I beg to move, That the Bill be now read a Second time.

The Northern Ireland (Financial Provisions) Bill, 1972, was introduced on 1st November and it now comes before the House for a Second Reading at the end of a week in which a good deal of attention has been given to the political future of Northern Ireland and to the hopes for the restoration of normal life there. My hon. Friend the Financial Secretary also came to the House earlier this week seeking approval for an order making available to Northern Ireland the final portion of loans up to the limit provided in the Finance Act, 1970. Clause 1 refers to that limit and seeks to provide for requirements a little further ahead.

The Bill has three clauses, not including the short title. The operation of Clauses 2 and 3 is linked with the currency of the Northern Ireland (Temporary Provisions) Act, 1972, which expires on 30th March, 1973, unless otherwise extended.

The House would be quite right to conclude from the shortness of the Bill and from the relative simplicity of its drafting that it is essentially a vital but interim measure. There is no fundamental revision of financial arrangements which were set up under the Government of Ireland Act, 1920, nor is there any alteration of the relationship between the Northern Ireland Exchequer and the Treasury which has subsequently evolved. That system continues as before, but with a new grant in aid flexibility and with arrangements for parliamentary accountability at Westminister for the duration of the present temporary situation. That is as intended.

The House will recall that the Northern Ireland (Temporary Provisions) Act pro- vided in Section 1(4) that the administration of Northern Ireland services should continue and their costs should be met as nearly as may be as if the Act had not been passed. The Bill continues in the spirit of that Act. Not only do Clauses 2 and 3 tie themselves to the operation of the temporary provisions Act but the Bill is concerned with only three limited financial proposals which are, we believe, necessary for the proper functioning of all the Northern Ireland Departments in the immediate and short-term period ahead.

Relations between the Northern Ireland Exchequer and the Treasury have, of course, developed throughout the last 50 years to take account of the various social and historical changes that have occurred. The general principle that parity should govern both expenditure and taxation as between Great Britain and Northern Ireland became established as the working rule in the years following the Government of Ireland Act and it was formally declared in the memorandum of 12th May, 1938. Over the years a number of arrangements covering specific items or social programmes were made between the two Governments. These were designed to supplement the tax revenue of the Northern Ireland Exchequer so that it could meet the increasing burden of public expenditure which rising standards and the principle of parity inevitably threw upon it.

The main subventions under these arrangements, some of which are reciprocal are described in the White Paper. "Northern Ireland—Financial Arrangements and Legislation", presented by my right hon. Friend and the Chief Secretary to the Treasury last June. They are the health services agreement; the social services payment: the national insurance and redundancy funds adjustments; regional employment premium; and agricultural subsidies. The White Paper estimated all these to total £133 million in 1972–73—that is, a net inflow of £133 million to Northern Ireland for these social, industrial, welfare and agricultural support purposes.

The very titles of these payments and agreements reflect the social history of the United Kingdom and the great advances that there have been in the last 50 years. That the original financial arrangements have had to be supplemented to meet new demands on public expenditure arising from entirely new social attitudes should surprise nobody. Many areas of Great Britain, particularly those that are designated for regional assistance, receive similar financial inflows, but because they have no separate exchequer the amount is less explicit. The Northern Irish effectively pay taxes at one and the same rate as the other regions of the United Kingdom.

Some time before the passing of the temporary provisions Act discussions were going on with the Northern Ireland Government about the inevitable need for some further supplement to Northern Ireland's resources. As the White Paper said in paragraph 3

"The continued rise in development expenditure and reductions in tax rates have for some little time made it clear that some fresh and possibly more comprehensive means of supplementing Northern Ireland's tax revenues was likely to become necessary."

Clause 2 provides for an interim grant-in-aid to the Northern Ireland Exchequer as a flexible means of supplementing Northern Ireland's tax revenues. In its flexibility the grant-in-aid is an innovation because it differs from the various agreements and special payments which are defined by formulae and are linked to specific purposes and programmes. But neither Clause 2 nor the Bill as a whole represents the Government's comprehensive and settled proposals for the future financing of Northern Ireland.

As hon. Members will readily appreciate, the longer-term financial arrangements are intimately bound up with the political and constitutional framework which my right hon. Friend hopes will emerge in the process of debate and consultation now going on.

Unfortunately it is still not possible to debate any aspect of Northern Ireland's life without considering the effect of the continuing acts of strife, destruction and violence. The civil disturbances have had cumulative effects on the economy particularly in certain sectors and in certain localities. The Government have recognised the difficulties that exist and have taken a series of measures right across the economy in support of the maintenance of activity, employment and prosperity. The grant-in-aid facility pro- vided under Clause 2 will help to ensure that these and all the other agreed expenditure programmes are funded from the Northern Ireland Exchequer.

As the White Paper makes clear, the impact of continuing high social and development expenditure in Northern Ireland was bound to lead to more drawing of loans for capital works and increased commitments from the Consolidated Fund. The major policy changes affecting expenditure in 1972–73 have been in the trade, industry and employment programmes. These follow the Cairncross Review of Economic and Social Development in Northern Ireland dated December, 1971, the package of measures announced on 27th July this year, and a number of other measures announced before and since.

The year has seen the setting up of the Finance Corporation to assist industry; a further acceleration of public capital works, including many in the amenity and health fields; special employment schemes involving environmental public works and agriculture; and a further expansion of industrial training. It has also seen increases in industrial incentives to preserve Northern Ireland's differential over the other assisted areas; special measures to help the liquidity of retail and service businesses; and a big contribution to the expansion scheme of the Belfast shipyard.

The House—and particularly hon. Members with Northern Ireland constituencies—will be aware that the province has had serious and stubborn economic problems for many years, particularly evident in high and localised rates of unemployment. The latest unemployment figures recorded a fall, but 38,000 people—that is, 7·3 per cent. of the labour force—are still out of work. Thanks to the good sense and determination of management, trade unions and work people, industrial production has been very little disrupted by the prevailing situation. Ulster industry is still very much in business, and asks no more than to be given an equal chance to compete for orders with suppliers elsewhere.

The record over the last few years and to date shows that performance and delivery will be maintained despite the political situation. We have current inquiries from important foreign investors who are attracted by what Northern Ireland has to offer in terms of financial inducements and a highly trained labour force. Currently we have one firm commitment to come to Northern Ireland. In this situation it would be doubly unfortunate if buyers in Great Britain should decide to switch their orders away from Northern Ireland simply on the grounds of general and unsubstantiated fears that the orders would not be fulfilled. I would urge anyone contemplating such action to give his Northern Ireland supplier an opportunity to discuss the situation, preferably by visiting Northern Ireland, where he could see and assess things at first hand rather than through the eyes of the television camera.

I now turn to the Bill. Clause 1 increases by £150 million the existing limit of £200 million on Northern Ireland's borrowing from the National Loans Fund. This is done by amendment of Section 35 of the Finance Act, 1970, which contains a provision for £200 million to be made available to Northern Ireland in £50 million tranches by order subject to affirmative resolution. Last Monday night the final £50 million portion was made available. It is therefore convenient and timely to provide in the Bill for further drawings in the years ahead. The effect of the clause is that the limit on loans is raised by £150 million on enactment.

Provision is also made in the clause for up to a further £100 million by order. The Northern Ireland Government pay interest on the loans they draw, and use them principally for on-lending to local authorities and public service bodies. The biggest single purpose for which the loans are employed is housing, through the agencies of the Housing Executive and the new town commissions. That accounts for almost 50 per cent. of what is currently being drawn. The remainder goes in roughly equal parts to the Finance Corporation, the Electricity Board and the local authorities for their general capital programmes. Loans from the National Loans Fund are not tied to any particular expenditures or programmes, but must be for purposes that the Treasury agrees to be capital expenditure.

Clause 2 gives my right hon. Friend the Secretary of State statutory approval to come before Parliament in the normal course of the appropriation and supply procedure for the voting of a grant-in-aid to the Northern Ireland Exchequer. Any grant or grants under the clause will therefore add to the existing sources of revenue of the Northern Ireland Exchequer. The grants will not be specific to particular decisions or programmes; they are concerned with funding and not with expenditure, so that both the grants under this clause and the loans under Clause 1 rank as transfers within the public sector, and do not themselves constitute public expenditure. Decisions affecting expenditure will continue to be taken as before, and the control of expenditure and the departmental accountability of the Northern Ireland Departments will continue.

There will, of course, be an overall relationship between the total agreed expenditure of the Northern Ireland Exchequer and the size of any grant-in-aid, and it is in this light that the approximate figure of £60 million estimated as likely to be required in 1972–73 should be regarded, rather than as an estimate of the cost of particular measures and expenditure decisions.

Clause 3 seeks to repair what hon. Members on both sides of the House have rightly described as a deficiency in the Northern Ireland (Temporary Provisions) Act, 1972. The prorogation of Stormont has left a hiatus in the parliamentary scrutiny of the accounts. These would normally have been subject to the examination of the Public Accounts Committee of the Parliament of Northern Ireland. The Government recognise the need to ensure proper and continuing accountability, and Clause 3 requires that the appropriation accounts of the Northern Ireland Departments and the other accounts defined in the relevant sections of the Exchequer and Audit Act (Northern Ireland), 1921, shall be presented to this House if they relate to 1971–72 or to any other financial year ending during the currency of the Temporary Provisions Act.

In practice this means that the appropriation accounts, and the trading and other accounts, and the reports of the Northern Ireland Comptroller and Auditor General will be presented at Westminster. The appropriation accounts, and the Comptroller and Auditor General's reports on them represent the major volume; but an important feature of the trading and other accounts, presented under Section 22 of the Act, is that they also contain the Comptroller and Auditor General's comments on any other accounts which he has audited and on which he has seen fit to make a substantive report.

The Minister states that the accounts will be presented to this House. Does that mean that they will be presented to the Public Accounts Committee or the Public Expenditure Committee for examination by hon. Members?

It means presentation to the Public Accounts Committee for examination by hon. Members.

Does that mean that accounts which would normally have been presented at Stormont, available to the Public Accounts Committee there and for scrutiny there, will now be presented here?

It means that those accounts arising from expenditure and activity in 1971–72, the financial year which ended during the currency of the Temporary Provisions Act, will be presented here. Similarly, if that Act should extend over a period during which the current financial year ends, those accounts arising from activities now going on will also be presented here. I think that that covers the gap that would otherwise arise.

The volume also lists all the accounts which are audited or examined by the Northern Ireland Comptroller and Auditor General, so I think that covers quite effectively the gap which hon. Members have rightly pointed out.

Therefore, within on the one hand the limitations imposed by the Temporary Provisions Act and, on the other, the wide-ranging powers of the Public Accounts Committee under Standing Orders, it is intended by Clause 3 to provide for appropriate and continuing public accountability while the present arrangements are in force. The clause deals with the specific matter that has caused some comment and criticism.

The Bill is an interim measure. It does not reflect the longer-term plans which are related to constitutional and political development in Northern Ireland. It is as an interim measure that I commend it to the House.

The Minister has given us a great deal of valuable information about the economic situation in Northern Ireland, which it will be most important for us all to read, particularly in the context of the appropriation accounts that we shall be considering in the near future. It follows that the Minister is the person to give that information.

I should like to concentrate on the Bill, and if my hon. Friend the Member for Salford, West (Mr. Orme) catches the eye of the Chair he will pick up many of the Minister's points and perhaps develop them.

The Minister explained that earlier this week in an order we provided a further £50 million from the National Loans Fund under Section 35 of the Finance Act, 1970, to the Northern Ireland Exchequer. It was the last bite of that cherry. The Bill increases the total to £350 million.

It is well to put in perspective the whole question of finance for Northern Ireland. It is also as well, as we approach the point of decision by the Government of this country, that we should obtain the facts of finance as well as of many other matters. It is part of the realism that we all talk about, quite correctly, the realism that we shall eventually all have to face up to.

Paragraph 67 of the Green Paper, "The Future of Northern Ireland", the paragraph which talks about the finance of Northern Ireland, tells us that loan advances to the Northern Ireland Government amounted to £65 million. We note that the estimates for 1972–73 are £100 million, a great increase in the course of a year.

Other information about the loans is given in paragraph 32 of Cmnd. 4998, "Northern Ireland: Financial Arrangements and Legislation". I deduce from the information in that paragraph that we are concerned here only with the on-lending. I should like information from the Minister about that, because I note from that paragraph that some capital expenditure is provided for by the revenue of the Government of Northern Ireland themselves. What is the distinction between the capital expenditure that comes from revenue and the capital expenditure that comes from the National Loans Fund money provided for the Northern Ireland Government? It may be that there is no distinction between the two, that it has arisen in an ad hoc way, but it is important for us to know for what purpose the Westminster Parliament provides the money from the fund.

The sum of £350 million is the new limit of the amounts provided from the fund. What control does the Treasury have of the sums to be made available after allocation? Is it done simply through the Public Expenditure Survey Committee in the first instance or is there any control afterwards of the expenditure by Government Departments? In this country the Treasury keeps a close eye on the expenditure of money after it has been allocated by PESC. Is there any such control of the allocation for money provided in this way to Northern Ireland?

I notice from the accounts that have been provided that interest is paid. What interest is paid by the Northern Ireland Government? As the Minister of State has explained, the bodies to receive moneys as on-lending are the local authorities. The Minister of State told us that a large amount of the money goes to the Housing Executive and to the new electricity board arrangement. It is some months since we approved by order the setting-up of a new electricity organisation for Northern Ireland, which took over what I think amounted to four organisations, the major function being co-ordination. As I recall, the Belfast and Londonderry organisations had been separate. There is also, although the Minister of State did not mention it, perhaps because he was only paraphrasing the list, the Northern Ireland Transport Holding Company.

Those are the major groups which I noticed. It was with surprise, therefore, which illustrates our lack of knowledge of this matter in the House, that I heard that some of the on-lending went to the Northern Ireland Finance Corporation. A few months ago, when the Northern Ireland Finance Corporation was set up following the Cairncross Report, I recall that a sum of money was supplied for it to operate with. Does that mean that the British Exchequer was providing on-lending money to the corporation as a starter, and that it is possible now to provide more money as a result of the action which we are taking today? Or are we talking about the same money? I am seeking to find out the method of providing money to the Northern Ireland Finance Corporation. This is a valuable corporation and an example of what we might do in Britain again. I remind the House that the Industrial Reorganisation Corporation, which was set up by the Labour Government, was shut down by the present Government, who have now had to re-introduce means of providing money to industry via the Industry Act, which was part of the change of heart of the Government during the course of this year.

The provision of money by central Government to industry is part of the development that one finds throughout the Western world. It happens everywhere and it is a dangerous political party which says that it will never do it. It happens everywhere; all parties find themselves doing it. The Government are doing it in Northern Ireland.

I am concerned about the control which the Government have. Under direct rule the Government have a fundamental responsibility for the money provided to private firms through the Northern Ireland Finance Corporation. I am anxious only to know what control Westminster has, as Westminster has fundamental responsibility, over the money which the Minister of State has told us goes to the corporation. In that respect, my hon. Friend the Member for Salford, West (Mr. Orme), who is sitting with me on the Opposition Front Bench, will be asking questions and dealing with the situation on the ground in Northern Ireland.

I was interested in the International Engineering Company in Belfast, and when I went to see it I found that it was ICL. It had been set up in the days of the Stormont Government. I understand that the Northern Ireland Government are a major shareholder and provide money for the International Engineering Company in Belfast. Will it get its money through the Northern Ireland Finance Corporation or from it, or will it get it in some other way via the on-lending which we are making to the Northern Ireland Government?

It is important, if Governments are to become involved—and I think there is no option but for them to do so—in the running of individual firms, that there is not just accountability at the end of the day but, whether we agree with it or disagree with it, provision for us to know what we are doing and how we are doing it. The International Engineering Company, which was formed out of ICL, provides some valuable jobs in Northern Ireland of the right sort. I understand that some discussions are to take place between that company and Harland and Wolff about the provision of a computer, which would be of value to the shipbuilding industry but which would be at ICL.

I know that hon. Members from Belfast will be very interested in that matter. But what is the machinery for this to be done? The Government are shareholders in both Harland and Wolff and ICL. If it is to the advantage of people in Northern Ireland, and Belfast in particular, that there should be a computer, then the matter is in the hands of the bosses, who are the Government, of the International Engineering firm and the firm which would make the computer. It should not be too difficult for the same bosses, maybe in a different guise, to get together.

The Treasury has laid down criteria over the years for public corporations. It is now 25 years since these public corporations, which we now choose to call nationalised, were set up and given some sort of criteria. Then there came the work of the Select Committee on Nationalised Industries. There are not many hon. Members present to hear me say it, but in my view it is one of the best Select Committees to develop over the last 20 years. What it has to say is of value to the people running the industries. Out of its work there came the 1961 White Paper on the financial and economic obligations of the nationalised industries—I will not go into the precise rubric which was laid down in that White Paper. From the Labour Government came the White Paper of 1967—"Nationalised Industries—a Review of Economic and Financial Objectives."

Throughout this period, the social obligations of public corporations have been discussed. People cannot justly say, "Is not it terrible that the nationalised industries do not make a profit?" if the Government tell them to carry out operations on which nobody could make a profit. Arising from that kind of situation, the corporations receive grants towards their provision of social services, and this enables their accounts proper to be judged on their merits, through discounted cash flows and the rest, which the hon. Member for Belfast, South (Mr. Pounder) understands in practice, unlike others of us who use them in a different sense.

Each of the boards of the nationalised industries is given an objective. For example, the objective of the North of Scotland Hydro-Electric Board is to make 6 per cent. net per annum. That is laid down over the next few years. I will not list the objectives that are laid down for the other nationalised corporations. What I am driving at—I have eventually got to the point—is, do we do this for the public corporations in Northern Ireland, for which we are now supplying another £300 million through the National Loans Fund, which is then on-lent by the Government of Northern Ireland to the individual boards?

May I ask one question in this connection? As a result of pressure from both sides of the House the Minister has been good enough to tell us about public accountability. I shall say a word about that in a moment. If we are objective about it, it is one of those matters that had to be left for deeper consideration in the Government's haste to impose direct rule. However, I have searched diligently this week trying to find in the various accounts to which bodies the money has been on-lent. I have not been able to find out. That may be a deficiency on my part. But I find on page 4 of the Financial Statement for 1972 that under "Public Debt"—or so it seems because loans and advances are made—money goes to the Northern Ireland Housing Executive, to the Government Loans Fund, which seems to be the on-lending agency, to the Craigavon Development Commission, to the Antrim and Ballymena Development Commission and to the Londonderry Development Commission. Then there is the Capital Purposes Fund. Neither in that nor in the rest of what I have looked through this week do I find mention of the new electricity organisation. Nor do I see any reference to the Transport Holding Company. It may be that this information is available somewhere and that my failure to find it is a deficiency on my part.

When one looks at the accounts relating to issues from the National Loans Fund in 1970–71, whereas for the rest of the United Kingdom there is information which accountants and politicians concerned in running local government and public corporations would revel in, all that one finds is loan transactions appearing in the National Loans Fund Account, in respect of which no account is included in this volume relating to the Northern Ireland Exchequer. In the one book giving the kind of information that one is seeking, one does not find it. I have not been able to find it anywhere else. It is important and it should be available. It may be that I have been looking in the wrong place. But I should like some help on that not just for the purposes of this debate but because hon. Members should be able to obtain this information easily.

On local government, is there to be any different method of allocation as a result of the new local government bodies which have been set up and for which there were to be elections? I shall say more about that in a moment. There are new local government bodies in Northern Ireland. Is procedure for on-lending to them by the Northern Ireland Government to be the same, or is it to be changed in any respect?

Arising out of that is the fact that, regrettably, there have been no local government elections. Who is to be the responsible person in law for these new local authorities which are being set up? I ask the question not because I believe that this should be the way, but are commissioners appointed who will be responsible for these local authorities? We are supplying the money. It is important that we know the Government's thinking in this respect.

As I said, my hon. Friend the Member for Salford, West will ask and discuss many of the questions which arise on the ground in Northern Ireland. I said that there were only two that I wished to ask, and I have asked one of them.

My second question relates to the Macrory reforms. As a result of orders in this House we have set up area boards. We discussed how people were to be allocated to these boards. It has been brought to my attention that on one area board in the west of the Province, out of 25 people on it, 17 are Protestant and 8 are Catholic. I am told that in the area the balance of the population is the other way round. I am the first to say that to allocate people to any sort of board on the grounds of religion would be foolish and that to have a statutory Protestant or a statutory Catholic would also he wrong. However, it has been put to me that in that part of the Province it stands out clearly that is under-representation of the Catholics in the area. It has been put to me, "It is the same old story. Everyone talks about reform and about putting matters right. We have had Macrory and the setting up of the area boards. But at the end of the day nothing is different when it comes to the kind of person who finds himself on an area board." I hope that we shall have some comment from the Government on this point, since these matters are probably of greater importance to people in Northern Ireland than the overall financial questions that I am asking. However they have to be asked from a House of Commons point of view, and I shall return to them.

In Clause 2 the Bill talks about grants and says that they will be about £60 million. The clause refers to grants-in-aid. The Minister spoke about them. May we have some information about these grants? When I first looked at the Bill I thought that these were local government grants. I began looking at the Bill in the context of block grants, percentage grants and unit grants. But is that so? If they are not just local government grants, what other forms of grants are implied and how do they differ from the system here?

What control does this House have over them? As I understand it, these payments are extra. They are on top of the £133 million about which the Minister spoke earlier this year and which was noted in the White Paper. Are we now saying that this is not £133 million extra to Northern Ireland but more like £200 million, or is it subsumed in the earlier figure of £133 million referred to by the Minister and in the White Paper? Then again, what is this extra money for? I imagine that some of it will be for additional pay awards, but it will be interesting to know about the rest of it.

Moving on to Clause 3, the Minister has given us a great deal of information about public accountability, for which the whole House is grateful. It is a point that we raised earlier. The hon. Gentleman has explained what is meant by "presenting accounts" to the House. May I raise one matter in respect of this? In past months there has been much talk about how we are to handle Northern Ireland business in the House. I confess that I find myself looking at it differently now, in November, from the way that I looked at it in July. I suppose that that is inevitable because a changing pattern of legislation is coming forward. But on the subject of public accountability, I presume that these accounts will be able to be looked at by the Public Accounts Committee in this House. I choose my words carefully because the selection of Members to serve on the Public Accounts Committee is not for a Government Department. Nor is it for the Opposition. It is done in a House of Commons sense. It is important that people with knowledge of Northern Ireland should be on the Committee in some way or another that would enable them to investigate these accounts. I have no clear idea of how this should be done, I only know why it should be done. Perhaps the Government, through the usual resources at their control, can look at this.

I am mainly concerned about the National Loans Fund and the questions I have been asking are directed towards that. Large sums of money are being provided by the Westminster Parliament and it is important that we should have the information readily available so that we know how the money is being spent. Above all, it is important for all of us to get our facts right. I do not look at this like some Irish absentee landlord looking at the peasants and saying, "How good we are to provide money for the poor." I am simply looking at this from a House of Commons point of view and saying that large sums of money are provided and we should know what they are. It seems that no one really knows but that it is a lot of money is for sure. Whenever I try to work it out I get my arithmetic wrong but it is something between £200 million and £300 million. We have to take into account the expenditure as a result of 18,000 troops in Northern Ireland.

It is important to look at the reality of the situation from a financial point of view. We must note the hard words spoken by the Prime Minister in Northern Ireland yesterday. Paraphrasing his hard remarks, what he said very firmly was that if anyone wants UDI there will not be a penny of the £200 million. The right hon. Gentleman may have been using the £200 million in one context. It is more than that. That is yet another reality which we will have to face up to. It is the taxpayer of the United Kingdom, and that includes the taxpayer in Northern Ireland, who is concerned with the provision of this money.

We would be foolish if we did not face up to another reality, which is that increasingly people in this country are questioning the worth of this expenditure. I make no value judgment on it; I simply say it is happening and we should take it into account. When a few months ago an attempt was made on the life of Mr. William Craig, many people here—I was one—thought how terrible it was. I said so at the Labour Party Conference. It made the people of this country say, "How terrible. What a country it is we are trying to help." The same people will be saying the same thing this morning when they hear that those whom we are attempting to help have attacked the wife of a Stormont Member of Parliament. They must be a brave crowd to attack a woman! Just as we attacked the attackers of Craig, so we do the same thing now. It is not irrelevant to the provision of money because this simply weakens the resolve of people here.

There has been one important aspect of reality and for this I thank the Minister of State. He has given us much information about the general financial situation. If he can help us on the National Loans Fund provisions I should be grateful. We must consider the money we are providing to Northern Ireland and bear in mind the need for accountability to this House.

Speaking as an Ulster Unionist Member I welcome on behalf of other Unionist Members and everyone in Northern Ireland the generous provisions made in this Bill. As the Minister of State pointed out, the sums involved are considerable—£350 million is the increase in the limits set in the Finance Act, 1970, on the sums to be advanced by the National Loans Fund to the Northern Ireland Exchequer. I was a little disappointed that we did not receive more details about the way in which the money is to be allocated. We welcome the statement that a large proportion of it is to go towards housing and that other sums are to be made available to the Finance Corporation to assist industry.

Surely when such massive sums are being allocated, when in previous debates the same figures have been quoted, we might have expected to hear a little more of the detail? I am not talking about accountability, as did the hon. Member for Leeds, South (Mr. Merlyn Rees). I am talking about the ordinary methods of dealing in this House with appropriations and estimates for future expenditure. Some indication might have been given about the estimates on which these calculations have been made.

Will my hon. Friend say something about the Government's thinking on how this money is to be serviced—that is, the source from which repayments of capital and interest will be met? In so far as money will be spent on housing which we badly need, do the Government expect that the rents from such houses will be adequate to pay the interest, which at present rates will be heavy, as well as repaying the capital involved? In so far as the money is made available to industry, will there be an element of subsidy to new industries and to enable existing industries to expand? Will industry pay the full commercial rate of interest or will there be help in servicing the loans?

It will be seen that the money being made available falls under two clear heads. First, very large sums are required in Northern Ireland to restore the damage of the last three years. I have seen the Belfast Co-operative building in my constituency attacked three times. Millions of pounds' worth of damage was done when the main building was burned down. The Prime Minister passed what is now a vacant spot where this magnificent building stood. It was moved and set up again nearby. That building has been attacked twice in the last few months. The damage done to shops, factory premises and so on throughout Northern Ireland is substantial. This is one of the first claims of Northern Ireland on the Treasury. It is a claim we are not at all happy to make but which nevertheless falls upon the British taxpayer.

Secondly, and perhaps more fundamentally, there is the need of industry to meet the traditional problems of Ulster which we have often debated. Problems are arising from the rundown of the traditional industries, like shipbuilding and linen, and increasing mechanisation in industry and agriculture. They have led to an extremely difficult employment situation in Ulster which many people believe to be one of the root causes of the unrest and rioting, which has been escalating since 1969.

If these problems are to be dealt with at source, public money must be made available—and the Bill makes public money available—to attract new industry to Northern Ireland. I welcome what my hon. Friend the Minister of State said when he referred to the industry which has approached him and which is considering setting up in Northern Ireland. It was estimated before the troubles commenced that we needed three or four major industries to set up factories in Northern Ireland each year merely to keep up with redundancies from the traditional industries without making any inroads on unemployment. Substantial sums of money will need to be spent on building advance factories, rate subsidies and other inducements to persuade firms to come to Ulster. Since Stormont has been suspended, this Chamber is the only place in which the matter of financial provision can be considered. I expect more details about finance to be laid before the House by the Government.

I wonder how individual firms are to be assisted. My hon. Friend the Minister of State referred to Harland and Wolff. I particularly welcome the sums which have been devoted to modernising that great shipyard. It is one of the finest shipyards, not only in the United Kingdom, but in Europe. Its building capacity, with its dry dock and giant crane, is equal to anything to be found in the world, even including Japan. Ships of up to 1 million tons can be laid down and built in the yard. With the new fabrication sheds, this places the Belfast yard in an enviable position among the leading shipbuilders in Europe and elsewhere.

The hon. Member for Leeds, South commented on the order for the computer. It has been said that ICL, an international company with a large factory providing considerable employment in Northern Ireland, is one of contenders for the order. Has my hon. Friend the Minister of State anything to say about this matter?

That leads me to a more fundamental matter. What degree of control do the Government intend to exert over companies such as Harland and Wolff and ICL through which large sums of Government money are invested? My hon. Friend the Member for Down, North (Mr. Kilfedder) will, if he gets the opportunity, deal with this matter in more detail. It is sufficient for me perhaps to say that, while I should not like to see day-to-day interference in the management of firms like Harland and Wolff and Short Brothers and Harland. I should like to see at the end of the year some form of accountability to this House and some degree of control over companies a large proportion of whose finance comes directly from Government funds.

As far as I know, the company is no longer known as ICL. Another company is being formed. We should know something about this matter in terms of public accountability. How does it get its money?

It is now IEL.

My hon. Friend the Member for Down, North, in whose constituency the company is situated, will deal in more detail with this matter.

I do not want to see interference in the day-to-day running of Harland and Wolff. For a firm engaging in international business as competitive as shipbuilding, it is important that it should be able to pick the best machinery for the job. The decision should be left to the experts. They will assess the tenders. They must be free to take what they judge to be the best commercial decision. However, hon. Members must be told how they arrived at their decision, and there must be accountability of how these large sums have been spent.

Part of the money being made available to the Finance Corporation should perhaps be made available to the aircraft industry. A firm in my constituency, Short Brothers, has drawn substantially on Government money. We all know the difficulties of the aircraft industry and the need to rationalise it, not only in Britain, but in Europe. This subject has Common Market implications. What will be the result for Short Brothers? It is an ideal employer of labour in Northern Ireland. If the employment situation in Short Brothers were to be adversely affected, it would have very damaging repercussions in Belfast, not only directly among those employed in the firm, but among the many people dependent on it, including shopkeepers.

It is a matter of concern that the diversification which Short Brothers attempted has come to an end. The factory at Newtownards has been closed. I wonder whether adequate consideration is being given by the management to the diversification of the company. It is engaged on very valuable work—first, podding the Rolls-Royce engines for Lockheed; secondly, developing the Skyvan and Skyliner, which appear to be doing well; and, thirdly, on the missile side.

Should not a longer-term view be taken of the future of employment in Short Brothers? Is sufficient support being given to the chairman and managing director of the company? In what way do they account for the manner in which the money advanced has been spent? Are the accounts of the firm to be made available to hon. Members so that we can scrutinise and consider how public money is being spent and whether it is in the long-term interests of the firm? Information on these matters must be made available to the House or to the appropriate Committee of the House which scrutinises and vets the expenditure of the money involved.

I turn to other matters covered by the Bill. The money is to be spent, not only on industrial development, but on industrial training. That is vital to the future of Northern Ireland, and I hope that my hon. Friend the Minister of State will say something about it.

The companies I have referred to have been playing their part in industrial training, and quite a bit of public money has been spent there, but does this provide adequate breadth of training? After all, the future of Ireland depends very much on the availability of a highly trained, skilled industrial force. What thoughts are being given to extending the technical college to assist other companies to establish their own training schemes so that young people in Ulster, who have suffered most from the troubles of the last three years, can acquire skills which are suitable to the 1970s and the hopes of expansion of industry which come from our entering the Common Market?

I will leave that subject of industry to turn briefly to housing. Perhaps the sector which has suffered most from the troubles in Northern Ireland is that of housing. We have some shocking slums in Belfast. My hon. Friend, during the past six months, since he has been acting as one of the Ministers responsible for Northern Ireland, has, I know, seen some of them. I refer to parts of my own constituency where the Prime Minister was travelling yesterday; I refer to those areas where the rioting has been most severe—in the New Lodge Road, Falls Road, and Shankill Road, well known to the hon. Member for Belfast, West (Mr. Fitt) who represented them in the Stormont Parliament.

Very generous sums of money must be made available for the housing industry. Is my hon. Friend satisfied that the portion of money which is to be spent on housing and industrial building will be adequately spent by the construction industry in Northern Ireland? When such considerable sums of money are to be devoted to the construction industry, some consideration should be given to the adequacy of our construction industry in Northern Ireland and to the demands which will be made on it in the years ahead.

Other items which are included in the accounts and which other hon. Members will mention in the debate include health and welfare. We are proud of our hospital schemes, particularly the Royal Victoria Hospital in Belfast and the City Hospital. I feel that my hon. Friend might deal just a little more with the hospitals and the amounts to be spent under this part of the accounts. Because we have such a small representation from Northern Ireland it is important that those of us who do come from there should be able to examine the ways in which public money is spent in Ulster, and to do so with the same degree of care as would be given them if the money were being spent anywhere else in the United Kingdom.

Part of the sums are spent on road schemes, and perhaps my hon. Friend would say what the Government's plans are for expenditure on the roads in Northern Ireland. What are the plans for the motorways and dual-carriageway roads? If the Province is to be adequately developed industrially, success will depend primarily on having a good transport system, and this basically turns on the adequacy of the roads which we have, not only the main roads in Ulster and those connected with the M1 and M2, but also other roads in the more remote parts of Northern Ireland, particularly those border areas where one hopes to see some new industry being set up in order to deal with their unemployment problems which, in many ways, are more difficult and intransigent than those in the City of Belfast and the new city which we are attempting to set up in Northern Ireland.

The hon. Member for Leeds, South referred to the security situation. I feel, as, indeed, I am sure, hon. Members on both sides of the House do, that it is fundamental to our problems. The hon. Gentleman referred to the deplorable attack on Mrs. Currie last night. I agree with what he said. It is a very tragic aspect of the problems of Northern Ireland that many women have suffered because of them. I have figures: 76 women and 40 children have been killed in recent months in Northern Ireland—killed. Till we can deal effectively with terrorists who are seeking to achieve a political end by a vicious and deliberate terrorist campaign, till that can be adequately dealt with, then perhaps it is superfluous to talk in this House, as we are, of the expenditure of sums of money for building up industry and the like. Perhaps my hon. Friend would add a word on this subject.

I read with great interest the remarks of the Prime Minister following the luncheon yesterday. He was issuing an appeal to the public in Northern Ireland to end the violence, but I would just add one comment to that. How does my right hon. Friend the Prime Minister expect the ordinary man in the street to deal with armed terrorists? How can he deal with the gunmen? Surely that is the job of the security forces. I hope that my right hon. Friend does not expect too much from the ordinary man in the street. The ordinary man in the street is being intimidated; he is being terrorised by people who, motivated and often assisted from outside Northern Ireland, are acting in a deliberately seditious manner.

We must turn our attention to the problem of outlawing the IRA throughout the length and breadth of the United Kingdom so that no longer can the IRA hold parties in Britain to raise money to buy bullets to shoot soldiers in Northern Ireland. It is a scandal; an absolute scandal. It is no wonder that a body like the UDA is set up, when many people doubt the sincerity of the Government in dealing with this problem, because they see that the Government are not even prepared to outlaw the IRA in Britain.

I do not want in this debate to elaborate on that topic, but it was mentioned by the hon. Member, and while we welcome all the Government are providing financially, and while I listen carefully to what the Prime Minister says, we would ask the Government to remember that the problem we are dealing with is perhaps a little beyond the control of the ordinary man in Northern Ireland.

I finish by welcoming once again the very generous financial provisions which are made to Northern Ireland. I hope that many of the points of detail will be covered as closely as possible by my hon. Friend when he is winding up the debate. Perhaps, if he is not able to deal with them in sufficient detail today, we may have a full debate on the financial affairs of Northern Ireland another time, when he can deal with these matters which have caused concern and which have been commented upon by the hon. Member for Leeds, South and others and myself in this debate and on the loan order earlier this week.

From the speeches we have heard this morning from the hon. Member for Leeds, South (Mr. Merlyn Rees) and the hon. Member for Belfast, East (Mr. McMaster) it will be clear that there is a degree of unanimity, which, I think, will be shown further as the debate proceeds. We should like to have spelt out to us the exact financial relationship between this House and the Government of Northern Ireland. For many years we have had figures given to us: once we heard of £75 million and it went to £150 million, and then it was £200 million and £300 million, and now it is £350 million.

There are in Northern Ireland those who will dispute all the figures. The leaders of the Vanguard movement would argue that there is absolutely no truth in saying that Northern Ireland is being subsidised to the extent of £200 million or £300 million per year, because the figures are used to make the case that Northern Ireland is being subsidised from this House. I believe that there are vast subventions of money from this House to Northern Ireland, but as yet no one knows the exact figure.

It is not only a question of financial provision to Northern Ireland; there are serious political overtones, because once the figures are clear in Northern Ireland as to the financial relationship, then people can decide whether or not they want to support a particular political ideology.

There may be people in Northern Ireland who are labelled as Republicans and who, when they see the exact relationship, may wish to support it. There may be others on the Vanguard, UDA or Unionist side of the political fence who, when they are fully aware of the financial implications, will not want to vote "Yes" in the plebiscite. Until the figures are made clear there will be a great deal of confusion.

There is no Government in Northern Ireland to spend the money which is channelled from the United Kingdom, and the local authorities are on their last legs. The members of local authorities have, understandably, lost much of their interest, because they are not sure what form the new council elections will take and whether the system of proportional representation will be adopted, as has been promised. A great deal of responsibility, therefore, devolves on the elected representatives to this House in querying how, when and where the money is being spent.

I understand that people have been appointed by the Secretary of State to area boards in Belfast and in the six counties, but they do not have the responsibility that elected representatives have. In areas of high unemployment the unemployed will expect their Members of Parliament to make representations about attracting industry to that area. They will not expect the same degree of attention from someone who has been appointed to an area board. In the spending of the money much more information should be made available to hon. Members who represent Northern Ireland constituencies.

I understand why the hon. Member for Belfast, East welcomed the Bill so vociferously. In his constituency there are two major industries—to which he never fails to give a "commercial"—which have received vast subventions. I do not quibble about that, because they are the linchpin of industry in Northern Ireland. I hope that any financial provisions will not be concentrated solely on attracting industry to Belfast. I live in Belfast and know just how serious is the unemployment problem there, but there is also a serious problem of unemployment throughout the rural areas.

The hon. Member for Belfast, East has rightly drawn attention to the necessity for training schemes being introduced and built up in Belfast to provide a pool of skilled labour, but it is necessary also to introduce such schemes in the rural areas. There is a tremendous need for industry to be brought to County Tyrone and Fermanagh. I recognise that a start has been made in Derry. I am perhaps asking rather a lot, but I should like to know what the Government have been doing to attract industry to areas of high unemployment in the Province. What type of industry do they envisage being able to attract? It needs to be labour-intensive industry employing a lot of unskilled labour, because a large pool of unskilled labour is available. That would immediately take up some of the unemployment and, in line with bringing labour-intensive industry to the area, a training or retraining scheme could be introduced for those who do not have the necessary skills to enable them to work in industry in Belfast.

There are no political divisions between the hon. Member for Belfast, East and myself on the question of the provision of financial aid to Northern Ireland. We both represent Belfast constituencies, where a great deal of damage has been done to industry and housing and even more to the people who live there. I regret that the hon. Member for Belfast, North (Mr. Stratton Mills) is not here, because I am sure that he would agree with me on this. Where shops and factories have been damaged or destroyed by explosions the Government have acted with great alacrity to compensate the owners. For example, the Government immediately made available to the Cooperative £10 million to restart the industry in another part of Belfast. I appreciate that speed is necessary, but I urge the Government to be as speedy in helping private individuals, particularly those who have lost their homes. Since 1968 and 1969 many people, Catholic and Protestant, have left their homes in Belfast because of intimidation. The houses remain unoccupied and the people who have left them have been given no compensation.

Some months ago the hon. Member for Belfast, North and I appeared before a committee set up by the Secretary of State in Northern Ireland to explain the tremendous hardship caused to people who were still attempting to pay off the mortgage on their old home while at the same time having to pay rent for the house in which they were now living. We were told that the Government recognised the urgency of the matter—but that was six or eight weeks ago. Yesterday morning I was in touch with the Housing Executive, but nothing has emerged from that body. In the spending of the money consideration should be given to ordinary people who have suffered tremendous loss because of the political chaos. They should be given equal treatment with industry.

The hon. Member for Belfast, East rightly drew attention to the needs of hospitals and the health service in Northern Ireland. Some hospitals, even major ones, would say that they are not getting adequate financial provision. Naturally, I think first of the Mater Hospital, the City Hospital and the Royal Victoria Hospital. There is a great need to develop the hospital services in Belfast. I am the first to admit that hospitals in Belfast can be compared with those in any other city in the world. The people working in the health service in Northern Ireland are dedicated people. Many improvements could be made to the heart unit in the Royal Victoria Hospital in which there is a dedicated surgeon who is renowned throughout the world for his professionalism and brilliance. The important work done at this hospital would be greatly helped if he were to be given further financial assistance.

I hope that when a committee is set up it will be composed of Northern Ireland Members, but not to the exclusion of other hon. Members because, after all, he who pays the piper calls the tune so there would have to be on the committee people representing constituencies other than those in Northern Ireland. The experience, insight and knowledge of hon. Members representing Northern Ireland constituencies would be valuable on the committee.

In conclusion, I would say that this is not the time to engage in a full-scale debate about security, but one has only to know the situation in Northern Ireland to recognise how serious the problem is. The Minister of State is now almost resident in Northern Ireland, and he will be aware of the great distress which exists—the total fear, particularly in Belfast, where almost nightly people are losing their lives because they are either Catholics or Protestants. I may take an opportunity on some future occasion to illustrate how many people are involved. The vast majority of those who have been assassinated recently were Catholics. I am not pleading the Catholics' case only because they are Catholics but because I do not want to see anyone getting killed in Northern Ireland.

Last night there was a dastardly attack on Austin Currie's young wife in Dungannon. In all the Irish newspapers yesterday morning, and in some English newspapers, there were reports that Austin Currie would not be at home last night. Those who engaged in this dastardly, cowardly and brutal attack on a young defenceless woman with three young children at home must have known that Austin Currie would not be at home. In these circumstances, would it not be possible for the police or the security forces to keep an eye on houses such as Austin Currie's house, which is in an isolated part of the country and which has been attacked many times previously?

I recognise that the security forces cannot give adequate protection to every household in Northern Ireland, but where it is known that a house has been attacked previously and that attempts have been made on the life of Austin Currie, surely this could be done. Now we have had this vicious, brutal attack on his wife.

The hon. Member for Belfast, East talks of terrorism in Northern Ireland. He says that the security forces must do what they can to stamp out the terrorism and that people in Britain would be prepared to give adequate financial resources to that end. But he seemed to be selective in his condemnation of terrorism. He said that the IRA should be outlawed in Great Britain because it collects funds to propagate its campaign of terror. But surely other terrorist organisations in Northern Ireland, when money is being supplied for security forces, should also be prevented from continuing their activities. One only has to read the Irish newspapers this morning to see that the IRA did not like the fact that the Prime Minister did not meet its representatives yesterday. Last night, members of the IRA went out with all sorts of arms and fired thousands of rounds, not at the security forces but into the air, just to let the Prime Minister know that they were armed. They were showing their resentment by firing their guns into the air. The security forces should take it as being their prime and urgent responsibility to try to retrieve those weapons which were fired last night. Weapons held by any private army, whether the IRA, the UDA or the Vanguard movement, are a danger to the whole of society in Northern Ireland.

Of course I condemn terrorism of every kind, but I was being selective, because I was speaking almost as a lawyer. The reason for the trouble and disturbances in Northern Ireland is that the IRA, whether the provisionals or the officials, has set out with bombs and bullets to achieve a political end. The rest is reaction to it. More than 650 people have been killed and more than 7,000 have been seriously mutilated during the last three years. More than 90 per cent. of those killed were killed by the IRA, which boasted of it. Of course, this has provoked a reaction. It is only logical. It is human nature that there should be some retaliation. We have to get to the root of the problem, and that is those who are determined on the use of violence to achieve a political end, the IRA. These are the people who should be dealt with first and foremost.

I cannot agree with the hon. Gentleman. It seems from his remark, "Of course there has been a reaction", that he is almost apologising for the existence of the UDA. Any terrorists in Northern Ireland are a danger to the whole society and steps should be taken to prevent their activities, particularly steps against those terrorists who are known. The UDA has been engaged over the past weeks in a campaign of terror. The security forces should be quite certain that they are not seen to be acting in a partial way against one section of the community or one section of terrorists.

In the chaotic political situation in Northern Ireland even the provision of all this money cannot bring peace. The people of Northern Ireland should now stand up and be counted, to help to see what they can do to end terrorism. There can be no military solution. Military forces and security forces alone cannot end the campaign of terror. In the final analysis it will be the Catholic and the Protestant communities who will drive the terrorists from their districts and eventually drive them from Northern Ireland.

I know that the Minister is very much involved in the housing situation in Northern Ireland. I welcome the Bill but I appeal to the Minister to give urgent consideration to the payment of compen- sation to the thousands of families in Belfast who have lost their homes because of the present disturbances.

Like everyone who has spoken in the debate thus far, I warmly welcome the Bill. I was particularly glad to hear my hon. Friend the Minister of State pay such a fair tribute to the state of Ulster industry at present and the fact that it is still, despite all the adversity, very much in business.

One of the things that inevitably, by virtue of television cameras and reports, has had an effect on English would-be customers has been the sight of disturbances they see in their news programmes. Some have assumed that the whole of Northern Ireland is in this state and that orders are not being fulfilled. However, from information I have had from the Northern Ireland Chamber of Commerce, I think I am right in saying that as yet no one has failed to fulfil orders which have been entrusted to him by customers. A tremendous tribute must be paid to managements and trade unions and everyone in Northern Ireland who has kept the wheels turning.

If I may inject a personal note on this matter, I happen to be involved in an organisation in Northern Ireland which was bombed last Thursday. I got there on Friday morning to find the place back in business. There was hardboard in use and quite a lot of mess, broken glass, and so on, on the floor. But there was no question of taking the weekend off and starting again on Monday. We started the next morning. That is indicative of the whole determination of Ulster industry and commerce. I was very glad, therefore, that my hon. Friend referred to this. No praise is high enough for the way in which the trade union organisations in Northern Ireland have kept the troubles off the shop floor.

Inevitably, in any discussion on Northern Ireland, whether we are discussing a financial measure such as this Bill or something else, people will say that the thought uppermost in their minds is the security situation. It is very easy to become bogged down in the agony of terrorism. After four years of so much death, injury, destruction and suffering, inevitably people will be distressed and depressed. I may be an incurable optimist—although I do not think so—but I believe that terrorism will end, that peace will be restored and that Northern Ireland will be a first-class place in a few years, when all this damage is repaired and the economy is back on its feet again.

If I thought differently, I would emigrate, and the last thing I intend to do is to leave the country of my birth, when I have an absolute faith that we shall be back on the road in due course. I must stress that I totally deplore and deprecate terrorism, from whatever source and in whatever manifestation.

A statement by the Minister of State at a Press conference at Stormont on 27th July, to which he has already referred, contained a sentence referring to a matter which I assume will be covered by the Bill—tourism. He said:

"The importance of the tourist industry within the services sector is recognised. Looking forward to the resumption of the expansion in tourism, legislation will be made shortly which will provide for a new scheme of capital grants for hotel development."

Since there is a capital grant element in the Bill, is it reasonable to assume that tourism will benefit from the Bill?

A great deal has been said about the desirability, and indeed the vital nature, of having full and total financial accountability in this House for such monies as are granted to and spent in Northern Ireland. As one who for seven or eight years now has been trying to unravel the financial complexities of the arrangements between the Treasury and the Northern Ireland Ministry of Finance, I must say that anyone who has the idea that somebody somewhere is trying to be secretive is being very unfair.

The arrangements are enormously complex, totally interwoven, and the existence of the Joint Exchequer Board—I say this in no spirit of criticism—also adds to the difficulties of itemising what money is given to Northern Ireland and what it is spent on. I unreservedly welcome any efforts by any body to try to work out under any known head the financial arrangements between this House and Northern Ireland. Inevitably, people get the idea that someone is hiding something. This is bad, when I am convinced that there is no desire to be secretive in any way about the amount of money or the manner in which it is spent.

The report of the Public Accounts Committee has been mentioned. I realise that this is outside the scope of my hon. Friend's responsibilities—he will rightly say that he has enough to worry about without that—but, for the last two or three years, there has been a Northern Ireland Member—myself—on the Public Accounts Committee. I presume that we shall continue with this practice when the time comes, and that someone from Northern Ireland, as is the case with someone from Scotland, will continue to be a member.

I know that it is argued that there should be a sub-committee to consider erstwhile Stormont expenditure. I would not go that far, because there would be an equal case in relation to Scottish expenditure. I would advocate having two sub-committees or none at all. But it would be wrong to add further complications to the work of the committee by singling out Northern Ireland especially in this regard.

I want to turn briefly to the Northern Ireland Finance Corporation. My recollection is that, up to this Bill, one-eighth of the National Loans Fund was made available for the Northern Ireland Finance Corporation. I am assuming that this remains the same under this Bill.

The Northern Ireland Finance Corporation, although it has been in existence for a relatively short time, has been doing a good job. Its terms of reference are absolutely vital to Northern Ireland at this time, including the power to offer financial assistance to undertakings threatened with closure or contraction, and to help where there are reasonable prospects of solvency in the long run. This always raises the question whether the assistance should be primarily for manufacturing industry, or whether the retail industry and the distributive trades should benefit also.

The subject which keenly concerns Belfast members is the state of the city centre. The various memoranda produced by the shopkeepers show that they are going through a very lean period. It is not sufficiently appreciated that, in that relatively compact area which the IRA made a positive determination to destroy by last December, there are 10,000 jobs at stake.

There are always difficulties when one draws a line, such as for a rate rebate, when there is an equal case for helping those on the periphery. Could my hon. Friend be slightly more generous in drawing the boundary of the city centre for those who are to obtain financial assistance? The situation at the moment is very serious. However, I in no way minimise the Government's assistance already to city centre traders.

The Housing Executive lies very much within the ambit of this legislation. Perhaps in what I am about to say I shall not choose my words too carefully, and for this I apologise in advance. Anything that I say which may be remotely critical is not intended to knock the concept of the Housing Executive. It is a vast structure, which has existed a very short time, and it has had substantial and at times acute administrative difficulties in operating during the changeover period from the old local government structure to the new centralised structure, at a time when housing has been a major problem in Northern Ireland. One hopes that it will shake down and become an effective organisation.

But there are some very serious problems within the work of the Housing Executive. For instance, there is the situation relating to housing lists, which virtually do not exist any longer. As soon as a house is completed nowadays, before it has been handed over to the Housing Executive squatters take up residence. I understand that the Executive has done all it can do, which is to legitimise these squatters by issuing them with rent books when they are available. But it is serious that the housing lists, except for the emergency list, are in abeyance at the moment. I realise the problems and no doubt my hon. Friend will do what he can, with the help of the Housing Executive, to revalidate those important lists.

Yesterday at Question Time, my hon. Friend the Member for Belfast, North (Mr. Stratton Mills) referred to the Executive purchasing houses whose owners have had to leave and who have found it extremely difficult, if not impossible, to sell. I understand that a Govern- ment statement is hoped for fairly soon, and I hope that it will be sympathetic to this problem. People are moving away and leaving houses vacant because they cannot sell them except at ludicrous knock-down prices. It is serious that owner-occupiers should suffer this additional hardship. As I said yesterday, some arrangements should be made for the Executive to take over from building societies properties in troubled areas which, for good reasons, the mortgagor has left and which cannot be got rid of except at a knock-down price. This, too, could perhaps be added to the stock of houses taken over by the Housing Executive.

This morning I received a letter from a constituent who is moving out and who wanted to know whether there is any provision for financial assistance when moving house, not when moving from one property to another in Northern Ireland but when moving to England. My constituent's husband has a job in England and it will be very hard to sell the house. Presumably this sort of case will be dealt with in the working party report, but I should like to know what assistance is available for furniture removing and so forth. I hope that if this question cannot be answered now my hon. Friend will consider it later and give an answer at a subsequent date.

I should like to take up a point which my hon. Friend the Member for Belfast, South (Mr. Pounder) has just mentioned concerning the Housing Executive. I was in the House at Question Time yesterday when the Government were urged to help people who sought mortgages. Many people in Northern Ireland need houses for rent. I know that many would like to buy their houses, but, at the same time, more houses should be provided by the Housing Executive for rent by people who at the moment are living in the face of terror and have nowhere to go.

I know of many people in Belfast who are desperately trying to get out of what are known as terror areas but who cannot be accommodated by the Housing Executive. It is deporable that these people should have to suffer so much. The Housing Executive ought to spend more money on getting houses built. There is quite a bit of unemployment in the building trade in Northern Ireland. Certainly in North Down there are builders who would undertake more work, and these people should be employed on building more houses.

I have in my constituency a landlord who purchased rows of houses in what is now the Republican area of Belfast and which, believe it or not, is still regarded as a no-go area. He purchased those houses in order to provide a reasonable income for himself on retirement. Today he is seeking national assistance because there is no money coming from those houses. People are living in them but they refuse to pay rent. It is a very Irish situation that this poor man is being hounded by the Belfast Corporation demanding that he repairs these houses. In fact, summonses have been issued. The man cannot get into the area. I asked my hon. Friend's colleague, who is responsible for development, for police protection to be given to this man so that he could carry out the repairs himself. The noble Lord said that the police cannot provide protection for a landlord who wants to carry out repairs to his houses. That is a deplorable state of affairs. We hear a lot from the Prime Minister about Ulster people helping themselves, but I think they are the ones who need assistance.

I have often said that I deplore any violent or unlawful action by Loyalists. I condemn the IRA campaign, which has been going on for years, since long before the Loyalists demonstrated that they were not going to tolerate the IRA terrorist campaign without doing something to defend themselves. Apart from the beneficial effect of such action by Loyalists on the IRA, it also has a detrimental effect on public opinion in the rest of the United Kingdom.

I want to refer to the Prime Minister's visit to Northern Ireland yesterday. As I have long desired such a visit to be made I welcomed his decision to go to the Province and talk to the people. That, I gathered, was the whole purpose of the visit—not to engage in a public relations exercise but to talk to the people. I think it was foolish of him to go there and seek opinions from so wide a spectrum as possible and then refuse to meet representatives of the Orange Order and of Vanguard. How can he understand what those people are thinking unless he speaks to them? By refusing to meet them he annoyed people who are not in the Orange Order or in Vanguard, because they thought that he was adopting a high and mighty attitude.

He spoke in my constituency in the Culloden Hotel—a luxury hotel where the staff of the Northern Ireland Office stay, at great expense to the taxpayer. Speaking for myself, they are welcome to stay there. I am always glad to see Northern Ireland's hotels benefit in any way possible. But in that hotel my right hon. Friend made a speech in which he lashed the people of Northern Ireland. As my hon. Friend the Member for Belfast, East (Mr. McMaster) has said, does he expect the ordinary people to fight IRA terrorists with their bare hands? What can they do against the gunmen and the bombers? Remember, also, that the very atmosphere of Northern Ireland creates such tensions and frustrations that the people are driven to deplorable actions. Ulster at present is like a patient suffering from cancer and screaming to her doctor—Dr. Heath—because he has not stopped the spread of the cancer, and, because she is screaming hysterically, her doctor is castigating her and telling her to help herself and trust that in good time he will cure her. But time is not on the side of the patient or of the doctor. Time is not on the side of Northern Ireland or of this Government. My right hon. Friend's speech showed a lack of understanding the harshness of his speech was certainly not welcomed by the ordinary, moderate people in Northern Ireland.

On the 1 o'clock news yesterday a statement was put out, presumably from the Prime Minister's office, announcing that the Prime Minister had gone straight from Sydenham Airport to Short Brothers and Harland, where he talked to the workers who told him how they had prevented sectarian violence there. The strange thing is that the Prime Minister never visited Short Brothers and Harland yesterday morning. At 6 p.m. the BBC put out a statement withdrawing that news item. People in Northern Ireland rightly got the impression—

Order. Will the hon. Gentleman relate his remarks more to the Bill, which is about capital expenditure in Northern Ireland?

I shall try to obey your ruling, Mr. Deputy Speaker. I was saying that the Prime Minister had referred to the money which had been given to the Ulster people and had said what they should do in return, and I was pointing out that Ulster people may misunderstand my right hon. Friend's visit as a public relations exercise.

I welcome the Bill because it helps to tidy up a number of loose ends resulting from the hastily contrived Northern Ireland (Temporary Provisions) Act. The National Loans Fund is an essential part of the operation of central government in the country and the Northern Ireland Government has operated long- and short-term loans through the fund for local authority and general development purposes for more than 20 years.

The fact that larger sums are needed today is a measure of the quickening tempo of the five-year development programme, quite apart from the effects of the terrible destruction being wrought in Northern Ireland by the violence and bombing of the IRA. One of the Government's first acts in June, 1970, was to underwrite the five-year development programme. Since I say harsh things about the Government I should like to say now what a generous gesture that was when they were faced with so many difficult problems at the time. Of course, they were taking over what the Labour Government had said they would do financially for Northern Ireland.

Basically, the plan was to create more work and build more houses, and despite the terror campaign the efforts have been reasonably successful. As the programme gets into its stride—at the moment it is only at the half-way stage—with improved housing, more rapid slum clearance, road building, harbour extensions, urban and rural development, and aid to industry over the whole range of economic activities, it generates greater capital requirement. This is all to the good, and we are glad to see it. It might have been better to increase it slightly last year. At the same time greater flexibility in decision-making at local level in Northern Ireland, aided by wider borrowing powers, might have given greater scope to the superseded Stormont Parliament.

The old Stormont Parliament is frequently criticised, but we should remember that it never had the power or the money which the Government have for implementing their policy. It might have enabled Stormont to take some of the measures taken by the Secretary of State since last March. Of course, my right hon. Friend has the great advantage of direct contact with his Cabinet colleagues in the Treasury, which makes a great difference.

But Northern Ireland has been starved of money for years. One reason has been the lack of interest shown in the Province by successive British Governments. As a region of the United Kingdom, Northern Ireland did not get its fair share of the affluence of the post-war years, as I am sure hon. Members will agree. I agree that parts of Scotland and Wales and some parts of England could tell the same tale. Since last March we have seen in Northern Ireland a story similar to that about the Londonderry Commission. The commission was given three times the staff, who were much better paid, and four times the income of the Londonderry Borough Council. The commission has accomplished a great deal, but with the same liberal backing from the Government the democratically-elected Londonderry Borough Council would have had just as much success.

There is great confusion in Northern Ireland, as there appears to be in the House, over the subsidy figure of £300 million. In his speech yesterday the Prime Minister seemed to have amended the figure to £200 million. But whatever the figure, no one is clear about how it will be made up. Does it include increased borrowing powers provided by the Bill and the Northern Ireland loans order which the House discussed earlier this week? Is it part of the cost of the development plan, or is it additional money? What allowance has been made for Northern Ireland's contribution to the general wellbeing of the nation?

There is a great deal of confusion, and we look to my hon. Friend to clarify these points. Of course, the Bill provides for the laying before the House of accounts and reports which would normally have been laid before Stormont. I am glad to see that. With increased borrowing powers it is only right that the House should have full details and an explanation of just how the money has been spent.

Yesterday, at Business questions, I drew the Leader of the House's attention to Early-Day Motion No. 47, which stands in my name and which deals with the need for Harland and Wolff, which is in the constituency of my hon. Friend the Member for Belfast, East, to buy a British computer. I am sorry that the hon. Member for Hitchin (Mrs. Shirley Williams) is not here, because she also has an interest in supporting British computers. I demanded time from the Leader of the House to debate the Motion at an early date and he replied that as far as he could see I would be in order to raise the matter in today's debate.

Although it is vitally important to ICL that the Belfast shipyard should buy or rent one of their 1903 series computers it is even more essential to the future of International Engineering Ltd. at Castlereagh in my constituency that the shipyard should opt for the ICL computer. IEL does not manufacture the computer but it makes the peripheral equipment which the computer requires. The value of the computer which the shipyard wishes to install is £300,000. The managing director of the shipyard, Mr. Hoppe, is reported to have said that the yard has decided to rent an American IBM machine for two years at a rental believed to be between £90,000 and £100,000 a year.

I do not know what will happen at the end of two years—whether the yard will then buy the machine and so waste about £200,000, no doubt of taxpayers' money, but about £30,000 of the computer order could have been accounted for by IEL, which employs 1,700 workers. The work is needed by the factory. More important, it is needed to keep IEL in the computer field, manufacturing data preparation and peripheral equipment which it has manufactured in the past when it was within the ICL group.

Northern Ireland's industry and economy benefit from the skill and ability which clearly exists at the IEL factory at Castlereagh. We are not talking here about private commercial firms. ICL, the Belfast shipyard, and IEL all have Government support and it would be fair to say that Harland and Wolff is virtually owned—to use the correct phrase—lock, stock and barrel by the British Government. The Government are an important shareholder in IEL and the remainder of the shares are owned by ICL, which is dependent on Government support.

The Government have made a point of their desire to maintain a British computer industry, as did the Labour Government. But what has happened in other cases where the taxpayers' money was involved? In the Computer Weekly of 31st August this year we saw one precedent. It stated that Glasgow University had intended to buy an IBM computer but that the Department of Trade and Industry had rejected that proposal and said that it wished it to purchase an ICL computer.

A document issued by the Northern Ireland Ministry of Commerce on behalf of my hon. Friend the Minister when IEL was established stated:

"The company will be looking for the fullest co-operation and backing of all personnel and the respective trade unions in order to ensure the success of the new venture."

IEL is a company in which 62·5 per cent. of the shares are held fey the Northern Ireland Ministry of Commerce. The statement says that my hon. Friend, then Under-Secretary, had said:

"Considerable effort has been put into this venture, which is of extreme importance in the Northern Ireland economic situation … the new company clearly has a significant contribution to make to Northern Ireland's high technology industrial capabilities. The immediate task ahead will not be easy. But the Government with its investment of some £2½ million believes that the new company, provided it receives the continuing support of all those concerned, is extremely well placed for a effective rôle in the industrial and economic future of the province."

How does that statement compare with what has happened? I wrote to my hon. Friend urging him to persuade the Belfast shipyard to purchase the ICL computer. His reply of 15th September stated:

"The Ministry was assured by the Harland and Wolff management that ICL was being given a full opportunity of persuading them of the merits of purchasing an ICL computer. It would have been inappropriate "—

an extraordinary word—

"for the Ministry to go further and attempt to direct Harland and Wolff as to their choice of equipment."

He rightly points out that in one sense the choice must be left to the commercial and technical judgment of Harland and Wolff, adding:

"I am sure that whatever choice the management finally settles on, they will have gone into all the very complicated issues very fully."

How does that compare with my hon. Friend's statement, when IEL, was set up in May this year, that it depended upon the continuing support of everyone? I ask my hon. Friend now to give that support to ICL and indirectly to IEL, which needs the work to keep its 1,700 employees fully employed.

I also wrote to my hon. Friend the Minister for Industrial Development, who showed in his reply of 2nd October that he had applied some pressure to the shipyard. He said:

"I wrote to Mr. Hoppe subsequently to underline my concern. However, Mr. Hoppe has now written to say that, after taking my views fully into account and after meticulous investigation (which I understand has included outside independent advice) the company's decision has had to be in favour of IBM.

I know that this decision will come as a disappointment to you, as it has to me. But I think we must recognise that the Harland and Wolff management have a very difficult task ahead to make the shipyard viable, and for this reason I believe there is a limit to the amount of pressure that the Government can properly bring to bear on the company where commercial judgments must be made."

Why cannot the Northern Ireland Office ask the Government to force the shipyard to buy an ICL computer in the same way as they persuaded Glasgow University not to buy an IBM computer? It is clear from the Minister for Industrial Development's letter that the managing director of the Belfast Shipyard, Mr. Hoppe, has told my hon. Friend that independent advice recommended IBM. Despite that statement, it is widely believed in business and commercial circles in Belfast that the independent consultants who carried out the evaluation of the ICL and IBM computers did not recommend that the shipyard should purchase the IBM computer. It is also believed in those circles that three-quarters of the board and management of the shipyard were in favour of purchasing the ICL computer but were overruled by Mr. Hoppe and the new data processing manager, who has previously always worked with IBM equipment.

There must be serious doubts about the shipyard decision. I demand that the whole matter be subjected to a thorough examination, especially as the taxpayer's money is involved.

ICL stresses that the advanced shipbuilding technique called Autokon, as implemented by Harland and Wolff on the Queen's University ICL computer, is the envy of many European shipbuilders, ICL contends that there is absolutely no reason why such a high standard of excellence should not be achieved for all Harland and Wolff's requirements on an ICL computer. ICL has considerable experience of the British shipbuilding industry, including the British Ship Research Association, and of the heavy engineering industry in general.

Harland and Wolff is to be congratulated on its plan to computerise its shipyard, as the Japanese have done, but it is not too late for the Department of Trade and Industry to subsidise a computer development project at the Belfast shipyard which would then be available to the rest of the shipbuilding industry.

The trade unions in Northern Ireland are concerned. Mr. Blease, Chairman of the Irish Congress of Trade Unions, has made loud and urgent demands that the Government should persuade the Belfast shipyard to opt for the ICL computer. The Lord Mayor of Belfast has made the same demands. Everyone in Northern Ireland who is connected with the industry wants the Government, who have invested so much money in the shipyard as well as in IEL, to persuade the shipyard to purchase the ICL computer.

My hon. Friend the Member for Belfast, East referred to Short Brothers and Harland. That is the firm which closed down one of its factories in Newtownards, in my constituency. Hundreds of people were thrown out of work. I should like to see something being done to provide work in North Down. The factory in Newtownards should not have been closed. I fought against its closure, but my words fell upon deaf ears, as did the words of the trade union movement. I hoped that Short Brothers and Harland would maintain its factory, but it did not do so.

In North Down there is a high density of population, and it is a growing population. Houses are being built—they are the type of house that I want to see all over Northern Ireland—but work is not being provided for the people who are living there, or who will live there. The Government should see that factories are established in North Down, in Newtownards and other parts of my constituency. Perhaps the Minister of State can tell me how many Government factories have been established in North Down. If he cannot tell me today, perhaps he can tell me at a later stage. I want to know when the last factory was established and what plans the Government have to build more factories and to induce firms to go to North Down. There is a rising population and, therefore, a great demand for employment.

It has been admitted that the road programme is behind schedule. In North Down—in fact, close to my home—the standard of the roads is deplorable. I ask my hon. Friend to drive along the roads closer to my part of North Down. He will find that many of them are in a dreadful condition. He will find that many roads urgently need improvement. I hope that I can have my hon. Friend's assurance that he will look at the condition of the roads in North Down.

It is thought in my area, and at times I think correctly thought, that because the people of North Down are law-abiding and there are no riots, and relatively little violence, they are being punished for their good behaviour. If they behaved as some people in Londonderry have been behaving people would be pouring millions of pounds into creating factories, houses and all sorts of community centres, but because they are law-abiding the people in North Down are not getting any of those advantages.

For example, I heard only last week of an organisation in Newtownards which looks after mentally retarded children. It is looking desperately for money. It has asked the Government for money to build a small hall on land which it has purchased in Newtownards so that it can provide facilities for these unfortunate children. But the Government have turned a deaf ear to its appeal. That is a deplorable state of affairs.

We have had an extremely informative and useful debate. It is unfortunate that these debates always take place in a different atmosphere from that which exists in Northern Ireland. However, we must try to pursue a policy which can bring economic stability to Northern Ireland, which will lay some basis of growth and full employment and in turn help to provide the political solutions that are so urgently needed.

The Bill deals with a large amount of money. We have had all sorts of speculation from both sides of the House as to how much money the Government may be subventing to Northern Ireland. The figure which the Prime Minister gave yesterday has been contradicted and other figures suggested. But all these figures on economic aid must be put alongside what is now spent on military expenditure. I said earlier—and my hon. Friend the Member for Leeds, South (Mr. Merlyn Rees) emphasised the point—that it is impossible to say within £50 million how much is the net outgoing. However, I am certain that the British people in this part of the United Kingdom are now sure that they are subsidising Northern Ireland and that Northern Ireland is not subsidising the rest of the United Kingdom.

That goes for many other parts of the United Kingdom as well.

I take the hon. and gallant Gentleman's point. However, I think that some of the other regions might look with envious eyes on the money that goes into Northern Ireland.

The analysis which we have been given this morning is very informative. The opening statement of my hon. Friend the Member for Leeds, South, with his deep knowledge of public expenditure, took us through the labyrinth of information and knowledge which he possesses. My hon. Friend gave an analysis of public expenditure which can be used in a much wider context as more and more public money is used. Such expenditure has to be more accountable. We must understand how the money is spent and who controls it. That is what we are trying to do today by the questions which we are putting to the Minister of State. We welcome the fact that there will be parliamentary supervision of such expenditure and that the House will be able to have the reports of the Public Accounts Committee. All this underlines the urgent necessity of getting a political settlement and getting matters on a much more rational basis.

In many aspects there is government by civil servants in Northern Ireland. Despite the work that the Ministers do, it is impossible for them to fulfil all the duties that are demanded of them. The new local government elections are required urgently. My hon. Friend the Member for Belfast, West (Mr. Fitt) talked about the local authorities which are now at a standstill, awaiting the creation of the new authorities and new structures. Excellent bodies have been appointed and are working, but they are not accountable to the electorate. That is an important democratic point that must be dealt with.

I want to put one or two questions to the Minister about the Northern Ireland Housing Executive, the Craigavon Development Commission, the Antrim and Ballymena Development Commission, the Londonderry Development Commission and the health services. The money which we are spending and the additional money which will be sub-vented from this House to Northern Ireland is such that this House and the British people are entitled to know how it is being spent, because there are many matters which need to be dealt with urgently.

Productivity, production and employment are the basic economic issues with which we have to deal. Coming to the more specific, work is now getting under way on the first phase of a proposed large industrial estate at Knockmore. When will the first factory unit be ready for occupation, and can the Minister say how long it will be before the 20-acre site itself is developed? I quite understand if the Minister is not able to give immediate answers to those questions. No doubt he will seek other means of informing the House. However, the questions need to be asked because of their vital importance to the economy of the locality and because they get down to specific points about which people wish to know.

We notice that in October, 1972, the unemployment rate in Northern Ireland was 7·3 per cent. That is double the figure in the United Kingdom, which itself is far too high. But it is west of the River Bann where unemployment is highest. Looking at the figures of male unemployment, one sees a rate of 16·9 per cent. in Derry, 18·5 per cent. in Newry, and 21·2 per cent. in Straban, and one realises the magnitude of the job facing any Government in this economic situation. The unemployment situation is but one reason why we wish to know how the money being directed to Northern Ireland is being allocated and whether special note is being taken of the needs of areas like those that I have mentioned. Of course, this does not exclude Belfast which itself is facing heavy unemployment. We understand that the troubles are not helping the situation. We want to knew from the Government the policies that they intend to develop in the coming weeks and months.

A number of references have been made to Harland and Wolff and to Short Bros, and Harland. They are very important firms not only in Northern Ireland but in the British context. To those who advocate UDI I say that if UDI occurred tomorrow, Harland and Wolff would not last six months since UDI would involve our taking out the £42 million of tax payers' money that the British Government have already given. We want to see a strengthening of those firms because they represent the skilled basis of the economy of Northern Ireland. They are an important industrial centre.

I come from an industrial centre in the United Kingdom. In the North-West we are seeing a rundown of heavy industry, especially heavy engineering. That can have disastrous effects on communities such as that which I represent which are not in the same category as Northern Ireland in terms of unemployment. When people talk glibly of standing on their own feet and at the same time about the lower standards in the Republic of Ireland, which we acknowledge economic-ally to be lower, I wonder what standards would be like if we took away the British subvention and left Northern Ireland on its own.

I was interested in the speech of the hon. Member for Down, North (Mr. Kilfedder) and his well-documented case about the computer, which he developed at some length. Harland and Wolff will not have heard a better case made for public ownership in a long time, such are the advantages to a firm like ICL of having public money put into it. We live in strange times. We find ourselves getting more and more support for Labour's economic policies. We should not look a gift horse in the mouth when an hon. Member on the Government benches makes the case for us.

But surely the final criteria must be the most efficient shipyard or the use of facilities to produce the most efficient manufacturing unit. If a company in which a lot of Government money is invested is obliged to take on something which is less useful to a competitor, the disadvantage must be quantified and made up from taxpayers' money.

The hon. Member for Belfast, East (Mr. McMaster) is underlining my point and that made by his hon. Friend the Member for Down, North. We are dealing with British taxpayers' money and increasingly taxpayers on this side of the Irish Sea will want to know, especially in the economic climate that we face at present with the freeze, that the money is being spent properly. In this case the Minister is obliged to give full explanations and to take into account the very strong points which have been made.

Housing in Northern Ireland is an aggravating and difficult situation. My hon. Friend the Member for Belfast, West told me about a case yesterday concerning the occupation of houses. Apparently one family was sent to eight different houses in Belfast only to find them all occupied by squatters. The Housing Executive is finding it very difficult to control the situation. I believe that the short answer is a rapid expansion in house building. More houses will have to be provided. House building figures for 1971 show that there were 13,797 completions. That is the highest figure on record in Northern Ireland. Are housing completion figures in Northern Ireland available for the first half of 1972?

According to figures issued by the Nationwide Building Society, the percentage increase in the price of a new house over the past five years has been 46. The average house in Northern Ireland costs about £5,244. While that may be a good deal less than in many other parts of the United Kingdom, when set against economic standards in Northern Ireland it is exceedingly high. I believe that the situation calls for some extension of the public money being directed towards Northern Ireland into the provision of houses by the public authority.

People are experiencing great difficulty. Instances have been given of people selling and buying houses in Northern Ireland, especially in troubled areas. I hope that the Minister will say what action the Government are taking to help people who have to leave, who want to sell their houses and find it difficult to do so. Irrespective of what a house in a trouble area might fetch, have the Government considered the possibility that they may have to even up the figure so that people will be able to buy and sell houses at the proper market price? Governments have had to do this in the past with clearance areas so that people could receive adequate compensation to purchase new homes.

The hon. Member has quoted an interesting figure of new house costs in Northern Ireland. Is this private or public sector, or both? It is a shatteringly high figure.

It is for the private sector. The source is the Nationwide Building Society and the figures are for the second quarter of 1972. There is anxiety over the housing problem which deserves serious examination and prompt action.

I understand that phase 1 of the Belfast urban motorway will begin early next year. Can a more definite programme be announced? This type of development is labour-intensive and because of the high unemployment rate and the nature of the labour force in the Province, which is not highly skilled except for some pockets, we need such projects. Many hon. Members will know that while there are some excellent roads in Northern Ireland, there are some very poor ones. There is need to extend and improve the roads west of the Bann, in the Londonderry area, in Belfast and other places.

I understand that there is a proposal to bring back the Belfast central line. May we have some information on this? What will be the cost? What employment possibilities are involved? I look to this to be a labour-intensive undertaking. I understand that the construction of a new station is being considered in the Maysfield area.

I turn to deal with the power situation. There is room for improvement here, as all hon. Members would agree. It has been decided to build a new oil-fired electricity generating station at Kilroot, County Antrim. We are told that work will begin in 1973. Is it possible to announce a firmer timetable? We hope that this will lead to increased employment. Perhaps we can be told how many jobs will be created. Does this type of development lead to any form of economic co-operation with, for instance, the Republic of Ireland? Electricity knows no boundaries and it would be to the advantage of Northern Ireland and the Republic if some such development took place. Has there been any consultation with the Republic on this point?

Industrial training is extremely important. I spoke earlier of the skill in Northern Ireland. There is a need to lay down a base of skill. We depend upon our ability to produce in what is a highly technological, industrial society. We cannot afford areas which are wilting. There are nine training centres in Northern Ireland at the moment providing 2,600 jobs. New centres are to be built at Belfast and Derry, while the Newry centre is to be expanded. Has the Minister of State any idea when these projects will be completed and how many extra places will be provided?

Are the Government doing what has been done in this country and enabling young people to be taken into training centres in areas of high unemployment to receive a 12-month period of training in the hope that that will set them on the road to an apprenticeship? This will have to be done more frequently, certainly in this country, if we are to reduce the growing number of young people finding it impossible to get a job when they leave school. This problem is central to many of the difficulties in Northern Ireland.

Does the Minister see a general improvement in the economic situation? He spoke of this earlier and called for new industries in the Province. He tried to make a brave job of it, but he was able to tell the House that only one new industry has been brought to Northern Ireland recently. We regret this as much as the Government because we want to see economic development improve rapidly. The questions which have been put by my hon. Friend the Member for Leeds, South, by myself and by other hon. Members are linked to this increased expenditure of British taxpayers' money. This debate takes place against the general political situation. We have spoken of security and the deteriorating situation which consistently damages the economic steps that are taken. We on the Labour side of the House cannot over-emphasise the urgent need for some political basis which will enable us to look forward to economic growth and development.

Reference has been made to the dastardly attack made last evening on Mrs. Austin Currie. I know Austin Currie and his wife, and I realise the pain that they must be suffering now. Just as we condemn without qualification the dastardly attack on Mr. William Craig, so we condemn the attack on Mrs. Currie. We must say to people in Northern Ireland, "If you want jobs, economic expansion and a fuller life, you will not get them through actions of this sort."

The warning given yesterday by the Prime Minister merely echoed increasing feeling and impatience in this country about Northern Ireland. When we discuss the border Bill next week that feeling will perhaps be reflected more widely. This is not the time to develop the argument. However, my hon. Friend the Member for Leeds, South has sent a message on behalf of this side of the House to Mrs. Austin Currie wishing her a speedy recovery. We must say to people in Northern Ireland, "Violence will not achieve your economic or political aims". We are trying to develop some form of political framework and economic stability in a worsening economic situation throughout the United Kingdom.

The Opposition welcome and support the Bill. However, we shall be increasingly alert about the question of expenditure. We are now moving into a new phase of post-Stormont legislation. It will be virtually new legislation and the House of Commons will have to examine it, pass its opinions on it and monitor it. We shall have to consider how money is spent and how developments take place. We welcome the Bill against that background and in that limited sense. This economic debate has been useful and important.

rose—

Does the Minister of State have the leave of the House to speak again?

Yes.

With the leave of the House I shall attempt to answer some of the many questions raised in this wide-ranging debate on all aspects of economic, industrial and social life in Northern Ireland as well as on certain aspects of the security situation which permeates so much of life in Northern Ireland. I shall not be able to cover all the questions which have been raised, and I should like to answer those which cannot be covered today in correspondence or at an appropriate time next week when we will have the opportunity of again discussing financial matters and the expenditure of public money.

I should like first to deal with a small point raised by the hon. Member for Leeds, South (Mr. Merlyn Rees). He asked what other sources besides the National Loans Fund could be drawn upon for on-lending to local authorities and other public bodies. They are very small, but they exist—for example, Ulster Savings Certificates, Ulster Defence Bonds and borrowing from the Belfast Savings Bank. That is, by the nature of things, a very small proportion of on-lending. Capital funds can be borrowed from areas of that kind as well as from the National Loans Fund.

The major point which the hon. Member for Leeds, South raised applies to Clauses 1 and 2. He asked what were the means of control of the loans for which authority is given under the Bill and the grant-in-aid. The authority for expenditure is inherent in the normal appropriation and supply procedure and is made when the policy giving rise to the expenditure is decided and has to come before the House for approval. We are here concerned more with the build- ing of the pipeline than with the flow through it.

Every item giving rise to expenditure which calls upon capital and therefore upon loans from the National Loans Fund, and every item giving rise to expenditure for which grant-in-aid is needed, is subject to the full rigours of the supply procedure. The Government are held to account for the policy, for the expenditure to which the policy gives rise and the procedure by which the expenditure is authorised by the House. That is worth making as a general point. There is no question of weakening control over the expenditure being made in Northern Ireland as a result of policy decisions made in recent months. We are here concerned with the means for transferring both loans and grant-in-aid to meet expenditure arising from policy decisions.

The hon. Member for Leeds, South raised the question of the interest paid on loans. The rates are specified by the Treasury. There is no special rate for Northern Ireland.

The hon. Member for Leeds, South and other hon. Members have referred to the question of the Northern Ireland Finance Corporation. When the order relating to the Finance Corporation went through the House, we discussed the question of accountability. The overall activities and expenditure of a body like the Northern Ireland Finance Corporation are subject, like every other major expenditure of Government, to the procedures for accountability and departmental accountability. But I think that the hon. Member for Leeds, South had more in mind than that, namely, the question of ministerial control.

In the debate on the order we made clear—and I think it was accepted by the House—that one of the objects of setting up a new agency of this kind is to delegate a certain amount of control and to allow room for innovation and flexibility in the organisation's operations. I have every confidence in the way in which the corporation is developing. As one hon. Member rightly said, it has only just started work and plainly it is feeling its way in many respects. It has been extremely helpful in making arrangements with the Northern Ireland banks for assisting city centre traders with liquidity problems. It has been involved in a number of cases. I have every confidence about the way in which it operates.

The corporation has a board on which sit representatives of the Ministry of Commerce and of the Government. Therefore, there is an adequate flow of information and understanding about its operations. But these are early days and it would be wrong to expect the corporation to be ready to rush into print with a mass of detail about its operations when it has only just started work. That would not be the way to encourage a body of this kind to help, as I believe it will, the development of Northern Ireland industry.

The question of International Engineering Ltd. kept coming into the debate in two separate ways. There was the question of how it was set up and how it was financed. The operation to take a Government majority shareholding was financed under the Industrial Development Act and not by the Northern Ireland Finance Corporation. The Government are a majority shareholder in the body. ICL is a minority shareholder, and under the agreement for the takeover it has a legal obligation to provide a certain amount of work to IEL, Castlereagh.

The other way in which ICL came into our deliberations was on the computer at Harland and Wolff, with a good deal of to-ing and fro-ing as to why this had not gone to IBM, on the assumption that it would somehow have helped ICL, and why it had gone to IEL. The facts of the matter are that by computer standards this is quite a small computer; though I agree that £300,000 is a lot of money, it falls below the lower limit of sums for expenditure on computers to be governed by the Government's procurement policy. That gives an indication of its limited size.

Points have been made in the debate which it is perfectly legitimate for politicians and the Government to put publicly and to put to bodies whether they are entirely State-owned, which is not the case with Harland and Wolff; or whether there is in them a majority Government shareholding, which also is not the case with Harland and Wolff; or whether there is a substantial minority shareholding, which happens to be the case with Harland and Wolff. In return, however, it has to be recognised, particularly in a small, complicated area like this, that if Harland and Wolff's judgment is—as it is—that technically the most suitable computer is the IBM, then, whatever views hon. Members opposite or anyone else may have about the virtues of State-owned industry, we could not operate a system of interference in the way that has been suggested so that the views of Harland and Wolff would be over-ruled.

An obligation on ICL to place an order for a computer which would have to be built to meet a difficult and very specialised requirement at IEL would have been sharply different from past practice. If it had been done, I doubt very much whether the effect on jobs would have been anything more than negligible.

The future of IEL, for which the Ministry of Commerce is responsible, rests upon our getting full orders and interest from outside. We have a number of avenues which we are exploring. I am not without hope that we can continue to develop the possibilities, but I do not think that the issue of a small computer for Harland and Wolff would have affected the matter one way or the other. That is my clear judgment of the situation.

It has been suggested by ECL or ICL that some joint committee should be set up with Harland and Wolff about the building and construction of computers of the kind suitable to the shipbuilding industry. This would help the IEL. Would my hon. Friend like to comment on that, or give his blessing to such a programme of research and development?

I would welcome in principle something of this kind. I am not at the moment technically qualified to judge on the possibilities, but if we could get something of this kind going it would be something which I should very much welcome.

The question was raised by the hon. Member for Leeds, South of the degree of control and the disciplines within which the nationalised industries or their equivalent in Northern Ireland operate. The answer is that they are overseen by the Treasury and the Ministry of Finance. The disciplines are similar to those being applied to public sector bodies under Treasury machinery—public sector operations, such as now exist for the electricity service, a new body and in the past a disparate body, operate in particularly difficult circumstances, such as the non-payment of bills and things of that kind, but the same disciplines apply as elsewhere in the United Kingdom. The hon. Member for Leeds, South asked where he might look for information: from the Northern Ireland Government, the Northern Ireland Office, the Treasury, the Ministry of Finance. Full details are to be found of these operations in the accounts which are published. If they are not in this House I will certainly see that they are provided. But I understand that they are in the Library.

He asked whether local government reform would affect the question of lending. It will make a difference in the sense that a great many more functions under the Macrory reforms would be financed direct out of the Northern Ireland Exchequer and out of lending by the central Government, rather than by going through the particular local authority in question. In other words, we shall see the kind of operation which functions for the Housing Executive, which is financed directly by lending from the central Government in Belfast or by grant by the central Government in Belfast, so that we shall make a change in that respect. But what is intended, and is the spirit of the Macrory reforms, is that fewer functions, on capital expenditure account at any rate, will be carried out by the new local authorities.

The hon. Member mentioned the membership of the area boards. It is slightly outside the range of what we are discussing today, but I know there has been some anxiety on this matter and it has been raised with me before. I will look precisely into the points he raised. But account has to be taken of the elected members of the area boards, who are not there at present and will not be till the new local authorities come into being—alas, now at a postponed date. When the elected members are there, the hon. Member may find that the points which he raised will look a little different from the previous figures of appointed members. They are to be bodies with a strong elected representation, rightly, for matters affecting their areas.

The hon. Member then asked about this extra £60 million or so being the amount of grant in aid, and what would be the extra spending in Northern Ireland. The answer to this strictly speaking lies in the Appropriation No. 3 Order which comes before the House next week, but there is an explanation in the autumn Supplementary Estimates published on 26th October and available in the Vote Office. There are set out a number of additional expenditures amounting to some £53 million or £54 million, which demonstrate the kind of money which will need to be covered by grant in aid—of about £60 million we are talking about here. The main items were expenditures arising first from the package for stabilised and increased employment which I announced on 27th July—a figure of £10 million; second, part of the already authorised and agreed payments to Harland and Wolff. Lastly there is the sadly inevitable item: compensation, including emergency financial payments made through arrangements we have for those badly hit. These are in the autumn Supplementary Estimates. I am sure hon. Members will already have seen them. They all add up to the sum of which we talking now: £60 million.

The hon. Member, finally, mentioned the question of the Public Accounts Committee and its membership, a point to which my hon. Friend the Member for Belfast, South (Mr. Pounder) also referred, reminding us that he was on the Committee. This is a matter for the House of Commons, but I am sure these points will be noted.

I think that that covers most of the points raised by my hon. Friend the Member for Leeds, South.

My hon. Friend the Member for Belfast, East (Mr. McMaster) asked about details of the £60 million. I hope I have guided him by drawing his attention to the autumn Supplementary Estimates. He will appreciate that this is where the full details are. I have mentioned some of them.

My hon. Friend mentioned the firm of Short Brothers and rightly praised what it is doing. It is doing extremely well. My hon. Friend mentioned additional support for a further development programme for the firm. There are various ideas existing there for the future. The company is doing very well on existing lines. It is a matter which will be of real concern because it is an important part of industry. It is a matter we can look at. I applaud the lively management going on at a very able and famous firm.

Industrial training was mentioned by my hon. Friend the Member for Belfast, East, and the hon. Member for Salford, West (Mr. Orme). Industrial training has for some years been tackled with great vigour. In relation to population, the number of people under training in Northern Ireland is running at nine times the level for the rest of the United Kingdom—a staggering comparison. A month or two ago we announced the expenditure of an additional £4 million for further industrial training. Several revolutionary and interesting ideas on training have been pioneered and developed in Northern Ireland, particularly the integrated training unit which brings together people who develop a special skill which might be useful in a modern engineering or advanced development firm and who are then kept as a unit in training as a career. That means that we get away from the grisly business of a person being trained for a year and at the end of that time going back on the street, which is of no help to anybody.

The hon. Member for Belfast, West (Mr. Fitt), in raising several important issues, commented on the confusion about the way in which Northern Ireland finances work, and what is a subsidy and what is not—a point that has run through the whole debate. I hesitate to plunge further into this matter for fear of increasing the confusion, but it is not quite so confusing as some hon. Members have suggested.

The basic elements are fairly clear. Northern Ireland, given that it pays taxes in much the same way as the rest of the United Kingdom, receives its share of the so-called reserved revenues, that is, income lax and so on, which amounts this year to about £272 million. It raises in local taxes about £37 million. Over and above that it receives a variety of special payments under various arrangements and schemes which, at the time of the White Paper published earlier this year by my hon. Friend the Chief Secretary to the Treasury and my right hon. Friend the Secretary of State, were running at a little over £133 million.

The White Paper made clear that there would be extra expenditures, precisely those that came forward in the autumn Supplementary Estimates. The £133 million or slightly more plus the extra spending of this kind adds up to about £200 million. Over and above that there is a lending rate of £100 million to local authorities and other bodies—the sort of thing we discussed on Clause 1. The £200 million is a valid and clear figure over and above the share which Northern Ireland gets by virtue of its population in relation to the whole of the United Kingdom. The £100 million in loans from the National Loans Board is also valid.

Those are the figures to bear in mind. Arguments may be made one way or the other about them but they are fairly straightforward figures which are worth bearing in mind, particularly when one sees the dedication to destruction of the crazier elements of the IRA who are determined to squander the future of Northern Ireland, and the head-in-sand talk of the UDA. They are both of equal madness when one considers the economic future of Northern Ireland.

The hon. Members for Belfast, West and Salford, West also commented on areas of high unemployment—the ghetto area aspect, very localised areas of high unemployment. The Government have sought to focus and direct funds specifically to these areas. For instance, we have announced promising new developments in West Belfast, which both hon. Gentlemen pointed to as something which in the broad generality tends to be subsumed in general propositions about Belfast versus the rest. Belfast is in need of additional employment. I have been to look at industrial sites which we are in the process of negotiating and on which we hope to be able to develop advance factories, and I am pushing ahead with this. Do not let us forget that, having built factories and introduced training units, we have to attract investment which—and I make no bones about it—will be very difficult. I believe that we shall be able to produce the possibility of extra jobs and the opportunity to work in these areas which in the past have been lacking.

It is with the thought of labour-intensive operations that the proposal has been put forward for the development of a direct labour force—"Enterprise Ulster"—for the whole of Northern Ireland, which will provide worthwhile employment—not unemployment relief—for many hundreds of people, in major public works projects, major reclamation schemes and other labour-intensive activities.

Security has also been mentioned, and Mr. Deputy Speaker allowed this subject to be discussed. The House will not expect me to go into these matters in great detail. Of course, I deeply deplore the continuing series of ghastly incidents, of which the murder yesterday of a policeman and the beating up of Mr. Currie's wife are, alas, two more appalling examples. My right hon. Friend the Secretary of State has expressed his sympathy to Mrs. Currie on this horrific happening and I echo him. These actions must be condemned as being quite unacceptable in a civilised society.

My hon. Friend the Member for Belfast, South mentioned tourist grants. Certain parts of certain loans that are drawn through the lending process, which the Bill makes easier, will go for tourist grants and the development of tourism.

My hon. Friend also mentioned city centre traders and the need to maintain the life of central Belfast. This has been and remains a major aim of Government policy. My hon. Friend was kind enough to recognise the considerable subventions, including the latest employment grants, that have gone to city centre traders. There are worries about there being so much security in the centre of Belfast that shoppers are prevented from going into the shops, but against that has to be balanced the fact that if shoppers can get in too easily so can bombers, hoodlums and killers. We have to balance this as we go. It has always been open for detailed discussions to be held between the Army, the police, the Belfast local authority and the city traders, and I welcome such discussions at any time. I authorised such discussions last Monday on the question of barriers being too restrictive of the movement of shoppers in certain side streets in central Belfast.

Many points have been made about housing, which is vitally important. I am not trying to duck this issue because it is central to our concern for Northern Ireland, but I propose to refer a number of detailed points to my hon. Friend the Member for Wokingham (Mr. van Straubenzee) who carries ministerial responsibility for the housing sector in Northern Ireland. I know that he will read them with interest.

On certain other aspects of housing I shall be glad to go into more detail when we consider the appropriation order next week. I note the serious and valuable points which have been made, particularly about compensation. Compensation is always a problem because in Northern Ireland everyone suffers and very few are able to insulate themselves totally against misfortune. I recognise the validity of the points that have been made. I will look into them and pass some of them to my hon. Friend the Member for Wokingham.

The hon. Member for Down, North (Mr. Kilfedder) asked about advance factories. There are two in the planning stage in his constituency at Bangor, and they are going forward.

The hon. Member for Salford, West raised many questions which I do not think he will expect me to answer in detail today. He returned to the question of high unemployment areas, which the Government regard as extremely important. We believe in taking specific and selective action both to attract new industries to areas of high unemployment and in providing the opportunities for them to come, through good advance factories, good facilities, good training and so on. We have announced a number of new advance factories in Londonderry, which is one of the most important areas in this respect.

The whole slant of our policy is designed to encourage firms or to give some inducement to firms to go to areas of high unemployment. Over and above that, the situation in Northern Ireland generally has to be made attractive for them, which, as many of them inevitably see things through the lens of the TV camera or in news headlines, is alas not easy unless they can be persuaded to come and see them themselves, which happily some of them do.

The hon. Gentleman mentioned a number of other major development programmes, a railway development and the new station, and capital spending on roads. These are going ahead in line with the development programme targets. Where there are difficulties they are difficulties less of administrative machinery than of the security situation, which intrudes on the business of building roads, houses and so on, in an awkward and sometimes very frustrating way. But these programmes are going ahead. So is the development of our energy programme. We did have the inter-connector with the Republic and we should be very glad to see that restored, although there are certain local difficulties in getting complete coverage for the work force that would have to operate all aspects of the inter-connector, particularly in very remote areas. But this is something we should like to see restored. The hon. Gentleman mentioned training, too. I have said that I consider this of great importance.

I have not covered all of the points but a great many of them. I think that the debate has shown that all sides recognise the need for Northern Ireland to continue on its not unsuccessful path of industrial development as a region of the United Kingdom. I think that people recognise, too, the truth of the points made yesterday by my right hon. Friend with great vigour: that the proposition that somehow Northern Ireland can break away and go it alone, on the one hand, or the proposition from the Provisional IRA, on the other hand, that somehow Northern Ireland can be bombed into a different view of its own future, are the propositions of people who have opted out of a sane, prosperous and just future, the propositions of people who will damage and not strengthen the Northern Ireland economy.

By contrast, our efforts will help in that direction and the Bill will enable us to go through with our programme. I commend the Bill to the House.

I beg to move,

That the Import Duties (Developing Countries) Order 1972 (S.I., 1972, No. 1620), a copy of which was laid before this House on 2nd November, be approved.

The order reimposes for the rest of the year the duty of 16 per cent. on certain leathers being imported from Argentina, Brazil, Colombia and Uruguay. Imports from the Commonwealth, the European Free Trade Area the Irish Republic and developing countries other than the four named will continue to be free of duty.

The bulk of imports affected by the order can be conveniently described as bovine chrome upper leather. The main use for this leather is in the manufacture of shoes. In 1971 the United Kingdom tariff on this leather was 16 per cent. on all imports other than those from Commonwealth, Irish Republic and EFTA suppliers. However, as the House will recall, we introduced an order towards the end of last year which granted preferential treatment for the whole of 1972 over a wide range of industrial products being imported from developing countries, including Argentina, Brazil, Colombia and Uruguay. The order brought into effect the United Kingdom contribution to the generalised system of preferences—the GSP—agreed upon at the United Nations Conference on Trade and Development.

When we agreed to the GSP scheme we made it clear to the beneficiaries and to other donors that we reserved the right to modify or withdraw the preferential tariff treatment from any product that was being imported into the United Kingdom, as a result of the preference, in such quantities or under such conditions as to cause or threaten serious injury to United Kingdom producers of like or directly competitive products.

The British Leather Federation applied earlier this year, on behalf of its members, for the reintroduction of duties on a wide variety of leathers from a number of exporting countries. The Government gave very careful consideration to the application and concluded that in the very narrow range of leather from the limited number of countries concerned there was adequate evidence to justify reimposing the duty.

Imports of these leathers had increased substantially during 1972, until it was clear that if no action was taken the imports would gain about a quarter of the United Kingdom market in 1972. This compared with only 8 per cent. of the market in 1971. It was clear that a continuation of this situation would threaten the continued existence of a number of small tanners and put in jeopardy the employment provided by them.

It is for this reason that I consider it reasonable to grant to the United Kingdom producers the renewal of the tariff protection, over this narrow range of goods, which they enjoyed prior to the beginning of this year. I therefore commend the order to the House.

I shall not detain the House long. Leather does not normally generate tremendous passion in the Chamber, but I have some questions and comments.

The first comment is a very general one, arising from the order. As the Minister has rightly said, a year ago we approved the British generalised preference scheme, and this is the first departure from it. On the general issue of import duties the Opposition are very anxious that in the negotiations which are taking place—and will continue over the next few months—about the harmonisation of our generalised preference scheme with that of the European Economic Community, the Government should be as tough as they possibly can. We think that they have a very good basis for toughness, because it is evident that our scheme is very much better. It is equally evident—I am sure that the hon. Gentleman will have seen correspondence that I have had with the former Chancellor of the Duchy on this matter—that there are many elements within the EEC, particularly the Socialist Parties in the EEC, who agree with us that our scheme should dominate the EEC scheme, rather than the other way round. So, in so far as the hon. Gentleman has responsibility for these matters over the next few months I hope that he will lend all his energies to taking a more realistic but, at the same time, a very tough line in the negotiations that take place.

On the subject of leather I have, first, a question on procedure. As one understands it from the past, normally the Department of Trade and Industry practice on anti-dumping measures has been to advertise and to consult. On this order there has been a departure from that general practice, and I wonder why. As this is the first occasion when an exception has been made under these generalised preferences, one would not like to think that a much worse precedent was being established than under the old anti-dumping measures. I hope that it will be the intention to consult more fully in the future and to advertise and give time for consideration of these matters.

My second point relates to substance. There are some rather extraordinary features concerning the order. It takes place against a background of a British tanning industry with some 14,000 workers, and a time when the price of leather in the world market is at a post-war peak. The prices are now higher than they were in the post-war period, even 1951.

There is also a background of a shortage of raw hides for British tanners. The Minister may be able to confirm that I am right in saying that 30 per cent. of United Kingdom hide production is being exported, that this represents a 20 per cent. increase in value over last year and that there has been such concern about the supply situation that the British Leather Federation asked the DTI whether it would impose export quotas, but the DTI refused. So there is a very odd supply and price background here.

There is no doubt that one factor in the supply situation is that some foreign countries, particularly those in Latin America—Brazil is a very clear example—are processing much more of their output, and that is affecting supplies. But as to the proportion of the increase in imports represented by those countries covered by this order, we need to get this carefully into perspective.

Imports from all OECD countries over the last year have risen by 18 per cent.—from £17 million to just over £20 million. As the Minister said, the proportion from the Latin-American countries in the order has risen much more sharply, by about 115 per cent., but they represent only a tiny proportion of total imports—only just over £3 million, compared with the £17–£20 million from all OECD countries. So there is some incongruity, at this time of short supplies, in selecting these four countries for this rather specific restriction.

I have one detailed point. It may be that the Minister cannot answer this one immediately, and if not, perhaps he can let me know the answer later.

One gathers that chrome crust, whose meaningfulness technologically escapes me, is included in the order, although the British Leather Federation asks only for restoration of duty on finished leathers. One consequence has been brought to my attention. Firms dealing with chrome crust leather, with orders placed some time ago in Latin America for partially-treated hides to be finished here, now find that large quantities of semi-finished leathers in transit to British tanneries are caught by this order. This will mean that industrialists here will have to pay much more than the contracted price, because of the imposition of a tariff, without any opportunity to make adjustments, because of the suddenness with which the order has been brought in. What are they to do?

I wonder whether there is any possibility of goods of this kind in transit being excluded from the order, or whether the hon. Gentleman can think again and make sure that only finished leathers are included in the order.

That raises another point—the general question where the tanners are to stand under the Government's price freeze. It is clear that the DTI considers that leather prices come under Article 5 of the White Paper. This imposition of import duties is bound to result in an increase in price, or in a considerable difficulty being caused for the industry in this country. Where will the industry stand in this respect?

All in all, it is a rather odd situation. Here we have the DTI taking a tiny corner of this problem of the supplies of hides, selecting developing countries in Latin America for tariff discrimination without having consulted or given a full opportunity for discussion, going further than it was originally asked to do by the British Leather Federation and effectively raising the price of hide imports from these four countries at a time of shortage of supplies and peak hide prices, just when the Government have announced a price freeze. This is an extraordinary way in which to make the first departure from the British generalised preference scheme, and it leads one to wonder whether the right hand of the DTI knows what the left hand is doing.

This is only for two months, and I would welcome from the Minister a clear picture of how he reconciles the order with the price freeze which the Government, ineffectively as we think, propose to carry out. We shall observe with some concern the consequences of what seems to us to be a somewhat less than usually adequately considered order, brought in in a very hurried way.

My hon. Friend spoke of the danger to small tanneries from cheap imports. I hope that he and his right hon. Friend will also remember the damage to British shoe firms and their employment prospects by the flood of cheap shoe imports well below the cost of the leather itself, and that similar action will be taken on that matter.

With leave of the House, I should like to try to answer the points which have been put. To take that of my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) first, the Government are keeping an eye on this and discussions will be put in hand as soon as any threat is foreseen. If I can write to her and explain precisely how we see the present situation, I will do so.

The right hon. Member for Lanark (Mrs. Hart) complained that the right hand of the DTI did not know what the left hand was doing. I hope to be able to prove her wrong in that at least. When she said that this is the first departure from the generalised system of preferences, she is right, but she is wrong when she sees in our action on this occasion some dangerous precedent.

Perhaps the right hon. Lady remembers the debate on 8th December last year, when my right hon. Friend the Member for Argyll (Mr. Noble) explained how we intended to safeguard the situation of our domestic industry. He set this out very clearly when he said that it was necessary that imports under the new preferences should be established as likely to lead to real injury before we could invoke the powers which he forecast we could use. He said:

"The use of our safeguard would not be justified simply as the result of increased imports. Nor do we have any intention of taking no action until a great flood of imports has arrived and caused the injury. We can and will act if industry can show that serious injury is threatened as the result, for example, of a marked upward trend in the volume of imports or in the rate that orders are being switched. … I can assure the House that the arrangements will be both flexible and quick to deal with any threats that arise."—[OFFICIAL REPORT, 8th December, 1971; Vol. 827, c. 1463.]

I think that the House understood at the time that this was a warning of how action would be taken which would be taken into account by those who dealt in the commodities affected and which they might feel they could safeguard themselves against by contractual arrangements of their own. But it was at least a sensible way of proceeding, because to wait for long consultations might cause a situation even worse than the one with which we were originally confronted and wished to correct.

The right hon. Lady is right: this is not an action which we particularly like to have to take nor a situation that we wanted to see arise. But she need not be too alarmed about this constituting a dangerous precedent.

As for consultation, if there are any traders who are concerned and who feel that a situation is developing in a way which could lead to action like this, perhaps the best thing that they can do is to make their anxieties known to the Department will in advance of the situation developing to a point where we feel that action should be taken.

As to the origin and source of leather on the world market, I find it difficult to give an authoritative comment at short notice. But so far as this affects the particular figures for the types of leather covered by the order, it is worth setting out the comparative statistics. During the first nine months of 1970 the quantity involved—not the value—in thousands of sq. ft. was 1,281; in 1971 it was 1,872; and in the first nine months of 1972 it was 6,457. The rate of increase has certainly been very dramatic and I hope the right hon. Lady does not feel that we have not a justification for acting.

On the matter of chrome crust, I know that one of the right hon. Lady's hon. Friends has been anxious on this score. He has been in touch with the Department and it has been arranged that an exchange of letters should take place to clarify the matter. I am advised that we were not asked by the British Leather Federation to exclude this type of leather from the order. No doubt, it would be best if the right hon. Lady were to agree to wait for this to be clarified in the promised letter.

On the question of the price freeze, I think the House accepts—and I hope the right hon. Lady does—that in this instance we have a duty to protect our industry against serious injury from increased imports. If we had failed to act, we would have put jobs at risk. Leather and shoe manufacturers who wished to put up their prices must make their case. The cost of imported raw material is only one element to be considered. Price increases would be authorised only where they represented a high proportion of the total costs. If there is something to be clarified here, I expect that the Department can provide amplification.

Finally, on the situation as it is likely to develop, perhaps the best thing I can say is that during the coming year we shall retain control under our own generalised system of preference arrangements. From the beginning of 1974 our scheme will be aligned with that of the EEC under which duty-free imports of certain sensitive products, including leathers, from the beneficiary countries are limited to specified quotas. I notice what the right hon. Lady said about the pace-setting attitude of this country in trying to liberalise and advance the position of the developing countries. She need not fear that in this respect we shall slacken in our efforts to bring European standards up to those which we apply.

I beg to move,

That the Housing (Payments for Well Maintained Houses) Order 1972, a copy of which was laid before this House on 6th November, be approved.

The intention of this order is to double the amount payable when a well maintained but statutorily unfit house is acquired by the local authority for demolition. This proposal was set out in the White Paper issued exactly one calender month ago today—Cmnd. 5124 "Development and Compensation—Putting People First." The order was made within three weeks of the proposals being set out in that Paper, so I think the House will agree that we have moved as quickly as possible on this item.

It was in paragraph 44 that this was set out. It was pointed out that the market value basis of compensation does not apply to a house that is declared to be unfit for human habitation. That may cover houses which are recognised as quite good homes but are unfit in certain respects. When such a house is acquired for demolition, compensation is restricted to the value of the site cleared of buildings. We have amended the law in that respect over a period of time, and owner-occupiers of such houses now receive the equivalent of full market value. But in the case of tenanted houses an unfit house that is being acquired at site value but has been kept in good repair in spile of its inherent unfitness will attract a well-maintained payment. At present that payment is four times the rateable value of the house—that is, if it has been wholly well-maintained. If the exterior only comes into that category half that payment is made, and the same if only the interior comes into the well-maintained category. If the tenant has carried out the maintenance of the house, or if the landlord has done part of it and the tenant part, an apportionment of those payments between the landlord and tenant is a matter for the local authority.

Our intention in the order is to encourage owners of houses which are approaching the end of their lives to keep them in as good repair as possible. In the Government's view, a little further encouragement is required than the payment of merely four times the rateable value. Therefore, in future, with respect to any order becoming operative on or after 17th October, when the White Paper was published, the proposed payment will be double the existing payment; that is to say, it will be eight times the rateable value.

The Government could have chosen in this case to say that the owners of these houses should receive market value, but I think there are two advantages in making the compensation a reasonable figure by means of the well-maintained payment. First, it is an encouragement to landlords of such houses to keep them fit and put them in a proper order and maintain them well. Secondly, there is the advantage that if the payment is made by means of the machinery of a well-maintained payment, the tenant can share it. If one had adopted the procedure of basing compensation on the market value it would have been difficult to give the tenant his fair share for what he had spent on maintaining the house.

When in 1919 this long-established principle was first recognised—that the structure of a house condemned as unfit is worthless and, consequently, only the site value should be paid—we were thinking of pulling down what were identified as slums. I think that the development of towns has gone further than that now. In order to carry out development we frequently pull down houses which, even if inherently unfit, are still in a state to provide good homes—houses on which, perhaps, people have spent considerable sums of money in maintenance over the years in order to keep them as homes and not let them fall into ruin. So, to compensate those who have kept their houses—which they are letting and not occupying—in good order, we are providing eight times the rateable value as the compensation—plus, of course, the site value.

On the basis of the recent National House Condition Survey it was estimated (hat there were 1·2 million unfit houses in England and Wales, 700,000 of which are in existing or potential clearance areas. That is roughly the sort of figure with which we are concerned. Over the next 10 years some 70 per cent.—those that are tenanted—may qualify for this compensation—provided, of course, that they are well maintained. I think that anything that can be done to encourage the maintenance of these houses, while they last, so that they make good homes for the tenants, should be welcomed.

As to the operative date for entitlement to payment, the order applies to any payment made after it comes into force in respect of houses in an order becoming operative on or after the date of the White Paper—that is, 17th October. Clearance operations, as the House will know, may take several years to complete, and on that date—17th October this year—there were many schemes in the machinery at different stages.

It is therefore necessary to specify what stage in the procedure should have been reached on or after the date of the White Paper for there to be an entitlement to the higher payment permitted by this order. Whichever stage is selected someone will be on the wrong side of the line, and I have no doubt that there will be cases of hardship just because someone is on the wrong side of the line. The date we have selected is that which will bring in the largest number of people that is reasonable in a reform of this sort. The later the stage in the pro- cedure the larger the number of people who will benefit and the latest date that can be adopted, which will ensure equality of treatment between claimants with houses in the same order, is the date of coming into operation of the order.

The order will be of great benefit to both tenant and landlord and will bring a measure of justice and fairness into the compensation code on the acquisition of an individual's property for the benefit of the community.

I am glad to say, on behalf of the Opposition, that we fully support the Government's intention to introduce the order, including the improved compensation terms which it contains. It will tackle a very important and growing problem, particularly in many of our large cities. There can be no doubt that the growing rate of obsolescence in many of our large cities is an increasing problem, particularly in the inner areas, as I know from the city of Birmingham. Anything that can be done to encourage landlords, tenants and owner-occupiers to keep their property in good order and to see that they are properly compensated when the time comes for demolition is, in my judgment, a social service of the first importance.

We have only to look at some of the streets in our inner cities to find the result of decay and obsolescence when people start to let their houses go. It is not only their houses that suffer but the whole environment of the neighbourhood. Neighbours complain about the deterioration in the standard of houses, and so on.

Until a few years ago there were very strong and proper complaints about the compensation terms available in such circumstances. I am glad to say that both major parties in Parliament have been very responsive to public opinion and to the distress caused to so many people who, when they lost their house, found that the old compensation arrangements, under which they received only the site value because the house was worthless, having become virtually uninhabitable, caused considerable financial distress.

I was glad, therefore, that in 1969 the Government, with the support of the Opposition, were able to put on the statute book a measure which responded to this concern and to the very serious problem. The Government are now going further and are proposing that the amount of compensation for well-maintained houses should be increased from four times to eight times the rateable value. I congratulate the Government on taking yet a further step in this direction.

I find, however, that although we have enacted legislation on the matter, far too many people are still unaware of its provisions, and that they can now get more adequate compensation when the house is demolished. They do not know that the tenants can share with the landlord in the amount of compensation which the order and the act enable local authorities to pay. Will the Minister tell us what the Department's view is of the effect of the new arrangements which were made in 1969? When we last discussed the subject many hon. Members sought to express their concern. The fact that their concern is not reflected in the Chamber today shows that the measures that we then took have had a considerable degree of success.

Nevertheless, my hon. Friends and 1, and other hon. Members who represent inner city areas, will confirm that tremendous ignorance still exists. It is extremely widespread. It is not confined solely to tenants; it seems also to extend to their professional advisers. When the House has approved the order, as I hope it will, I urge the Government to embark upon some sort of publicity campaign so that everyone knows what his rights are, and so that the people know that if they keep their houses in good order, when the time comes for them to be demolished they will be entitled to reasonable and adequate compensation for the money they have spent in the last few years of their houses' lives.

Such publicity should be by traditional means. The Government might try sending a circular to local authorities asking them to advise each household involved of the provisions of the order and of the way in which those provisions have been extended, and advising tenants and owner-occupiers to consult their legal advisers to ensure that they are getting the maximum amount of benefit from the order.

This is a useful step to tackle a growing problem of great concern and I greatly appreciate the speed with which the Government have acted following the White Paper. It is in every way commendable, and I hope that what we are trying to do on both sides of the House will not be thwarted by ignorance of tenants, owner-occupiers, or their professional advisers.

The Minister has pointed out that tenants can participate in the benefits to be given by the order. The benefit will go largely to landlords rather than owner-occupiers, because most owner-occupiers already receive reasonable compensation under the 1969 Act. We do not object to that, because if the order provides for a higher state of house maintenance it encourages landlords to repair their houses, which we welcome.

If the tenant were the person who had kept the house in a reasonable condition and maintained it well, it would be monstrous if he did not receive the benefit of the grant for himself. Can the Minister tell us more about the machinery by which the tenant will apply for the grant?

I reinforce what my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) said about the desirability of publicising the tenant's rights, because few tenants know about them. Some of us have already encountered problems, though not very widespread, where the tenant has done the repairs and has applied for a grant but the landlord has received a sum exceeding the well-maintained grant by way of his compensation, perhaps because of the site value, and the tenant has received nothing. In those circumstances there is no inducement to him to do his repairs and maintain the house well.

Has the Minister any figures of the extent to which tenants have availed themselves of the grants and what percentage of the grants has been given to them as distinct from the landlords? Those figures should be available. Perhaps we may have them from the Minister on another occasion if he cannot give them to us today.

With the leave of the House, I will answer the last question of the hon. Member for Birmingham, Aston (Mr. Julius Silverman) first. I cannot satisfy him today, but it is a figure which we should have and one which might be included in the publicity that I hope we can give to the payments.

Although I cannot give the figures, my impression is that tenants are not claiming as they should, and that in many cases the payment goes by default. The tenant is offered a council house in exchange for the house from which he is to move, there is all the bother of moving, getting his family into the new place and so on, and he does not claim what he might be entitled to receive for the money that he has spent on keeping his previous home in order.

The claim is made entirely informally. This is one of those cases in which the informal procedure is of great advantage. The claim does not have to go to the county court or anything like that. The tenant merely applies to his local town hall. I think that the division of the payment is determined in a fair manner. Inquiries are made of the landlord and tenant and there is an attempt to obtain agreement between them on the apportionment. If that is not possible, the matter is settled by way of arbitration at the town hall.

I turn now to the question of publicity, for which the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) called. The order is part of a whole package, set out in the White Paper, on improving compensation. I cannot guarantee to do any publicity on this one item alone until we have passed the Bill giving the whole package, which I hope will be achieved shortly. When the whole package is put together we shall ensure publicity about it.

At present, at the time of making a compulsory purchase order good local authorities send to each occupier—and to the owner if they know who the owner is—a letter explaining the exact process that can be adopted, how to make claims, and so on. Even so, I have found, when I have gone down a street to be demolished, that although the town clerk in my constituency has sent a very informative letter, people do not read such letters. The letters are closely typed, and people just think, "This is not for me". It is not until someone calls and discusses the matter with them that they take it in.

Therefore, we must think of better means of publicity than the formal letter from the town clerk, however good and informative it has been. A personal touch is needed here, if only through television and radio, although calls at the house are best. We shall be sending out circulars to the local authorities advising them on this matter, and when the compensation Bill has been enacted, I shall keep both hon. Members informed of how we shall publicise the whole package.

Before I get into the main body of what I have to say about the Access credit card system and the abuses connected with its introduction, I congratulate the Under-Secretary of State for Trade and Industry who will be replying to the debate. I have known the hon. Gentleman for many years and I have a high regard for him. This is the first opportunity I have had of congratulating him publicly on his appointment. Although I shall have one or two fairly harsh things to say about the Government's inactivity during the last year and a half, none of it is a reflection on the hon. Gentleman but on his predecessors in the office which he now holds.

May I make it clear that I welcome the introduction of a credit card system. I have more than one credit card myself and I find them extremely useful. I think that everybody must welcome any advance towards a society where the use of cash becomes less necessary and less frequent. There are, however, certain aspects of the introduction of the Access credit card system which have given rise to a considerable degree of public concern. I understand that so great is the public concern that The Times business section has received a greater volume of correspondence on this issue than it has on any other that it can remember.

My first concern about the Access card arrangements, as distinct from the Barclay card arrangements, is the cartel way in which it was introduced. The three banks, Lloyds, Midland and National Westminster, waited for Barclays to have the courage to go in and test the water to see whether a credit card scheme on a large scale could be run. When Barclays had taken the risk and made the heavy investment, they all came in together. They did not have the courage to stand on their own feet. Their argument was that the market could stand only one more card and that it would not be satisfactory if they were all to compete separately. That is just too bad. If the private enterprise system means anything, then those firms which make a fetish of advocating competition should be prepared to stand on their own two feet and compete one with another.

There are ominous implications in an arrangement where four of the biggest financial institutions of this country can group themselves together to provide jointly a service of this sort on the grounds that it is easier and more convenient for them to do. My concern is not of recent standing. As long ago as 15th April, 1971, I and my hon. Friend the Member for Walthamstow, West (Mr. Deakins) wrote a joint letter to the Secretary of State for Trade and Industry, asking him to refer to the Monopolies Commission the planned introduction of the Access credit card system. I received a reply dated 20th May, 1971 from the Under-Secretary of State to the Depart- ment of Trade and Industry, which in part said:

"As regards a monopoly reference, I explained in the adjournment debate on 2nd December last the Government's general attitude to the possibility of referring the banking industry to the commission. In this particular case…"

—that is the coming Access credit card—

"it is likely that when the three banks introduce their new credit card either they or Barclays or both will have more than one-third of the market for this service."

That is a self-evident statement if ever I read one. The letter continues:

"But the legislation does not allow us to base a monopoly reference now on a monopoly situation which may develop in the future."

Well, so be it. No doubt technically that was a perfectly accurate statement of the legal position at that time. However, we now have the Access credit card in operation, and either that or Barclay card must clearly have more than one-third of the market for the service. I give notice to the hon. Gentleman that I shall be making a formal demand for a reference of this development to the Monopolies Commission.

One aspect of the introduction of Access which has given great public offence has been the way in which cards have been sent out unsolicited. They have been sent to people who have never asked for them. Some of the excuses put forward by spokesmen for the Access system have been disingenuous in the extreme. They have said that it is not a matter of giving people unsolicited service. They have merely been advised of existing services that they can make use of if they wish. But there is all the difference in the world between advising people that a bank offers overdraft facilities and advising an individual that an overdraft is available to him.

Some of the ways in which the Access people have been comporting themselves lay them open to the charge of displaying considerable arrogance. In one piece of their literature there is a yellow page headed "Conditions of Use". It begins:

"The Access Card must be signed by the person to whom it is issued. …"

Nothing is said there about whether or not it is wanted. It says:

"… ('the cardholder') immediately on receipt …"

Nowhere in the conditions of use is the recipient told what he should do with his credit card if he does not want it when it has been sent to him.

I wish to draw attention to Government negligence in this respect. In August of this year the Government issued a discussion paper which was circulated among interested parties setting out their proposals for implementing parts of the Crowther Report on Consumer Credit. Paragraph 4 of that memorandum is headed "Mass Mailing". It says:

"No credit card should be issued except in response to a request or application therefore."

That is a Government document which was put out in August of this year. At the time that they circulated the document the Government knew very well that the Access system would be beginning this month. It is clear from the correspondence that I read that it had been common knowledge for more than 18 months. The Government must have known that this was the way that the Access people intended to distribute their cards. Right hon. and hon. Gentlemen opposite have done nothing about it. For the Government to say in answer to parliamentary Questions this week that they are contemplating legislation in this matter is the most blatant example that I have heard of delaying the shutting of the stable door until after the horse has bolted.

I know that the rules of order forbid me to call for legislation in the course of an Adjournment debate. But I say to the Government that they know that they need not have waited for legislation in this respect. The power of the Bank of England to influence the commercial banks is very considerable. As far as I know, no effort has been made by the Government to use their influence on the Bank of England to tell the commercial banks that conduct of this sort would not be tolerated. Now right hon. and hon. Gentlemen opposite are making pious noises when they know that there will be no further major credit card scheme introduced here and that the damage has already been done.

There is a further aspect of this Access system which I find the most scandalous of all. I draw the attention of the House to condition No. 8 of the Access scheme which reads:

"If the ACCESS card is lost or stolen the card-holder will notify the bank's ACCESS Department immediately"

—again there is that little touch of arrogance:

"the card-holder will notify"

—not "should notify" but "will notify". The condition goes on:

"and confirm in writing. The cardholder will be liable to the bank for any transaction effected by use of the card by any person before such notice is received as if he had used it personally."

In other words, a person may have his card stolen and may be in total ignorance of that for an almost unlimited period. It is not unknown for ladies to be unable to find things in their handbags, for men suddenly to start using a different suit and to forget where they have left a card or a small item of that sort and not to be aware of the fact that the card is not mislaid but has been stolen.

The Access people say, "It does not matter; you have no rights whatever in this situation until the poor innocent cardholder has found out that his card has been stolen and notified us and we have received the notification."

It is my personal experience in the last ten days that a lady in an office with which I am associated left that office for a short time. When she came back it was obvious that someone had walked into the office and had been in her handbag. She thought that £5 had been taken. She was astonished to be rung up by her bank manager the next day and to be asked whether she had been cashing large numbers of cheques the previous day, each for £30. She said that she had not. There were 20 cheques in her cheque book. The cheque book and the credit card were taken and, astonishingly, not one of the 20 branches of the bank which had been visited by the thief had questioned the signature or the withdrawal of this money. My hon. Friend is on to an important point. If these credit cards are to be available in such large numbers, then much better security arrangements are needed and there ought to be a limitation on the liability of the credit card holder in circumstances such as those I have outlined.

I am obliged for that helpful interjection. I am not clear about the legal position in that case but it might be a comfort and a reassurance to that woman to know that there is a clear distinction in law as between a signature forged on a credit card slip and one forged on a cheque. Where a fraudulent signature appears on a cheque a bank cannot escape liability no matter what sort of small print it writes into any contract. It has a clear legal responsibility for ensuring that the signature on a cheque purporting to draw funds from an account is a genuine signature.

Under these conditions the banks seek unilaterally to absolve themselves from any such obligations. Where there are circumstances such as my hon. Friend has described, when someone is drawing on a cheque with a false signature under cover of a credit card, I would hope that the more strenuous provisions of the law would protect the card holders. I would certainly welcome clarification from the Under-Secretary. One of the annoying things is the arrogance of the banks. They say, "You do not have to worry too much about condition No. 8 because we intend to enforce it only where there has been fraud." It is no business of the banks to determine whether there has been fraud. If there is any question of fraud it is for the courts to determine.

The banks are setting themselves up to be judge and jury in their own case. They will say whether there has been fraud; they will determine the amount of penalty to be exacted. The Government should pay immediate attention to condition No. 8. In other countries more advanced in these matters than this country there is legislation which limits the amount of liability which any card holder can suffer as a result of having a card stolen. In the United States it is, I believe, 50 dollars—about £20—which I would consider to be a reasonable amount.

I revert to the discussion paper which the Government published in August in which they envisaged precisely these circumstances. Paragraph 6 on the page from which I have already quoted states:

"Such liability"—

that is, the liability of the borrower in the event of unauthorised use of his card—

"should be limited to £30''.

The Government have done absolutely nothing about it. On the American experience, the credit card companies have the right to claim the 50 dollars only if they have supplied every holder of a card with a pre-stamped, pre-addressed cancellation notice that the holder can immediately put in the post to the card company with the minimum of delay and inconvenience to himself.

There is yet a further point on the question of unlimited liability about which I should welcome clarification by the Minister. What happens if the card is mailed to a customer of the bank but never reaches him? Suppose that it falls into wrong hands. Somebody else gets it, sees the name, puts a fraudulent signature on it and starts to use it. Is the intended card holder liable? I know that there has been correspondence in the Press to the effect that there would be no liability on the genuine or should-be card holder in those circumstances because, he not having signed the card, there is no contract between him and the credit card company.

But we still have not finished with the question of unlimited liability. There is another trap in condition No. 11 of the Access credit card scheme. That condition deals with the issue of joint credit cards in a family. In other words, a husband or wife, whoever is the initial card holder, may, by applying to the card company, obtain a card for another member of the family. That is a sensible and admirable arrangement and no doubt many families will enter into it. However, the last sentence of condition No. 11 reads:

"At the written request of the cardholder such additional card will be cancelled immediately on its return to the Bank".

Suppose that a married couple obtain a joint card and the marriage falls on unhappy times. I make no individious distinctions here, as I hope the advocates of Women's Lib will note. However, for the purposes of argument, if the original card is in the name of the husband and the husband asks for an additional card to be made out in the name of the wife, if the marriage breaks un and the husband sends a written request to the bank that the joint arrangement be cancelled, that request will not, according to condition No. 11, apply unless the wife surrenders the card herself voluntarily to the bank. It is a preposterous state of affairs, but there it is, in black and yellow, in the condition in the Access scheme. I do not see how the English language can be interpreted in any other way. I would say to even the most happily married couples that they should beware of the dangers they might be letting themselves in for if their marriages were unfortunately to fall on difficult times.

The real answer to this question of the unlimited liability is that the banks should provide the insurance themselves. Heaven knows, they are going to make enough profits from this scheme. There is no reason whatever why they cannot insure themselves against any possible losses which might arise from fraud or other improper use. At the very least, if they do not do that, they should provide facilities to the card holders to insure themselves at some nominal extra annual fee. I cannot myself see why security arrangements cannot now be sufficiently advanced for a person's photograph to be inserted somewhere on the card so as to make difficulties of that sort much less frequently encountered.

The banks, as I say, are going to make some pretty substantial profits from this scheme. Apart from anything else, interest rates will be high enough, at least where the credit holder is foolish enough to have this instalment credit running in tandem, so to speak, with the basic credit card system itself. There is an interest-free period for purchases. The interest-free period will run to the twenty-fifth day of the subsequent month. Thereafter interest will be charged at 1½ per cent. per month, or, to be more accurate, as another piece of the literature says

"at only 1½ per cent. per month".

What a beguiling "only" that is: "only" 1½ per cent. Even a mediæval usurer would have blushed at describing 1½ per cent. a month as "only" at that rate.

What, however, is the actual rate to the user of the card under this instalment credit facility? How does one work it out? What is the actual cost at this nominal 1½ per cent. per month? The answer will depend on the repayments programme in which the user engages himself. One can set up various sets of circumstances according to how soon or how late after interest charged appears on the statement the holder pays off his monthly instalments. The effective cost to him will vary according to when he makes payment.

I do not ask the House to take it from me, for I went to a leading merchant bank in the City to ask those bankers to make the calculations for me. They are quite interesting. Although we have a fair amount of time for this Adjournment debate today, and that is why I am spreading myself somewhat, I will not weary the House with all the assumptions which I have here, and which are specific and quite technical, as to how to determine the minimum and maximum degrees of extension of credit available under the scheme. I will willingly make them available to anybody who may seek to challenge the conclusions.

The result, as I am informed, after pages of calculation, is that the minimum rate of cost, on even an annual basis, to someone using this extended credit facility is 16·48 per cent., about 16½ per cent., per year. The maximum rate, assuming the least favourable combination of circumstances, is just over 19 per cent. per year. These figures apply only to instalment credit for the purchase of goods. If one draws cash on one's Access card the rates of interest are appreciably higher. Very roughly, again within the range between the most and the least favourable assumptions for the card holder, interest rates vary between about 18½ per cent. per annum, on the most favourable assumptions, and 21 per cent. per annum on the least favourable assumptions. These people have the gall to talk about "only 1½ per cent. per month".

My advice to any card holder is to use the card for obtaining the initial credit but in no circumstances to use the instalment credit facilities. Anyone who can will be well advised to get a bank loan or an overdraft at between 8 and 12 per cent. per annum rather than pay these extortionate rates. Publicity of this sort demonstrates the crying need for regulations to ensure truth in lending. The public should know in any credit extension facility what is the true rate of interest.

I come to an extraordinary anomaly in the Government's attitude to the credit card system. Only in the very recent past has the Chancellor of the Exchequer announced that he is demanding special deposits from the banks with the objective, amongst other things, of reducing the lending base of banks and making it more difficult for them to extend personal loan and overdraft facilities. Yet, at the same time—according to the literature of the credit card company—he is turning a blind eye to the extension of £300 million worth of credit. In other words, the Government are cutting down the banks' ability to extend low-cost credit and at the same time turning a blind eye to the introduction of high-cost credit schemes to the tune of about £300 million.

I predict that the banks will make a massive return from the schemes, and that the gross returns will be far in excess of the rates of interest I have just quoted. Industrial companies have to publish separate figures for their trading by major items of activity. It is high time that the banks were compelled to publish separately the profits they make from credit card schemes.

Associated with the scheme has been some extremely offensive advertising. One advertisement on the Victoria tube station reminds me of a cartoon which appeared in the New Yorker a few years ago showing a young couple proudly holding up a baby and saying, "Three more payments and the baby is ours".

I hope that I have said enough to show the need for far greater public supervision over large financial institutions, and I hope for a satisfactory reply from the Minister.

I congratulate the hon. Member for Dudley (Dr. Gilbert) on drawing the attention of the House—albeit on a Friday, which is never the best time for a well-attended House—to the launching, last month of the Access credit card. That this matter has caused considerable concern is evident from my post, and no doubt from the post of every hon. Member, from Questions that have been put down and from the considerable Press comment.

I also congratulate the hon. Gentleman on the way in which he put his case. He might have been much more emotive, but he has argued his case logically and sensibly, although I do not agree with all that he has said. On some aspects I do agree with him, but he mentioned others that are not quite correct, and one on which he is entirely wrong. I will deal first with his last point while it is clear in our minds. The hon. Gentleman alleged that the Government were turning a blind eye and did not know what they were doing by not limiting the credit card facilities, on the one hand, when at this time they were putting a new and definite level of special deposits on the total of bank lending.

I have to make it clear that the money lent under credit card facilities will be part of the total banks' lending against which the special deposits will have to be made. In other words, this is not some separate amount. It is only another type of the banks' lending. Therefore, it is an overall package; and whether the banks lend it through credit cards, mortgages or their ordinary overdrafts on accounts, they all come together and there is no separation.

I am grateful to the Minister, and I take the qualification he is making. It is also true that as a result of this combination of circumstances there will be a reduction in the amount of funds available for low-cost loans, such as personal overdrafts and loans, and an expansion of this high-cost lending. These two will continue simultaneously under these arrangements.

I shall return to that point. What the hon. Gentleman is now propounding is quite contrary to the Crowther Committee's recommendations, in which it was made clear that one section of society should not be barred from any type of credit it may or may not want, and that it should be up to society to choose what credit it wants or uses rather than for it to be interfered with by anyone else.

Perhaps I could run over the background—particularly on consumer credit—which comes from Crowther. After all, a detailed and comprehensive study of the whole matter was carried out by the Crowther Committee. One of its basic criticisms of the present credit law was that, like Topsy, it had "just growed", and gone on growing, and that this had been done not in any rational way but in response to individual problems and aspects of credit and lending as they arose.

This has resulted in a hotch-potch of law regulating consumer credit. The committee recommended that in future there should be a comprehensive code regulating all forms of credit. So, in looking at the credit card, we must bear in mind that this is merely another form of credit which may be available. It is a form which has been evolved to serve some of the needs of consumers better than existing forms. We have seen the development of different aspects of credit, from check-trading—which, after all, has been with us since the turn of the century—to the evolvement of hire purchase, conditional sales—in order to get round hire-purchase limitations imposed by different Governments—and new schemes of easily obtainable personal loans, the advertisements for which seem to require little if any collateral.

Secondly, the Crowther Committee drew up general guidelines for those responsible for policy on consumer credit. Among the committee's conclusions was set out as the first principle of social policy—this is what I referred to earlier—that the users of consumer credit should be treated as adults who were fully capable of managing their own financial affairs, and that it was not for us to believe that they were not. Further, there should be no restriction on their freedom of access to different forms of credit in order to protect the relatively small minority who get into difficulties.

The committee also found that consumers were not making such extensive or, indeed, excessive use of consumer credit as to outweigh the considerable benefits that they derive from its use. The question is: should this philosophy apply to credit cards? The Crowther Committee obviously saw that this would benefit part of the community. Credit cards are wanted, and are thought to be of benefit, so the Government must be careful not to hamper their proper development because of a few—nonetheless serious—criticisms of their introduction or some aspects of their operation.

The introduction of the Access card represents no new departure. The Barclay card has been in existence for six years. Similar marketing methods were used at its launch and it has obviously provided a service valued by a large number of consumers. A second card must create competition.

There is a legalistic argument against a reference to the Monopolies Commission—who is to define the "market"? One can define it as those who are using the card, but the actual market is probably thought to be much bigger, and there is free entry into it. Therefore, the legal aspect of the reference is difficult.

If there is free access to the market and we may expect other cards, that totally demolishes the banks' argument that they have to go in with a joint card. I was merely using the Department's own criterion of 33⅓ per cent. Clearly, one of two schemes must have more than a third of the market.

Just one or two corrections. It is not the DTI's proportion but the legal aspect of the reference. I suppose that one could say that one person had a monopoly of the "market", but I do not think that we are right to use that term. These are the only ones in existence. I will certainly consider this proposal, but I do not believe that we are likely to take any action.

The Crowther Committee recommended a general code which would apply across the board to all forms of consumer credit. Among the protections recommended were the disclosure of the cost of the credit in percentage and cash terms in advertisements and in the agreements, controls against false or misleading advertisements, prescription of minimum information to be included in agreements, and provision for minimum rebate of charges for those who settle debts early. In principle, the Government are very much in favour of what Crowther has, overall, held.

The committee thought that these rules should apply no matter what form the consumer credit arrangement took. It obviously wanted credit cards covered. But, as the committee recognised, although a general framework is necessary, certain forms of credit require special rules over and above those generally needed in the consumer credit field as a whole. Obviously, such rules are needed for credit cards.

The main difference between credit granted on a credit card and other forms of credit is that the credit card is no more than a small piece of plastic, which is a near-negotiable instrument which gives the holder immediate access to credit and can be easily lost or misused.

I come now to the matters about which the hon. Member for Dudley expressed concern.

There is a point of importance to be raised before the hon. Gentleman moves on. He concedes the need for special rules and quotes Crowther in aid. When are the Government likely to introduce legislation to bring about the state of affairs for which the hon. Gentleman has expressed support?

The hon. Member is an old parliamentary hand, and he knows how these matters have to be arranged. Neither my right hon. Friend the Secretary of State nor I can be expected at this point to say exactly when legislation will come forward. We have made perfectly clear that legislation on consumer credit will be brought forward. I hope that it will come as soon as possible.

I turn now to the—

Will the hon. Gentleman give way?

No. I shall go no further than I have gone, so the hon. Gentleman need not press me.

Outrageous.

No it is not.

"This year, next year, sometime, never".

I am being absolutely honest with the hon. Gentleman. I have replied to his question quite fairly, and I shall not alter what I have said.

I come now to the principal matters of concern raised by the hon. Member for Dudley. I take, first, the method of issue. I was surprised that he did not mention that concern has been expressed about the possibility of breach of confidentiality through the disclosure of information about customers' accounts.

It has been suggested, as I say, that there may in that way have been a breach of confidentiality regarding the bank account of an individual, since information was given to someone else. I understand that there was, in fact, no divulging of the details of a customer's account to the credit card company. The individual banks merely notified the Joint Credit Card Company—it is not the "Access Company"—of the names of the customers whom they wished to have a card and suggested a credit limit. The banks then sent the cards to their customers. If individuals are concerned about confidentiality, I suggest that they should, as the bank advertising suggests, see their friendly bank manager.

I do not want to get into argument about "solicited" or "unsolicited". The Access card was not sent out in the unsolicited way in which the Barclay card was sent, whether the recipients held a bank account or not. There may be the odd exception, but the company would claim, I think, that the card has been sent only to customers of one of the banks, and it argues that this is an extension of the credit facilities which the banks give.

The second issue arises on the distribution of cards. The unsolicited mailing of credit cards was a general issue examined by the Crowther Committee, and it pointed out, as I have said, some of the dangers inherent in the mass mailing of credit cards. I entirely agree that there are dangers. As the committee said,

"By mass mailing techniques, card issuers are putting into circulation large numbers of near negotiable instruments, already bearing the name of an individual".

The committee did not make any direct recommendation on this aspect but merely drew attention to the problem. In our study of the report, we are, as has already been said in reply to Questions, taking account of the new opinion on this matter, and we are considering fully the evolvement of view since Crowther reported.

Thirdly, as the hon. Gentleman suggested, there is the liability of the person to whom a card has been addressed if the card is stolen or lost on the way to him. I can tell the hon. Gentleman that that person has no liability at all.

The fourth point concerned the liability of the card holder after he has accepted and signed the card, should it get lost or stolen. This point arose when the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) referred to the lady with whose office he was associated. It is the standard term of most, if not all, credit card contracts that if a card accepted by an individual is lost and comes into the hands of a third party the card holder will be responsible for the cost of the unauthorised purchases made prior to the date on which the issuer is notified.

The Government are looking fully into the possibility that it should define, by legislation if necessary, the maximum loss which the card holder should bear. I hope that after this statement the companies may themselves look into this and perhaps take action.

A fifth criticism has also been voiced at the interest to be charged—

May I intervene before the hon. Gentleman proceeds? I am grateful for his constructive remarks, but he has not addressed himself to what the credit card companies say now. They are already saying that they will not enforce this condition unless there is fraud. My point is that it does not lie in the mouths of the credit card companies to determine whether or not there is fraud. This can be dealt with only by some proceeding which has effect in courts of law.

The hon. Gentleman is quite right. Nobody can declare fraud other than the courts.

They do. They claim to do so.

They make certain suggestions but, in fact, nobody except the courts can determine whether there has been fraud.

They can extort the penalty.

I would have thought it obvious—I do not wish to give legal opinions here—that any person concerned about this matter ought to ensure that he is legally informed, because I believe that the situation of the customer is very much stronger than might be suggested by certain matters which have been circulated in the Press.

I now turn to the subject of the cancellation of the wife's card—which I think was the hon. Gentleman's "Woman's Lib" point. I think this is a matter which must be for the bank's discretion as such. A lender puts his own money at risk and he must be allowed full discretion as to when and to whom he lends it. That defines the question of when he withdraws the credit facilities.

With respect, the whole point is that he is not able, under condition 11, to withdraw the credit facility.

I am not going to prolong this question and answer situation, or we shall never finish. I now turn to the question of interest. As the hon. Gentleman suggested, it is 1½ per cent. per month, which can work out at a maximum perhaps of 19·6 per cent on the basis of annual compounding—slightly more than the hon. Gentleman suggested. I agree with him that the use of the term "only 1½ per cent. per month" is not a very proper or fair representation. Of course, this must depend on the consumer's use of his account.

I will refer to someone who I am certain never expected to be mentioned—one of our police officers in the House—who suddenly realised that I must be replying to the debate and who said, "The credit card is an awfully good thing". I asked him why, and he said that he had looked into it. He had to pay up 25 days after he received his account; if he purchased immediately he received a nil account he would get an extension to about 50 or so days' credit. He said to me: "I think I shall use that". That is, indeed a difference of approach by a sensible and charming person who has obviously analysed the matter carefully. It demonstrates in some ways the different approaches to the matter.

The Crowther Committee considered whether there should be statutory control of interest rates on credit and decided against it. I am sure that is right. However, I believe that the credit card companies should openly disclose in their advertising the true costs of borrowing so that the cardholder is able to realise fully the true cost of his borrowing.

On an annual basis?

Both on an annual basis and in the short term.

The sixth issue arises because retailers offer a discount on the cash price of the goods or services given to holders of bank credit cards. But the acceptance of credit cards does not necessarily involve increased costs or lower profits leading to higher prices. From the retailer's point of view it may well be that the discount is more than offset by additional custom, by the elimination of the risk of bad debts, by the reduction in the amount of cash handled and by the replacement of other credit arrangements which they may already have.

But here I wish to sound a warning. Holders of credit cards should watch out to see that they do not pay higher prices for their goods when using their credit card than they would by paying cash. I hope that people will bear that warning in mind. Many shops not accepting credit cards may be enabled to offer lower cash prices. Customers who wish to pay cash should be able to take advantage of it. There is a competitive situation here and the consumer has a very real choice.

In looking at the amount of credit that is likely to be released under the scheme the Crowther Committee said that consumers at the moment were not making such extensive use of credit as to outweigh the considerable benefits which they were enabled to derive from it.

I hope that I have covered most of the points which have been raised. Any credit provided by the banks under credit card schemes must be financed from within the total resources available. Those resources are subject to influence by the authorities through the new system of monetary control introduced last year. The extension of credit cards has not been associated with any relaxation in the monetary policy. It is for the banks to decide the particular form of their lending and the new credit card should be seen mainly as a change in the method of making finance available by the banks concerned. It will not necessarily lead to any long-term addition of bank lending or of the money supply. The new Access scheme represents a competitive response by the other major clearing banks to Barclaycard, which was introduced in 1966 when the Labour Government were in office. Obviously, all the banks associated in the scheme recognised that there was considerable potential for a new credit card scheme and were anxious to enter this field. But they were presumably convinced that the retail market, the shops which had to make out the credit slips, would much prefer to have one rather than three banks entering it.

The American experience confirms that view.

The competition between Access and Barlclaycard is entirely in accordance with the aims of the new approach to monetary policy, which was intended to stimulate new developments in banking. The credit extended is likely mainly to support the purchase of consumer goods, which is appropriate to the Government's aim of sustaining a faster rate of economic growth and reducing unemployment, provided that the overall growth of money and credit is kept within acceptable limits, which the Government are determined to do. I have referred to the recent call for special deposits.

The individual credit limits on the Access cards—typically between £100 and £250, although some people may have been allowed up to £500 credit—are too low to permit the use of bank credit cards for speculative transactions, which had been alleged to be possible.

Therefore, although the Government consider that credit cards and their methods of marketing may give rise to concern, my speech has shown that credit cards if properly applied can be a beneficial addition to our credit system. My Department is looking at the weaknesses which the distribution has revealed—the unsolicited nature of the distribution, the problems covering fraud and negotiable instruments, and the limiting of the liability. In our framing of any new legislation on consumer credit these matters will be fully and properly considered, to the benefit of the consumer and not for the protection of the banks.

rose—

Does the hon. Gentleman rise on the same subject?

I do indeed, Mr. Deputy Speaker.

The hon. Gentleman has already spoken.

I have not risen to speak at all. I intervened in the speech of my hon. Friend the Member for Dudley (Dr. Gilbert), and I should not be making this speech now if the Minister had allowed me to intervene in the middle of his speech. As he did not, I shall say something about the subject now.

First, I join the Minister in congratulating my hon. Friend, who has done a signal service in raising the matter if there is one field in which there is a mystique and tremendous ignorance and a great need for consumer protection, it is the whole of credit, or, to give it an old-fashioned name, usury. We are here concerning ourselves with usury.

I was a little disappointed at the Minister's approach to the subject of interest rates. The hon. Gentleman skipped lightly over the question of interest rates of 16 per cent., 18 per cent. and 20 per cent.

I did not.

Unlike the Minister, I am prepared to give way if he wishes to intervene. I think he did skip lightly over the question.

I was brought up on the story of Christ in the Temple, who apparently dealt with the money lenders 2,000 years ago much more expeditiously and effectively than the Government intend to deal with them today. We can only be sad about that.

The Under-Secretary of State was right to remind us of other forms of credit apart from credit cards, which I use and find to be of great convenience when properly used. Credit cards enable one to buy goods and to be able to pay for them expeditiously. If one does so within 25 days one avoids the necessity of incurring inflated interest charges. When credit cards are used in that way they can be of very great convenience to the public.

But there is no doubt that one of the intentions of the credit card promoters is to encourage people to buy things that they would not ordinarily buy, and possibly to buy beyond the limit of their normal capacity to repay. It is in that situation that we run into difficulties. In the promotional literature which was sent not to the public but to the shopkeepers, virtue was made out of that situation. The literature said:

"What Access offers you can be summed up in two words: more business. … It also means (and experience with credit cards shows this) that the Access shopper will spend more. He will buy, for example, a more expensive suit. Or perhaps a new shirt and tie to go with the suit that he has just bought."

There is no doubt that part of the psychology of these cards is an attempt to get the customer or the client to buy beyond what is his reasonable means. As the Under-Secretary of State was saying, if one adds to that proposition the fact, for example, of hire-purchase payments, there is a mystique. There is a growing expectation of consumer legislation and protection in the whole area of usury or credit. Such legislation is very much overdue.

I hope that when the Government introduce their legislation they will have in mind the administrative costs of this sort of scheme. I admit that it is difficult to make a judgment as to what the right sort of interest repayments should be if one does not know the cost of administrating the scheme. I hope that when the Government come to think about their legislation they will make it mandatory upon the banks and other organisations that operate these schemes to tell us the cost of administrating them as distinct from the rate of the interest charges. We shall have a great deal more knowledge about the subject if that happens.

When the hon. Gentleman refused to give way, having spoken sympathetically about the need for legislation on this matter, the good will which his sympathetic words had generated in our breasts was immediately dissipated. No Chancellor of the Exchequer has ever more closely guarded the Budget secrets than the hon. Gentleman apparently intends to guard the secret of when we shall have this legislation. I am prepared to believe that it is a complicated matter—unlike the present Bill which is going through Parliament—and that parliamentary draftsmen cannot be expected to draft the legislation overnight. The Government may change their minds on economic policy and the draftsmen will have to make allowances for that sort of thing, but the Government should be able to tell us approximately when we can expect this legislation.

It is not as if the Queen's Speech is overburdened with legislation so that there will be no time for a Bill on this subject to come before the House. Not a bit of it; the situation is quite the opposite. It is clear that in the coming Session we shall have plenty of time in which to enact legislation of this kind. The Minister ought to be able to tell us whether we may expect the legislation this Session, which has 12 months to go, next Session, or even in the next Parliament. For the reasons that my hon. Friend and I have suggested in respect of stolen credit cards and cheque books, there is an urgent need to protect consumers from exploitation and certainly to limit their liability in cases like the very unfortunate incidents to which I have drawn attention.

It would be perfectly easy for the Government to draw up legislation of this kind. There are no serious technical obstacles, and it exists in other countries.

My hon. Friend is quite right. The United States has legislation to deal with situations of this sort. However, I hope that we are reasonable men on this side of the House. We know that the banks, chambers of commerce, industry, I hope the trade unions and possibly the Co-operative movement have to be consulted—

They were by Crowther.

That is true. But the advent of this latest credit card is post-Crowther. For that reason there has been a multiplication of the difficulties since the Crowther Report was published.

It is outrageous that the Minister is not prepared to tell us when protective legislation will be introduced. The hon. Gentleman will not even give the House an idea of the Government's thinking about imposing a proper limitation on the liability of those who are unfortunate enough to lose their credit cards. We have not been given a whisper about what the Government think should be the proper rate of interest to cardholders.

I am satisfied that this will not be the last time on which we refer to this matter. We shall be pressing the Minister in other ways to be a little more clear and logical about the Government's approach than he has felt himself able to be today. I am sure that it was not because he had no wish to be more helpful. His attitude was that he wanted to be helpful. He made it clear that he recognised the danger and that the Government intended to act. That makes it even more mysterious why he was not able to be more clear-cut in his advice to my hon. Friend the Member for Dudley.

I welcome this opportunity to draw attention to the problems of salaried employees involved in takeovers, mergers and company reorganisations.

I do not propose to refer to the problems of weekly paid employees who are caught in this way simply because I want to conform to the convention of a short and narrow Adjournment debate. It is not that I do not recognise that weekly paid employees are also likely to suffer acute distress and hardship in circumstances of this kind.

This is a problem which is specially relevant to the Department of Trade and Industry, although it also intimately affects many other Departments. Action could be taken to relieve the problem by other Departments, especially by the Inland Revenue.

Readers of our national Press will have noticed in recent days a spate of very expensive advertisements drawing the attention of shareholders to the advantages and disadvantages of permitting mergers and takeovers of some of our most prominent public companies. I do not comment on the merits or demerits of any proposals before shareholders at the moment. But it is topical to raise the general question of the suitability of some of the mergers which are promoted by financiers and business people; and to look at the problems of redundancy which may arise as a result of the effects of the Industry Act and the reorganisation of public companies following our entry into the EEC.

I am not saying that rationalisation is unnecessary and I would be the last to suggest that enormous benefits are not obtainable through company reorganisation. But every unbiased person must admit that these benefits are frequently obtained at least partly at the expense of the employees. This is a matter which is causing widespread hardship and even more widespread anxiety. We have not only to consider the human problem, but the effect on efficiency, too. Once the self-protective instincts of management are alerted to the danger of a takeover it often moves in the worst direction and acts in a way which does not assist the effective operation of the firms involved.

Some observers of industry, particularly those who have learnt about it out of books, might remark that it is the fault of the employees if they are caught by a takeover because they ought to have been able to see what was coming. But loyalty to one's company ought to be respected. We ought not to work on the assumption that a man should run out on his firm at the first sign of danger. The total unpredictability of some of the mergers that have been announced in recent months must also have taken even the best-informed and most perspicacious employees entirely by surprise.

We have to remember that transferability of pension rights, in spite of Government promises in their manifesto, have not been brought into effect. In addition, specialised skills are frequently not marketable outside a narrow range of concerns. Government action is needed and it is not only by legislation that effective action could be taken.

My first recommendation is that we should act now on our promise to make pension rights in occupational schemes transferable—not ultimately but at once. This has been done for the Civil Service and we should do it now for private industry. It is a matter which lies largely within the discretion of the Government. If the iniquitous mixed benefits rule were not still being applied by the Inland Revenue then de facto transferability of pension rights would have come about already for virtually all enlightened concerns with final salary schemes.

It would be proper, too, to suggest to the appropriate institutes that there should be changes in accounting practice, particularly where large-scale reorganisations have taken place following mergers and take-overs. In those cases shareholders should be notified fully of the implications of any changes in accounting practice which are being introduced. All too often it is said, and we do not know whether it is true, that following a takeover the new management has changed the accounting practice or ways of dealing with the pension fund, ways of evaluating work in progress and so on—and so has achieved a sort of spurious profitability, apparently as a result of the merger, though in fact simply as a result of changing the methods of handling the accounts.

Thirdly, we must work our way to-wards a much more generous level of redundancy compensation or what we could call the payment of gratuities of an altogether more generous order and on a much wider scale than at present. Redundancy compensation should be related to salary and length of service but it should go far beyond what is statutorily imposed at the moment. I suggested some years ago that if a generous pension scheme gives two-thirds pay to an employee leaving after 40 years of service, it would not be inappropriate if one-third pay were given to those leaving after 20 years of service. That may be oversimplifying the formula but I have mentioned it to show the scale of redundancy compensation which I believe to be appropriate in modern circumstances.

It will be said that this proposal would place a heavy burden on employers; but why should the whole burden of the human cost of reorganisation be borne by the employees—or by society—when it is the employers who one would presume make the profits as a result of reorganisation? Moreover, the Army and other parts of the public services introduced a system of this kind long ago. The short service contract in industry must come, just as it has come in the armed services, the police, the fire service and other branches of the public service.

There are two particular reasons why we should increase the level of gratuities or redundancy pensions. The first is that it would help to place an obstacle in the way of unsuitable mergers in the form of an inescapable and substantial cash commitment to the employees. Secondly, the House must recognise the existence of an urgent social problem. Those who make profits by creating redundancy should pay a larger share of the resulting cost to society.

By leave of the House, I should like to reply shortly to what my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) said. He gave me notice, for which I thank him, that he would raise this matter if there were time. He will realise that many of his points are not for me or the Secretary of State for Trade and Industry but for a number of other Departments.

I have considerable sympathy with some of my hon. Friend's arguments. Any likely repercussions on employment from mergers are already taken into account by my Department, together with any other relevant factors, in considering whether particular mergers should be referred to the Monopolies Commission. That will definitely continue to be the case.

However, it is correct to emphasise that the long-term position of employees in the companies concerned must receive the utmost consideration when mergers are being considered. The lives and careers of employees should be of prime concern to management at all times and must not be excluded by management when any takeover question is before its board.