one side or the other. It is not an employer or trade union scheme, but a scheme that has come about because both sides of the community have come together to create something that works. In my constituency — I have bored the hon. Lady with this before and I am happy to do so again—YTS has been highly successful. Initially there was some scepticism—I will put it no more strongly than that—but the local trade union movement decided that the scheme could be helpful to the young people of the area. It became a success because of the way in which everyone rallied around. It is easy to criticise the community programme for not providing training. However, the community programme, or more particularly the schemes from which it descended, were temporary work programmes—there is nothing wrong about that—but it is clear that they were not training schemes. Although the better type of community programme had a training element in it, it was almost coincidental to the main task. The essence of the new training programme is that the training element is no longer fortuitous or coincidental; it is crucial to it. That is the essential difference between the new training programme and the community programme. What made YTS a success was the local commitment from the trade union movement and the local labour movement. Sadly that commitment was not universal. What could make the new training programme a success is the fact that it could receive the support of both sides of the community. The programme that we are implementing was written by the Manpower Services Commission. It was aware of the budget within which it was working—about £1·4 billion. That is a huge amount of money even by Government standards. The MSC had the project of producing a quality scheme. It would have been open to the MSC to come back and say, "It cannot be done and that is it." It said that funding would be tight, as did the hon. Gentleman, and that is correct. However, the MSC made it clear that it had produced a programme that provided quality training for the unemployed. The programme received the unanimous recommendation of the MSC commissioners and it therefore followed that it also received the recommendation of the trade union commissioners. I appreciate that, as the hon. Gentleman said, although those union commissioners voted in favour, that is not yet the view of the TUC. If the trade union commissioners on the MSC believe it is in the interests of the long-term unemployed for the programme to go ahead, it is a grave matter to say that they are wrong. If, at the end of the day, those commissioners have sold themselves out, what does that make them? Uncle Toms or people duped by the wicked Government? I do not believe that such comments are of any help. The reason why my right hon. Friend the Secretary of State was willing to accept, without qualification, the programme as written was that it was unanimous—the result of work done by both sides of the industrial community. The hon. Gentleman referred to the YTS in his constituency that operates under the auspices of CATO.  He produced the remarkable figure that about 95 per cent. of those who go on CATO go into employment later. That is in fact well above the national average. The national average is 60 per cent. going into work and a further 14 per cent. going into some other form of training. The fact that YTS can produce such a result in the hon Gentleman's constituency is proof positive of what such schemes can do. Many of the objections which are now being voiced about the new training programme were once made about the youth training scheme, which is now broadly accepted, even to some extent by the hon. Member for Ladywood. It is now accepted as a respected and respectable way for young people to start their working lives. I should like to think that, when people are considering how the new training programme may work out, they will consider the experience of YTS.

Ms. Short
The Minister must not describe what he thinks may be my view, if he does not want me to intervene. Labour Members take the view that the better parts of the youth training scheme provide very good training and tend to lead young people into permanent jobs. I join the Minister in paying tribute to the scheme in the constituency of my hon. Friend the Member for Ogmore (Mr. Powell) which has a 95 per cent. success rate. That is exceptional, especially in an area of such high unemployment. Some parts of the scheme are very good, but others are not so good. We object deeply to the Government's recent move to abolish the right to supplementary benefit for 16 to 18-year-olds and thus make the scheme compulsory. We should prefer a scheme that guaranteed that the highest quality of training would be provided to all and that the income levels of young people placed with employers would be topped up to take account of the work that they do when they are on the employers' premises. That is our view of the youth training scheme. We should like to see improvements, but we do not completely reject it. We reject the Government's move to remove the right to supplementary benefit and thus make the scheme compulsory.

Mr. Nicholls
I hope that we shall never hear again, in some of our more rowdy exchanges, Opposition Members complaining that the youth training scheme is only a skivvy scheme. Progress appears to have been made tonight and, if we do not hear such remarks again, we shall be all the better for it. The hon. Lady is right to point out what is essentially obvious. There is nothing wrong in making the obvious point that any scheme will be made up of the better and the worse, the good and the bad, the great and the not quite so great. However, the youth training scheme has achieved a remarkable overall figure for getting young people into work. The MSC is also concerned about quality. The move towards approved training organisations is another means by which quality can be controlled. If the MSC is, broadly speaking, able to achieve its present degree of quality—obviously, the occasional bad scheme must be rooted out—and is even able to satisfy the hon. Member for Ladywood to some extent, there is no reason to think that such a scheme will not also work for the unemployed. I am grateful to the hon. Lady for the points  that she has raised and I shall try to deal with them. I try to answer all questions, but, whereas answers are guaranteed, satisfaction is not. The hon. Member for Ogmore said that there might be only a small amount of work experience in the new training programme. I can assure him that that will not be the case. We believe that common sense and experience show that a person who is trained in the context of the workplace with an employer stands a far better chance of finding a job than if he has been entirely project-trained. Remarks used to be made that YTS does not guarantee a job. Of course, it does not: there is no such thing as a guaranteed job. An employer will often take on a young person for whom he says he has no job but whom he says he will train. He gets to know the trainee because he is on the premises; loyalties are built up and in the end the employer finds that he can offer the trainee a job. Common sense and experience show that workplace training is more likely to lead to a job than training that is wholly project based. That is why the aim is that 60 per cent. should be employer-based and 40 per cent. directed training. The hon. Member for Ogmore was concerned that the Government might be treating the community programmes with contempt. Absolutely not. Imitation is the sincerest form of flattery, and we are taking the best types of community programme and using them as a model on which to build the new scheme. The hon. Member for Ladywood reminded us that there are good and bad community programmes, but we are building on the best. I can assure the hon. Member for Ogmore that there is no question of the Government treating community programmes with contempt. The hon. Gentleman—quite properly—talked about the voluntary nature of the scheme and sought assurances. He also mentioned the effect of section 20 of the Social Security Act 1975. I shall deal with that when I deal with the points raised by the hon. Lady. He also mentioned benefit-plus and pointed out that it had only a relatively small lead over benefits and that people would be refunded for their travel expenses only after the first £5. He went on to say that most people would be only £5 better off. It is the curse of politicians that we tend to generalise, especially if it suits our purposes to do so, but the hon. Gentleman may be generalising a bit in this regard. There will he cases to which that applies; to others it will not. Training allowances are as recommended unanimously by the MSC. I make no apologies for repeating this crucial point. The MSC's unanimous recommendations were accepted by my right hon. Friend. They amount to a benefit entitlement — depending on circumstances—of between £10 and £12 a week. Travel costs of more than £5 will be met and lodging costs will he paid when appropriate. Assistance with the necessary costs of tools and clothing will be provided and child-care costs of up to £50 a week per child will be met for lone parents. So those who undertake training will be better off than they would be if they were not training. The hon. Lady spoke of her views and those of the Opposition. She went on to say that the scheme was objectionable in principle. I do not want to raise the temperature of the debate and I do not think I could, at this time of the morning, in any case. My exchanges with the hon. Lady, often late at night, show that we must get to grips with a paradox: I can work with the hon. Lady on the Employment Bill and be impressed by her industry  and intelligence and yet be staggered by some of the things she says. So I must now ask the rhetorical question: are the hon. Lady's views on the training scheme and those of the Opposition the same? Both of us were less tired than now and our last exchange, during the Report stage of the Employment Bill, was more heated than this one. I keep a cuttings book on the hon. Lady, in which I find the following: "My personal view—I stress that—is that the Secretary of State is now seeking to humiliate the trade union representatives on the MSC with the changes in the Bill. It is time for them to leave the commission to seek to represent the interests of the unemployed and those who seek training through traditional trade union measures. I stress that that is my view. It is my serious view". This produced a certain amount of excitement on the Government Benches because we realised that it was possible to appear at the Dispatch Box without representing the Front Bench of one's party. The hon. Lady was pressed to say precisely for whom she was speaking, and she said: "I have made it clear that in this matter, this is a personal view. Everything else that I shall say will reflect the position of the Labour party from the Front Bench. I said before that this was my personal view, and I am entitled to put forward that view…On the question whether the trade union movement continues to have representatives on the commission, I said that that is a matter for the trade union movement." —[Official Report, 10 February 1988; Vol. 127, c. 433.] If I have understood the position correctly, it is reasonably fair to assume that the trade union commissioners on the MSC are in favour of the scheme, and that the representations that had been unanimously made and accepted by the Secretary of State might mean that the Labour Front Bench would accept them as well. I suppose that in a sense that is a fair assumption, because the hon. Lady said that her views on that were different from those of the Labour party. I am certainly not clear in my mind whether the Labour party is sceptical of this and wants to watch it very closely or perhaps wants more money to he spent on it. At the very least it is prepared to back the judgment of the TUC commissioners by giving them the benefit of the doubt. I am not sure whether the hon. Lady, with her considerable industry and energy, has now been able to persuade the Labour party to ditch this scheme, with all the implications that that would presumably have for the standing of the trade union commissioners. I am not trying to provoke the hon. Lady, but perhaps she would like to intervene to say whether she is freewheeling on this issue or speaks with the authority of the Labour Front Bench. I shall be happy to give way to her, but will not press her if that is embarrassing.

Ms. Short
I was waiting for the Minister to finish his point before intervening. I thought that he was concentrating on part II of the Employment Bill. My hon. Friend the Member for Oldham, West (Mr. Meacher), our shadow Secretary of State, made absolutely clear our criticism of and opposition to the new adult training scheme. There was no difference in view on that and our view was repeated on many occasions from different perspectives. What TUC representatives do on the Manpower Services Commission is a matter for them. The Minister will know that there are close links between the trade union movement and the Labour party, but the Labour party does not tell the trade union movement what it  should do. Nor is it the case that representatives of the TUC tell the Opposition Front Bench what position to take on matters such as this. The matter of the acceptability of the adult training scheme must be judged independently by each trade union and by the Opposition Front Bench. The Minister must know that that process of judging and of each trade union taking a position is going on at the moment. On 6 April the general council of the TUC will take a decision about whether to endorse the action of its commissioners on the MSC. The Opposition Front Bench view is that the scheme is unacceptable. The question whether the TUC commissioners continue to serve on the Manpower Services Commission is a matter for the trade union movement. My personal view is that the time has come for them to withdraw from the commission.

Mr. Nicholls
That sounds plausible enough as far as it goes, but if it is accurate there would have been no need for the hon. Lady, when talking about the training programme, to draw a distinction between her views and those of the Labour party. I suspect that the hon. Lady has had to set herself to squaring a circle. It sounds plausible, but certainly depressing. [Interruption.] I fully accept that and that is why I quoted the hon. Lady's words at length. I know what she said before, and I know what she says now. If what she says now represents a concise view of her attitude to these matters, it is good enough on the basis of this debate but does not explain why, when dealing with the Labour party's attitude to the new training programme, she drew a distinction between her own views and those of the Labour party. That was the point that I was making, and I think that everybody who takes an interest in these matters would have been interested to know about it. The hon. Lady, having dealt with her objection in principle to this scheme, said that there was not sufficient, training and that we should provide more jobs on the community programme. Again, I suppose this is a difference in philosophy between us. The hon. Lady obviously believes—and I accept that she believes this sincerely — that new, meaningful, real jobs can be created by the use of the public purse and that it would be possible to get rid of unemployment to a very large extent using the public purse to create worthwhile schemes. She can quite easily and properly construct a scenario in which worthwhile tasks are done. The difficulty, we say, is that it is not possible to get rid of the dole queue simply by the use of public money. She takes one view and we take another. That is the reason, for what it is worth, why we do not agree with the idea that the way to get rid of the dole queues is by vastly increasing placements in a community programme which concentrates not on training but on making jobs. We do not believe for one moment that that works.

Ms. Short
rose—

Mr. Nicholls
The hon. Lady seems to want to intervene again. I give way. I suppose the exercise is good for both of us.

Ms. Short
The Minister must not misdescribe my position. We are not calling for an expansion of the community programme. The point that I made which I think he seeks to refer to—and I understand that the hour is late—is that many of the jobs done under the  community programme should be full-time, properly organised jobs which people are trained to do on a permanent basis. That was the point that I was making when I referred to the needs of the disabled and some of the most vulnerable groups in our society. I am calling for the expansion not of the community programme but of the the provision of public services, where they are needed, and of permanent jobs.

Mr. Nicholls
The whole point about the new training programme is that essentially it is community programme plus training, and that is something which the hon. Lady is obviously keen on. The hon. Lady referred to the problems of job substitution and, she said, to the Department's own figures. I suspect that she was referring to an article by Messrs. Deakin and Pratten which appeared in the Employment Gazette, and which by a happy coincidence I happen to have with me. The hon. Lady has in the past proved beyond all reasonable doubt that the devil can quote the Bible for his own purposes, because she has managed to read this article on a number of occasions to try to cast doubt on the validity of YTS. She used this article on one particular occasion to cast serious doubt on and to denigrate the effect that YTS has had in practice. That report, quoted, as I have said, in favour of the proposition that YTS has caused a lot of job substitution and dead-weighting, starts with the proposition that YTS induces extra jobs, and then goes on to say that the survey found that YTS had increased the number of youths being trained and improved the quality of industrial training, and that these changes in training programmes increased the employment prospects of the young workers involved. It says that much of the training was of an impressively high standard and that YTS had been successful in creating positions for school leavers, placing more young people in training and improving the quality of training for those and other trainees. Yes, it has, and there is no reason to suppose that, given proper diligence on the part of all concerned, the new employment programme will not achieve the same. The hon. Lady then turned to the question whether the scheme would be designated using the power under clause 26 of the Employment Bill, the effect of which is to change the provisions of section 20 of the Social Security Act 1975. I will say a word or two about that in a moment. Coupled and linked with that was the thorny old question of availability for work. It may be worth spending a moment or two stressing the fact that there seems to be an idea being bruited, for reasons that I cannot imagine, that there is something new about the availability for work test and that it is some wicked new instrument which the satanic Tories have taken to flagellate the poor, miserable working classes back into work. There is nothing new about availability testing. The principal legislation which clause 26 amends is the Social Security Act 1975, which was passed in the period of a Labour Government. The hon. Member for Oldham, West (Mr. Meacher) was a Social Security Minister in that Government. That legislation dealt with availability for work and there was nothing new about it in 1975, for it underpinned the way in which the welfare state was created and it stemmed from Beveridge. Anyone who doubts that it is an unreasonable proposition that, broadly speaking, those in receipt of benefit should be available for work need look no further than the proceedings on the Employment Bill and at the utterances of the hon. Member for Oldham, West—his remarks have a Right-wing feel about them, but they are none the worse for that—who said: "No one objects to a measure of compulsion as a last resort for individuals who are blatantly malingering. That has been on the statute book for a long time and was probably put there in the first place by the Labour Government in the 1948 national insurance legislation. We have never objected to it… the principle is unchallengeable." In case he had not got the point over, he went on: "it is perfectly reasonable to deny benefit to people who patently and unreasonably refuse to avail themselves of a job or a training scheme. We are not in dispute about that." Then he went on, because sometimes good points need to be stressed: "there is no question whatever of people being able readily to malinger on benefit". — [Official Report, Standing Committee F, 21 January 1988; c. 633–36.] The hon. Gentleman seemed to be saying there that he was content with the legislation which was passed by a Government in 1975 in which he was a Social Secuity Minister. So the idea that there is something devious, wicked and radical about availability testing is not on.

Ms. Short
rose—

Mr. Nicholls
The hon. Lady may be rising to explain that yet again she wishes to dissociate herself from the views of her senior colleague. I give her the opportunity to do so.

Ms. Short
The Minister should not try to be clever at this late hour and he should not seek to mislead the House. We are aware that Beveridge established an availability for work test. The Government recently tightened up that test considerably and imposed new standards, three that I can remember offhand. One was about how far people were willing to travel for work. The second concerned the level of income they would seek and that they should not seek the level they had had before but should opt for the going rate in their local area. The third was a tightening up on whether people cared for children or other dependants during one day and were therefore available for work the following day. We have just been promised in the White Paper a further tightening up of the availability for work test. Let us be honest and agree that there has always been an availability for work test, but it has been tightened up and a further tightening up is promised. That is a shift. The Minister must accept that. Let us not play games at this late hour.

Mr. Nicholls
I am not trying to play games with the hon. Lady, although I suppose I could always be tempted. It is curious that I should be accused of misleading the House when I am only reminding the hon. Lady of the forthright comments of her hon. Friend the Member for Oldham, West about availability testing. He leads for the Opposition on these matters and he is in favour of availability testing. The hon. Lady says we have tightened it up. We have done no such thing. We have simply ensured that availability testing is properly considered, and, if she is saying that we have changed the ground rules, the answer is that we have not. If somebody finds that his benefit is suspended because doubt has been cast on his availability, then whether or not at the end of the day that person was  available for work and should have that benefit restored will not be decided by a Minister. It will be decided by an appropriate appeal tribunal administering the law, as it has been since Beveridge and before that. I shall use a nice, neutral word and say that it really is not helpful for the hon. Lady to say that there is something sinister about availability testing. There has always been availability testing and it is quite proper that it should be observed. If there is doubt in a particular case, if criteria have been used too restrictively, a person may have the usual recourse to the appellate procedure. The hon. Lady tempted me to speak about availability but we are really discussing the designation of the scheme. The hon. Lady—I suspect to build me up before expressing her utter disappointment at my reply—said that, whatever else could be said about me, I tended to answer questions rather than simply to evade them. She then paraphrased the words of my right hon. Friend that there was no intention at present to designate the scheme. That is exactly the position. I do not regard that reply as evasive. It is as straightforward as I can possibly make it. My right hon. Friend made it absolutely clear that it has to be a voluntary scheme., The MSC made it absolutely clear that it considered that the scheme should be voluntary. My right hon. Friend accepted that and has taken every opportunity to say, as I say now, that that is the position. The hon. Lady is going too far. She is going further than she would if she were standing on this side of the House in saying that I should give an assurance that the scheme will never be designated. Why is it such a good idea that I, as a Minister, should say that we shall never designate under legislation that was passed by a Labour Government? [Interruption.] The hon. Lady accuses me of lying. Perhaps she will withdraw that. I heard the hon. Lady quite distinctly. I was called a liar, and I invite her to withdraw that word.

Ms. Short
I did not call the Minister a liar. I said that it was a lie to suggest that clause 26 is no change from the legislation of a previous Labour Government. That is such a distortion of the facts that, in common parlance, it is a lie to describe it in that way. There is no way in which I am calling the Minister a liar. He knows that. This is really unnecessary.

Mr. Nicholls
The effect of clause 26 is to alter section 20 of the 1975 Act to ensure that the sanctions on a designated scheme would apply equally to refusal of work and approved training. The clause slightly alters a section of legislation passed by a Labour Government to rationalise it as much as anything else. To say that it should never be used is tantamount to saying it should never have existed in the first place. If the  hon. Lady is requiring me to say that never, for ever and a day, never this side of the millennium should this clause be used, then that section of a Labour statute is wrong arid never should have existed in the first place, and the hon. Lady should have been working for its repeal before now and not simply producing the idea now. I stress to the hon. Lady with as much verve, vigour and enthusiasm as I can that there is no question of the scheme being anything other than voluntary. I shall pick one point to take her by the hand, as it were, and get her to understand the proposition. She said that there was no intention to designate at the present time, but asked what was the present time, and said that it could be very soon indeed. It would be completely incompatible with all our intentions if the Government were suddenly to designate the scheme. If we were suddenly to designate the scheme, the hon. Lady would be leaping up and down in barely-disguised glee, saying, "I told you so. That is what they always intended to do. They designated it and it is not voluntary." If the Government want the scheme to succeed, it is hardly likely that they will designate it, but if the hon. Lady expects me to say that it will never he designated she should have been working before now for the repeal of the section.

Ms. Short
It is perfectly reasonable to ask the Government to give an undertaking that they will not designate the scheme during the lifetime of this Parliament.

Mr. Nicholls
I am not prepared to say that the scheme will never be designated during the lifetime of this Parliament, or during the next Parliament, or by the turn of the century. If the hon. Lady is taking that line, she should have been working for the repeal of this section and criticising her hon. Friends for having included it in the Act. The hon. Lady ended her speech by saying that she hoped that all would unite to make the scheme unworkable. She said that it was outrageously unfair. It is not easy for hon. Members who have never been out of work—or who, if an election result went against them, would be able to walk straight into a job because of their academic and educational background—to understand what it must be like to be one of the long-term unemployed. Yesterday I went to a job club in Nottingham where I met somebody who had been a hotel porter. He loves portering in hotels. That is the job that he wants to—In accordance with MR. SPEAKER'S Ruling—[Official Report, 31 January 1983; Vol. 36, c. 19]—the debate was concluded.

Economic Developments (Nottinghamshire)

6.6 am

Mr. Andrew Mitchell  (Gedling)
I am grateful for this opportunity to debate economic developments in Nottinghamshire. I apologise to my hon. Friend the Minister for having kept him up so late, especially as he has a heavy schedule ahead of him. I am grateful to him for agreeing to reply to the debate. This subject is of particular interest to my constituents and to the people of Nottinghamshire. It is also of great interest to some of my hon. Friends, particularly my hon. Friends the Members for Nottingham, East (Mr. Knowles), for Nottingham, South (Mr. Brandon-Bravo), for Sherwood (Mr. Stewart), for Newark (Mr. Alexander) and for Broxtowe (Mr. Lester). All of them have expressed strong interest in this debate and have given me a number of ideas to include in it. Any ideas that are original and interesting come from them. They take no responsibility for anything that I say that does not come up to their high standard. Despite the lateness of the hour, I hope that there is not too unreal a feeling in the Chamber. I often wonder how many hon. Members have dreamt that they were speaking in the House of Commons at 6 o'clock in the morning and have woken up to discover that they were. I shall use the time that is available to me to consider three questions: first, economic development in Nottinghamshire, and its landmarks; secondly, a number of specific and key aspects of economic development in Nottinghamshire; and, thirdly, a number of points that I hope my hon. Friend the Minister will note and then consider. If Nottinghamshire were a stock exchange commodity, it would be severely under-valued. I have lived in Nottinghamshire for three years and have put down roots in the county, but I hope I still maintain a certain objectivity of view. In the past the county has hidden its light under a bushel. Its particular virtues and its appeal to those who wish to invest in the county have been very much undersold. The film that was made on Nottingham city during the latter part of 1987 by Mr. Dimbleby for independent television caused very deep distress. It was deeply insulting to many of the people who live in Nottingham and to many of my constituents. It focused attention on one aspect of Nottingham that is completely unrepresentative. The inner urban deprivation that the film tried to portray was entirely atypical, and gave a very false impression. Many people—some of them business men who did not know Nottingham particularly well—experienced a reaction clearly chronicled in the local paper and by local radio stations: if they ever drove through Nottingham, they would make sure that the doors were locked and the windows shut. The film made by independent television directly led to that erroneous view of the city. I should like to talk a bit about how my constituency, Gedling, fits into recent economic developments. There is not a great deal of heavy industry in Gedling; it has always been to some extent a dormitory town for Nottingham city. Nevertheless, we take a close interest in what happens in Nottingham, which we regard as the centre of the wheel, with Gedling as one of the spokes. We recognise that what  happens today in Nottingham affects the wealth, the standard of living and the quality of life in Gedling tomorrow. We cannot stand immune from what happens over the border. I am grateful for the way in which the hon. Members who represent Nottingham accept that view, and for their understanding that we in Gedling have a part to play in the debate on how the inner city of Nottingham develops. First, let me salute the work of the local council in Gedling—officers, management team and members—for the work that they do through the ecomomic development committee. In the finest traditions of Conservative politics, the council seeks to handle urban and economic development as manager and organiser, without becoming too much involved in the venture itself. The aim is to stimulate development, and act as a catalyst for it. I can think of no better example than the new business centre to be opened in about three weeks' time in Arnold, which will make available 21 units, of which 14 are already let. The space measures between 160 and 600 sq ft. together with appropriate support facilities for the small businesses that will be setting up there. We have no doubt that, before the centre is open, virtually all those places will have been filled. I am delighted at the success of the project. The council's aim has been to ensure that new starters can move in, but not stay there permanently. They are there to ensure that they make a good start, and then they can move on. It is also to put the small businesses that are taking advantage of the accommodation in touch with action resource centres and with Nottingham Business Venture, and to act as a go-between. That too is very important. The business centre has a broadly neutral effect in financial terms. It is not expected to be an expense on the ratepayers of Gedling, and eventually, when suitable management is found, I have no doubt that the borough council will part with it to the private sector and allow it to be run by an appropriate body there. That is a good example of the way in which local government in Nottinghamshire, and in the borough that I represent, is able to stimulate the activities of small business men and the businesses of tomorrow. Along with that, perhaps the major economic development—in Gedling—adjacent to the worst area of unemployment—has been the development at Victoria park at Colwick, through unstinting hard work by both the private sector and the borough council over a long period. An area of some 100 acres, part of which is now a derelict railway yard, and which has—to put it mildly—seen better times, is now being redeveloped. The first phase will provide for non-food retail, and most of it is already let. It will provide between 200 and 300 new jobs locally, in an area with a worrying level of unemployment—which, however, has come down from 20 per cent. to 16 per cent. in the past 18 months, and where, I am sure that satisfactory trend will continue. While dealing with economic developments close to my constituency in Nottinghamshire, I cannot fail to mention the importance that we attach to the road infrastructure there, and, in particular, the importance of the Gedling bypass, about which there is enormous concern in my constituency. The new developments that I have been outlining, particularly on Colwick sidings, will help to add to the enormous traffic congestion in that part of my constituency. Indeed, a report by the county council officers stressed that nowhere in the whole of the county was traffic increasing so fast as in that area of Gedling. The road there has been talked about since the 1930s, so we have already been waiting over 50 years for some relief in that respect. The Government have also said that they will look favourably on transport support grant being made available for that important road. I hope that the county council will reconsider its capital programme priorities. It is a matter of regret to many of my constituents that they have not seen fit to include it in the latest review of its capital programme. I hope that in time it will be possible, and preferably as quickly as possible, to ensure that that important new road comes about. The sort of economic developments that I have outlined underline the importance that that should, indeed, take place. Let me move on to a wider perspective. I said earlier that Gedling is overshadowed by what happens in inner-city Nottingham. What happens in Nottingham today matters very much to the large numbr of my constituents who work there. I also mentioned that we have watched the debate about Nottingham's future with great interest. I should like to pay tribute to the work that has been done over a long period by the Nottingham Evening Post, a popular and powerful local paper. It has been a ceaseless and fearless campaigner for concentrating the minds of the local community and politicians on the importance of pulling together and getting on with the job of bringing inward investment to Nottingham and ensuring that those areas that require rejuvenation are rejuvenated. We have also benefited greatly from the proximity of the constituency of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), the Chancellor of the Duchy of Lancaster, who takes such a close interest in what happens in Nottingham. That can only be to the city's great advantage. In particular, Nottingham Development Enterprise has sprung up as a result of local concern and the initiative of local politicians. It is fortunate in having as its chairman David White. Last night. at a board meeting, the new board was confirmed, which included the chairman of Boots, the managing director of Plessey, the senior partner of Peat Marwick in the region and the regional director of NatWest. In addition, the appointment of NDE's new chief executive, Michael Neale, who has had so much experience in the London Docklands development corporation, has recently been announced. With that galaxy of talent and experience, I hope that NDE will now be able to get on with the difficult job that it has set itself. It is important to stress the aim of an organisation that in many respects is effectively a private sector urban development corporation.

Ms. Clare Short  (Birmingham, Ladywood)
I thought that the local authority, as well as the private sector, had a place on the board, unlike the Government's urban development corporations, which cut out local authorities.

Mr. Mitchell
I am grateful to the hon. Lady for giving me the chance to make the point that NDE is specifically a private sector initiative and its main and central purpose is to bring private sector bite to the problems of rejuvenating those parts of Nottingham which need it. I should make it clear that it is, in a real sense, a radical  departure from what has happened in the past. There is plenty of evidence to sustain my view that it is very much a private sector UDC, with certain differences. There are in Nottingham a number of major derelict sites and that is one of the first objectives which the NDE must now tackle. Progress has been stalled in a number of respects by the hope of the owners of those sites for retail planning permission. Those areas of land are substantial. We must resolve whether to give retail planning permission to all the sites, in the hope that that will saturate the market and undermine the premiums, or whether we should use the compulsory purchase order procedure to bring the site back into economic development. That issue must now be resolved quickly. The second aim of NDE is to ensure that we do more to market Nottinghamshire and Nottingham, to bring in further investment. NDE is right in having identified one of the problems of Nottingham and Nottinghamshire as lacking a coherent identity and a central theme. The country of Nottinghamshire, by tradition, has been very self-contained; I am sure that the hon. Member for Mansfield (Mr. Meale) will agree with that. One of the most important problems to be addressed by NDE is Nottingham's ability to go forward with a national arid international identity. When I recently visited the royal ordnance factory in Nottingham, which, because of relocation of other aspects of its business, is seeking to increase its work force from 1,100 to 2,000, I was told of the difficulty being experienced in encouraging people to transfer to Nottingham. I find that extraordinary. The area has a tremendously high quality of life and a good central position. A major Nottingham-based company, which has branches and warehouses all over the country, recently sought to work out, using a sophisticated computer programme, where would be the most advantageous and central position to have its headquarters. It came up with an area within five miles of where it is in the centre of Nottingham. Apart from the excellent quality of life, the leisure and shopping facilities are famed in the region. The local countryside is not sufficiently well known outside the county, but is among the most beautiful parts of England not yet discovered by the tourists. Employment in Nottingham is broadly spread, which has enabled us to weather some of the more severe effects of recessions. The outstanding labour record and the good relationship with trade unions is another good point. We benefit greatly from the low cost of housing. Every national housing survey shows that housing is low priced, which benefits people who are relocating or wishing to invest in the country. Housing is reasonably priced when compared with other parts of the country. NDE should equally be concerned about infrastructure. We have the fourth largest airport in the country, which, until recently, was the fastest expanding. The county is fortunate in being served by the A1 and M1, but the A453, which leads into Nottingham, is an extremely dangerous road, so I hope that a way will be found to improve the link road. If one travels west from Nottinghamshire, it is difficult to get on to the M6 without going through Derby, Stoke and so on. As we move towards a unified Common Market in 1991, it will be  important to sort out those problems, and I hope that the county and the Department of Transport will make some progress before that date. Local attention must concentrate on the defects of the railway network. We on the eastern side of the county are fortunate to have the east coast service, which has been electrified. It is an excellent service, which can get to Grantham in under an hour. That is in contrast to the Midland line, which serves the city of Nottingham. The service there is very slow and we must speed it up if we are to get more inward investment to Nottingham and attract businessmen to the city. The chairman of NDE has been successful in persuading British Rail to put more trains on the Midland line and to cut the London journey time by six minutes, bringing the speed of the journey up to that of the average speed of the journey from London to Birmingham. Despite the fact that I understand British Rail's position and accept that very heavy capital investment would be needed to improve that line substantially, I also believe that gradual improvement is absolutely essential. British Rail has spent about £25 million on improving signalling at Leicester and for us to get the benefit of that improvement on the Midland line there should be a strong commitment over a period—and I accept the financial necessity for that — for British Rail to improve continuously the quality of the service on the Midland line. Those are challenges for Nottingham, and NDE is seeking to help. It is important to explain that the Government's approach to the inner cities and to Nottingham in particular has been very beneficial. I welcome the recognition that "inner city" is not a generic term. For example, differences exist between Liverpool, Sunderland — where I fought a seat in the general election in 1983 and was defeated—and Nottingham. We cannot use the same term to describe those three very different areas. Nottingham is right to identify the need for a private sector initiative and that is a very important way forward. Reverting to what I said earlier in response to the intervention from the hon. Member for Birmingham, Ladywood (Ms. Short) about the relative merits of the NDE approach or the UDC to stimulate economic growth in Nottinghamshire, I want to stress that no Government money is being made available to the NDE. If my hon. Friend the Minister decided to set up a UDC in Nottingham it would cost between £100 million and £160 million. However, under the NDE initiative, which we hope will supplant the necessity of a UDC for Nottingham, no Government money is to be invested. The city council is putting up about £50,000 and £50,000 is being put up by the county. The chamber of commerce, with its range of private sector interests, has also offered its full support. However, we must accept that, if the approach fails, and it is necessary to set up a UDC in the area, that will be much more expensive. I hope that my hon. Friend the Minister will consider that it is important that he and his colleagues find a way to help in that context. I want to offer one idea for further thought about one of the most important aspects of the work of NDE. Local authorities in Nottingham have been successful in securing a number of the urban grants made available by the Government. I hope that the Government will decide to  allow a secondee from Whitehall — either from the Department of the Environment or the Department of Trade and Industry—the DTI is the lead Ministry in those respects in Nottingham—to work in the city for a year to help guide and sort out the mish-mash of grants and other aspects relating to Whitehall. To have such a secondee in the offices of NDE would be a great advantage and would be welcomed. I do not think that that will necessarily be a new idea for the Government, but I hope that they will consider it as a fruitful and constructive way of helping, and one that costs virtually nothing in comparison with the overall costs of a UDC. One of the key characteristics of economic development in Nottinghamshire has been the dominance of the small firm. We have greatly benefited from the Government's measures in that respect. The encouragement of development, through enterprise and incentives has been very helpful. The chamber of commerce in Nottingham cites, as particular benefits provided by the Government to help small business men, the reduction in taxation, the simplifying of bureaucratic burdens on employers and the removal of some of the nervousness that it detected about business expansion and, also, more mundane matters such as moving to cash accounting for VAT. There is widespread and vigorous support in the chamber of commerce for some of the measures affecting the taxation of small business men which were announced in the Government's community charge legislation. It has been suggested that the chambers of commerce are against that legislation. Certainly, in the Nottinghamshire chamber of commerce, one of the most powerful in the country and the second largest, there is strong support for those changes. In the past few years, the textile and clothing industry, which used to be the linchpin in Nottinghamshire, has started booming again. There is no point in competing with labour-intensive, Third-world industries in that market. In many places, the industry has been re-equipped and re-machined. It employs many of my constituents, who are undergoing something of a renaissance, which is tied in with the fashion industry in Nottingham. I salute the achievements of companies such as Atlas House on the Colwick estate. I recognise the contribution to economic development by Labour-controlled Nottinghamshire county council. One of the attractive aspects of the county council—I am afraid there are not many—is the fact that the council takes a pragmatic, common-sense and highly professional view on economic development. It is important to demonstrate that, in our approach to inner-city and economic development, we try to put party politics to one side and to concentrate on a unified approach to solving these difficult problems. I hope that that aspect of the way in which we conduct our local economic affairs appeals to central Government. Having set economic developments in Nottinghamshire in a general context. I should like to consider two specific and important parts of its economy. The first and largely untapped one, which is growing steadily, is tourism. By contrast, the second is deeply rooted in Nottinghamshire, is among its oldest industries and is of fundamental importance to the area's prosperity—coal. The hon. Member for Mansfield (Mr. Meale) will wish to expand, although not necessarily agree with, some of my points about the coal industry. Most outsiders who know Nottinghamshire know it as the home of Robin Hood, yet we have been remarkably slow to capitalise on the natural attraction and advantage that that gives us. Perhaps Nottinghamshire is known also for Holme Pierrepoint, the national water sports centre. There has been a radical change in the local approach to stimulating tourist and leisure activity—private sector led—in tourism. It has been recognised that there is a major chance of winning new jobs for the county. This is reflected in the high quality and high occupancy rates of the local hotels. It is interesting that three quarters of the people who conic to the area are business men rather than tourists. Although the area is attractive to tourists from north Europe, who like the shops, restaurants and nightlife which are offered, this has not penetrated so deeply into the minds of some of our fellow countrymen. It is very much a part of that strategy to tempt those people who are coming from the north to break their journey in the midlands and to see some of Nottinghamshire's advantages. That strategy has enormous potential. In support of that, I draw attention to the activities in the county of Centre Pares, a Dutch company. In a recent £40 million investment, it built its first British holiday village—a new concept—in Sherwood forest. It opened last spring and has been fully booked ever since. At first there was some anxiety that it would appeal only to the Dutch and to those familiar with the concept, but local people have taken to it with relish. This new concept in luxury rural living has provided 400 new jobs; another expansion has recently been announced, and there are more jobs coming. It is a great step forward. The area now abounds with new ideas for stimulating tourism as an aid to economic development and capitalising on some of the county's natural assets. We now have the possibility of a Pilgrim Fathers heritage trail in Bassetlaw, which is where they started from. There is an idea for a museum of the Civil War in Newark. You will recall, Mr. Deputy Speaker, that the county was on the wrong side in the Civil War, but the area is steeped in history from that period.

Ms. Short
Which was the wrong side?

Mr. Mitchell
The hon. Lady need hardly ask me that in this place. The area has huge potential. In the last 10 days the Robin Hood centre, another new concept for Nottinghamshire, went public to raise £2·5 million to open a "Tales of Robin Hood" centre. That is a further example of capitalising on this important aspect of our history—albeit late in the day. Other new thoughts include setting up an international football history museum and soccer centre, which would be a world first for Nottingham. In Notts County, we have the oldest football league club in the world and in Nottingham Forest the most successful, although I pay due deference to my hon. Friend the Member for Welwyn Hatfield (Mr. Evans) in that respect. Perhaps having immortalised Robin Hood, we are now about to do the same for Brian Clough. A worldwide soccer centre could be a major attraction for European soccer enthusiasts. I shall move on to the more contentious subject of the coal industry in Nottinghamshire. My constituency is very much a coalfield community. Next door, I have my hon. Friend the Member for Sherwood (Mr. Stewart) who so admirably represents the seat with the most collieries in the  country. We are steeped in the lore of the coal industry. Gedling colliery in my constituency, which last year lost some £5·7 million, is this year hoping to approach break-even. The colliery has a very proud tradition, although most of those who work there come from outside my constituency. It is proud of its reputation and by local tradition supplies the Queen with her coal at Sandringham. Gedling is one of the few Conservative local authorities that is a member of the Coalfield Communities Campaign, and one of our Conservative councillors is a member. He has spent his life in the coal industry and is a former colliery member. I do not think that it is an exaggeration to say that the CCC benefits from having a man of his stature as a member. I hope that the time will not come when Gedling feels that it should withdraw from the CCC because it is too party-political. That trend has been identified and it would be regrettable, and a great loss to the CCC, if that happened. The importance of the Nottinghamshire mining industry is demonstrated by the fact that last year British Coal drew half its operating profit from the county. In spite of the National Association of Colliery Overmen, Deputies and Shotfirers strike, productivity has increased by 13 per cent. in the past year, and progress is being made. The board of British Coal should seriously consider moving its headquarters to Nottingham. It seems absurd that the headquarters of a business should not be in the area where that business principally operates. I hope that British Coal will consider that seriously. British Coal's commitment to Nottinghamshire is underlined by the fact that in each of the next five years it will be investing £100 million in the industry. I need hardly mention the promotion of the plans for Asfordby as showing British Coal's commitment to the Nottingham coalfield. What is so encouraging—we sometimes lose sight of this factor in debates on coal — is that productivity and competitiveness are increasing all the time. The hon. Member for Mansfield speaks on these Issues with great concern. I must tell him that the future of British coal must depend upon greater competitiveness and productivity. I accept that, in the past few days, we have heard further sad news about closures. They are a fact of life in the mining world. That was recognised when the Labour party was in government, as well as today. There is often quite simply nothing that we can do when a pit is exhausted, or extraction is uneconomic. But if we continue to concentrate on productivity and competitiveness as the linchpin of the industry, it has a great future. Two thousand people have been recruited into the industry in Nottinghamshire in the past year, of whom 120 are shool leavers. The industry is now the lowest-cost producer in western Europe. These are important steps forward. I believe that the Nottinghamshire area will accept the six-day working plan. Although the leader of the NUM tells us that miners fought for a five-day working week, he does not tell us that the five-day week came in because in many cases the men were working only a three or three- and-a-half-day week before the war and the five-day working week agreement was to guarantee and secure five days of work and wages. A six-day working week is not to be feared. It would allow for flexible working and the possibility of, say, three weeks working for six days, followed by a week off. Whatever arrangement was  undertaken no more days would be worked in a year than are worked now. This is the way for the industry to have more productivity, employment and success. An important factor in this matter is that the Government's proposals for privatisation of the electricity industry represent a great chance both for the Nottinghamshire economy and for the miners. I am fortunate to have the headquarters of the East Midlands electricity board in my constituency, I visited it last Friday to meet the board and the chairman, Mr. John Harris, to talk about what they regard as the opportunities for the area arising from the Government's proposals on electricity generation. I was struck by the enthusiasm with which they greet the proposals. They recognise that, while distribution is a natural monopoly, generation of electricity is not. They say that there are already queues of people seeking to enter the generation industry. I believe, subject only to the Nottinghamshire miners continuing to increase productivity and competitiveness, that there is a great future for the coal industry. Nottinghamshire can be the power house for coal-fired generation. EMEB is already talking to the miners about how they can bring that great advantage to the Nottinghamshire economy, to the miners who live and work in the county, and to the development of the industry. I am very grateful to my hon. Friend for listening to the debate and I look forward to his reply. I hope that he detects in Nottinghamshire the determination to face these challenges. I am pleased to be joined by the hon. Member for Mansfield (Mr. Meale) who regularly expresses interest in many of these matters. I hope that my hon. Friend will recognise the keenness to build on the success that has already been achieved in the economic development of the county, and in those areas that I have signposted to him, he and his ministerial colleagues will give us a constructive and welcome fair wind.

6.43 am

Mr. Alan Meale  (Mansfield)
I congratulate the hon. Member for Gedling (Mr. Mitchell), but I must take an opposing view to some of his remarks, particularly his references to the textile industry and to British Coal. Contrary to what he has implied, British Coal's management does not give great hope for Nottinghamshire. The Government are causing problems in that respect. Perhaps 2,000 workers have been recruited by British Coal into the industry in the past two years, but since 1979 when the Conservative Government came to power, the overall manpower in the coalfield has decreased from 34,000 to 19,000. Yesterday's announcement of the closure of Crowny pit at Mansfield colliery in my constituency, makes the situation even worse. It is a terrible decision for my community and it will do no good for the economic development of Nottinghamshire. The hon. Member for Gedling has said that it would be nice if British Coal shifted its headquarters to Nottingham city. For my constituents, those headquarters might as well be in Timbuktu because they receive little or no beneficial responses from them. The pit closure at Crowny will have devastating effects on the community. Only yesterday British Coal said that there will be no compulsory redundancies at the pit. That is complete nonsense. A short time ago Linby colliery was closed and 50 former employees have yet to find work. Some of that number were supposed to turn up next Monday at Mansfield colliery to start work. Thus there is little hope for the workers—between 950 and 1,000—at Crowny pit. The decline of the coal industry in Nottinghamshire is not because coal is running out. In 1983 Crowny was found to contain more than 12 million tonnes of resource reservable coal. Less than 2 million tonnes has been withdrawn from that pit. The industry is not subsidised by the Government and, as a result of a fall in the price of coal, jobs and coal must go. That does not make economic sense. The Government, instead of investing in the coal industry, as other countries do, have gone for profitability and cheap, imported coal. The hon. Gentleman and his hon. Friends will be aware that millions of tonnes of cheap, second-rate coal are lying on the Continent at Ghent, Rotterdam and elsewhere. I am told that more than 20 million tonnes of such coal exists. It is sold at £13 a tonne, plus £8 carriage costs—a total of £21 a tonne. That is two thirds of the production cost of British coal. We cannot compete with those prices. The hon. Gentleman should be aware that imported coal is blood coal. It has been mined in South Africa by miners earning £20 a week, many of whom die in the process as a result of bad working conditions. No Government should stand back and rely on cheap, imported coal. It cannot be argued that the workers at the Crowny pit were uneconomic. In the past four months the workers have broken two world records for coal cutting at the face. A short time ago local magazine and newspaper articles were describing how wonderful the workers at Mansfield were for knocking out such large amounts of coal. Those miners were not involved in the 1984–85 miners' strike. They worked throughout that strike in support of the coal board and the Government. Sadly they have been let down and have been told, without any warning, that the pit is to close. In the past there have always been negotiations and discussions with workers at the highest level within the industry. Those discussions were for the purpose of informing the miners of forthcoming problems. The Crowny pit closure has illustrated another fundamental problem with British Coal. No such discussions took place. The other day members of the mining community were called in and told that the pit was to close. A story is going about that the Government have said that British Coal can have £24 million to invest in the mining industry in Nottinghamshire, but that a pit had to close. Everyone thought that it would be Calverton and not Mansfield. Mansfield is a secure bastion for the Government. It worked hard when the Government needed it so much, but now the Government and the coal board have walked away. There are other problems in the Mansfield community, apart from those relating to mining. Textiles are also a bastion of reliable employment in the Nottinghamshire area. Recently, the Viyella factory, which was based in my constituency and represented 250 years of textile manufacturing of the highest grade products in Nottinghamshire, closed down. I was interested to see recently in Vogue magazine that the company was still trading with the Mansfield logo and saying that all the products were produced in a homely Nottinghamshire  factory based in Pleasley in Mansfield. That is nonsense, as all the workers have been sacked and the factory has closed down and moved to Lancashire. British Coal is already bargaining and bidding for the Pleasley Vale area because there is an opportunity to explore the large area of opencast seam coal and strip it clean. That valley used to produce the highest quality goods which were sold in New York, Paris, Hong Kong and London. Viyella products are a trademark of Harrods, which Conservative Members will know so well. The Government are not making great economic strides. As a result of their policies, industry is losing out and is about to lose out even more if they persist in their reactionary and backward economic policies. The hon. Member for Gedling criticised the lack of help for the small business community in Nottinghamshire. Like him, I dread to think what will happen unless some kind of sense can be derived from the Government's strategy on the poll tax. We need help to ensure that those businesses do not go to the wall. Many thousands of bankruptcies have occurred in Nottinghamshire in recent years and we must ensure that they do not continue as a result of the introduction of the poll tax. The situation in north Nottinghamshire is grave. The setting up of a founding fathers' trail in Bassetlaw will not solve the problems of my hon. Friend the Member for Bassetlaw (Mr. Ashton) regarding economic development in the area. Much more is needed.

Mr. Andrew Mitchell
I accept the hon. Gentleman's point, but we must continue to stimulate local economic development. Tourism in the county can play a role in that. I hope that the hon. Gentleman will not pooh-pooh one of the two or three initiatives which are currently under consideration and which, together, constitute a great deal more than one independent and isolated idea.

Mr. Meale
I am not pooh-poohing everything that the hon. Gentleman said; in fact, he spoke quite a lot of sense. However, tourism will not save Bassetlaw, Sherwood—with its Centre Pares — or Mansfield. I welcome the large companies that are coming into the Mansfield area and trying to develop tourism. But tourism will not solve our problems. It will only scratch the surface of the major problems in the community. I ask the hon. Gentleman to remember what has been said in recent days about putting up money for the inner cities. I have grave doubts about Government policy in that respect. I ask the Government to consider seriously such areas as Mansfield. According to a recent study by Nottinghamshire county council, Mansfield is, in parts, the second most deprived area in the county. It is not only the inner cities that need help, but such areas as Mansfield with pockets of extreme deprivation. We also need help for the small business community, which is failing to survive. Today I got from the Library the figures for unemployment in Mansfield. Since 1979, when the Consevative Government were elected, unemployment has more than doubled in my constituency. As of yesterday, 3,760 men and 1,260 women were unemployed there, 32 per cent. of whom were under the age of 25, and more then 40 per cent. of whom were long-term unemployed — more than 2,000 people. The decision to close Crown Farm, Mansfield's colliery, will add 1,000 people to the dole queues in my constituency and surrounding constituencies. That places a heavy burden on future developments. My district council is trying hard to get involved in economic development. It has just hired a senior economic adviser and is producing booklets and brochures. It has started a campaign—I know that the hon. Member for Gedling supports it—to try to get a rail link from Nottingham to Mansfield, which is the largest town without a rail link in Britain. Conservative Members and the Government must realise that we need central Government help. Our major industries — textiles, mining and others — need some bolstering by the Government. We do not want to keep open uneconomic pits and pits whose coal is inaccessible, but there were 9 million tonnes in the pit that closed yesterday. We need support from the Government to get that out. The local authority needs money to invest in a range of industries. It is no good saying that everything in the picture is rosy, so let us go forward together. We need action, not only in cities, but in areas such as Mansfield.

6.57 am

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. John Butcher)
I congratulate my hon. Friend the Member for Gedling (Mr. Mitchell) on his success in the ballot and on the manner in which he deployed his arguments. He spoke eloquently of the advantages of Nottinghamshire from all points of view — as a place in which to work and to which others should come to work and to visit if they have surplus cash to spend in their leisure time. The themes in his speech were so good that they should, perhaps, be incorporated in, and constitute the frontispiece of, whatever information the county council next publishes. To an outsider, it appears true that Nottinghamshire has tended to hide its light under a bushel, although it is being more assertive now. It was interesting to hear that Nottinghamshire has joined Mr. Dimbleby's casualty list, which appears to be growing. Perhaps the people there have seen vividly the pitfalls that may appear when television reporting of that sort is foisted on a local community. I also join my hon. Friend in congratulating the new business centre in Arnold, which he told the House had already let 14 of its 21 units. That is an excellent rate of progress. My hon. Friend also talked about the Victoria park at Colwick, where 100 acres of derelict land are being developed and which should generate 200 to 300 local jobs. My hon. Friend made a very important point about the road infrastructure and I shall return to that theme in a moment.

Ms. Short
We have heard about retail development on one of the derelict sites. I understand that it was the view of both local councils that planning permission for retail development should not have been granted, but that that was overturned by the Secretary of State for the Environment. There are now grave local problems about developing other derelict sites because there is great competition for planning permission for retail development. Big financial houses are competing to come into Nottinghamshire and they would provide a considerable amount of jobs. I hope that the Minister will note that the Government's intervention, their overturning of local decisions and the granting of planning permission for retail development seems to be creating a block on the development of other derelict land and that that block could be disadvantageous to the local area.

Mr. Andrew Mitchell
rose—

Mr. Butcher
I think that I had better answer that point, and then I should welcome an intervention by my hon. Friend. I hope that the hon. Lady has noticed some very recent announcements—in parliamentary terms in the early part of today—from my hon. Friend the Under-Secretary of State for Employment. If I remember correctly the contents of his press release, grants of about £8 million have been allocated to the east midlands. He made that announcement in Nottingham and a major element of the grants will be for derelict land. This vexed question of how one chooses which kind of development should go ahead in what sort of area applies not just to Nottinghamshire but nationally. We should agree first that anything that can restore derelict land to productive use so that jobs can be created is to be welcomed. The second question is about the balance of employment available in a locality. We have to trust our planning and the appeals procedures that go with the planning methodology to produce a balanced conclusion. I would not hazard a guess about which type of employment would be most agreeable to the residents in a particular location.

Mr. Andrew Mitchell
I am extremely grateful to my hon. Friend for giving way. The hon. Member for Birmingham, Ladywood (Ms. Short) raised an important matter, but, unfortunately, she has been furnished with only half the facts. One of the principal aspects of the debate on this development was whether permission should be granted for housing to be constructed in the area. The borough council fully accepts that there should be some retail space, and there has been much debate about that as well. The point made by the hon. Lady gave only a partial view of the debate in respect of that application.

Mr. Butcher
My hon. Friend the Member for Gedling reminded the House that his constituents have been waiting for the Gedling bypass for 50 years. The decisions about whether transport support grant applications should be invited and whether the capital programme should be reconsidered are matters for the county council. I am sure that my hon. Friend the Secretary of State for Transport will be most interested in my hon. Friend's comments and will examine Hansard to see whether any of my hon. Friend's observations apply to him. The Nottinham Development Enterprise is an excellent effort. It has been private sector instigated and, from my contacts with the industrial and commercial community in Nottinghamshire, and especially with the chamber of commerce, I can say that there are some very vigorous and imaginative people in the county and the city. I am sure that the NDE methodology will maximise chances of success. The question raised in this context relates to the secondee. I shall look carefully at what my hon. Friend has said — perhaps I should do that in a more rested condition — to see whether either the Department of Employment or the Department of Trade and Industry can come up with a response that my hon. Friend will welcome. Tourism is another topic which occasionally excites the House. Some say that tourism is not a sufficiently macho form of employment and see employment to be welcomed only in the manufacturing sector or mining — in the  traditional industries, as they have been called. As long as the United Kingdom is generating from all sources of employment sufficient wealth to sustain the quality of life which hon. Members would welcome, we can be more or less neutral on how individuals earn their living. I have said many times in the House that it is predominantly the manufacturing sector that generates most efficiently cash income for the United Kingdom, in that 80 per cent. of its output is internationally tradable. But that is not to say that the service and non-manufacturing sectors have not made a useful contribution. They have made a magnificent contribution in terms of job creation and have generated hundreds of thousands of jobs, some of them in the teeth of the 1981–82 recession. So we can be genuinely open-minded on where employment should come. I wonder whether Nottinghamshire has recently understated the role of Robin Hood in its previous history.

Ms. Short
It is saying that he never met Maid Marian.

Mr. Butcher
Nottingham, as the hon. Lady quite rightly says, is desperately trying to assert that he never met Maid Marian. As someone who was born in a mining community in Yorkshire, I prefer the Invanhoe legend; and as someone who went to school in Huntingdonshire, I can confirm that Robin Hood definitely did not have a lapsed title there. He was none the less an interesting man, an enigma and very much a Saxon in his attitude to those who were trying to rule us in a rather anarchistic and feudal manner. He represented the rights of freeborn Englishmen, perhaps in a mythological sense and in a way which the English have liked to reassert in the ensuing centuries. My hon. Friend the Member for Gedling spoke generously about the coalfield communities campaign and said, quite rightly, that efforts should be made to keep it on an objective, all-party basis. Like him, I hope that it does not develop into a lobbying operation for a particular political stance. The suggestion that the National Coal Board headquarters should move to Nottingham was interesting. If that is the growing centre of gravity in the mining industry, that is something for the board to consider. I would expect my hon. Friend to make a strong point in that regard, and my right hon. Friend the Secretary of State for Energy may care to take a look at it, although I suspect that he is pretty busy at the moment on broader issues. I believe that across the public sector there should be far more decentralisation and that we should continuously examine the location of jobs either in Whitehall Departments or in public utilities which report to them. My hon. Friend concluded by saying that increasing productivity has to be the continuing way forward for the coal industry, and it is, I believe, the correct conclusion for Nottingham and for his constituency that we should examine the ingredients for success and build on them. The hon. Member for Mansfield (Mr. Meale), understandably in the light of very recent news, spoke passionately about the impact of the colliery closure in his constituency. I fully understand why hon. Members have to, and always will, I hope, speak up when such events occur. I know that efforts are necessary to do our best to replace the jobs that have been lost. I hope that when the hon. Gentleman deals with his local authority and when that authority puts forward  development programmes, he will say that it is not enough to appoint economic advisers or issue leaflets. More important is the type of home and welcome that Mansfield gives to people who, of their own volition, wish to bring work to, or start work in, the location. While this may not apply to Mansfield, there have been cases of cities appointing economic advisers and development units but insisting on slapping on rate increases that are far too high to create a welcoming environment for the job providers. I welcome the observations that my hon. Friend made and I appreciate the reasons for the observations of the hon. Member for Mansfield. I shall not detain the House for long. In Nottinghamshire there are signs that the recovery has strength, that the traditional industries are finding a new way forward, that new industries are coming forward, that the enterprise culture is alive and kicking in the city and county and that the days when Nottinghamshire may have been underestimated may now, with the help of its MPs, be coming to an end. By that I mean that, because of those efforts, the underestimation will come to an end.

Ms. Short
Will the Minister repeat that?

Mr. Butcher
One must be extremely careful in the early—or should I say late?—hours of a parliamentary day. The hon. Lady will know that on occasions such as this, one loose adjective can cause the most disproportionate amount of trouble. I am doing my best, at this hour, to control my adjectives and to speak slowly, clearly and in a considered manner, and though I have not even begun to read the speech that has been prepared for me, I hope that I have passed the test, certainly from the point of view of the usual channels, in responding as positively as I am able to the points that have been made.

Capper Pass Factory (Polonium Emissions)

7.12 am

Mr. James Cran  (Beverley)
I am grateful for this opportunity to address the House this morning. I suppose that I should really call it this evening for, unlike most others in the House, I have had the benefit of a good night's sleep. At business questions yesterday I raised the subject of cancer clusters. My constituents and I are worried not only about the substance of the facts but about the manner in which the issue was publicised. It came as a surprise to many people last Friday evening to turn on their TV sets to view Channel 4 and see what many fair-minded people would regard as a sensational programme. The problem with such programmes is that, while they focus the mind, they also worry many people quite unnecessarily. As a consequence of that programme, I have received many letters from constituents asking whether the matters stated in that programme were correct. That is why I raised the matter in the House yesterday, and I am fortunate to be able to raise it now. What is the substance of the problem? I have no doubt about the fact, having checked it, that there is a higher than average incidence of cancers among children in a particular part of my constituency, one might say in the direction of the prevailing wind from the factory in question, which is called Capper Pass and is part of the Rio Tinto-Zinc organisation. Since 1977, there have been eleven cases of cancers in children. That may not seem a lot in relation to the total population of my constituency, or indeed of the area within it that we are discussing, but when that disease strikes, the effect on the families involved is 100 per cent. When considering the national average of what one would expect in terms of the incidence of cancer, I discovered that for seven types of cancer, the observed rate in my constituency is above, and in some cases considerably above, the United Kingdom average, albeit the actual numbers involved are, I repeat, extremely low. I wish to get that message across to my constituents so that they do not believe the newspaper reports which talk about "cancer villages". That gives the impression that anybody and everybody is liable to succumb to cancer, and that is not the case because, as I say, the numbers involved are very low. None the less, the disease is distressing when it occurs. That distress is reflected in the letters that I receive from constituents with young families who worry about what may happen during the next few years of their children's lives. That is why I as a Member of Parliament, and the Government, have to take the matter extremely seriously. I have to pay tribute to my hon. Friend the Under-Secretary of State for the Environment, the Member for Lewisham, East (Mr. Moynihan). Yesterday, I beat him to his Department, today he beat me to the House of Commons, and I must pay tribute to the readiness with which he was prepared to see me. I know that he has had a very busy schedule this week, and I believe that he was in Malta yesterday, but that did not prevent him from seeing me. It will give my constituents confidence to know that the Minister was prepared at very short notice to hear representations from a Member of Parliament, and in this case a very new Member of Parliament. I also put it on record that my hon. Friend's Department is not the only one with responsibility for this matter. The Department of the Environment is involved in the pollution control and the identification of the pollution, but if there is a medical problem after that, it then becomes the responsibility of the Department of Health and Social Security. Again I should like to place it on record that the responsible Minister there, who I understand is Lord Skelmersdale, will readily meet me to discuss the matter, and I hope to see him early next week. What is the problem with which we are all faced? As I have said, the company involved is Capper Pass and I must place it on record that it is an extremely responsible company. When I was newly elected, I did not have to ask the company whether I could investigate what it did or whether I could look around that installation. The managing director made sure that, within a week or two, he had invited me to see his operation because he knows as well as I do that there are environmental considerations arising out of that plant, particularly the smokestack. He went to considerable lengths to show me what is done in the factory to ensure that all types of emissions from the chimney are controlled and monitored. Immediate action is taken if emission levels are higher than those allowed. An extremely sophisticated control mechanism is operated by that plant to monitor polonium 210 and other emissions, such as lead and arsenic. I stress, however, that the level of all emissions into the atmosphere is below allowed limits, which my hon. Friend the Minister will, I am sure, affirm. Capper Pass is the biggest tin smelting company in Europe. It discovered in 1984 that one of its by-products was emitting alpha radiation. After very sophisticated laboratory tests, it was found to be polonium 210. The National Radiological Protection Board was quick to lend its aid to the company to analyse the substance. Polonium is of natural origin. Tin deposits are often to be found in granite rocks and it is not, therefore, surprising that there are emissions of alpha radiation from tin, which then get into the production chain. That is exactly what occurred in this case. However, for this very reason, I must ask why the inspectorate did not take the initiative before 1984 and go to Capper Pass and to similar companies that handle products that might emit radiation to conduct tests in the manner I have just described? Again I stress that the amount of radiation being emitted by the tin did not, in the event, justify such action; it was well below the level that has been permitted since 1984. The problem having been identified, there was a detailed study of the smelting processes at Capper Pass. Polonium was found to be concentrated in three areas in that factory, which were then classified as "controlled areas". That underlines the action that the company took, when it discovered that there was a problem, to contain and control it. It then proceeded to develop processes to separate the polonium into what I believe is called intermetallic dross, which is then stored until the activity decays. Polonium 210 has a very short half-life, and decays very quickly; the procedure can therefore contain most of it. Inevitably, in this process small amounts of polonium will find its way in the form of gases, through the cleaning plants, resulting in an emission into the atmosphere by way of Capper Pass's large chimney stack. My constituents  see the emissions every day as they go about their business, and they can be forgiven for thinking that radiation—alpha particles, polonium 210 or whatever we are to call it—is being showered upon them. To date, I question whether many of the commentators have been very responsible in this regard since I have discovered that the authorisation granted with the licence by the radiochemical inspectorate in 1985–86 was for up to 592 megabecquerels, or 16 millicuries, of polonium per week. Having obtained from the company the list of results of the tests undertaken since then, almost on a weekly basis—in some cases, more often—I discover that the emission of polonium has been well inside the limit authorised in the certificate in 1984–85. It is extremely important for the record that the House, my constituents and, more particularly, commentators who may be sitting with their pencils ready for the next sensational and censorious headline, note these facts. Looking at a list of the test results since 1985 in a random way, I discover 6 per cent. of the authorised emission, 3 per cent., 4 per cent., 5 per cent. and 2 per cent. In other words, very low levels are being emitted from the chimney. Although the levels are low, however, the House will remember what I said at the beginning of my speech: cancers are none the less occurring around the factory at double the national rate, or more. There is a question to be answered: why does that rate of cancers occur in my constituency? Prima facie, it appears — if we are to believe the National Radiological Protection Board, the pollution inspectorate and, no doubt, a bevy of other organisations under the aegis of the Department of the Environment — those cancers are not occurring as a result of the small amounts of radiation being emitted from the chimney. I do not know. None the less, there is undoubtedly some form of problem. My aim — I am determined to see that I achieve it—is that we get to the bottom of why that is occurring. It is important to say that, after and during the time the certificate was being authorised, the company went to great lengths, as I have seen on the ground having visited the factory, to install sophisticated air cleaners, and other pollution control equipment. It has six high-volume air samplers which are positioned around the works, and those are examined weekly. Therefore my constituents should understand that if a problem did occur that equipment would quickly show it. The letter that accompanied the certificate of authorisation that was sent to the local authorities—Beverley district council and Humberside county council—said: "Low level solid, liquid or gaseous waste within the limits set out in this authorisation may be safely discharged to the environment and no special measures need to be taken by your authority." The local authorities in question have taken their responsibilities extremely seriously, and since the certificate was granted they have considered responsibly the question of emissions. Indeed, the borough of Beverley has a sophisticated programme to check the emission of arsenic and other base metals such as lead. So far as I can see, all that could possibly have been done seems to have been done in this case. I can only conclude that if these control measures are undertaken at this factory, the constituents of other Members of Parliament can have confidence that it is happening in  their constituencies too where such factories are located, and there is no doubt that they occur widely throughout the United Kingdom. It is also important to put on the record a letter from Her Majesty's inspectorate of pollution, dated 2 March 1988. It says: "Reported discharges" from the chimney of Capper Pass "have been considerably lower, at less than 10 per cent. of the authorised limit, and any consequential radiation exposure has been correspondingly reduced. Radiation exposures as low as these are significantly below the natural background radiation exposure—2mSv per year"— No doubt the Minister will tell me what that means; but the important thing is that radiation coming from that chimney is well below the natural background radiation exposure— "and well within recorded regional variations and may therefore be considered to be radiologically insignificant." Those are strong words from careful civil servants, who are not known for being extravagant. That is a strong statement, and I repeat it: the emissions from the chimney can be "considered to be radiologically insignificant." I am pleased to read that, and I wish that those who initiated the television programme had taken the opportunity to gain access to the information that I have been able to find so easily. It has been suggested that much information is kept secret and that it is difficult for Members of Parliament and researchers of television programmes to gain access to information, but I have not found that to be the case. The company was only too prepared to open its doors to me and to tell me everything I wanted to know, and the same can be said for the local authorities, the pollution inspectorate and, of course, the Minister. The figure of 592 megabecquerels per week maximum that could be emitted from the chimney was not plucked out of the air, but was calculated on the basis of scientific assessment. I would like to know how it was arrived at, and if the Minister, cannot tell me, I shall table the appropriate parliamentary question to elicit the information. In calculating this limit Her Majesty's pollution inspectorate went to great lengths to take advice from its own experts and from the International Commission on Radiological Protection. That advice was in turn endorsed by the United Kingdom National Radiological Protection Board, and the figure was arrived at after considerable investigation by all responsible bodies, which take their duties very seriously. Neither I nor the Minister and his officials are complacent about the rate at which the cancers are occurring. We must get to the bottom of the problem. The HMIP should, as I have already said, have been aware that radiation was probably in the tin being smelted, because the tin often comes from granite rocks. We must ask ourselves why that situation was allowed to occur whereby HMIP did not know. The inspectorate must in future take the initiative in cases such as these. All this having occurred, I have no reason to believe that it will not be followed by other television programmes and statements, and the Government have a responsibility to investigate the matter thoroughly. I hope that the Minister will consider favourably my request that the pollution inspectorate should go into the factory at Capper Pass and make a detailed investigation. I do not  know what the HMIP does, but my constituents and I want a thorough "going over", because only that will assuage the feeling of people who, when they look at their children, worry that they are being covered in radiation. When I look at my eight-year-old daughter Alexandra, who is the apple of my eye, I would not want to think that about her. Of course she is not, and nor are my constituents, but that is why the HMIP must conduct a thorough investigation. The HMIP conducted a routine investigation in 1986. I believe that under present circumstances, it behoves an organisation such as that to go into sensitive plants at least annually, to establish in the public interest whether the factory is complying with the Certificate of Authorisation. That point raises another question and I have already tabled a written question to elicit the information in greater detail. What exactly is the mechanism of control for polonium 210 in this factory and in factories like it? I am led to believe that the company takes samples from the smokestack and from various other parts of the plant. Is that in the public interest? I do not mean to imply that the company is not undertaking the testing in a responsible way. I believe that it is. However, it is not fair on the company or the community around the factory for the company to play a very large part in ultimately monitoring itelf. That cannot be right. In addition, Mr. John Urquhart, whom I understand is a statistician, took part in the television programme to which I have already referred. He made various allegations based on statistical information. Mr. Urquhart did not allow me to see the statistical data, nor did he, as I understand it, allow the local authority to see the data. Therefore, perhaps the Minister will tell me whether he and his officials have seen the data. I believe that the matter would have been dealt with responsibly if all parties had been given the information in question so that we could raise the issue with the Minister. If I or any organisation had failed to do that, we would have been rightly and roundly condemned. No doubt my electorate would have told me what they thought about that at the next election. I repeat that I was not told about that statistical information. I deprecate that, in view of some of the very sad letters that I have received from frightened constituents. There also seems to be "something rotten in the state of Denmark" when a collection of television producers, researchers and the rest can put together a programme like the one that I and others saw, which then has the effect on ordinary people that this programme has had. That aspect will, I believe, need investigation. After the really important issues have been dealt with, such as the investigation to which I hope that the Minister will tell me he can agree, I will see Lord Skelmersdale to discuss this question: if the problem is not occurring because of polonium being emitted from the chimney, why is it occurring? If it is occurring—as has been suggested because of a random cluster of cancers—it behoves the DHSS and the Government. to tell my constituents why random cancer clusters occur. I will expect to hear answers on those points from Lord Skelmersdale's officials and his scientific and medical advisers next week. If we do not fully understand why those clusters occur, I will press the Government very hard to devote such resources as are necessary to discover the truth of the matter. We cannot sit back and say, "It is not  coming out of the chimney. That is not causing the problem. The problem is geological or geographical." That is not enough of an answer. I will want very full answers from the Government and I hope that I am about to receive the first tranche of the answers from my hon. Friend the Minister.

7.44 am

The Parliamentary Under-Secretary of State for the Environment (Mr. Cohn Moynihan)
My hon. Friend the Member for Beverley (Mr. Cran) has a reputation for being a very hard-working constituency Member, placing his constituents' interests at the top of his priorities. I congratulate him on a comprehensive analysis of an important issue which he has considered in detail. My hon. Friend rightly pointed out that he came to see me well before most meetings normally start, in the early hours of yesterday morning. He raised the matter on the Floor of the House yesterday afternoon and wisely spent a good number of the hours of the night preparing for his speech this morning. He gave a first-class exposition of a difficult and highly technical problem, which combines a requirement to understand the scientific background with a requirement to understand the sensitivities of the local electorate, who are obviously worried, especially when scientific expertise is not necessarily widespread. I appreciate the way in which my hon. Friend has brought this subject to the attention of the House. I shall make in about 10 minutes an initial reply. My hon. Friend has raised a number of important issues which I should like to pursue through other channels. This gives the House an opportunity to hear from the hon. Member for Burnley (Mr. Pike), who has been up many hours preparing and waiting to bring his important subject to the attention of the House. It is right that he should have five minutes before the Adjournment of the House to do so. If my speech is somewhat curtailed, it will be for that reason and because of the hour. Clearly there is concern over the reported leukaemia clusters among children on Humberside. There is no evidence to suggest that the alleged incidence of leukaemia on Humberside is related to the discharge of polonium from Capper Pass, but local variations in the incidence of disease and the concern that has been expressed by my hon. Friend are sufficient for this matter to be studied in full. For that reason, I understand that the DHSS will receive a report from the small area health statistics unit at the London School of Hygiene, which is concentrating on this issue. I am sure that my hon. Friend and colleagues in the Department of Health and Social Security will make sure, when he receives the statistics, that a comprehensive report is provided to my hon. Friend the Member for Beverley, but that is, no doubt, a subject to discuss when they meet. Capper Pass processes metal ores and residues to extract tin, lead, other metals and alloys. Some of those raw materials can contain naturally occurring radionuclides which can become separated due to extraction and processing. The levels of radioactivity in these raw materials are usually such that they fall outside the scope of the Radioactive Substances Act 1960. That is true in the case of Capper Pass where the raw materials generally are not radioactive within the meaning of the  Act. In 1984–85, after the discovery of residual activity in bismuth alloy supplied to a German company, Capper Pass undertook, at the instigation of the regulatory bodies, a systematic investigation of the behaviour of polonium-210 in its plant. It was discovered that the extensive and rigorous processing causes polonium-210, which exhibits complex physico-chemical properties, to volatilise at high temperatures and then condense and plate-out on colder plant surfaces. Consequently, over 95 per cent. of the polonium-210 is not discharged; it is retained within the plant while it decays away with a half-life of 138 days to form stable lead. It is assumed that discharges of polonium-210 were occurring before this discovery but, because of its relatively short half-life, no build-up in the environment can have taken place. During its inspection programme, HMIP reviews all sites authorised to discharge radioactive wastes. Authorisations are reviewed periodically to determine whether changes are appropriate resulting from changed circumstances, improved technology and scientific advances. It is the intention to complete a further assessment of Capper Pass before the end of this year. However, the inspectorate will also co-operate with any other formally established inquiry. The onus for demonstrating compliance with the requirements of an authorisation granted under the Radioactive Substances Act 1960 rests with the operator. In the case of Capper Pass, samples of stack discharges and samples from environmental monitoring stations are collected by the company. Stack samples are analysed by the company and environmental samples by the National Radiological Protection board. Stack samples are taken and analysed weekly and a request for the results should be made to the company. HMIP carries out independent analysis of spot samples as a check on the operator returns. My hon. Friend rightly pointed out that statistical data on the incidence of disease are for consideration by the Department of Health and Social Security, which is supporting the study by the small area health statistics unit at the London School of Hygiene, to which I referred. An independent assessment carried out by the NRPB concluded that any radiation exposure from discharges at the permitted level would be insignificant at about 0·02 microSieverts per year. Radiation levels as low as that are well below the natural background radiation exposure of between 1,000 and 2,000 microSieverts per year, and well within recorded regional variations. Advice on the criteria for setting limits of exposure for the public are published by the International Commission on Radiological Protection in its report No. 26 dated 1977 and by NRPB in its report GS9 dated 1987. I shall obtain details of those reports and make them available to my hon. Friend. The provision of the information is extremely important in alleviating local worries and concerns. I echo my hon. Friend's point about the retention of information for use for public consumption. If information is necessary to allay public fears, it is very wrong that it should not be made available as comprehensively as possible. On that point, I shall ensure that we provide my hon. Friend with as much help and information as he needs on the detailed points that he has brought to the attention of the House. Average emissions of polonium-210 have been well below the authorised limit. Some fluctuation occurs from one week to another and depends on throughput, among other factors. Authorised limits are set to take these  factors into account. Control over the use of radioactive substances and disposal of radioactive wastes is a central Government responsibility. There is a requirement under the Radioactive Substances Act for HMIP to consult and inform local public bodies of such uses and disposals. In the case of Capper Pass, copies of the authorisation certificate were sent out in accordance with normal procedures to Humberside county council and Beverley borough council in October 1985. The authorisation was discussed at a meeting of the north Humber bank pollution liaison committee during October 1985, prior to its coming into force. Section 13 of the Radioactive Substances Act prevents the disclosure by HMIP of information about the use of radioactive materials in the course of a commercial activity except when the permission of the user has been granted. We must pay due attention to that, as it is the expressed will of Parliament. Monitoring of the environmental behaviour of polonium-210 can be a difficult and costly exercise, as my hon. Friend knows. However, I emphasise that, if local authorities wish to undertake it, HMIP will be pleased to give advice and assistance where appropriate. In view of the concern expressed by my hon. Friend, I am willing to go further than that in asking HMIP to provide a comprehensive report on the subject and to ensure that all the points that he has drawn to my attention are adequately answered, and I ask my hon. Friend to come back to me if he has any specific anxieties. He has vigorously pursued this matter on behalf of his constituents and it is absolutely right that the Government should respond comprehensively and with equal vigour to his questions. That is a brief resumé of the position. I have made a background-setting speech with due consideration given to a number of the specific questions brought to the attention of the House, but I emphasise that I regard this as a first step in helping my hon Friend. We shall of course answer the additional points that he brings to our attention in another form—whether at Question Time or by letter. I shall make sure that all the necessary resources are put behind giving him the opportunity to continue to serve his constituents with the vigour, ability, knowhow, and desire for detail that he has shown on this issue to date.

North-East Lancashire (Enterprise Zone)

7.55 am

Mr. Peter L. Pike  (Burnley)
First, I thank the Minister for allowing me a few minutes in which to make an important case on behalf of my constituents in Burnley and north-east Lancashire. My questions are brief and simple. I urge the Minister to ask his right hon. Friend the Secretary of State to consider carefully the application for an extension of the north-east Lancashire enterprise zone that was submitted last month, and to meet a delegation from the area that wishes to put the case for that extension. But for the fact that the Secretary of State announced on 17 December 1987 that he did not consider that the experimental zone should be continued, I would not be pursuing the matter now. Being aware that the Government have said that they do not want to move in that direction, I urge that the scheme should be given most careful consideration. I also point out to the Minister that my case has the support of the hon. Member for Hyndburn (Mr. Hargreaves) and of the hon. Member for Pendle (Mr. Lee), who is a Minister and very supportive of the case. I am not trying to be difficult with the Under-Secretary of State for the Environment, the hon. Member for Rossendale and Darwen (Mr. Trippier). I recognise that he is in a difficult position, and I cannot ask him to state his views on an enterprise zone that covers his own constituency, in view of the conflict with his ministerial position. I do not in any way malign him, as I understand that he is not in a position to say openly what he feels about the situation. I was closely connected with the enterprise zone before I came to the House. It covers the four constituencies of Burnley, Hyndburn, Pendle, and Rossendale and Darwen. It is somewhat different from the normal enterprise zone. Most of the developments a re on greenfield sites rather than derelict land. Since the enterprise zone was declared, it has proved to be an example of what the Government have always advocated—a combination of national and local government and the private sector working together to improve a particular area. It must be said that, in the short time that the enterprise zone has been in existence, the sites are almost full in all the constituencies. It looks like a mini boom-town, which is in stark contrast to many other parts of those four constituencies. Not only has benefit been felt within those areas but, because of the emphasis that the council has put on showing firms what we can provide, there has been a carryover effect into the rest of north-east Lancashire. Some people have come to look initially at the enterprise zone, and have then gone to other parts of the area. The particular problems of north-east Lancashire are related to obsolete industrial premises and a narrow economic base. Forty per cent. of the jobs in Burnley are in manufacturing industry. In north-east Lancashire as a whole, two thirds of industrial premises were built before 1930. These are important points. Pendle has even more jobs in the manufacturing sector than Burnley. It is clear that, of the second generation of enterprise zones declared by the Government, Burnley has been extremely successful. Indeed, we would welcome any Minister to come to view this success. We believe that our case has the full support of the four borough councils in the area. I hope that the Secretary of State will consider  the matter, that a delegation will be welcomed, and that the Secretary of State will recognise the success that the enterprise zone has achieved for the area.

7.59 am

The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan)
The hon. Member for Burnley (Mr. Pike) has made a number of important points especially about the representations that have been made and the effect that they would have on any decision about a ministerial visit. I shall discuss those matters with my colleagues at the Department and ensure that we write to him about that. The hon. Gentleman also asked about the application to extend the enterprise zone. Obviously there are many factors that must be considered, not least the success to date of the existing zone. We shall write to the hon. Gentleman in reply to the specific points that he has drawn to the attention of the House.It being Eight o'clock, the motion .for the Adjournment of the House lapsed, without Question put.

Western European Union

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]

8 am

Mr. James Hill  (Southampton, Test)
I raise this issue simply because I have been Whip to the Western European Union delegation since 1980. Indeed, as it is the 40th anniversary of WEU this year and it is considered to be the European pillar of NATO, it is time to wash away some of the myths that surround WEU. I venture to suggest to my hon. and learned Friend the Minister of State that if we stopped 100 people this morning in the street in London I do not think more than one or two would have heard of WEU, let alone know its purpose. With that in mind I must go back in time. In 1984 there was a meeting of the Council of Ministers. At that time the chairman was Herr Genscher and he introduced a paper, entitled, "The reactivation of WEU." He made some telling points and one of the most significant was: "It is important that public opinion be involved in the debate about defence and security, principally through an improved dialogue between the W.E.U. Council and the Assembly and by raising the profile of the activities of those bodies." That did not happen. The reactivation that was supposed to take place was rather dampened by a zero budget. It casts doubt on the Council of Ministers of that time when one considers that they seriously wanted a significant move in the WEU's relationship with NATO. I want to discuss the reactivation of the institution, its enlargement—there are other countries that may wish to join—and a resolution that was introduced in the Hague on 27 October 1987. In addition, I wish to discuss the overall effects of harmonisation of an arms policy for our industries in Europe and the harmonisation, in this technological age, of the computers and so on in the vehicles of war. The reactivation of the institution has not started. I understand that there is a Council of Ministers meeting in the Hague again in April when some of these matters will be discussed. I must say—even against some of my European colleagues—that one generally gets a sea of platitudes rather than moves forward in such meetings. Occasionally, a platitude is almost as useful in the European forum as a strident statement is in this House. Throughout the European scene my hon. and learned Friend must radiate that the WEU is presently the only European organisation, empowered by a treaty, to discuss defence and security matters. The institutional structure of the WEU is well developed and it has a small Council of Ministers, always useful, and a small parliamentary assembly. Some of my friends and colleagues in the European Parliament would desperately like to take over the defence and security of Europe, but I do not think that, with all credibility, that should even be contemplated. We have discussed relocation. The British delegation went to the administration offices of the WEU, which are situated in London, to discuss that matter. Obviously, it makes nonsense to have the administration offices in London, the political forum in Paris and our closest NATO contacts in Brussels. Consequently, whatever one says—we all realise that the French may be a little difficult about this—Brussels would be the most sensible location for the WEU in the future. We must also have a new image. When we relocate, we must have a new logo, like the Department of Trade and Industry. We must cut out the mystique. The WEU is almost like a secret society. I become a little annoyed when I have to explain what the WEU is. Every time I say "WEU", people say, "Oh, what's that?" and I have to go through a ritual. WEU sounds like a European collection of ladies making jam or producing woolly goods. It is not a sensible title for a very important structure concerned with European defence. A new name would be appropriate, with a new location. In addition, public relations must be beefed up. How often does one read about the WEU in the national newspapers? One may read twice a year that we met in plenary session in Paris. A few international journalists who are particularly committed to defence matters may be present and one may see WEU in print, but, if one goes to the House of Commons Library and reads the national newspapers here, one would read about NATO 1,000 times, but would only see WEU once. That situation must change. Enlargement is a sensitive and delicate matter for the Council of Ministers. Spain and Portugal have been most pressing in wanting to be considered to join WEU. I have also heard, as most parliamentarians hear such things, that Greece and Turkey would also be quite receptive to joining WEU. That is another matter that we must sort out. If there is to be a genuine Western European defence commitment, those countries must be included in it. There may be problems in the future, if, for example, the United States defence budget is cut for social reasons and the Americans cut back in Europe. We cannot suddenly, overnight, raise our sleepy heads and say, "My god, we haven't spent enough on conventional weapons. We haven't got our act in order. We are still issuing instructions in seven languages." We must have harmonisation, and this year we must resolve whether to allow other countries to join the WEU. The Council of Ministers brought out the platform, as it is called in European circles, on 27 October 1987, so it is a relatively recent resolution. One of the things that brought to my notice how far the WEU could go was part of the resolution, which states: "It remains our primary objective to prevent any kind of war. It is our purpose to preserve our security by maintaining defence readiness and military capabilities adequate to deter aggression and intimidation without seeking military superiority". I have already discussed that with my hon. and learned Friend and we have congratulated one another on it. The minesweepers and naval ships that went to the Gulf represented a collaboration by the WEU. No one knows that outside the House. They think that a friendly little gathering sent a couple of ships to the Gulf. I have even heard that Luxembourg, which has no navy, but is one of the seven, paid a large amount of cash to support the operation. So there is a will to contribute. I and my hon. and learned Friend have discussed, and he has probably discussed with our right hon. Friend the Secretary of State, the fact that we see the future of the WEU as an emergency force to help—not to be an aggressor towards—countries outside the NATO circle that want the support of European countries in defence matters. The Gulf war could be the first of a number of occasions when we use the platform and start to do what we have always done in the past—to be an emergency humane force for good. Harmonisation has been a long story. In the battlefield, when all is smoke, mud and goodness knows what, one cannot have European nations all using different equipment. A gun made in Italy cannot have German bullets. There must be harmonisation of hardware. On Monday, at a colloquy just across the road at the Queen Elizabeth II centre, the secretary general of the WEU recalled the words of President Von Hassel in October 1979 on the subject of European armaments policy. My hon. and learned Friend will recognise the words: "The more the countries of Europe are divided, the more they will depend on the United States."—so much is obvious—"It is up to Europeans to decide whether they want relations within the Alliance between the United States and Europe to take the form of a North American protection or genuine co-operation. The contribution of our transatlantic allies—essential though it is"— we cannot cock a snoot at President Reagan's wonderful efforts on behalf of European defence— "and long may it remain—can no longer be the alibi for doing less." He meant that several countries were getting European defence cover without paying for it. Many of them, when the United States wanted to place rocketry on their lands, were the very people who made the greatest possible fuss. So those who were not paying the piper were calling the tune. When the Council of Ministers encourages the enlargement of the Western European Union, they will be able to control that. Following the signing of the INF agreement, there is now a definite move in Europe towards wanting an agreement on conventional and chemical weapons, with verifiable examinations of stockpiles. That takes me to another point that I am sure has been discussed in the Council of Ministers. I have another quote from the secretary general of the WEU. He urges: "equipment research effort enabling us, for example, to exercise control over the transport of heavy weapons, access to material storage centres and the manufacture of certain chemicals." More important than all that, if we are not to be completely reliant on the Americans for our surveillance for verification processes, is that Europeans must pool their research resources on inspection satellites and, more generally, on airborne verification techniques. The heavy financial burden that is inherent in this type of research calls for co-ordination that could be entrusted to a specialised body. When the secretary general of the WEU talks about a specialised body, he means his own institution. It is ideally suited and has been carrying out verification procedures since the end of the last world war. It has a very small staff and works on a skinflint budget. The countries of Europe are not willing to pour money into an organisation that was a few years ago, to their eyes, quite moribund. With the changing times, the budgets of the WEU have to be re-examined. We must recruit highly qualified verification staff and must start to think about other equipment that will make the verification process much easier. We cannot sit around and hope that all these things will happen before something else does. A presidential election campaign is in progress in the United States and I am pleased to see Mr. Bush doing so well. In politics, one must look a bit further ahead than the  next four years and cast one's mind forward to the position in 12 years. At that time there might be a President of the United States who is not as willing as the current President to accept the burden of European defence. He may not even know where the centre of Europe is. Many American politicians do not know. About six months ago I talked in Washington to Senator Gore. His knowledge of European defence would fit into a cigarette packet. American politicians go forward with great schemes for their continent of 250 million people and do not realise that more than 400 million people in Europe want secure defence. I should like to say a few words about the work of the WEU. I know that the Minister is looking at the clock because 30 minutes is scarcely enough for a complex debate of this nature. I recommend anyone who is interested in European defence to examine some of the papers issued by the WEU. In the last plenary session in January there was an excellent paper on European armaments co-operation. That paper contained an outstanding resolution. Another paper was on recent developments in Soviet external policy. That is the nub of the problem and we need to know how that Soviet policy will change in the next few years. Another excellent paper was produced on the INF treaty and on disarmament in general. For people who are interested in technology, there is a wonderful paper on the military use of computers. Finally, because the WEU is a political body and has the usual tug of war, we had an extremely good paper on the activities of the Council. Having said all that, I ask my hon. and learned Friend to make sure that in the sea of platitudes which he, of course, encounters from time to time, he cuts through and really does put a realistic European view on defence matters.

The Minister of State, Foreign and Commonwealth Office (Mr. David Mellor)
I am very grateful to my hon. Friend the Member for Southampton, Test (Mr. Hill)—I do not say that as a platitude; I know that it is always said, but I really mean it—for coming in this morning and speaking with such good humour and good sense. I very much enjoyed his speech and thought that he hit the centre of the target on most of the issues that he raised. That is not surprising, because he has enormous experience in this field. As he said, he has been associated with WEU for nearly 10 years, and his partnership with my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg), the new leader of the Conservative group in WEU, bodes well for the future. It is clear that the attempts that we are all making to give WEU a more central role can succeed only if all parts of WEU are able to carry the strain of upgrading their efforts. My hon. Friend has very properly made some points that the Council of Ministers will have to think about, and plainly we in the United Kingdom in particular will have to think about when we assume the presidency of WEU, as we shall be doing in the next few months. It is equally necessary that the parliamentary arm of WEU should be vigorous. I was extremely impressed when I went out to speak to one of the last parliamentary sessions by how good the attendance was and, in particular, by the enthusiasm of the British Members from all parties. They attended the plenary meetings in strength,  but there was also an almost 100 per cent. turnout for the briefings afterwards. I thought that the enthusiasm that people brought to bear there boded very well for the future, as did the willigness of all concerned to listen to speeches that were intended to be challenging—certainly my own contribution was—because, plainly, if WEU is to be relevant, we shall have to talk frankly about a number of quite difficult issues and one or two people's sacred cows might have to have a knife put into them. But more of that later. My hon. Friend made a good point when he talked about the vital nature of the relationship between the United States and Europe. In no sense is WEU intended to displace the United States contribution in Europe. It is intended to be a forum within which the European pillar of NATO can discuss sensibly and coherently what we need to do to ensure that we are living up to our commitments. When one looks at the population of Europe as against the population of the United States, and the increasing narrowing of the gap in gross domestic product between Europe and the United States, it is not hard to understand why there are voices in the Congress and elsewhere calling on Europeans to accept a greater share of the burden of common defence. If we are to maintain a strong Alliance, as my hon. Friend made clear, we must heed those voices and respond to their call. That is the challenge to us and we are ready to accept it. We are all the more ready to accept it after a highly successful NATO summit, for which, of course, we have to pay the warmest tribute to my right hon. Friend the Prime Minister, whose idea it was and whose role in ensuring that the statement that came out at the end was firm and principled was, as everyone acknowledged, paramount. We must not just talk about political solidarity; we must take practical steps to do more. We can do so against the background of an already considerable contribution within Europe to Europe's defence. My hon. Friend exposed facts that he said were not well enough known, and it can never be repeated too often that of NATO's forces in Europe we provide from Europe 90 per cent. of the total manpower, 85 per cent. of the tanks, 95 per cent. of the artillery, 80 per cent. of the combat aircraft and 70 per cent. of the fighting ships in the eastern Atlantic and the Channel. Although my hon. Friend is right to say that not every country takes pride in the size of its defence budget, overall we in Europe spend about $110 billion a year on defence, which is 30 per cent. more in real terms than our spending in 1971. Not only need we spend money—because we must not fall into the trap of thinking that the answer to any point is to say how much money one spends—for we as a party, and I hope all the Governments of Western Europe, are not interested in just signing a cheque. We want value for money. We must see what we are getting out of it. That is where the expertise about which my hon. Friend spoke is crucial, for it is necessary for us to have, for instance, more collaborative ventures between armament industries in our different countries. We must reduce duplication, produce new equipment more cost-effectively, and the commonality of equipment must be increased for all the reasons my hon. Friend gave. Twenty collaborative programmes have been instituted by the' Independent European Programme Group since 1984. We are currently involved in 12 of those equipment projects, and at the same time the members of NATO's  integrated military structure have been co-operating in implementing the conventional defence improvements initiative, which is intended to increase the operating effectiveness of our forces by improving, for example, their communications systems, air defence, ammunition and fuel stocks, airlift capacity and so on. Also, we are much involved in the tail-to-teeth movement. Since 1979, 20,000 men have been transferred from the support area to the front line and the reserves have been increased by 50,000. We also want to encourage the two members of NATO which remain outside the integrated military structure—France and Spain—to extend their forces in support of the Alliance. We have put a number of suggestions to the French in recent months for ways in which we might all work together. I do not want my hon. Friend to become restive because I appreciate that he was talking about WEU and I have spent a lot of time talking about NATO. But we must set the work of WEU in a framework, and the essential framework is in a complementary role to NATO but with specific tasks that it can do and perhaps NATO cannot. That is why the decision was taken a few years ago to breathe life back into WEU, a decision which, as my hon. Friend said, has promise but is an agenda and not an achievement so far, though there are achievements. I accept the stimulus he is putting on us to try to ensure that during our presidency we make progress. What, then, is the role of WEU? Political solidarity is vital in all this because a Europe which can get its own ideas straight and speak with one voice must be a more rewarding partner for the United States and a more effective alliance in general. So the European pillar must have a way in which it can determine these issues, not so as to exclude the United States but to allow us to respond constructively to the challenge that, as I say, is properly thrown out from time to time by Congress. There are ways, which have already been found, in which political solidarity can he developed, and the WEU platform  provides a yardstick by which all members can measure their development in security and judge their own interests and requirements. WEU can also provide a forum in which its members can discuss how to confront together threats posed to their shared interests outside the North Atlantic treaty area. My hon. Friend drew attention to the co-operation by WEU in the Gulf. I need not add to that. I endorse what he said. It is encouraging evidence of what can be achieved within WEU and which, to be frank, could not have been achieved if WEU had not existed because it provided vital cover for some of our European friends to get involved. If that cover had not been available, they might not have done so. Thus, WEU can excel as a forum in which members can concert their views on vital issues and as a focus for the discussion of practical defence co-operation, for this must not be pie in the sky; these must be practical issues, as my hon. Friend pointed out. I conclude by dealing with the two points my hon. Friend said we had to try to resolve in the coming months—colocation and enlargement. On colocation, all the members are agreed that if the organisation is to fulfil its active new role, the elements in London and Paris must be brought together. I am afraid that it has not yet been conclusively decided where. It remains our view that the best place for this would be Brussels because of the proximity of NATO and the EEC. On enlargement, Ministers agreed in October that they would examine with a favourable predisposition the possibility of accession to WEU by Spain and Portugal. This remains the case, and that matter will be resumed at our meeting next month. Obviously I cannot say how it will turn out, but I have taken on board the points that my hon. Friend has made. This is a timely debate. We are about to embark on our presidency, and I can assure my hon. Friend that his ideas will be taken fully into account as we plan our agenda for the next 12 months.

Question put and agreed to.

Adjourned accordingly at half-past Eight o'clock.